San Diego Magazine / June 2008 / Innovation Prospectors

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Innovation Prospectors

San Diegans ply a river of ideas for biotech gold

(page 1 of 2)

POP QUIZ: San Diego biotechnology companies have developed products to diagnose or treat:
A. cancer
B. HIV
C. prostate cancer
D. diabetes
E. all of the above

It’s all of the above. In roughly 30 years, biotech in San Diego has progressed from Big Idea to Big Science. About 700 companies employing 40,000 workers have sprung up on the mesas in and around La Jolla. Together, they have an annual economic impact of $8.5 billion, making San Diego the third-largest biotech community in the nation, behind only Silicon Valley and Boston.

So it’s fitting the international BIO convention drops anchor at the San Diego Convention Center June 17 for what may be the largest BIO gathering ever. It will certainly dwarf the last one held here in 2001, with more than 20,000 attendees expected versus 14,000 in ’01.

The interest is all the more remarkable considering the brambles biotechs must surmount in 2008——a sideways stock market in which investors flee to the safety of established biotechs at the expense of the lesserheeled; a product-development cycle that runs more than a decade before government approval; and a Food & Drug Administration under fire for approving drugs like the pain reliever Vioxx, which has proven more of a benefit to plaintiffs’ attorneys than patients.

None of this is deterring biotech prospectors from panning for gold. The upside to successful drug discovery is still a hefty nugget, which may lead, for example, to a partnership with a wealthy Big Pharma company such as Pfizer or Merck. It’s also a platform from which to launch an initial public offering (IPO) and become a validated discovery company. With that comes the opportunity to grow from a $100 million firm dependent on venture funding to a $1 billion company that funds other firms. All it takes are massive doses of innovation and . . . patience.

“The biotech industry is all about innovation,” says Joe Panetta, CEO of the local trade group Biocom. “If you look at where San Diego sits on the innovation landscape, we’re number one. [This is] not based on size or age of the industry, but on some sophisticated statistical work done by the Santa Monica–based Milken Institute to compare the 12 biotech clusters in the country.”

Biocom evaluates two broad factors. One is the “bio technology innovation pipeline,” infrastructure that allows a metropolitan area to capitalize on its biotech knowledge and creativity, such as the quality of its workforce and number of research and development dollars it receives. The other is “current impact assessment,” an area’s success in bringing ideas to the marketplace and creating companies, jobs and products. The Milken group assigned San Diego the highest score in its Biotech Index.
1. San Diego (100)
2. Boston (95.1)
3. Raleigh–Durham–Chapel Hill (92.5)
4. San Jose (87.8)
5. Seattle–Bellevue–Everett (83.8)
6. Washington, D.C. (79.4)
7. Philadelphia (76.5)
8. San Francisco (75.8)
9. Oakland (74.3)
10. Los Angeles–Long Beach (66.5)
11. Orange County, CA (54.1)
12. Austin–San Marcos, TX (47.8)

Part of San Diego’s advantage lies in its academic and research community, including the University of California, San Diego; the Scripps Research Institute; the Jonas Salk Institute for Biological Studies; and the Burnham Institute for Research Studies.

Historically, our biotech industry has produced winners such as Hybritech, which created the PSA test for prostate cancer; Idec Pharmaceuticals (now Biogen Idec), which created Rituxan, a treatment for non-Hodgkins lymphoma; Agouron, which pioneered Viracept, for treatment of HIV/AIDS; and Gen-Probe, whose diagnostic tests screen 80 percent of the nation’s blood supply for sexually transmitted diseases. More recently, Amylin Pharmaceuticals received FDA approval for its drugs Symlin and Byetta, two of the first new treatments for diabetes in decades.