October 15, 2008 > Union City hosts third annual biotechnology symposium
Union City hosts third annual biotechnology symposium
By Simon Wong
Representatives of biotechnology firms from throughout the Bay Area attended the third Union City Annual Biotechnology Symposium at the Crowne Plaza Hotel on October 2, 2008. Keynote speeches were given by Matthew Gardner (President/CEO, BayBio), Melinda Richter (CEO, San Jose Bio Center), and Gilbert Ahrens (Venture Capital Relations, JP Morgan).
Gardner presented an overview of biotechnology, its growth and impact on the Northern Californian economy and Richter discussed start-ups, the economic and social worth of life sciences and the outlook for the future. Ahrens reviewed financing and a venture capitalist's perspective of what constitutes a good biotech investment.
The young industry is beginning to mature after thirty years. In Northern California, the life sciences industry currently has 250,000 direct and indirect employees. The Bay Area is the only region in the world that has four major research universities - UCSF, UC Berkeley, UC Davis and Stanford - each receiving annual research funding in excess of $500 million. Philanthropy accounts for a large proportion, more so in California than elsewhere in the US.
Multi-nationals have decided their US-presence will be in the Bay Area and Cambridge, MA. Large pharmas find the innovation of start-up firms, including those in Union City, attractive. Northern California, with 492 products in Phase II and Phase III clinical trials, is more productive than other biotech centers in the United States and outperforms most of Western Europe. California, as a whole, is a world leader.
National Institutes of Health (NIH) grant funding for basic research has reached a plateau and could be problematic for new-company formation in the next five years. An Initial Public Offering (IPO) is no longer a viable way of raising finance to complete product development. Consequently, there are more partnerships with large pharma companies or other biotechs to generate revenue and more intangible asset financing to secure advanced royalties. Aggregate funding for the life sciences industry peaked in 2001; since then the flow of funds has been slower.
Venture capital (VC) has been reasonably constant, finding its way to major biotech centers at home and abroad. Good ideas are funded regardless of economic conditions. Cancer and infectious disease are the largest areas of research in this region. JP Morgan is one of the main sources of VC funding for life sciences. 34 percent of US VC firms are located in Northern California.
Besides additional NIH funding, continued growth and success depends on several factors:
Education must include biotech training programs for the next generation of biotechnology workers. CalState East Bay and Ohlone College are playing a key role. Professional development leads to economic development.
A Silicon Valley branch of the Patent Office can reduce a five-year backlog of applications. Similarly, the FDA takes two years to review and approve final test data. Shortening this timeline will lower costs and make drugs more affordable.
Communication between companies and local government is essential to understand the needs, objectives, available resources and how to overcome any difficulties.
The Union City Annual Biotech Symposium was created as Union City's Economic Development Director Christine Friday recognized the need to attract different industries to the City. She noted, "The presence of the life sciences industry is of mutual benefit for the City and for biotech companies. We are centrally located. We have the assets to offer them. The Symposium creates synergy, is a forum for the exchange of information and increases awareness of the industry's trends and issues."
"Union City is an excellent location, offers plenty of opportunity and has great access to the Peninsula and to Oakland. We have a BART station and shall have a world-class intermodal train station. There are many opportunities for site development and redevelopment," added Joan Malloy, Planning Manager, Union City.
"Union City is a great place to live and work because there is unanimity on the part of the residents and policy-makers, the City Council and Planning Commission, for growth of sectors that benefit the local economy, the community and the private and public sectors, said Mark Leonard, Economic and Community Development Director, Union City. "Union City welcomes growth and has tremendous opportunities linked to the transportation benefits that the Intermodal Project presents. This has attracted a lot of private investment and development to the area."