California Dreaming - Pharmaceutical Executive

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California Dreaming


Pharmaceutical Executive


Are We There Yet?

To get to the center of the action, head north from downtown San Diego and travel 15 minutes up the coast. You'll reach the town of La Jolla ("the jewel" in Spanish), a small coastal town that classic crime writer Raymond Chandler, a onetime resident, dubbed "a place for geriatrics." But no more. Now stylish shoppers stroll in and out of the Rodeo Drive-like shops along Main Street, while down along the scenic cove, perfectly fit young people engage in all manner of physical activity. The breakers are thick with round-the-clock surfers. The only remotely sedentary residents are the seals, scores of them, basking on the sand.

A little further up the coast is an area called Torry Pines Mesa. There, amid acres of rugged coastline, canyons, and hillsides framed by lush landscaping, sit the stylish granite and glass buildings that house hundreds of biotech companies. All around them, like covered wagons circling a campfire, are the cluster's research institutions: the University of California at San Diego (UCSD), the Scripps Research Institute, the Burnham Institute, and the Salk Institute for Biological Studies, whose breathtaking building, designed by Louis Kahn, perches high above the Pacific.

It's these centers of science, of course, that made the biotech cluster possible. First came the Scripps Institution of Oceanography (SIO), founded in 1903 as the Marine Biological Association of San Diego. In the 1950s, it was joined by The Scripps Research Institute (TSRI). But the real push toward life sciences came in 1960, when TSRI hired a team of immunologists from the University of Pittsburgh led by Frank Dixon, and immediately became a force in bioscience. The city then donated 27 oceanfront acres for the Salk Institute, and the area finally got a full-fledged research university, USCD.

The ground had been prepared—all that was needed was the seed. That was planted in 1978, when Howard Birndorf and Ivor Royston, researchers who'd been lured to UCSD from Stanford, incorporated Hybritech, a startup to pursue monoclonal antibody technology. Even before Hybritech was acquired by Lilly in 1986, it began spawning new companies, as Birndorf and other staff left to start enterprises of their own. In 2003, the San Diego Chronicle counted more than 50 Hybritech offspring, including such firms as IDEC, Ligand, and Amylin. (This brief history is drawn from "America's Biotech and Life Science Clusters: San Diego's Position and Economic Contributions," available online at http://www.milkeninstitute.org/.)

The growth went on until 12 to 15 years ago, when "Pharma began to notice San Diego," according to Joe Panetta, head of Biocom, the region's biotech trade association. Along with another key organization—the nonprofit Connect—Biocom is glue that, in large part, holds the cluster together.

"Johnson & Johnson built their research facility around that time," says Panetta. "Not long after that, Novartis came and built [what is] now Novartis Genomics Institute. Lilly made some significant investments, including Amylin and Applied Molecular Evolution. Merck bought Sibia Neurosciences about six years ago, and built up a sizeable research group before they had to scale back. And of course there's Pfizer. They've made a major commitment."

But to support the growth of new companies, you need money. Panetta has spent the past several years encouraging venture capital to come to San Diego. "Instead of simply saying, 'Why don't you pick up and move here lock, stock, and barrel?' we'd say, 'Why don't you create an office here?'"

As an added incentive, BioCom opened a suite of offices for investors upstairs at its headquarters. "Ed Torres from Lilly Ventures is out here frequently," says Panetta. "He's got an office back in Indianapolis, and he has an office upstairs. We've got folks up there from all over the place who are affiliated with VC firms outside of San Diego. They spend a significant amount of time here, looking for opportunities to invest."

As Panetta looks around the country, he sees many areas attempting to stimulate economic development by creating biotech zones. To the Biocom head, though, there's no substitute for three decades of market-driven evolution.

"There are a lot of regions that are trying to fast-track the creation of a biotech cluster. You can try. You can create the semblance of a biotech cluster by pulling all the different elements together. But it took 30 years to build this [infrastructure]—30 years of people who've had experience running companies in the venture world and stayed here."


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