GEN begins an exploration of many of the world’s top biotech hubs. We’ve labeled the series Biotech around the World. The first article begins on the U.S. West Coast, talking with local execs about what makes their region special.
Innovation isn’t based on geography. There are many bastions of innovation throughout the world, each with their own advantages and pressures. During the coming year, GEN plans to look at some of these regions through the eyes of some of the executives who live and work there.
We start on the U.S. West Coast, checking in with Judy Chou, PhD, president and CEO of Altru Bio in San Francisco; James Brown, DVM, president and CEO of DURECT, in Cupertino (Silicon Valley); A.J. Bergmann, CFO at Capricor Therapeutics in San Diego; and Andrew Scharenberg, MD, cofounder and CEO of Umoja Biopharma in Seattle. Responses have been edited for clarity and conciseness.
GEN: What is the greatest innovation coming out of your region?
Chou: One of the Bay area’s standout contributions is in the realm of biologics, particularly recombinant antibody therapies for hemophilia, cancer, and autoimmune disease… offering targeted treatments with fewer side effects.
Our region also has spearheaded the discovery of novel targets to combat various cancers, such as HER2 and VEGF, which paved the way for more effective and tailored treatments that are reshaping the landscape of cancer therapy.
More recently, Bay Area innovators are incorporating AI into drug discovery and development. This innovation leverages key talent across both the high tech and biotech industries, positioning our region as a leader in this field.
Brown: Numerous groundbreaking discoveries in life sciences have emanated from the Silicon Valley/San Francisco Bay area, including Genentech’s pioneering work in developing recombinant DNA technology and the involvement of Stanford University and the University of California (UC) Berkeley in the Human Genome Project and in the development of checkpoint inhibitors. Stanford’s leadership in stem cell research has positioned it at the forefront of regenerative medicine exploration, and the transformative gene-editing technique CRISPR-Cas9 was honed and refined by UC Berkeley researchers.
Concurrently, biotech companies are crafting RNA-based interventions targeting disease-causing genes. The ALZA Corporation, now part of Johnson & Johnson, spearheaded innovations in drug delivery…to optimize drug absorption and facilitate the targeted distribution to precise tissues. In this vein, enterprises like DURECT are actively harnessing the potential of epigenetic therapies to access conditions lacking effective treatment avenues.
Bergmann: San Diego continues to accelerate innovation in biologic medicines, including cell and gene therapies. Capricor Therapeutics, for instance, is developing cell and exosome-based technologies to treat or prevent a broad range of diseases.
Scharenberg: The Pacific Northwest is a hub of ground-breaking discoveries for cell and gene therapies. What started at the Fred Hutchinson Cancer Center decades ago has grown into a wide array of cell and gene therapy programs from discovery through FDA-approved treatments. The range of work includes discovering novel CAR T drug targets and innovative delivery mechanisms, pushing these therapies into new applications in and beyond oncology, and broadening overall access to these treatments.
For example, we at Umoja are excited about the patient outcomes associated with the earliest generation of CAR T cell therapies despite significant limitations in access, reach, and cost. We have built a scientific platform that aims to create CAR T cells directly in the patient’s body.
GEN: The greater Bay area, San Diego, and Seattle are known, historically, for their livability, mild climates, and vibrant business ecosystems. What is it about your region that makes life sciences companies want to set up shop and stay there?
Chou: The Bay Area’s appeal lies in its thriving ecosystem, where talent, entrepreneurship, and innovation converge. The renowned universities, research institutions, and diverse industries here create a dynamic talent pool spanning disciplines like biology, engineering, and data science.
Home to tech giants and large pharma, the region’s legacy of experienced biotech entrepreneurs fosters a supportive ecosystem for startups and established biotechs (both public and private) with collaborative networks and mentoring opportunities.
San Francisco also is home to the J.P. Morgan Healthcare Conference (the industry’s largest investor conference) as well as Biotech Showcase. These two bring together innovative leaders and companies from around the world to connect, partner and invest. Known as the “Birthplace of Biotechnology,” the Bay Area is the first city in the U.S. that planned for biotech growth, establishing the resources and infrastructure needed for success and to drive further drive economic growth.
Brown: Silicon Valley and the Bay area host three prestigious universities/medical schools—UC San Francisco, UC Berkeley, and Stanford—renowned for cutting-edge life science research. These institutions foster innovation through collaborative partnerships between universities and biotech firms.
The region’s venture capital network additionally fuels innovation, creating an ideal ecosystem to translate basic science into revolutionary medicines. Graduates, venture firms, and businesses have fueled innovative startups, including giants like Genentech/Roche, Chiron/Novartis, ALZA/J&J, DNAX/Merck, Syntex/Roche, Gilead and BioMarin.
Bergmann: In San Diego, leading research institutes such as the Salk Institute, Scripps, and the University of California-San Diego were founded in close proximity to each other and the Pacific Ocean. Researchers and students flooded the shores, attracted by first-rate resources and emerging opportunities. Shortly after, a tidal wave of capital and executive expertise rushed in to build and sustain the now-thriving ecosystem. Biotech companies continue to emerge and grow, expanding economic value, access to investors and skill workers, and the cultural vitality of the region.
Scharenberg: Even as the life science research in the Pacific Northwest has matured and young biopharma companies have been acquired, a spirit of innovation in the cell and gene therapy space has persisted. The hothouse of early-stage biotechnology companies here is fueled by innovators from our universities and medical centers. The accumulated knowledge and expertise make Seattle and the broader region attractive for high-impact talent to relocate and join the same causes.
GEN: What are some of the biggest business challenges for your region, and how do you overcome them?
Chou: One of the most substantial challenges we face in the Bay Area is the cost of conducting business, particularly the soaring expenses associated with real estate. The competitive landscape of this region, known for its robust business environment, is coupled with a high cost of living that extends to office spaces and facilities. (Redfin reports the median home price in San Francisco was $1.3 million in July, down 8.2 percent year-over-year.)
AltruBio has tackled this hurdle through an innovative approach—adopting a hybrid working style. By strategically blending remote work opportunities with physical office presence, we strike a balance that minimizes our real estate footprint while still retaining the ability to attract and retain top-tier talent, both locally and from outside the Bay Area. This approach enables us to navigate the financial complexities of the region, ensuring operational efficiency without compromising our ability to access a diverse and skilled workforce.
Brown: The primary hurdle for operating a start-up biotech firm in Silicon Valley is the high cost of living, which historically deters potential hires and prompts existing staff to consider leaving. (Redfin reports Cupertino’s median home price for July 2023 is $2.9 million, up 9.2 percent over last year.) A secondary challenge involves luring experienced ex-FDA regulatory professionals to relocate from established lives to the West Coast.
However, the pandemic-induced remote work trend has broadened hiring horizons, allowing companies to onboard remote employees beyond the region. This shift has alleviated pressure from the aforementioned challenges while attracting a more extensive talent pool. For instance, at DURECT, our chief financial officer (CFO), head of regulatory, and chief medical officer (CMO) reside outside the region.
Bergmann: To secure more business, specifically biotech business, civic leaders agreed to relax some of San Diego’s rigid regulations surrounding construction, permits, and zoning. However, in parallel with the booming life science industry, the cost of living and rent have skyrocketed. (Redfin reports the median home price in San Diego was $901,000, in July, up three percent from the previous year.) Also, the once-affordable, relatively accessible, lab space has become a scarcity.
Scharenberg: While the Pacific Northwest is a hub for cell and gene therapy innovation, we are not yet at the same level as the broader biotechnology ecosystem. The largest biotech hubs such as Cambridge, Massachusetts, or San Francisco, California, comprise technology-agnostic healthcare innovation ecosystems that are constantly creating scientific knowledge and expertise, along with two other key ingredients for sustained innovation: capital and executive expertise.
Seattle and the greater Pacific Northwest are making great strides in the latter two areas, but we are not yet on the same scale as Cambridge and San Francisco. Thus, we must be creative in how we gain access to talent. That includes being open to second locations, remote work flexibility and offering relocation assistance where certain capabilities or specialties are in high demand. (For a housing comparison, Redfin reports downtown Seattle’s median home price is $595,000 in July, down 4.8 percent year-over-year.)
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