San Diego ranks third on the list of top life sciences clusters in the United States, but the industry saw volatility in the first half of the year, with stocks that surged and then slumped. The first half of 2014 in the San Diego tech scene was filled with some welcome financial news and a call to arms for the startup community.
Biotech stocks have had a bumpy ride so far in 2014. After surging at the start of the year, biotech stocks have become volatile amid concerns about the cost of the drugs that they’re developing. Doug Regnier, who heads Ernst & Young’s initial public offering operations along the West Coast, said over the long-haul that’s probably good for the companies, since the shareholders now tend to be long-term investors familiar with the market.
BIO International Convention
After a six-year hiatus, the BIO International Convention returned to San Diego in June, bringing with it more than 15,000 people, $56.3 million in economic benefits, big names and national attention.
This year’s four-day conference at the San Diego Convention Center featured keynote speakers Hillary Clinton and Sir Richard Branson. Branson urged attendees to save the world from the effects of climate change. He called on companies to enter the field while plugging his Virgin Earth Challenge, which offers $25 million to whoever finds an environmentally sustainable and economically viable way to remove greenhouse gases from the atmosphere.
Mergers and acquisitions
Early this year Dassault Systemes, a French 3-D design software company, bought San Diego-based Accelrys, a life science software maker, for about $750 million to gain access to its software for managing scientific data.
In February, scientific equipment maker Thermo Fisher Scientific completed its purchase of rival Life Technologies for $13.6 billion, plus the assumption of $1.5 billion in net debt.
Health care products maker Mallinckrodt completed in March its $1.21 billion purchase of San Diego-based Cadence Pharmaceuticals.
Seragon Pharmaceuticals, a closely held company based in San Diego that develops drugs for cancers that resist estrogen deprivation therapy, is being purchased by Genentech for up to $1.7 billion. Genentech, a subsidiary of the Swiss-based Roche Group, said it will pay $725 million upfront in cash.
--By Jennifer Chung Klam. Klam is a San Diego-based freelance writer.
VC money picks up
After a down year in 2013, the first six months of 2014 started off on a better foot for venture capital funding and fundraising, both nationally and in San Diego. Bobby Franklin, president and CEO of the National Venture Capital Association, said the firms he heard from were expecting VC fundraising to be nearer the $20 billion mark in 2014 than the $16 billion level of 2013. The PricewaterhouseCoopers MoneyTree Report showed that VC investment in San Diego companies hit nearly $243 million in the first quarter of 2014, up from $203 million year over year.
Focus on Startups
A renewed and invigorated focus on growing San Diego’s startup community dominated many tech discussions. Makers Quarter -- an open plot with plans to be developed into a hub for startups downtown -- is still in the works. The IDEA District in East Village has a similar goal of uniting the new companies spinning out of San Diego and providing support and services in one location. The third Plug and Play pitch event in May saw five local startups receive $25,000 as well as a spot at Sunnyvale’s EXPO, and the first half of 2014 concluded with the second annual Startup Week from June 17 to 21.
Unmanned aerial vehicles -- drones -- made headlines in the first half of 2014 as their commercial use came closer to reality. UAVs have been used for military and government purposes for years, but are illegal for any commercial purpose under Federal Aviation Administration regulations. The agency is expected to release its preliminary commercial regulations in September 2015, and companies are gearing up for their introduction into the airspace. San Diego is primed to take a leading role in this industry as it is already home to a large number of drone manufacturers across the defense and commercial spectrum.
-Compiled by Katherine Connor, The Daily Transcript