While San Diego’s biotechnology engine is home to 550 companies, has some 40,000 workers and has a $9.2 billion impact on the local economy, a report said it might not be getting the fuel it needs.
“In review, the San Diego life sciences industry in 2010 was a blend of positive and negative that produced a mixed bag of results,” Jones Lang LaSalle (NYSE: JLL) wrote. “Venture capital investment, the life-blood of the region’s life sciences industry, began 2010 coming off of a strong fourth quarter of 2009, which saw $178 million invested into local industry.
This surge, however, did not last long as the first quarter of 2010 posted an investment amount of only $81 million.”
The report added that the second quarter was the only one last year in which more than the region’s historical quarterly average of $127 million was received by the biotechs.
In the meantime, big companies such as Life Technologies, Illumina and Nuvasive experienced healthy growth and added to their employment base last year.
Offsetting the positive news was Biogen Idec’s (Nasdaq: BIIB) announcement in November that it would be closing its entire San Diego facility in the Nobel Corporate Center in UTC and would be taking 325 workers with it. The good news here is Illumina (Nasdaq: ILMN) has backfilled the 470,000-square-foot space.
Among smaller companies, biotech start-up firms accounted for 35 percent of all technology start-ups last year here.
Although some 184 local biotech companies were helped last November with a total of $67 million in federal grants to get them going, the venture capital funds remain the mothers’ milk of the industry.
This isn’t to say there weren’t venture capital investments. Several firms received some sizable amounts during the fourth quarter of last year.
aTyr Pharma was provided with $23.05 million for early stage trials on biologic drugs based on Physiocrines. Physiocrines are natural human proteins designed to provide therapies for a wide range of blood, muscular and vascular disorders.
Genomatica, which creates sustainable chemicals, received $21.25 million for late stage trials.
Aires Pharmaceutical, which develops therapies for pulmonary conditions, received $20 million in funds for early stage trials.
Ceregene garnered $11.5 million for later stage trials of drugs designed to treat Parkinson’s and Alzheimer’s diseases.
Each of the remaining recipients received less than $7 million for their experimentation during the fourth quarter.
As some companies were working through trials, other biotechs were filing for an initial public offering.
After relatively no activity in 2008 and 200, where the two years combined only witnessed four biotech firms going public, 2010 recorded somewhat of a revival with 14 companies entering the public markets.