Bay Area biotech shows resiliency
SAN FRANCISCO (KGO) -- The world's biotech business is focused on San Francisco as companies and investors gather for the annual JP Morgan Health Conference. A Bay Area trade group put out its annual report Wednesday on an industry worth $50 billion to California's economy.
BayBio, Northern California's biotech industry association, says California is the world's most productive life sciences research center, and so far, it's staying on top despite the battered economy.
"We have not seen necessarily the same pace of slowdown that we have in other parts of the country in the industry. So the industry here seems to be maybe not perfectly counter-cyclical, but resilient even in the down economy," said BayBio's Matthew Gardner.
Biotech is a high-risk business where the average product requires 14 years and a billion dollars of investment before it is released.
Pierre Cassigneul is president and CEO of Brisbane-based XDX where scientists are working in the cutting-edge area of personalized medicine, instead of a blockbuster drug to treat everyone suffering the same disease, using DNA to help identify the best medicine for each patient.
"To basically individualize, personalize the treatment both in terms of who the patient is, what the form of the disease and the timing as well," said Cassigneul.
Cassignuel's company has relied entirely on venture capital funding, something harder and harder to get.
BayBio says in 2007 Northern California biotech companies received about $2.6 billion dollars in venture capital investment. The first three quarters of 2008 show that pace off a bit at $2.1 billion.
However, Hoyoung Huh's Brisbane-based cancer drug company BiPar Sciences just this week raised $20 million in venture capital.
"The money is there for supporting innovation, but the selectivity is much higher, so investors are being much more selective and taking a longer period of time to decide on an investment," said Huh.
In addition to funding, the state's biotech industry is worried that the budget crunch will hurt education and that someday there might not be enough qualified scientists in California to do the work.
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