Bay Area faces biotech competition

A group of biotechnology insiders issued a dire warning Thursday, saying that other states and countries were pillaging Northern California of its talent and potential products due to an environment not in tune with the struggles of a growing industry.

BayBio, a biotechnology industry association, released its 2008 impact report warning legislators not to become “complacent” with the current growth and wealth associated with the booming industry.

The biotech industry — founded in the 1970s and centered in the Bay Area — employs 90,000 people in Northern California and accounts for more than $6 billion in wages, according to BayBio.

But according to the report, the industry faces four key challenges: access to money, recruiting, planned growth and attracting investment.

BayBio President Matt Gardner encouraged lawmakers to create corporate tax incentives for major investments in the state, a tax amnesty for capital gains from life-sciences investments and incentives for local communities to zone biotech regions during planning.

“We’re already missing some opportunities; it’s a question of how longwe let this go on,” Gardner said at a morning conference held at Hotel Nikko.

Dan Welch, the chief executive officer of Brisbane-based biotech company InterMune, said he was concerned about the next 30 years of biotech in Northern California because “other states have better offers.”

“It’s not the companies will leave lock, stock and barrel,” Welch said. “It’s that their growth may take place elsewhere.”

As for recruiting new employees into the Bay Area, Welch said InterMune “doesn’t even try” anymore because of the high cost of living here and the shock to new recruits. “In my experience, we don’t even try and recruit from outside the Bay Area,” Welch said.

San Mateo County Supervisor Jerry Hill took in the presentation and called biotechnology the “bedrock” of San Mateo County’s economy, which is home to industry giants including Genentech and Amgen of South San Francisco.

“We have to continue to incentivize the risk” in order to reap any benefits, Hill said.

San Francisco is poised to absorb some of the industry’s growth with a biotech campus in Mission Bay, as well as planned life science building developments in The City’s Eastern neighborhoods and 2 million square feet of biotech building space planned out at Hunters Point, said Michael Cohen, director of the Mayor’s Office of Economic and Workforce Development.

“We’re very focused on making sure there’s growth for this industry in San Francisco,” Cohen said.

Biotech industry at a glance

» 90,000 employees in Northern California

» More than $6 billion in wages

» Average wage: $68,000

» 6,000 new jobs in last year

» Average time for Federal Drug Administration approval of a new drug: 14 years

» Average cost for development of a new drug: $800 million

Source: BayBio

dsmith@examiner.com

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