Is Bay Area Biotech in Trouble?

One of the key biotech research concentrations in the US may be in trouble. The pharmaceutical and biotech industry is (at first glance) scattered all over the country. Some of the scatter, though, is due to a few large outliers (like Eli Lilly in Indianapolis), or to a background sprinkling of many small and often short-lived companies that emerge from nearby universities.



The largest R&D clusters are well-known: Big Pharma, for example, has a number of sites stretching up from around Philadelphia, through New Jersey, and up into parts of Connecticut. In Massachusetts, Cambridge, Boston, and the surrounding area form an intensely active zone of their own - intense enough that some of the big New Jersey players (like Novartis) have moved their drug discovery operations up to be part of it. And in the west, San Diego has a persistent (although much smaller) startup culture, while, thanks to Genentech and others, the area around San Francisco is known as the ancestral homeland of the entire biotech industry.

But that's where the trouble is. The Bay Area has shown what looks like a net stagnation (or even contraction) of R&D jobs in biotech over the last few years, and the current downturn is not helping at all. The recent acquisition of Genentech itself by Hoffman-LaRoche (Big Pharma if ever there was) also has people worried. Roche was content for many years to own a bit over half of Genentech and to let the company largely go its own way. Now that they have the whole thing, they keep saying that they'll do things just as before - but opinion's very much divided on whether they can stick to that promise. The track record of large (and heavily managed) companies keeping alternate research cultures alive is not good.

The usual option is for researchers to jump to another company if thing start going badly. And that's actually a good way to measure the health of the local research culture: is there anywhere for people to go? Some research sites are monocultures: when Pfizer closed its research operations in Michigan (Ann Arbor and Kalamazoo, inherited from their earlier acquisitions), there were very few options for the scientists there. Nothing in the area could soak up more than a small fraction of the R&D staff that were being asked to leave or relocate. On the other hand, the assumption around Boston has always been that there must be somewhere around the area to go when you have to jump ship. Although at the moment things are rather tight, in past years a person could sometimes switch jobs and not even change parking spots.

But Roche seems to have been counting on many Genentech people having nowhere else to look, and they may have had a point. Vacancy rates for life sciences real estate have been climbing - the existing companies are in no mood to expand, and it's not like the funding environment is making it easy to start new ones to fill the space. This period is going to cut a notch into the population chart of startup companies everywhere, of course. But the flip side of asking "Is there anywhere else to go?" is "If I start a company, will I be able to find good people around here?" That's what keeps an R&D cluster going - but there's no law that says it has to go on forever. We have to hope that the conditions pressing on the industry now won't be enough to disable some of the most productive research environments in the world. It wasn't easy to create them, but getting them back would be even harder.

Presented by

Derek Lowe

Derek Lowe is a drug discovery chemist with 20 years of experience in the pharmaceutical industry, which is still very much his day job. He's worked on projects targeted at Alzheimer's, cancer, diabetes, infectious diseases, and other areas, but like most discovery scientists in the business, he has yet to produce a marketed drug. Explaining how and why this happens is what led to the launch of his blog, "In the Pipeline", in 2002, and the explaining continues. . .

Never Tell People How Old They Look

Age discrimination affects us all. Who cares about youth? James Hamblin turns to his colleague Jeffrey Goldberg for advice.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

Never Tell People How Old They Look

Age discrimination affects us all. James Hamblin turns to a colleague for advice.

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

Video

Pittsburgh: 'Better Than You Thought'

How Steel City became a bikeable, walkable paradise

Video

A Four-Dimensional Tour of Boston

In this groundbreaking video, time moves at multiple speeds within a single frame.

Video

Who Made Pop Music So Repetitive? You Did.

If pop music is too homogenous, that's because listeners want it that way.

More in Business

Just In