Biotech companies enter new era with more products; NORTHERN CALIFORNIA AT THE CENTER OF U.S. INDUSTRY
BYLINE: Steve Johnson, Mercury News
With about 300 medical products on the market and nearly 400 more in late-stage tests, Northern California biotechnology companies are on the cusp of a commercial explosion, according to a report by the industry group BayBio.
But competition from other states and countries where it is cheaper to operate with fewer government regulations could woo many local companies elsewhere, according to several experts who unveiled the report Tuesday.
``We are starting to see part of a brain drain'' of Bay Area biotechnology talent heading to Singapore, China, India and other nations, warned Dr. Daniel Perez, a BayBio board member and venture partner with Bay City Capital, a San Francisco investment firm.
``That is what's alarming.''
The report includes data from 900 life science companies from Santa Barbara to Sacramento, although most of the businesses are in the Bay Area. About 60 percent of the companies have fewer than 50 employees and many continue to struggle financially. Nonetheless, the industry is quickly evolving into a commercial powerhouse, the report concluded.
The region's biotech firms already boast 288 treatments and other products now on the market and another 395 products are in late-stage studies, the report said.
Among the products undergoing advanced tests are 169 potential treatments for cancer, 51 for central nervous-system ailments, 35 for infectious diseases, 28 for respiratory difficulties and 27 for cardiovascular problems.
The region has attracted many new companies because of its top-notch universities, venture capital sources and entrepreneurial spirit, said Pierre Cassigneul, chief executive of XDx, a South San Francisco firm that makes products for monitoring immune systems.
``Northern California is a magnet,'' he said. ``If you want to go into biotech, there is no better place in the world.''
But developing those products hasn't been easy. The report said it takes 14 years and costs $800 million to get a typical medicine approved by the U.S. Food and Drug Administration. Moreover, biotech executives -- who tend to struggle for years before making a profit -- often feel overwhelmed by government regulations.
BayBio's president, Matthew Gardner, said elected officials are beginning to understand the unique needs of biotech companies and are starting to pass legislation to help the industry.
``There is a great spirt of collaboration at the moment, especially in Sacramento,'' he said.
Nonetheless, he and others at the report's presentation said the government must do more to help the industry thrive.
Given the enormous obstacles facing biotech companies that are bringing products to market, said Perez, ``sometimes you think you are better off playing the lottery than doing this.''
Contact Steve Johnson at sjohnson@mercurynews.com or (408) 920-5043.