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Thursday, Mar 28, 2024

Biotech Companies Not Looking to Locate in L.A.

Lack of dedicated research areas and venture capital funding hampers the growth of biotech and life sciences companies in the Los Angeles area, industry officials said at a conference addressing the industry’s direction. While areas outside of the city proper, such as Thousand Oaks home to Amgen and the Santa Clarita Valley have attracted multiple companies, more needs to be done, said Alfred Mann, the CEO of MannKind Corp., a Valencia-based pharmaceutical firm developing drugs to treat diabetes and cancer. “It’s something we need to do in the city center,” said Mann, who serves as chairman of the Southern California Biomedical Council. The BizBio Conference at the Millennium Biltmore Hotel was the twentieth such event organized by multiple organizations to discuss the importance of a billion-dollar industry that brings thousands of high-paying jobs to the state. It is an industry that shouldn’t be taken for granted because there are other states and countries more than happy to lure away the companies and employees. “These companies open the door to real cures for HIV, cancer, diabetes and coronary diseases,” said Billy Tauzin, a former congressman now heading PhRMA, the lobbying organization for the life science industry. “When these cures are eventually found, my guess is they will be found here in a lab in California.” While San Francisco and San Diego excel at grouping like-minded biotech and medical device companies into clusters, Los Angeles finds itself at a disadvantage in that its biotech companies are spread out. Clusters create synergy between companies and create a sense of comfort among the scientists working there who know if they lose their job there is a company across the street they can go to. A biotech corridor is proposed in East Los Angeles near the USC Medical Center and the USC Health Sciences Campus. City officials outlined during the conference that it will work to create housing in that area and improve the infrastructure as incentives for companies to locate there. Lack of venture capital was also cited as a reason for why Los Angeles lags behind other areas of the state in attracting more biotech companies. Even with $1.5 billion poured into the Los Angeles area, it was still considerably less than the $7 billion received by Silicon Valley companies. In recent years, venture capitalists spent one-third of their money on biomedicine, with 47 percent of that being spent in California, Tauzin said. Amgen has its own venture capital arm that puts money into start-ups as acknowledgement of how much research takes place outside of Amgen’s labs, said Jay Hagan, managing director of Amgen Ventures. Kythera Biopharmaceuticals, Inc. in Calabasas, a maker of dermatological products is among the companies funded by Amgen Ventures. President and CEO Keith Leonard was previously general manager for Amgen Europe. Unlike, say, Genentech, the biomed giant in San Francisco, Amgen has not had many employees who leave to strike out on their own, Hagan said. “We’re a big company,” Hagan said. “It takes a while to get to the point where they decide to do something more entrepreneurial.” But for one observer of the biotech scene, the major drawback to Southern California isn’t the lack of research clusters or minimal venture capital. “Housing prices are the biggest deterrent,” said Robert Patti, who brings new clients from the San Fernando Valley to California Manufacturing Technology Consultants, a not-for-profit consulting organization. Indeed, panelists during the conference addressed the stiff competition California faces when it comes to biotech. North Carolina, for example, is particularly aggressive to bring companies to its research triangle through tax incentives and an available labor pool. Labor studies by big pharmaceutical companies do not point west but to North Carolina, Georgia and Virginia, said one speaker. “There are so many other areas people can go for jobs,” Patti said.

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