Members Push Merger of 2 California Life Sciences Industry Groups

Xconomy San Diego — 

The move to combine two nonprofits that are dedicated to advancing California’s life sciences interests was set in motion 11 months ago, when CEO David Gollaher resigned from the San Diego-based California Healthcare Institute (CHI).

Gollaher’s departure from the public policy group he co-founded in 1993 created an opening to assess whether it made sense to merge CHI with BayBio, the life sciences industry group based in South San Francisco, according to OncoMed Pharmaceuticals chairman and CEO Paul Hastings, who is on the boards of both CHI and BayBio.

“We’ve been hearing from our members for some time that in order for us to be competitive that we need to speak with one voice,” Hastings said. “The way one should run a trade organization is to understand what its membership needs are.”

In a statement yesterday, BayBio and CHI said they have signed a letter of intent to combine their operations into a newly created organization, the California Biomedical Innovation Alliance (CBI), in a merger to be completed by the end of March.

Sara Radcliffe

Sara Radcliffe

In addition to a new identity, the consolidated group will be headed by a new CEO—Sara Radcliffe, the executive vice president for health at the Washington, D.C.-based Biotechnology Industry Organization (BIO). She will begin her new job in January.

In the statement, CHI chairman and Theravance BioPharma chairman and CEO Rick Winningham, says, “The merger of CHI and BayBio will create the strongest possible organization, capable of advocating for policies that support innovation and enable the success of our member organizations, as well as the growth of the life sciences sector within California.”

After CHI’s Gollaher resigned to join Foster City, CA-based Gilead Sciences, Hastings said BayBio and CHI formed a joint committee to evaluate a merger, with three members appointed from each group’s board. BayBio and CHI both wield considerable klout in California’s life sciences industry and beyond. Both boards include prominent industry CEOs and high-ranking pharmaceutical executives, venture capital partners, lawyers, and accounting firm partners.

Todd Gillenwater, a public policy expert who was serving as CHI’s interim president and CEO, will move to Washington D.C. to take on a larger role for CBI in global policy, advocacy, and communications.

But there was no clear role in the statement for Gail Maderis, who has led BayBio since 2009. Hastings said a CBI integration team led by Radcliffe would determine whether there is a place for Maderis in the combined organization, along with other BayBio and CHI staffers.

When I sent an email to Maderis, inquiring about her plans, CymaBay Therapeutics Hal Van Wart, who is chairman of BayBio and will serve as CBI’s vice chairman, responded, saying Maderis had forwarded my query “per the communication plan that the CBI Steering Committee put in place.”

Van Wart added: “Gail has been a highly valued and effective CEO for BayBio and we will be addressing her role in the near future. The merger is still at the Letter of Intent stage and we intend to have the integration team lead by Sara Radcliffe sort out the best roles for everyone going forward. Sara does not start until early January. So, there is nothing further to report at this time.”

Hastings also said the joint committee that has been overseeing the merger has not yet determined where CBI’s new headquarters would be. The group plans to maintain offices in San Diego, South San Francisco, and Sacramento, as well as Washington, D.C., he said.

CHI currently currently has 11 staffers and a $3.4 million budget. BayBio has 16 staffers and a $3.2 million budget. Dues-paying members support both organizations, and many life sciences companies and service providers belong to both, including OncoMed Pharmaceuticals, Hastings said.

Both nonprofits have “relatively lean organizations,” Hastings said, but their operations overlap in many ways, and the joint steering committee sees an opportunity to combine “the best of both organizations” to create an industry group with a stronger statewide presence and that would operate more effectively with an estimated budget of roughly $6 million.

Joanna Schulman, the founder and managing partner of San Francisco-based Thallo Bioscience Advisors, said she belongs to both CHI and BayBio, and considers the proposed consolidation as logical. “The two organizations have been very thoughtful about what the advantages would be in combining forces,” Schulman said. “There have always been questions about all these organizations in California, and wouldn’t it be better if they were consolidated.”

It’s unclear, though, what ramifications, if any the merger poses for Biocom, the regional life sciences industry group based in San Diego. “Up here in the Bay Area, we have had very little contact with Biocom,” Schulman said. She added that the various regional industry groups have been “cannibalizing” support from each other.

Biocom CEO Joe Panetta offered his view of the merger in an email yesterday.

“This strengthens BayBio and CHI in Northern CA,” he wrote. “We have certain partnerships with BayBio, e.g. CalBio [an annual conference organized jointly by Biocom and BayBio] and the BIO convention that we hope to continue. We’re still growing, added over 125 members this year, with more than 650 members at year end. We opened a DC office that has been a great success for our SoCal members. We believe that strength lies in regional representation… and is uniquely characteristic of this life science cluster.”