Making predictions can be a tricky business. Nevertheless, Xconomy recently brought together some of San Diego’s most prominent life sciences leaders to offer their vision for what the regional biotech cluster will be like in five years.
They broadly agreed that San Diego has proven itself as a great seedbed for life sciences startups. The list of recent buyouts includes Life Technologies ($13.6 billion), CareFusion ($14.4 billion), Receptos ($7 billion), Seragon Pharmaceuticals ($725 million), Aragon Pharmaceuticals ($1 billion), and Auspex Pharmaceuticals ($3.2 billion). Yet one central question arising from their discussion went largely unanswered: Are there specific steps this region can take to boost the life sciences ecosystem so that more seedling biotechs can become independent global giants and remain in San Diego?
Biocom CEO Joe Panetta set the stage in his opening remarks for San Diego Life Sciences 2022 by highlighting a few milestone events in the life sciences sector that occurred five years ago, including the sale of San Diego’s Amylin Pharmaceuticals for $7 billion.
Amid such fast-paced changes, Panetta posed a rhetorical question, “Where will San Diego be five years from now?” and some answers emerged from the ensuing discussion:
—Vividion Therapeutics CEO Diego Miralles said the economy has been expanding since 2009, but he questioned how long that would continue. “I guess the best advice I can give you is to raise as much money as you can right now,” Miralles said. “Be like the squirrel that keeps walnuts in the tree for winter. Winter is coming.”
—Halozyme CEO Helen Torley said the diversity of startups represents one of the strengths in San Diego’s life sciences community, and that’s reflected in the variety of diseases that companies are targeting, as well as the different mechanisms of action. “In San Diego, we avoid ‘group think,’” she said. Torley said she also intends to keep Halozyme in San Diego, and grow it into a global giant.
—Illumina senior vice president Susan Tousi, who oversees Illumina’s engineering, informatics, and product development, said, “Everybody will be sequenced in the not-too-distant future. With genomic information providing context, standards of heath care will shift and accelerate, and people will be able to monitor their wellness in real time.”
—Former aTyr CEO John Mendlein offered a dramatic example of two life-changing drugs that were developed by San Diego startups that were subsequently acquired and moved to Boston. Aurora Biosciences, now part of Vertex, initiated the development of ivacaftor (Kalydeco) for cystic fibrosis. Idec Pharmaceuticals, now part of Biogen, started work on rituximab (Rituxan) for use against non-Hodgkins lymphomas, other cancers, and many autoimmune diseases. U.S. sales now amount to more than $7 billion annually, and rituximab is on the World Health Organization’s list of essential drugs.
Mendlein’s point is that all the attendant benefits that derive from a blockbuster drug like rituximab are now flowing to Boston instead of San Diego.
—On the other hand, the capital requirements for moving a drug candidate through clinical trials and into commercialization can be overwhelming, according to Rich Heyman. As the CEO at Aragon and Seragon Pharmaceuticals, Heyman said he faced the challenge of raising hundreds of millions of dollars for clinical trials. From there, Heyman said, it would require hundreds of millions more to get to manufacturing, marketing, distribution, and other large-scale operations. Under such circumstances, Heyman said, establishing a strategic partnership with a big pharma like Johnson & Johnson makes a lot of sense.
The bottom line?
To build biotechs that strengthen a regional life sciences ecosystem, you really have to beat the odds.
Here at Xconomy, we’d like to thank the sponsors, whose support made San Diego Life Sciences 2022 possible, including our host and gold sponsor Alexandria Real Estate and reception sponsors BioBlocks and KPMG. We’d also like to say thanks to our audience, who engaged the speakers with their questions and ideas.