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very nicely accommodate both Novo’s existing Seattle diabetes group as well as their newly announced obesity program, but they will probably stay in South Lake Union. Another idea is to convert this large space into a biotech incubator, although this seems a bit problematic. Seattle already has a small biotech incubator (Accelerator’s 18,000 square-foot facility) and it would be difficult to fill the relatively humongous Helix facility (750,000 square feet), although a portion of it could be used for that purpose. Janssen, the biotech arm of Johnson & Johnson, has set up large biotech incubators in Boston and San Diego, and it recently announced the development of a new 30,000 square-foot facility for South San Francisco that could house up to 50 startups. A large building housing many companies could help generate the mixing of people and ideas that are important in helping shape the growth and development of new biotech companies.
Could the Helix site become home to the area’s largest biotech company, Seattle Genetics (NASDAQ: SGEN)? The campus could comfortably fit all of its current employees (almost 700) with lots of room to grow. If Seattle Genetics did take the space, though, it would simply open up a big hole in Bothell, WA, its current location. Given how expensive it is to build out laboratory space, it would be nice if the Helix facility stayed a focal point for the local biotech community. I’d hate to see the buildings torn down and the property converted into a hotel for passengers using the nearby cruise ship terminal. Filling a space this large will not be easy, and much of the value, of course, resides in the waterfront property itself.
Successful Biotech Hubs Are Built on History
San Francisco has managed to grow as a major biotech hub without having lab groups from Eli Lilly, GlaxoSmithKline, AstraZeneca, Novartis, Merck, J&J, or Sanofi. Some of these companies don’t need to have a direct presence in the area because they have subsidiaries in the region (e.g. AstraZeneca’s Medimmune unit is located in several cities just south of San Francisco). What the Bay Area does have, of course, is Roche’s Genentech group, branches of Pfizer and Bristol-Myers Squibb, UCSF, and a strongly developed, academia-based incubator program, QB3, among its assets. Similarly, Boston’s biotech hub survives without Lilly, AstraZeneca, J&J, Bayer Healthcare, and Roche. But it does have branches of Pfizer, GSK, Novartis, Sanofi, and Bristol-Myers Squibb, along with a number of successful large biotechs, well-funded startups, and a large number of academic powerhouses.
One component that stands out to me is the historical continuity of early biotech companies in each city. Genentech helped launch the biotech revolution in South San Francisco, as did Biogen Idec (NASDAQ: BIIB) and Vertex Pharmaceuticals (NASDAQ: VRTX) in Boston. All three grew to be economic dynamos that were built on foundations of scientific excellence. Immunex might have joined this group but for the fact that it ran into serious manufacturing bottlenecks for its breakthrough rheumatoid arthritis drug etanercept, and that helped seal its fate. Seattle has no surviving biotechs from the 80s, and only four that I can identify from the 90s: CTI BioPharma (created in 1991), Omeros (started in 1994), Seattle Genetics (founded in 1998), and Dendreon (launched in California in 1992, and then relocated to Seattle in 1998). All are currently marketing their own drugs, although Dendreon and CTI face some serious financial headwinds that put their future prospects in doubt. The lesson seems clear: to thrive in this business, it is a good idea to grow big early and expand on your initial successes.
I never thought much about it when I moved here in the mid 80s, but over the years I’ve heard repeatedly from different quarters that recruiting people to Seattle is difficult because of our relative geographic isolation in the upper left corner of the country. Boeing made that same kind of argument (the need for a more centralized location) when it moved its corporate headquarters to Chicago in 2001 after some 85 years in Seattle. Whether our location really impedes Big Pharma companies from setting up outposts here is unknown, but there’s no way to alter this geographical reality.
The closure of the local Amgen facilities brings into sharp focus a number of the challenging issues that face our local biotech community. Tomorrow, in the third and final part of this article, I’ll review some of the other important questions facing U.S. biomedical research, compare our state’s funding of biotech initiatives to several others, and pose a series of questions that can be used to help guide us forward in crafting a workable plan to reinvigorate biotech in Seattle.