The life sciences cluster of the Valley region has picked up significant momentum in the last decade, but still has room to grow before it reaches the level of business seen in the country’s larger hubs.
Brent Reinke is the founder and chairman of Westlake Village-based BioScience Alliance, an organization focused on growing and connecting the life science industry in the Conejo Valley. He recalled the lengths that the industry has traveled to get where it is today, noting the initial difficulty of convincing venture capitalists about the region’s business viability.
Even though a biotech giant was in the making at Amgen Inc., the lack of an expanded life science community with companies of different sizes made things difficult for employees and companies like Amgen, according to Reinke.
“Folks at Amgen, I think, would certainly admit it was difficult for them to attract and retain people because if you came to Amgen 10 years ago, if there was a rift, if you got laid off, if you quit for whatever reason, for the most part, you’d be forced to leave,” Reinke said.
Despite challenges, opportunities for the local industry began to spring up through the success of Amgen and Kythera Biopharmaceuticals, the latter of which was acquired in 2015 by Allergan for $2.1 billion. The growth gave rise to well-experienced employees seeking to start their own businesses or join others, and proof to venture capitalists and scientists that large-scale success could be obtained in the region.
Employment ecosystem
Nowadays, Amgen is near several life science companies that act as a security blanket for employees should they have to depart the biotech company. Such an employment landscape serves Amgen according to Reinke, who said that it may now be easier for the company to recruit because employees know there are other options.
“It’s an interesting dynamic, and it’s part of what happens when you have a cluster like this,” Reinke said. “The reality is companies pilfer from one another but that’s just part of the ecosystem. There are challenges to it, but there are also benefits from it.”
A significant lack of wet lab space is a more recent issue that the local industry has had to navigate, according to Reinke, who said that the challenge has only been relatively addressed.
Dr. Sean Harper, managing director of life science venture capital firm Westlake Village BioPartners wrote in an email that prior to his firm’s founding in 2018, there was an inconsistent rate of new company formations to support the development of the infrastructure needed to support small biotech companies, such as lab incubator space. Westlake Village BioPartners is also led by veteran venture capitalist Beth Seidenberg and has been involved in some of the largest funding rounds of local life science companies, such as a $250 million round of Series B financing completed alongside Matrix Capital Management and Surveyor Capital.
“This presented a big challenge to startup biotech (companies), in that they would have to invest time and significant capital building this space themselves,” he added. “Since Westlake was founded, companies such as Alexandria Realty have entered the ecosystem and have built such facilities with more to come.”
Alexandria has contributed life science office and laboratory space to some of the country’s powerhouse life science clusters, such as the San Francisco Bay area and Boston.
More efforts are being made to prioritize lab space in the Valley region. For example, Agoura Hills Business Park recently sold in an off-market transaction for $29.7 million to a joint venture between Harbor Associates and Gemdale USA.
“A portion of the property has been successfully converted into lab space, which plays well into our bullish view on the growing life science demand in this emerging submarket,” Gemdale Executive Director and Head of Acquisitions Tim Nguyen said in a statement. “Despite the Covid-19 headwinds, Harbor has increased occupancy to 94 percent by attracting the life science groups who have been actively expanding in the Conejo Valley.”
Government ‘vision’
Immpact Bio Chief Executive Dr. Sumant Ramachandra has noticed an increase in biotech-centric construction on his drives from West Hills to Thousand Oaks, developments that he said are necessary for companies like Immpact that need specialized facilities, not just traditional office space.
Immpact is a clinical stage company that specializes in CAR T-cell platforms used for oncological therapies. The Camarillo company announced $111 million in Series B Financing this January.
Ramachandra said that for the local life science ecosystem and its companies to grow, it needs a number of things in addition to lab space.
“First, you must have the type of workers who are going to be able to do this type of high-skilled work, whether it’s at a CEO level, or someone at a manufacturing level because the biotech industry is heavily regulated,” Ramachandra said. “And you need people who are really committed to that level of quality and regulations to make it successful.”
It has been challenging for Immpact to find the right talent due to a partial need for technical in-person work that involves working with patient cells that eventually go back to patients after being transformed and purified in a facility, according to Ramachandra.
“There may not be enough people (to choose from) if employees need to be able to physically come into work and perform their duties daily versus people who can work in a virtual or hybrid environment.”
A strong science and technology background, as well as collaborations with universities and other companies is needed for more local companies to succeed, according to Ramachandra. Immpact’s treatments are based on research from University of California – Los Angeles and the Migal-Galilee Research Institute in Israel.
Ramachandra added that having the ability to develop ideas through incubators is also important, as is the presence of venture capital firms like Westlake Village Biopartners, a point echoed by Reinke and Harper.
One factor that will impact the growth of local life science companies is outside of their direct control — city and state governments.
“Having the right vision at the government level becomes really important, because then changes could come in the form of local functions like job fairs, for example,” Ramachandra said. “Those give opportunities for people to apply to several companies and then choose the best one that matches their interest and what they want to do.”
Arcutis Biotherapeutics Chief Executive Frank Watanabe said that operating his company in California has been a challenge.
“We’re overregulated and overtaxed. There are many reasons why a company would think about leaving California,” Watanabe said. “Fortunately, there are reasons for people and companies to stay too, but I think that Sacramento is not doing itself any favors by continuing to make California a not terribly business friendly environment.”
Arcutis in Westlake Village, which ranks No. 21 on the Business Journal’s list of Bioscience Companies, is on the cusp of launching its first product, a topical cream for psoriasis. Its shares closed at $20.78 on April 6.
Watanabe added that independent commercial companies such as Arcutis and MannKind Corp. are important to local life science growth, as are large firms such as Amgen, a view shared by Harper at Westlake Village BioPartners. “Those of us who watched the development of biotech hubs such as Cambridge Massachusetts, and the San Francisco Bay Area saw that both companies that remain independent and those that are acquired by larger biopharma companies are important to the growth of such hubs,” Harper wrote. “The acquiring companies often need the expertise and people in the acquired company, so that talent tends to stay in the local ecosystem. Oftentimes, the acquiring company will invest significantly in hiring and expansion, further bolstering the local ecosystem.”