91.1 F
San Fernando
Friday, Jul 19, 2024

Cluster Effect

What images come to mind when one thinks of the local economy? For some, perhaps it’s the fields and furrows of the produce farms in Ventura County; for others, maybe it’s Santa Clarita’s movie ranches, or the dozens of IT and business services firms crammed into strip malls and office buildings across the San Fernando Valley. Less analogous is the life sciences industry – apart from Amgen Inc., of course, the pacesetter on the Business Journal’s annual list of the region’s biggest bioscience companies. Yet the momentum among the firms that comprise this year’s rankings suggest that might be about to change. Just look at the advances made by Sylmar-based Second Sight Medical Products, No. 16 on the list beginning on the next page. Last year, the company – whose products restore limited sight to some blind people – expanded its reach overseas with the first international procedure involving the implantation of its prosthetic retina, called the Argus II, and has launched clinical trials for a cortical implant that have will have much broader indications. Achievements like these will happen more and more frequently as word spreads about the bioscience cluster in this area, said Dina Lozofsky, executive director of the L.A. offices of San Diego-based trade group Biocom. “People don’t know about L.A. in terms of the biosciences,” Lozofsky said. “We’re raising awareness to bring the talent in, become more of a cluster and also network with each other.” Challenges The Valley area faces some significant barriers to becoming the next San Diego or San Francisco. Those areas have more established bioscience communities and have long relationships with investors. “A lot of what we’re seeing is that companies are relocating either specific functions or the entire business outside of the region,” said Matthew Fienup, executive director of the Center for Economic Forecasting at California Lutheran University in Thousand Oaks. Still, the Valley area has a good and growing roster of bioscience companies. Besides Amgen, the cluster in Ventura County includes No. 23 Sienna Biopharmaceuticals Inc. and the research and development facilities of No. 14 Atara Biotherapeutics in Westlake Village, among others. Amgen has downsized in the region over the past few years. Between 2016 and 2017, it decreased its workforce by a little more than 200 employees, according to data provided by the company. Some of those jobs included workers relocated from Amgen’s headquarters in Thousand Oaks to its new, $25 million plant in Tampa, Fla., where it has 450 employees. “Amgen was founded in Thousand Oaks in 1980 on the frontier of biotechnology research,” company representative Kristen Davis said in an email. “We still believe that Ventura County is the ideal location offering proximity to leading research, a growing hub of biotech innovation, and providing our staff a great place to work and live.” Though the Bureau of Economic Analysis lumps industry figures for the biosciences in with nondurable manufacturing, Fienup noted, one can infer through other data sources that roughly 60 percent of the output for that category is attributable to life science companies. Firms in this sector are designated as “chemical” manufacturers by the bureau, Fienup explained; employment in this category has declined by 1,700 in the past decade. Despite decreasing its footprint, Amgen continues to be the area’s largest employer. Nearly three-quarters of the 7,400 jobs in chemical manufacturing sector are at Amgen. “Amgen is still a cornerstone of the regional economy,” Fienup said. “It’s one of the greatest sources of growth, innovation and upward mobility for residents here.” Besides, when Amgen lays off workers, the intellectual talent that the company sheds often wants to remain here, said Brent Reinke, a lawyer with the Musick, Peeler and Garrett law firm in Westlake Village, who specializes in the biotech field. It was a mass layoff at the company in 2008 that gave him the idea to start the Bioscience Alliance, a nonprofit to help boost the growth of a life science cluster in the Valley area. “I looked at it from perspective of glass half full: that much intellectual talent coming out of the company all at once,” Reinke said. “(I thought), let’s take talent that lives in the area and has been either voluntarily or involuntarily forced out of the company and build something.” The price of housing has not been of great concern for Sienna Biopharmaceuticals in Westlake Village, which added 10 employees this year and recently expanded its executive team to add Caroline Van Hove as chief commercial officer, in addition to rehiring John Smither as chief financial officer. The cost of living is cheaper in Ventura County than it is in the areas surrounding other local biotech cluster locations, such as Santa Monica, and the quality of schools in the region make it attractive for families, Chief Executive Dr. Frederick Beddingfield III said. “While, perhaps, smaller than some areas such as San Francisco and Boston, we’re seeing strong stability in the region,” Beddingfield said. The company also benefits from being able to recruit from both larger biotech firms as well as start-ups, he added. Room to Grow A similar phenomenon to the proliferation of companies around Amgen has sparked the rise of a biotechnology cluster in Santa Clarita, where the growth revolves around the technology and talent that started with the work of late scientist and billionaire philanthropist Al Mann, who also started the Valencia-based Al Mann Foundation for medical device research. No. 24 MannKind Corp. and Second Sight were both founded by Mann; No. 3 Medtronic Diabetics acquired Mann’s Northridge-based company Minimed in 2001, and No. 6 Boston Scientific Neuromodulation Corp. was established in Valencia following its acquisition of spine stimulation technology developed by No. 7 Advanced Bionics Corp., which manufactures cochlear implants. “I think the roots of especially the medical device cluster here comes from Al Mann-related companies and the research done by the Al Mann Foundation,” Holly Schroeder, executive director of the Santa Clarita Valley Economic Development Corp, explained. “That led to a number of spin-off companies in various incarnations.” Some of the talent that came out of Mann’s companies has gone on to work for companies like Boston Scientific or have started their own firms, Schroeder said. This next generation of firms is helping the region become more established in the life sciences as it attracts new talent, she added. “This next generation of startups is a good sign for the strength of the cluster,” Schroeder said. “That’s a very beneficial thing.” Despite the growth of the region’s life science cluster, the process to becoming a bona fide hub will be long, she added. Companies in the life sciences take longer than other tech firms to grow on account of Food and Drug Administration regulations and the need for immense capital, she noted. “The process to take (a product) through clinical trials to something approved by the FDA is very lengthy, and very expensive,” Schroeder said. While a software startup can get its product off the ground in months or even weeks, pharmaceutical and medical device companies can expect as long as a decade before they have a viable product ready for the market, she added. Yet as more investor capital flows into the region, more bioscience firms will be able to afford to endure the lengthy process, Biocom’s Lozofsky said. For many years, investors were hesitant to put money into the area’s bioscience firms simply because they did not consider the area an industry hub, she noted. “It takes more convincing for them to come here and talk to our companies, and investors here in L.A. haven’t necessarily engaged as much with biotech as much as other industries,” Lozofsky said. That’s changing now not only due to the success of spin-offs from Amgen and the work of Al Mann, but also the movement of biotech-oriented incubators into the region, she said. Lab Launch Inc.’s Chatsworth offices and the Ventura Biocenter in Thousand Oaks give scientists a place for research and development. “The growth of this activity will mean that more companies can stay in our area,” she said. As they do, the region’s reputation as a bioscience center will grow – along with money from investors. More facilities to push along innovation are on the way, the Bioscience Alliance’s Reinke said. One of his initiatives at the organization is to build what he would like to dub the “Gold Coast Bio Center,” a Thousand Oaks-based accelerator for bioscience companies. “You build it and they shall come,” Reinke said. “I really believe there’s some truth to that.”

Featured Articles

Related Articles