CA hopes to help ailing biotech firms with long-term strategic plan

MENLO PARK — As dwindling venture capital financing and competition from other regions stalls growth in biotechnology’s birthplace, the state is taking steps to create a strategic plan to keep the Bay Area in the forefront of the industry.

By Tim Simmers, Oakland Tribune BUSINESS WRITER

Gov. Gray Davis’ administration held a working summit Tuesday aimed at paving the way for more innovators to discover more cures and rejuvenate the local sector’s economy.

"We’ve been stalled in the nuclear winter of finance," said Brian Cunningham, president and chief executive officer of South San Francisco-based Rigel Pharmaceuticals in his keynote address. "The industry has cut back, had to lay off some workers and many companies have seen their stock fall below the $1 barrier."

The half-day summit at SRI International attracted more than 200 leading private and public sector stakeholders to discuss strategies for attracting life science and biotechnology companies, while several U.S. regions and other nations try to lure local companies away.

The high cost of housing and business taxes, declining schools and long commutes loomed as big problems facing Bay Area biotech companies. So did shrinking financing from the venture capital industry, and red tape in turning intellectual property researched at local universities into commercial projects. Those problems could keep the Bay Area from delivering cures and innovative new treatments, said business leaders, who broke into working groups to help find solutions.

States such as Michigan, North Carolina and Massachusetts are aggressively pushing to attract biotech firms to build a cluster of companies that rivals the hundreds that now exist in the greater Bay Area.

Taiwan just committed more than $70 billion to build a biotech cluster of companies for that country. San Diego is another growing biotechnology region that threatens to attract local companies.

"We want to take the advantages of the Bay Area and maintain its competitive edge as other regions and states encroach on the industry," said Robert E. Oakes, director of Gov. Davis’ San Francisco regional office. "We have our work cut out for us to guarantee the future of Silicon Valley in life science and biotechnology."

Oakes added that the state’s technology, trade and commerce agency recently noticed that the Bay Area was the only region in the state experiencing negative economic growth. State officials decided to target biotechnology to boost the region’s economy.

The governor’s group hopes to deliver a 10-year strategic plan to spur innovation and ensure the future of California and the Bay Area’s life sciences industry, which began more than 25 years ago with the founding of Genentech in South San Francisco.

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