August 9, 2016
By Leah Cannon, PhD | Click here to view at Life Science Network
We recently sat down with California Life Sciences Association
(CLSA) President & CEO Sara Radcliffe to learn more about the organization’s mission and the health and trajectory of the life sciences industry in California.
What does CLSA do?
The CLSA is the public policy and business solutions organization representing California’s statewide life sciences innovation community. We are laser-focused on bolstering life sciences research, investment and innovation in California by developing and advocating for effective national, state and local public policies, supporting entrepreneurs and providing business solutions. We advocate, innovate and connect on behalf of the sector.
With offices and experienced professionals in Sacramento, Washington D.C., South San Francisco and San Diego, CLSA brings industry, academia and other life sciences stakeholders together to directly engage our state legislature, the Administration, our 55-member congressional delegation, local elected officials and other policymakers and key opinion leaders to promote and protect California’s life sciences innovation ecosystem. Our broad membership up and down the state includes: biotechnology, pharmaceutical, medical device, and diagnostics companies, research universities and institutes, investors and service providers.
How does the number of life science companies in California break down in terms of company size and pharma vs biotech? Out of the 2,848 life science companies that call California home, 1,662 work in medical device and medical equipment manufacturing and 1,186 represent biotechnology and pharmaceutical companies. While this includes leading California-based corporations such as Amgen, Genentech, Gilead Sciences and Edwards Lifesciences, it also includes many non-California-based companies heavily invested in the state, such as Boston Scientific, Johnson & Johnson, Medtronic and Pfizer. Notably, across both biotech and medical devices, the vast majority of companies are small, entrepreneurial, privately held start-up firms.
Californian life science companies employ over 281,000 people and generate around $130B in revenue. Why is the California life science industry so strong?
California is the world’s most successful life sciences economy for a number of reasons. World-class research universities and research institutes such as our UC and CSU systems, Stanford, USC, City of Hope, Cedars Sinai and Sanford-Burnham-Prebys Medical Discovery Institute, lead the way. California is also known for its risk-taking life sciences entrepreneurs and investors that fuel and drive the innovations of tomorrow. Add in the third leg of the stool – the leading multinational companies headquartered or with R&D or manufacturing operations in California – and you have an ecosystem that very few other states or countries can match.
Californian universities and academic institutions awarded the most doctorates (6,200) and the most life science doctorates (1,314) in 2014 of any U.S. state. California also has more universities in the Shanghai Index of the Top 100 schools and received more NIH funding in 2014 than any other state. How much do you think high quality education drives the economic success of the Californian life sciences industry?
Historically, California’s strong biomedical enterprise stems from an equally strong academic and non-profit research infrastructure. The state fuels its life sciences engine with some of the world’s most prestigious universities and independent research institutes. These organizations are the fuel that feeds a high percentage of California’s life sciences innovation, as well as providing a well-educated, highly motivated work force.
California continues to dominate the nation in academic achievement. In 2013, academic institutions in the state awarded 4,966 doctorates to young scientists and engineers. By contrast, the second highest state, New York, awarded 2,985.
However, this intellectual achievement is not an end in itself, but rather a means towards an end. This standing reflects an outstanding educational system that attracts brilliant minds from around the world. Many of these scientists move on to work in academic labs and industry. This intellectual firepower translates into innovative science, which attracts federal grant money. In 2014, California labs were awarded 7,328 grants totaling $3.3B from the NIH, driving cutting-edge research.
How can Californian companies attract more funding?
CLSA is working with industry and state, local and federal policymakers to increase research and education funding, streamline regulation, adjust the tax code and deliver other changes that will make it easier for our entrepreneurs to move new ideas forward and ultimately attract more funding.
What is the breakdown of VC vs Angel vs grants vs other funding in the Californian life science industry?
While we don’t have an official breakdown available, we do know: • In labs throughout the state, California’s academic researchers attract billions of dollars in grants from the NIH and other entities. o In 2015, Californian institutions received more than 7,328 awards/grants, totaling $3.3B – a 15 percent share of all NIH grants distributed. o Among Californian institutions UCSF, UCSD and Stanford lead the pack, bringing in a combined $1.31 billion of NIH funding. • In 2015, California attracted just over 50 percent more life sciences VC investment ($4.79B) than Massachusetts ($2.37B), the 2nd biggest attractor of life sciences VC investment and nearly 100 percent more than the 10th biggest state, Connecticut ($183M). • California’s $4.7B in life science investment is a sharp increase from the $3.6B the state’s entrepreneurs received in 2014. o This increase was reflected in all stages of company development: seed, early, expansion and later stage. By contrast, seed stage investments declined in the nation as a whole in 2015. o In 2015, funding was attributed: ▪ Seed Stage: $190M for biotech; $14M for medical devices ▪ Early Stage: $2.16B for biotech; $320M for medical devices ▪ Expansion Stage: $316M for biotech; $381M for medical devices ▪ Later Stage: $888M for biotech; $522M for medical devices
How can life science companies work to decrease costs?
The competitive U.S. marketplace helps to control costs while encouraging the development of new treatments and cures. Generally, there is competition from another brand in less than two years. Clinical and real-world data, along with consultation with payers, physicians and patients, are all at the core of pricing considerations. Since the main buyers of the drugs are private insurance plans and the government, pricing decisions do not generally consider an individual’s purchasing power.
California’s life sciences sector is committed to delivering high value to patients and the healthcare system. The new treatments our sector develops save lives, benefitting patients, the healthcare system and our overall economy. For example, in the early 1990s, AIDS was a death sentence. However, innovative new medicines – highly active antiretroviral therapies known as HAART – changed the landscape, transforming a deadly disease into a chronic, highly manageable condition. The transformation was stunning. In 1990, HIV/AIDS was the seventh leading cause of death in the U.S. By 2010, it had fallen to 23rd. In 1995, the death rate was 16.2 per 100,000; by 2010 it was 2.6. In addition, from 1996 – 2010, HAART led to a $615B net economic benefit (after the cost of treatment). HAART’s ultimate dollar value in lives saved has been enormous; its emotional value is incalculable.
Our members are also working hard to develop and pursue new, innovative financing and payment models to bring savings to the system, such as value-based contracting, including through direct engagement with insurers and others.
Do you think pharma, biotech and academia are becoming more integrated and collaborative?
Absolutely. Today, academic-industrial partnerships are part of an integrated development strategy for any of the world’s top pharmaceutical and biotechnology companies and a growing number of academic institutions. Learning institutions and private companies guide, shape and in many instances help fund faculty, develop curricula and provide hands-on training.
Where do you think the biggest successes will be in the Californian life sciences industry in 2016 and beyond?
While we consider all aspects of California’s life science industry to be interesting, perhaps the most compelling fields for us are the digital health and precision/personalized medicine sectors. We’re proud to say that California is leading the way in both of these burgeoning fields. Additionally, we’re also witnessing a convergence with the life science industry with computer science, data science and engineering. With more high-tech companies, like Google, investing in life sciences, we anticipate seeing collaborations between the tech sector and pharmaceutical and medical device companies.
We’re excited by the progress we’ve made, and it’s clear that we’ve come a long way over the past decade. It’s important that each of us in California’s life science sector take stewardship of the sector, encouraging connections and advocating for our shared success.
Click here to view at Life Science Network.
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