Biotech industry faces challenges

January 10, 2008 7:38:24 PM PST
Medical breakthroughs are being made as a result of the Bay Area's biotechnology industry, as it continues to be a bright spot in our local economy -- creating jobs and amazing new drugs.

But how well can it withstand the recession that may be coming?

The Bay Area is now home to nearly 1,400 biotech companies, and the number is growing at a rate of one new company every 10 days to two weeks.

The growth is the result of an appetite by investors willing to put money into years of research to come up with new, bio-engineered drugs.

"What we're seeing right now is continued investment, and we estimate in the next five to 10 years that another $50 to $100 billion dollars will be spent in the industry," said BayBio president Matthew Gardner.

However, biotech could be bracing itself for a recession this year. Daniel Welch is president & CEO of Intermune, a Brisbane company with 125 employees. It is developing therapies for lung disease and for Hepatitis-C viral infections.

"Biotechnology is already a risky business, and in the face of recession, compounds that risk. Through past recessions, venture capital continues to flow albeit somewhat less, but certainly it does threaten to decrease the growth of the industry," said Intermune President and CEO Daniel Welch, M.B.A.

Bay Area biotech companies created 6,000 new jobs last year. That brings the total to 90,000 employees, who make an average wage of $68,000.

That's $6 billion in payroll.

"Fortunately in San Mateo County, we've had an industry like the bioscience community that's provided us that strength, that foundation, over the past few years. We hope that can sustain us," said San Mateo County supervisor Jerry Hill.

Leaders of BayBio, the biotech industry group, say future growth and success will depend on support from Sacramento in the form of tax breaks and a better educated work force.

BayBio also hopes to get help from the federal level, more funding for the National Institute of Health and the National Science Foundation and more staffing for the Food & Drug Administration -- which handles approval of new biotech therapies.