Birthplace of biotech
California has four of the top ten biotech clusters in the US – the San Francisco Bay Area being the biggest in the state and second in size in the US only to the Boston/Cambridge cluster situated in Massachusetts.1 Not long ago San Francisco was rated number one and is keen to restore that position; Genentech, often described as the world’s first biotech company, was incorporated in the city in 1976. There had been biotech research undertaken before this time but this event is generally regarded as the beginning of the biotech industry.
Thereafter, things progressed rapidly with the company leasing a 10,000 sq. ft property two years later in what is now DNA Way in South San Francisco. In the same year Genentech cloned human insulin which it subsequently licenced to Eli Lilly. In 1979 it also cloned human growth hormone. Other biotech companies followed, notably Gilead in 1987.2 Today, with Genentech having been absorbed by Roche in 2009, the top ten biotechs in terms of revenue in the Bay Area include Gilead at number one followed by Biomarin, Nektar, Exelixis, Pharmacyclics, Fibrogen, Principia, Ultragengx, Five Prime Therapeutics and Rigel.3
Not just a biotech centre but a tech centre too!
The San Francisco based biotech cluster is situated in the Bay Area about 15 minutes away from the bustling centre of the city and includes over 200 companies with some involvement in biotech.4 Sometimes referred to as Biotech Bay, it offers much to biotech companies that are thinking of locating there.5
One unique strength is having Silicon Valley as a neighbour, particularly as we live at a time when there is an ever-growing fusion between technology (especially AI and machine learning) and healthcare6. In this respect, it is notable that Tim Cook, CEO of Apple observed ‘I think there will be a day when we look back and say Apple’s greatest contribution to mankind has been in healthcare’.7 For biotechs today, proximity to Silicon Valley can mean significant opportunities for cooperation as well as access to a huge pool of tech talent and increased availability of funding.
Another highly relevant strength is the availability of life sciences talent and the proximity to major academic institutions such as the University of California, San Francisco and Stanford. With the pandemic boosting demand for lab space, the approval of 5 million square feet of new R&D real estate in the area, much of which is under construction, is another important consideration.5 There are also obvious lifestyle attractions provided by the iconic city itself, Napa Valley, great beaches and access to skiing.
With its heritage, location and forward-looking mindset the Bay Area is optimistic about the future and the possibility of regaining its position as the foremost biotech cluster in the US. That said, it is an expensive place to live and work; as with its rival in Massachusetts it is faced with competition from other parts of the US where costs are typically lower. There are now significant clusters evolving in many areas of the country – ranked by size these include New York/New Jersey, The BioHealth Capital Region (Maryland, Virginia, Washington), San Diego, Los Angeles, Great Philadelphia, Seattle, Raleigh-Durham and Chicagoland.1 There is no room for complacency for San Francisco or any other centre but all hope to prosper from the post-pandemic biotech boom.
- Philipiddis A. Top 10 US Biopharma Clusters. Genetic Engineering and Biotechnology News. 2021
- Leuty R. A quick history of the biotech industry. San Francisco Business Times. 2016
- DeClue S. The top 10 Biotech Bay Companies by revenue. Biospace. 2019
- Wilson M. How many biotech companies are in the Bay Area? Restaurant – Norman.com. 2020
- Newpoff L. Bankers share what makes a good life sciences real estate opportunity in Biotech Bay. San Francisco Business Times. 2022
- Gourevitch A et al. Deep Tech and the Great Wave of Innovation. Boston Consulting group. 2022
- Wolff J. The Bio-Boom: Building a biotech company in Silicon Valley. Probe Magazine. 2019