December 5th, 2004
When it comes to forecasting the potential of state-funded stem cell research to benefit San Diego’s entire community, I find myself thinking of another time in the region’s history when our citizens also used public assets for scientific endeavors. I think the following historical examples demonstrate how a community’s investment in research and technology can yield tremendous unforeseen benefits.
In 1960, two stars in their respective fields, polio vaccine developer Dr. Jonas Salk and famed architect Louis Kahn, went to the San Diego City Council to ask for a gift of land on the Torrey Pines Mesa. Their vision, supported by child health advocates at the March of Dimes, was a research center overlooking the Pacific that would be a beacon for scientists around the world. In June of that year, a special referendum was held where San Diegans voted to honor their request, and as a result, the city donated a 27-acre plot of land overlooking the Pacific.
By the turn of century, this area of San Diego had grown up to become the most densely concentrated area of life science research in the world, and the heart of the region’s vibrant biotech and medical device industry. Now there are more than a dozen academic research institutes in San Diego, and more than 500 life science companies, many of them located adjacent to the institutes on the bluffs of Torrey Pines.
Innovative San Diego researchers have perfected the biotech business model, in which an enterprising, entrepreneurial professor or scientist licenses an idea or technology from academia, secures private investment from the venture capital community, and develops a product or therapy that helps patients.
The statistics attached to the biotech industry that was created on the Mesa are staggering. According to the Chamber of Commerce, employment at life science companies has doubled since 1993 to more than 36,000 in 2003. Biotechnology is the largest technology cluster in San Diego, with more employees than either telecommunications or defense. The Milken Institute, which this summer named San Diego the top biotech cluster in the nation, estimates that the life science industry in San Diego is responsible for $5.8 billion of the region’s gross product.
But numbers alone do not adequately describe how researchers in San Diego’s biotech industry have changed the face of health care over the last 30 years.
The first treatment for any patient now diagnosed with indolent non-Hodgkin’s lymphoma, a devastating blood-born cancer, is Rituxan, a first-of-its kind drug developed in San Diego by Idec Pharmaceuticals. Idec last year merged with Boston-based Biogen to become Biogen Idec, the third largest biotech company in the world, now with 1,100 local employees at two new facilities.
Just last week, Biogen Idec, working with Elan, another firm with a large presence in San Diego, received FDA approval for another first-of-its kind treatment for multiple sclerosis that revolutionizes therapy for this debilitating disease and offers new hope for hundreds of thousands of people. The drug, called Tysabri, works so well that the FDA moved it through the approval process in record time to get it into the hands of patients as soon as possible.
There are countless other examples of how researchers in San Diego are successfully transforming academic science into successful, life-saving products. Viracept, one of a new class of drugs that helps control HIV infections, was developed at Agouron Pharmaceuticals, which is now part of Pfizer La Jolla, the fourth largest of all of Pfizer’s drug discovery and development sites worldwide. Some 1,500 scientists and support staff on Torrey Pines are researching viruses like AIDS, SARS and hepatitis, as well as diabetes, cancer and diseases of the eye like glaucoma or macular degeneration.
How is this all tied to stem cell research and its future in San Diego? It is simple. Today’s basic research becomes tomorrow’s life-saving therapies.
Many scientists view stem cell research to be as significant of a technological advancement as early recombinant DNA work of the 1970s. The companies cited above and hundreds of others use this basic, core technology that has allowed the biotech industry to grow. We must always move forward with any promising new technologies that offer the same kind of potential.
Just as public assets in the form of land put into use for scientific research in the 1960s helped make our biotech industry what it is today, $3 billion in public funding for stem cell research in California will fuel the innovations and therapies of tomorrow.
Some might view the funds to be provided by Proposition 71 as a giveaway to the biotech industry. That couldn’t be further from the truth.
The reason we need public funding of this research is because there are first so many elemental questions to be answered about how to harness the potential of stem cells, and the only way to answer them is to do the basic research. Typically, this form of research is not conducted by the biotech industry, but by research institutes and universities under grants issued by the National Institutes of Health.
Conducting applied research to develop stem cell therapies will require private investment from venture capitalists. There is a basic rule of venture capital investment in biotech that for every dollar of public funding that goes into basic research, ten more dollars of private funding are required to develop that idea or technology into a product.
As San Diegans work to transform basic stem cell research into products, there is now no doubt that more of those venture dollars will flow into San Diego. According to figures from Ernst & Young, venture investment in San Diego’s health care industry was $521 million in 2003, and well past that in the first three quarters of 2004. Already, we have seen two of the three largest biotech companies in the world set up venture funds in San Diego; the passage of Proposition 71 means that even more private investment and high-paying jobs will come to our region to start new biotech companies.
While the economic impact of stem cell research in San Diego is hard to estimate, using past models of the life science industry we can make some projections about the potential. The Milken Institute estimates that every life science job contributes 1.7 jobs to all other sectors, and every dollar of output produced by the life science sector generates another $1.10 beyond it. The state can expect licensees of stem cell technology to offset costs associated with the initiative – as an example, technologies licensed out of UCSD alone generated $17 million in 2002 for the university.
Californians overwhelmingly voted for Proposition 71 because we all support investment in public research. And we all know people who suffer from Alzheimer’s, or diabetes, or Parkinson’s, or spinal cord injuries, or any of the 70 diseases and conditions that stem cell research has shown the potential to treat or cure. We all have hope for future cures in these diseases, and clearly, it is the biotechnology industry that will use private investment to develop this basic research into life-saving products.
Researchers in San Diego are well positioned to compete for the $300 million annually that will be doled out by the California Insitute for Regenerative Medicine. Using the traditional peer review model of scientists, a 29-member Independent Citizens Oversight Committee will ensure the best research gets funded, while avoiding conflicts of interest. UCSD, the Salk Institute and the Burnham Institute, which were active in getting the bill passed, have positions on the Independent Citizens Oversight Committee. With our city’s strong academic presence in this young field, we should enjoy the benefit of a substantial portion of the grant funding coming to San Diego.
Tonight, just across the road from where it all began in Torrey Pines, San Diego’s life science community will gather with the Consulate of Sweden to celebrate the lives and accomplishments of the 13 recipients of Nobel Prizes who have made San Diego their home. Joining us in the largest Nobel Laureate Dinner outside of the annual event in Stockholm will be ten young scientists and their teachers from high schools around the region who won an essay contest and will get their chance to meet some of the Nobel Laureates in attendance. It is my hope that one of those young scientists, or a researcher at one of our institutions, will utilize stem cells to develop cures and therapies for people around the world.
Panetta is president and chief executive officer of BIOCOM, a Southern California life sciences industry group.
By Joe Panetta