Biotech L.A. #3: Cultivating Biotech in Los Angeles

With its universities, Los Angeles graduates 20% more biotech students than any other university cluster, deploys an average total research expenditures deemed the second highest in the nation and has disclosed more inventions, spawned more start up companies than any other regional college group. However, post-university, Los Angeles ranks sixth out of eight major biotech regions in total venture capital investment and last -out of eight major biotech regions- in venture capital deals.

Cultivating a Vibrant Biotechnology Industry in Los Angeles

Cultivating a Vibrant Biotechnology Industry in Los Angeles

Cultivating a Vibrant Biotechnology Industry in Los Angeles

Cultivating a Vibrant Biotechnology Industry in Los Angeles

Los Angeles is home to an estimated 10 million people, the bustling center of a metropolitan region of 18 million people, the second largest by population in the United States. Los Angeles is also an international gateway, with high-volume ports and airports, and thriving industries that invite global investment. Aerospace, technology, fashion, entertainment, and research all continue to grow, create employment, and innovate in the region.

However, Los Angeles trails other regions with fewer top universities, less capital flowing, fewer philanthropic ventures, and less talent among new graduates in one industry: biotechnology.

A biotechnology hub that reflects the level of local talent and economic and social capital is well possible. The recent alignment of vision between the University of Southern California (USC) and private citizens focusing their generous philanthropy on scientific innovation in Los Angeles has started a movement.

Dr. Gary K. Michelson, through his eponymous Michelson Medical Research Foundation [MMRF], constructed the physical space on the USC campus in which engineers, scientists, and policymakers can work as an interdisciplinary team on the leading edge of society’s most pressing and complex medical needs. Dr. Michelson was joined in his generosity by Malcolm and Barbara Currie, creating the Michelson Center for Convergent Bioscience.

Biotech | Malcolm and Barbara Currie have donated $10 million toward the endowment of USC Keck School of Medicine and construction of the USC Michelson Center for Convergent Bioscience (Credit: USC Photo Library).
Biotech | USC Michelson Center for Convergent Bioscience [Angle View]
Biotech | Gary K. Michelson holds a rendering of the USC Michelson Center for Convergent Bioscience [2014-10-23] (Credit: Steve Cohn)
(Top Left) Malcolm and Barbara Currie have donated $10 million toward the endowment of USC Keck School of Medicine and construction of the USC Michelson Center for Convergent Bioscience (Credit: USC Photo Library).
(Bottom Left) At 190,000 square feet, the USC Michelson Center for Convergent Bioscience is the largest building on the USC campus and the most recent addition to a growing biomedical research hub in Los Angeles (Credit: MMRF/USC).
(Right) Gary K. Michelson holds a rendering of the USC Michelson Center for Convergent Bioscience at the USC Michelson Center Groundbreaking Ceremony on October 23rd, 2014 (Credit: Steve Cohn).
Biotech | Malcolm and Barbara Currie have donated $10 million toward the endowment of USC Keck School of Medicine and construction of the USC Michelson Center for Convergent Bioscience (Credit: USC Photo Library).

Malcolm and Barbara Currie have donated $10 million toward the endowment of USC Keck School of Medicine and construction of the USC Michelson Center for Convergent Bioscience (Credit: USC Photo Library).

Biotech | Malcolm and Barbara Currie have donated $10 million toward the endowment of USC Keck School of Medicine and construction of the USC Michelson Center for Convergent Bioscience (Credit: USC Photo Library).

Malcolm and Barbara Currie have donated $10 million toward the endowment of USC Keck School of Medicine and construction of the USC Michelson Center for Convergent Bioscience (Credit: USC Photo Library).

Biotech | Malcolm and Barbara Currie have donated $10 million toward the endowment of USC Keck School of Medicine and construction of the USC Michelson Center for Convergent Bioscience (Credit: USC Photo Library).

Malcolm and Barbara Currie have donated $10 million toward the endowment of USC Keck School of Medicine and construction of the USC Michelson Center for Convergent Bioscience (Credit: USC Photo Library).

While Dr. Michelson and the Curries are committed, along with USC administrators, to maintaining a physical, academic, and social space for groundbreaking research, the region must attract yet more commitment and vision.

A 2014 study outlined the strides Los Angeles must make. The report, commissioned by the Los Angeles County in 2012, was conducted by the Battelle Memorial Institute, a non-profit biotechnology research consultancy. Officially titled the Feasibility Assessment and Master Plan for Advancing the Bioscience Industry Cluster in Los Angeles.[1], and commonly referred to as the Battelle Study, the results highlighted notable differences between Los Angeles and comparable cities, and identified major areas for improvement.

Significant shortcomings included biotechnology jobs comprising just over one percent of private sector employment, compared to three percent in other cities with equal or less potential. Another outstanding negative difference was that private biotechnology companies, in spite of institutional commitment within globally recognized universities, don’t parlay discoveries into the market, instead leaving the region in pursuit of capital and more advantageous tax and regulatory structures elsewhere.

Apart from quantifying differences that reify the region’s failure, the Battelle Study concluded that Los Angeles must produce major change in three main areas: build lab space, magnetize and retain top science talent, and attract venture capital investment.

To begin, booming biotechnology hub requires sufficient “wet laboratory” space, in which sensitive and volatile materials can be safely handled. Such spaces require specialized construction and design, and thus, committed investment. The Michelson Center for Convergent Bioscience established a critical first step. At 190,000 square feet, the Center is the largest on the USC campus.

Biotech | USC Michelson Center for Convergent Bioscience [Angle View]

At 190,000 square feet, the USC Michelson Center for Convergent Bioscience is the largest building on the USC campus and the most recent addition to a growing biomedical research hub in Los Angeles (Credit: MMRF/USC).

Biotech | USC Michelson Center for Convergent Bioscience [Angle View]

At 190,000 square feet, the USC Michelson Center for Convergent Bioscience is the largest building on the USC campus and the most recent addition to a growing biomedical research hub in Los Angeles (Credit: MMRF/USC).

Biotech | USC Michelson Center for Convergent Bioscience [Angle View]

At 190,000 square feet, the USC Michelson Center for Convergent Bioscience is the largest building on the USC campus and the most recent addition to a growing biomedical research hub in Los Angeles (Credit: MMRF/USC).

Secondly, a biotechnology hub can only be created by top talent. The Battelle team noted that Los Angeles must do more to attract and retain top talent in the various fields that comprise biotechnology. Here, also, the Michelson Center’s design is expected to foster the collaboration to attract talent. The layout can house 30 to 40 principal investigators, or lead researchers, and the state-of-the-art equipment and facilities to apply the knowledge acquired at USC and other renowned universities in southern California. Since 2012, USC has improved recruiting, now boasting globally respected researchers such as Ray Stevens, Peter Kuhn, James Hicks, Vadim Cherezov, Vsevold Katritch, and Valery Fokin. Each of these scientific leaders were recruited with the Michelson Center’s laboratories as their planned destination.

Valery Fokin's laboratory will join the USC Michelson Center for Convergent Bioscience upon its completion in 2017 (Credit: Valery Fokin).

Valery Fokin’s laboratory, currently hosted at the [email protected], will join those of Steve Kay, Raymond C. Stevens, Peter Kuhn and others in the USC Michelson Center for Convergent Bioscience upon its completion in 2017 (Credit: Valery Fokin).

Valery Fokin's laboratory will join the USC Michelson Center for Convergent Bioscience upon its completion in 2017 (Credit: Valery Fokin).

Valery Fokin’s laboratory, currently hosted at the [email protected], will join those of Steve Kay, Raymond C. Stevens, Peter Kuhn and others in the USC Michelson Center for Convergent Bioscience upon its completion in 2017 (Credit: Valery Fokin).

Valery Fokin's laboratory will join the USC Michelson Center for Convergent Bioscience upon its completion in 2017 (Credit: Valery Fokin).

Valery Fokin’s laboratory, currently hosted at the [email protected], will join those of Steve Kay, Raymond C. Stevens, Peter Kuhn and others in the USC Michelson Center for Convergent Bioscience upon its completion in 2017 (Credit: Valery Fokin).

Valery Fokin's laboratory will join the USC Michelson Center for Convergent Bioscience upon its completion in 2017 (Credit: Valery Fokin).

Valery Fokin’s laboratory, currently hosted at the [email protected], will join those of Steve Kay, Raymond C. Stevens, Peter Kuhn and others in the USC Michelson Center for Convergent Bioscience upon its completion in 2017 (Credit: Valery Fokin).

Outside the Michelson Center, USC’s undergraduate college is now home to a separate interdisciplinary endeavor, The [email protected]. Its stated mission is “to address ‘impossible’ health challenges that have long eluded conventional approaches, [uniting] the best minds in chemistry, biology, medicine, mathematics, engineering, physics and nanosciences.” [4]

In July of 2015, USC hosted a panel on building one centralized source of innovation, a “corridor” in East Los Angeles. A representative from the federal Economic Development Administration attended, along with county government representatives, and a mix of public and private sector representatives. Los Angeles County Supervisor Hilda Solis said, “I envision a biotech corridor that will establish a school-to-workforce pipeline helping undergraduate and graduate college students transition from the classroom to full-time employment as they secure local good-paying jobs.”[2]

In addition to creating thousands of construction jobs to build out the physical space, the stated goal is to create 4,000 permanent biotechnology jobs for local graduates with advanced degrees in the fields of science, technology, engineering, and math. To accomplish this end, USC President C.L. Max Nikias, has ardently pursued the construction of the corridor, writing an opinion editorial in the Los Angeles Times, interviewing with the local Los Angeles NBC affiliate, and frequently speaking, formally and informally, about the university’s and the region’s potential to build and grow a corridor.

USC President C.L. Max Nikias, KTLA Anchors Courtney Friel & Rick Chambers discuss Plans for a Biotechnology Corridor in Los Angeles [KTLA] [2015-02-23]

USC President C.L. Max Nikias, KTLA Anchors Courtney Friel & Rick Chambers discuss Plans for a Biotechnology Corridor in Los Angeles [KTLA] [2015-02-23]

USC President C.L. Max Nikias, KTLA Anchors Courtney Friel & Rick Chambers discuss Plans for a Biotechnology Corridor in Los Angeles [KTLA] [2015-02-23]

USC President C.L. Max Nikias, KTLA Anchors Courtney Friel & Rick Chambers discuss Plans for a Biotechnology Corridor in Los Angeles [KTLA] [2015-02-23]

The value of developing a vibrant biotechnology corridor has been recognized by some outside of the Los Angeles area as well. Last August, Maryland congressional representative Steny Hoyer visited Los Angeles. During his trip, he conferred with several representatives of USC, including President Nikias and Professor Ray Stevens. They discussed the USC’s accomplishments in fostering a burgeoning biotechnology industry in the greater Los Angeles area. Representative Hoyer said, “I appreciated the opportunity to hear about the collaborative efforts between private and public officials to boost the community’s biotechnology industry, which can serve as a model for other regions across the country.”[3]

The third and final area of lack addressed by the Battelle Study was venture capital. From 2007 to 2012, Los Angeles lagged far behind the major biotechnology centers of Boston, San Francisco, San Diego, and Philadelphia in terms of total venture capital investment. During this time period Boston and San Francisco led the way in total venture capital funding with $8.2 and $7.9 billion respectively. In the same time period Los Angeles County only attracted $939 million. In terms of the number of venture capital deals, Los Angeles performed even more poorly, the last of the eight biotech centers in the selected time frame. The region closed 72 deals, while over the same period, Boston led with 1,001 venture capital deals, followed by San Francisco with 803, San Diego with 597, and Philadelphia with 316.

Source: Feasibility Assessment and Master Plan for Advancing the Bioscience Industry Cluster in Los Angeles [August 2014; Battelle Technology Partnership Practice for Los Angeles County – Chief Executive Office]

Source: Feasibility Assessment and Master Plan for Advancing the Bioscience Industry Cluster in Los Angeles [August 2014; Battelle Technology Partnership Practice for Los Angeles County – Chief Executive Office]
Source: Feasibility Assessment and Master Plan for Advancing the Bioscience Industry Cluster in Los Angeles [August 2014; Battelle Technology Partnership Practice for Los Angeles County – Chief Executive Office]
Source: Feasibility Assessment and Master Plan for Advancing the Bioscience Industry Cluster in Los Angeles [August 2014; Battelle Technology Partnership Practice for Los Angeles County – Chief Executive Office]

Analysis of funding stages revealed yet more. The Battelle Study showed that in the country’s five strongest biotechnology regions, of the venture capital money that is invested, an average of 35 percent is spent on early stage and seed funding. In Los Angeles County only 20 percent, of what is already a much smaller total venture capital investment, is spent on these early stages of commercialization. This means that many start ups and “spin offs” spawned by Los Angeles’ world class research institutions such as USC and UCLA, City of Hope, Caltech, and others look outside of Los Angeles for funding, talent, and locations. Most telling is that of the $939 million in venture funding received by Los Angeles area biotechnology companies during the period in question, 98 percent came from outside of the region.

The Study noted that not only was venture capital needed to pull institutional innovation into the local private sector, but cash was needed to firmly root biotechnology in the area. Los Angeles County should, the Study concluded, encourage three or four proven bioscience venture capital firms to open Los Angeles offices. Investors could also, they wrote, hedge risk by investing in a fund of funds, or group of startups backed by a shared fund. This approach reduces the risk to the individual investors and allows the fund to provide seed and early stage investments to multiple promising biotechnology companies.

With the Michelson Center’s physical space for innovation and the Battelle Study’s comprehensive analysis, the way is clear. The next phase will be growing local awareness of opportunity, and building the Los Angeles community’s commitment, to advance biotechnology industry. That advancement will bring medical breakthroughs, cures for the incurable, and economic stimulus.

USC President Touts Planned Biotech Center as Job Creator [NBCLA] [2015-06-27]

USC President Touts Planned Biotech Center as Job Creator
[NBCLA] [2015-06-27]

USC President Touts Planned Biotech Center as Job Creator [NBCLA] [2015-06-27]

USC President Touts Planned Biotech Center as Job Creator [NBCLA] [2015-06-27]

MMRF Initiative

References

  1. Report on Consultant Evaluation for a Potential Countywide Biotechnology Partnership Program [2014-08-05; County of Los Angeles – Chief Executive Office] / Feasibility Assessment and Master Plan for Advancing the Bioscience Industry Cluster in Los Angeles [Battelle Technology Partnership Practice]
  2. Los Angeles Leaders discuss Biotech at Roundtable Discussion with Commerce Official [2015-07-09; Teresa Lara, USC News]
  3. Rep. Steny Hoyer praises USC’s Efforts to boost Los Angeles Biotech Industry [2015-08-27; USC News Staff, USC News]
  4. The [email protected] [USC Dornsife]

Related Links

Juliesta Sylvester, Ph.D. is a biochemist who promotes innovation and technology transfer at the interface of academia and industry. Her research has spanned pharmaceutical discovery, molecular diagnostics, bioinformatics, and quantitative systems analysis. She is an avid world traveler, invited speaker at national and international meetings, and enthusiastic consultant for startups.

Juliesta Sylvester, Ph.D. is a biochemist who promotes innovation and technology transfer at the interface of academia and industry. Her research has spanned pharmaceutical discovery, molecular diagnostics, bioinformatics, and quantitative systems analysis. She is an avid world traveler, invited speaker at national and international meetings, and enthusiastic consultant for startups.

Juliesta Sylvester, Ph.D. is a biochemist who promotes innovation and technology transfer at the interface of academia and industry. Her research has spanned pharmaceutical discovery, molecular diagnostics, bioinformatics, and quantitative systems analysis. She is an avid world traveler, invited speaker at national and international meetings, and enthusiastic consultant for startups.

Juliesta Sylvester, Ph.D. is a biochemist who promotes innovation and technology transfer at the interface of academia and industry. Her research has spanned pharmaceutical discovery, molecular diagnostics, bioinformatics, and quantitative systems analysis. She is an avid world traveler, invited speaker at national and international meetings, and enthusiastic consultant for startups.