California Biomedical Industry Report 2015

Transcription

1 Biomedical Industry Report 015

2 Letter from the Governor leads the nation in the biomedical industry, supporting highly skilled and well-paying jobs in communities across the state. The sector drives improvements in healthcare through the development of new medicines and technologies. Last year, enacted several laws to strengthen our life sciences community and maintain our competitive position, including AB 9 and SB 90, which made targeted investments in the sector. This year s state budget included 0 research grants to support the federal BRAIN Initiative to map the human brain. The budget also set aside $ million to advance the potential of precision medicine. Jerry Brown Governor of The state of is committed to supporting innovation and fostering the biomedical industry. I look forward to continuing to work with leaders from companies and research institutions throughout the state to find solutions that advance new medical technologies, strengthen our economy and contribute to a healthier society. Sincerely, EDMUND G. BROWN JR. Letter to Stakeholders is an innovation machine. From groundbreaking studies at world-class universities, to entrepreneurial startups to global leading corporations, the state has shown the world how to build a thriving life sciences community. Favorable policies have helped make the world s leader in biomedical research and development. That success has, in turn, rippled through the state s economy. In 01, life sciences companies employed more than 70,000 ns, with average wages that topped $100,000. Todd E. Gillenwater President & CEO Healthcare Institute Equally important, this innovation ecosystem permeates the state. In 01, academic researchers in are projected to receive 7,00 NIH grants totaling $. billion, by far the most in the nation. Many of the studies funded by these grants will lead to new insights into human biology and possibly new therapies and diagnostics. With 11 of the world s top 100 universities (according to the Shanghai Index), is well-positioned to continue this dominance. Ultimately, intellectual discovery attracts venture capital. companies are projected to receive more than $.8 billion in VC funding in 01. These investments, as well as those from the NIH and other groups, have spurred even more innovation and helped the state recover from a devastating recession. As you read through this report, you will see other statistics that validate the breadth and quality of our life sciences community. However, a word of caution is always in order. Open up any company s financial report and you will find these words: Past performance does not guarantee future results. The same is true on the state level. While s biomedical sector has done well, we face increasing competition from other states and nations. We cannot forget the sound ideas that got us here. But also, we must find new ways to grow the innovation economy and remain world leaders in the life sciences. That future will not get built on its own. The heavy lifting belongs to us. Peter J. Claude Partner, Pharmaceutical & Life Sciences Advisory Sincerely, Todd E. Gillenwater President & CEO Healthcare Institute Peter J. Claude Partner, Pharmaceutical & Life Sciences Advisory

3 The Innovation Pipeline holds a unique position in the worldwide life sciences community. Golden State companies are leaders, producing some of the world s most innovative therapies and diagnostics. In turn, these corporations have made the state s life sciences industry an economic juggernaut. Just a few statistics from 01 bear that out, as the industry produced: $101 billion in total revenues $7. billion in total wages $101,50 in average wages $.8 billion in venture capital investment s successful biomedical industry is the end result of an extensive innovation pipeline. This ecosystem begins in the state s outstanding academic centers and research institutes, continues with an entrepreneurial, start-up culture that rewards risk-takers and culminates with successful companies that produce hundreds of new drugs, diagnostics and devices. The sector serves as an increasingly important element of the state s economy, with the biomedical industry employing 70,00 people in 01. More importantly, s life sciences community helps patients around the world, as innovators from San Francisco to San Diego tackle many of healthcare s unmet needs. Biopharmaceutical and Medical Device Employment by state, Biomedical Industry in, 01 (estimated) Total revenue $101 billion Direct employment 70,00 Total wages and salaries $7. billion Average annual biomedical industry wage $101,50 Total NIH grants awarded $. billion Total venture capital investments $.8 billion Total biomedical exports $. billion Direct federal taxes $7. billion Direct state and local taxes $.7 billion Number of life sciences companies,66 Biopharmaceutical Companies Public 169 1,108 total Private 99 Direct Employment Device and Diagnostics Companies Public 8 1,58 total Private 1, Indirect and Induced Employment 01 ranking by employment New Jersey New York Indiana Pennsylvania Illinois Minnesota Massachusetts North Carolina Florida Texas Michigan Ohio Utah Wisconsin Employees, change from ,795 1,089 8,88 5,967 5,956,09 1,680 1,9 0,911 7,090 5,701 1,57 17,5 16,605 15,951 (5,015) (-8,71) (-1,87) (-,7) (-,605) (-7) (-1,85) (-5) (1,71) (-1,799) (9) (1,86) (1,198) (,59) (905) Employment growth, % -17% -% -6% -11% 0% -% -1% 5% -6% % 10% 7% 19% 6% ,00 *01 Biomedical Industry Report based on 01 employment data ,000* Total Direct, Indirect and Induced Jobs: 767,

4 Academic Excellence s life sciences industry is built on, and fueled by, world-class universities and ground-breaking biomedical research. According to the Shanghai Index, has 11 of the world s top 100 schools. New York is the next closest with five. One of the pillars of the life sciences infrastructure is a welleducated workforce. In 01, universities produced more than 6,000 doctorates in the science and engineering fields, including more than 1,00 in the life sciences. These newly minted scientists will be among the next generation of trailblazing entrepreneurs. In labs throughout the state, s academic researchers attract billions of dollars in grants from the Top 10 States Receiving NIH Funding 01 vs. 01* 01 01* 7,55 7,0 Awards Massachusetts,98,780 New York,768,67 Pennsylvania,19,68 North Carolina,157,06 Texas,5,56 Maryland,059 1,950 Washington 1,58 1,59 Illinois 1,80 1,81 Ohio 1,579 1,8 $697M $68M $68M $61M Funding $9M $965M $97M $95M $889M $877M $776M $858M $1.5B $1.7B $1.9B $.0B Note: 01 data reflect awards through September 9, 01 *Data excludes R&D contracts and projects funded through the American Recovery and Reinvestment Act $.1B $.9B $.9B $.9B National Institutes of Health (NIH) and other entities. For federal fiscal year 01, institutions received more than 7,00 grants, totaling $. billion, a 15. percent share of all NIH grants distributed. Massachusetts is the second most active state, with a 10.8 percent share. Among institutions UC San Francisco, UC San Diego and Stanford lead the pack, bringing in a combined $1.8 billion of NIH funding. Looking at the top ten Congressional districts for NIH funding, aggregated by region, the San Francisco Bay Area tops the list with more than $1. billion. After that, Los Angeles and Orange County come in at $7 million, followed by San Diego at $50 million and Sacramento/Davis at $187 million. The True Measure of Success While economic growth is important for any industry, life sciences brings an added dimension to the table new technologies and treatments that help people worldwide. In 01, companies filed 1,05 investigational new drug (IND) applications.* Many of these emerging therapies are designed to treat cancer, infectious diseases and central nervous system disorders. Overall, the life sciences industry has an impressive record of developing new treatments that improve survival and quality of life for millions around the world. Top 10 Organizations Receiving NIH Funding 01* UC San Francisco UC San Diego Stanford University UCLA UC Davis Scripps Research Institute $185M USC UC Berkeley $11M UC Irvine $100M $187M $171M Institute of Technology $6M $78M $76M $50M Note: 01 data reflect awards through September 9, 01 *Data excludes R&D contracts and projects funded through the American Recovery and Reinvestment Act *through Sept. 5, 01 $55M

5 Products by Therapeutic Area Investigational New Drug (IND) products through Phase III clinical trials Cancer 19 Infectious Diseases (incl. HIV) 11 Central Nervous System 117 Hormonal Systems/ Nephrology (incl. Diabetes) 96 Immune System 78 Cardiovascular Eye/Ear Musculoskeletal Pain Respiratory Hematological Dermatology Gastrointestinal Genitourinary Diagnostic/Imaging Agent/ Delivery Miscellaneous World Class Research Institutions continues to lead the world with the highest number of premier research institutions. The Golden State is home to 11 of the top 100 universities on the Shanghai Index. These institutions include: Stanford University, UC Berkeley, Institute of Technology, UCLA, UC San Diego, UC San Francisco, UC Santa Barbara, UC Irvine, USC, UC Davis and UC Santa Cruz. New York came in second with five institutions, followed by Pennsylvania and Texas with four apiece. Number of Universities in the World Top 100 Shanghai Index, 01 rankings New York Pennsylvania Texas Illinois 11 5 Massachusetts Arizona Maryland New Jersey North Carolina Doctoral Recipients in Life Sciences Disciplines Top 10 states, 01 New York Texas Total life sciences doctoral degrees , Mass. Penn. N. Carolina Illinois Ohio Maryland Florida s stellar academic prowess was on full display with over 1,8 life science doctorates awarded in 01. By contrast, New York was awarded less than 900.

6 Driving Growth The confluence of innovative thinking, hard work and ample funding has created a life sciences powerhouse, which continues to be a major economic driver throughout. As noted earlier, in 01 s biomedical industry employed more than 70,000 people, with an average salary of around $101,50. As a whole, the life sciences industry produced $101 billion in revenue, paid $7. billion in direct federal taxes and $.7 billion in direct state and local taxes. s biomedical exports in 01 increased to $. billion from $0.9 billion in 01. But the economic impact of the life sciences goes far beyond the companies that develop our drugs, devices and diagnostics. Hundreds of thousands more ns, in a wide variety of areas, support the industry. As a result, the biomedical sector is a key factor in sustaining growth throughout. Biomedical Employment vs. Other Key Sectors in, 01 Computer and peripheral equipment mfg. Biomedical industry Internet, telecommunications, data processing Other electronic equipment mfg. Motion pictures Aerospace 71, ,96 166,1 18,9 70,89 57,865 Total Biomedical Employment by Cluster in, 01 % % % Cluster Employees Bay Area* 60,66 Los Angeles County 5,09 Orange County 0,77 San Diego County 6,71 Riverside and San Bernardino counties 1,79 Ventura and Santa Barbara counties 11,19 Sacramento area** 9,80 Northern *** 8,501 TOTAL 70,89 Note: Clusters do not sum to total due to omitted counties and data suppresion at the county level. * Includes Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara and Sonoma counties **Includes Sacramento, Butte, El Dorado, Nevada, Placer, Solano, Sutter, Yolo and Yuba counties *** Includes Monterey, Kings, Tulare, Inyo, San Benito, Fresno, Mono, Santa Cruz, Merced, Madera, Stanislaus, Mariposa, Tuolumne, San Joaquin, Calaveras, Alpine, Amador, Mendocino, Lake, Colusa, Sierra, Glenn, Plumas, Humboldt, Trinity, Tehama, Lassen, Shasta, Del Norte, Siskiyou and Modoc counties Total Biomedical Employment by Cluster as a percent of the total, 01 % 0% 15% 1% 5% Biomedical Wages by sector, 01* Avg. wage Academic research $65,800 Biopharmaceuticals $15,801 Medical Devices, $86,901 Instruments, Diagnostics Research & $110,661 Development, Testing Labs Wholesale Trade $9,59 TOTAL $101,58* Total wages $.69B $6.9B $6.9B $7.0B $.1B $7.B * Total average

7 A Magnet for Investment s academic excellence generates thousands of life sciences innovations. The basic science discoveries funded by the NIH do not stay in the laboratory. They are often licensed to pharmaceutical companies, biotech firms and start-ups. In many cases, the scientists who make these discoveries start their own companies to carry the research forward. This constant flow of innovation attracts investment from around the world. It s estimated that life sciences companies will have received $.8 billion from venture capitalists in 01, or 5 percent of the $8. billion VCs are projected to invest in the life sciences nationwide. Especially significant, $1.8 billion will support s early stage companies as they work to bring new therapies, devices and diagnostics to market. These investments, at all stages, are felt throughout the state. Silicon Valley is projected to receive $.8 billion in 01. San Diego is projected at $67 million and Los Angeles/Orange County at $5 million. Life sciences venture capital investment is second only to software in and is a significant contributor to s projected 60.1 percent share of all venture capital investments in the United States in 01. Business Grants The NIH also invests in s life sciences industry through their small business grants. The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs provide significant support for emerging companies, particularly those who are not yet positioned for venture capital. These grants provide critical seed funding to help small start-ups prove their technologies and grow. Once again, leads the nation in NIH small business grants. The state received 91 awards in 01, which translates into $16 million. Massachusetts is second on the list, with 175 awards for $7 million. While these numbers seem small when compared to venture capital funding, they are critically important investments that help small companies gain a toe hold in the competitive life sciences industry. Mergers and IPOs As products come closer to market, smaller firms must often seek more resources through initial public offerings or mergers with larger companies. This process rewards investors for their faith in the company and allows them to recirculate capital, investing in other innovative start-ups. In 01, the M&A market is on pace to eclipse 01. Through late September, there were 70 completed biomedical M&A deals where the target company was located in, compared to 70 completed deals in all of 01. Where terms were reported, these 01 transactions have totaled more than $ billion. The IPO side has been equally busy. Through late September, there were 0 IPOs in 01, bringing $1.5 billion into emerging companies. In 01, there were 17 initial public offerings. Venture Capital Investment, Biotech and Medical Devices by stage, U.S. and, 01-01* $.0B $.1B $1.87B $.08B BIOTECH U.S. $1.65B $1.61B $77M $1M $5M $1.6B $1.0B $10M $1M $11M $817M $191M $181M *01 data based on projection from first two quarters * * 01 01* * $M $81M $9M $M $9M $65M $56M Expansion stage $17M $189M 01 $70M $8M $99M $8M $61M $880M Start-up/ seed stage Early stage Later stage $1M $01M $6M $77M $59M MEDICAL DEVICES $5M $7M $778M $6M $70M $56M $0M $588M $1.17B $1.1B $1.1B Top 10 States for Life Sciences Venture Capital Investment 01-01* Calif. Mass. Conn. $9M $11M $M Penn. $8M $M $10M Texas $8M $10M $8M Wash. $161M $6M $67M Ill. $18M $M $7M Minn. $166M $161M $M Mich. $98M $8M $195M N.Y. $109M $1M $1M $1.5B $1.6B $1.80B $.68B $.91B $.76B * *01 data based on projection from first two quarters

8 Moving Forward provides a case study in how to build a robust life sciences industry from scratch. It starts with a worldclass academic system. In turn, the innate curiosity nurtured by outstanding education produces waves of innovators. Not satisfied with the status quo, these entrepreneurs often dedicate their lives to making things better. By attracting both public and private investment, their ideas are ultimately transformed into life-saving products. But this formula didn t just happen. The innovation pipeline was supported, in large part, by favorable public policies that have allowed creative minds to flourish. That approach has helped s life sciences industry become the leader it is today. However, the world is changing rapidly, and the state cannot afford to rest. Global competition has increased dramatically in the past decade, and will continue to be a challenge. Both the state and nation must always remain one step ahead of these dynamic market forces to ensure continued leadership in biomedical education, research, investment and product development. Top Biomedical Employment in, 01 vs Academic research Biopharmaceuticals Medical Devices, Instruments, Diagnostics Research & Development, Testing Labs Wholesale Trade TOTAL 66,57 0,5 0,809,5 5,10,065,605 6,55 65,081 7,9 7,65 Growth rate 0.1%.0% 0.1%.7% 1.% 70,89 1.% Report Authors Todd E. Gillenwater President & CEO Healthcare Institute Peter J. Claude Partner, Pharmaceutical & Life Sciences Advisory Project Team Will Zasadny Manager, Communications Healthcare Institute Erin McInerney-Prichard Manager, Pharmaceutical & Life Sciences Advisory SOURCES Bureau of Labor Statistics Quarterly Census of Employment and Wages; 007 Economic Census; (pages 1,, back page) Bloomberg (page 1) PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report based on data from Thomson Reuters (pages 1, 5) National Institutes of Health (pages 1, ) IMPLAN modeling system (page 1) Writing Josh Baxt Baxt Communications Graphics and Design Paul Horn Economic Analysis Kristen Soderberg Bernie Manager, Health Policy Economics NSF/NIH/USED/USDA/NEH/NASA; Survey of Earned Doctorates, 01; Shanghai Ranking Consultancy; BioPharm Insight; IND filed through Phase III, Sept. 5, 01 (page ) Thomson Reuters Financial (page 5) PHOTO CREDITS David Fulmer via Flickr Creative Commons ( capitol photo, cover) David Schexnaydre via Flickr Creative Commons (page ) About Healthcare Institute CHI represents more than 75 leading biotechnology, medical device, diagnostics and pharmaceutical companies, and public and private academic biomedical research organizations. CHI s mission is to advance biomedical research, investment, and innovation through effective advocacy of policies to improve public health and ensure the continued vitality of the life sciences sector. CHI s website is Follow us on Facebook, LinkedIn and YouTube. See methodology and more at About s Pharmaceutical and Life Sciences Industry group is dedicated to delivering effective solutions to the complex strategic, operational, and financial challenges facing pharmaceutical, biotechnology, and medical device companies. We provide industry-focused assurance, tax, and advisory services to build public trust and enhance value for our clients and their stakeholders. More than 195,000 people in 157 countries across our global network of firms share their thinking, experience, and solutions to develop fresh perspectives and practical advice. For more information visit: and CHI HEADQUARTERS 888 Prospect St., Suite 0 La Jolla, CA 907 Tel: Fax: chi@chi.org CHI SACRAMENTO 101 K St., Suite 180 Sacramento, CA 9581 Tel: Fax: CHI WASHINGTON, D.C Rhode Island Ave., N.W., nd Floor Washington, D.C. 006 Tel: Fax: Healthcare Institute