Posted by: Audrey Erbes | April 19, 2010

BayBio 2010 Generated a Lot of Excitement: Where’s The Jobs?

Life science audiences are interested in two areas today as a result of the sharp 2008 economic downturn and resultant recession–funding and jobs. The most recent sign of an upturn I felt directly was upon attending the recent BayBio 2010 Conference on April 7th. Even after a week, I still felt the positive vibes of the conference rooms and networking. During the Plenary Luncheon, Brook Byers of Kleiner, Perkins and Byers, shared with attendees that he sensed a “thawing since beginning of year.” Subsequent news has tended to  support his “gut feel.” Although he mentioned that the liquidity problem isn’t changing anytime soon, he also noted that you can find money if you do a lot of networking to find out which VCs are writing checks. He suggested speaking to bankers and lawyers to get a handle on this.

Dave D. Hood, President of DH3 & Associates and Senior Advisor for the Principal Assistant for Acquisitions, The U.S. Army Medical Research and Material Command mentioned there are lots of funds out there, one only needs to search for them. He spoke enthusiastically about potential funding from nontraditional sources.

MoneyTree just reported that first quarter 2010 VC investments were up 38% over the first quarter of 2009 and the life science sector–the majority of which was biotech–grabbed the largest share of the money. Elsewhere I’ve been reading that IPOs are happening again but that  news so far is more favorable for high tech than life science. Fred Frank, formerly of Lehman Bank and now Vice Chairman of Peter J. Solomon Company, told conference attendees that of five life science IPOs so far, only one has done reasonably well. He reminded audience that today an IPO is not an exit strategy but the beginning of one.

Other conference speakers mentioned the need for advocacy of  bioscience industry issues to avoid loss of the premier status of the Bay Area cluster. Byers believes that any repatriation of overseas profits by U.S. companies should be tied to job creation. Regina Rabinovich, Director of Infectious Diseases, The Bill and Melinda Gates Foundation, pointed out it’s important to emphasize with Congress that the solution is global, not just local.

BayBio reports positive trends for discovery and development of bioscience products in California vs. 2009. The number of California-developed treatments and cures available to patients now number 1,754 vs. just 1,294 in 2009. Treatments in Phase II and Phase III development trials are up significantly to 1,128 in 2010 vs. 738 in 2009 and 815 in 2008. Northern California is responsible for the larger share of that productivity which shouldn’t surprise us since the Bay Area is the world’s largest life science cluster. Yet there are signs that California is slipping alongside the rates of growth vs.  other clusters in states which seem to be providing more support to educational infrastructure and stronger efforts to lure companies to locate in their region. You can find more information about California’s role in developing treatments at www.californiacures.com. BayBio’s Impact 2010: The Future is Here report is another source covering the Bay Area cluster but  unfortunately lags behind current news since the data is mostly that from 2008-2009.

How about job creation? News indicates continued increases in job creation although a slowed growth in 2009 vs. 2008.  I’m hearing of more folks finding new jobs than a year ago but the national layoffs still outnumber the increased hiring reports. Since so many of our companies live on other people’s money, they naturally had to tighten the purse strings to get through the recession. There’s worry that outsourcing of preclinical work to China and India will negatively impact continued job increases in the Bay Area, but experts claim that there’s no real savings when you consider the cost of training, hiring skilled and experienced management and loss of local oversight by U.S.  company-based management developing products for the U.S.

We expect funds will increase as companies and their funders recognize they can’t sit idle any longer because they need to  meet demands of development collaboration milestones. Some start up companies will likely benefit  from the government’s special recovery programs and increased SBIR grants just announced or find new customers in unlikely places like governmental agencies.

So here’s this week’s job list for those of you wondering where this week’s report is. Note that the list will open in a new window.

Audrey


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