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California: Top Gun in the West

University researchers in California launched the biotechnology revolution in 1973 through a collaborative effort to insert foreign, functioning genes into bacteria by recombinant DNA methods. Today, California is the home of 2,500 biotechnology companies with 212,700 employees and 75 research institutions concentrating on human diagnostics, pharmaceuticals and therapeutic applications, according to the California Healthcare Institute. California has a third of U.S. biotechnology public companies and half the nation's employment in the sector.

Leading-edge California biotechnology firms include Amgen, Affymetrix, Bio-Rad, Chiron and Genentech, which have generated new companies through spin-offs, mergers, out-of-state re-locations and new start-ups.

Pharmaceutical companies are investing in all areas of California. Robinson Pharmaceuticals in 1999 announced a 112,000-sq.-ft. (10,400-sq.-m.) expansion of its Santa Ana facilities that will create up to 400 new jobs by 2001. Pharmative Corp. has signed a 10-year lease for 740,000 sq. ft. (68,700 sq. m.) of space at Vista Business Park in Valencia, Los Angeles County. And CombiChem is expanding into a 75,000-sq.-ft. (7,000-sq.-m.) facility in San Diego. Palo Alto-based Incyte Pharmaceuticals is consolidating four buildings into a new, expanded campus in Stanford Research Park.

The California Healthcare Institute has identified seven biomedical clusters in the state: San Francisco Bay Area, Sacramento, Santa Barbara, Los Angeles, Inland Empire, Orange County and San Diego. The San Francisco Bay Area cluster is the largest in the state with 645 companies and more than 80,000 employees. Los Angeles is the second largest cluster with 35,400 employees working in 467 firms.

Large pharmaceutical companies are major investors in California. Switzerland-based Novartis, for example, recently founded two new research facilities in San Diego: The Novartis Agricultural Discovery Institute, which will emphasize agricultural research, and the Novartis Institute of Functional Genomics, which will focus on the functioning of human genes in preventing diseases.

To encourage biotechnology, California has the highest R&D tax credit in the nation for qualifying expenses, according to the California Trade and Commerce Agency. California also emphasizes its highly skilled work force, which includes nearly a fifth of the nation's employment in physical research labs.

Elsewhere in the west, Seattle and Spokane, Wash., are seeing increased biotech investment. "Seattle and other established technology centers are attracting a lion's share of the biotech industry, but Spokane has affordable, available facilities, and we're building more," said Dr. C. Harold Mielke, director of the Health Research and Education Center at Washington State University. In addition to new labs and R&D centers, a new biomedical/biotech business park is planned in Spokane's West Plains.

In the Southwest, New Mexico has a growing cluster of about 90 smaller, biotech companies. "Our strengths are drug discovery applications and medical devices," says Andrea D'Ambrosia, president of the New Mexico BioMed/BioTech Association. "We have several laboratories, a medical school and a 100,000-sq.-ft. (9,300-sq.-m.) incubator available to start-up companies." In spacious New Mexico, land is no problem, and numerous incentives are available. But the labor pool needs to grow, says D'Ambrosia.