A Bio Revolution
Marin’s biotech industry not only brings in billions of dollars per year, but also creates high-quality jobs and life-changing medicines and procedures.
ALL THE WORKERS in BioMarin Pharmaceutical’s Novato plant look alike.
It’s not that the drugmaker’s more than 1,100-strong local workforce lacks diversity. The uniformity comes from the dress code required to enter the clean rooms where the company’s lifesaving drugs are made: dark blue pants and shirts with tight cuffs, puffy caps covering hair, goggles and layers of disposable booties over shoes.
That’s just to walk the halls.
To enter the rooms where the company cultures and purifies the enzymes that make up its drugs, workers first enter an air lock, where they don rubber gloves and unwrap freshly laundered lab coats from plastic packaging. One more layer of booties, a squirt of hand sanitizer, and finally they can enter, their bundled-up feet making whisking sounds across the floor with each step.
Inside the rooms, air whooshes through filters that catch any bacteria, skin cells or hairs somehow shed by the wrapped-up humans within, lest the impurities get into the product. So clean is the air that the only smells in here are the astringent odor of sanitizer and the occasional whiff of plastic from the disposable tubing that moves the brown liquid that will become the drug Vimizim through the plant.
“If you have allergies, this is a great place to be,” jokes Erik Fouts, who oversees BioMarin’s three drug production plants in Novato. Fouts has a Ph.D. in molecular and cell biology; the majority of his staff, who are busy cleaning out stainless steel vessels in preparation for the next production run, have bachelor’s degrees in life sciences or engineering.
This is the epicenter of Marin’s small biotech cluster, which is growing thanks to the area’s educated workforce and proximity to research facilities. Between Marin and Sonoma counties, biotech firms bring in $2.7 billion in annual revenue, the Marin Economic Forum estimates. The biotech mini-boom is an outgrowth of the region’s strength in life sciences. While other counties, such as San Mateo, may have more companies, we have more life sciences businesses per capita here than in any other California county, according to the MEF.
Biotech companies harness living organisms to create products and processes. Many, like BioMarin, are drugmakers, using living cells cultured in stainless-steel vats to produce enzymes that can treat diseases.
A Rare Breed
BioMarin specializes in “ultra-orphan” drugs, meaning that the enzymes it formulates treat uncommon genetic disorders. Vimizim, approved by the FDA last February, is for rare metabolic syndrome Morquio A, which afflicts 260 known sufferers in the United States. BioMarin executives refer to many of their customers by their first names, and patients themselves have suited up to tour the plant and visit with scientists researching new cures.
“We treat rare diseases, and that gives us rare opportunities,” says Chris Brodeur, associate director of commercial manufacturing, who likes to show visitors photos of the time he and a patient’s mother swam to Alcatraz together in a fundraising effort to combat Morquio A. Employees are especially tight with that patient’s family, who relocated from Chile so the patient could participate in a clinical trial at Children’s Hospital Oakland.
As for the company’s older drugs, like Naglazyme, approved in 2005 to treat a disorder called MPS VI, some staff members are now working with patients they have watched grow up. MPS VI patients, short in stature and with enlarged heads, can suffer from poor endurance; Naglazyme gives them the strength to walk farther and climb more stairs, and data suggests patients on the therapy also live longer.
A marketing director was recently trying to arrange a video shoot with the first patient to receive commercial Naglazyme, now a student at Louisiana State University. The patient’s exams schedule was interfering. “Jill sends a note and says ‘School first!’,” says spokeswoman Debra Charlesworth with a grin.
With such tiny customer bases and high research and development costs, BioMarin must charge high prices for these drugs. Infusions of Vimizim cost up to $400,000 a year for one patient.
In addition to its expanded Novato production facility, part of which used to be a Birkenstock warehouse, BioMarin is expanding its new San Rafael headquarters and laboratories. Two start-ups that spun off from BioMarin, Raptor Pharmaceuticals and Ultragenyx Pharmaceutical, are both based in Novato. Marin is also headquarters to a foundation that pushes for biotech-friendly public policy, the EveryLife Foundation, led by Dr. Emil Kakkis, who left BioMarin to start the foundation and later launched Ultragenyx.
The Buck Starts Here
Supporting these companies with research partnerships and talent are the Buck Institute for Research on Aging and the University of California, San Francisco. UCSF is more commonly associated with the much larger biotech cluster in South San Francisco, but BioMarin CEO Jean-Jacques Bienaimé (“JJ” to his staff) points out that the university is “not that much closer to South San Francisco than it is to here.” BioMarin has partnered with both, as well as with research institutions outside the region.
The Buck is helping to grow the Marin biotech cluster by spinning off independent companies to bring its scientists’ discoveries on prolonging healthy life to market. The nonprofit research facility has also supported the growth of BioMarin and other existing biotech drugmakers through scientific partnerships and by sharing resources like laboratory space; Ultragenyx leases its lab space from the Buck, for instance. The Buck also continually draws new research talent to the region through its undergraduate, graduate and postdoctoral programs, some of which are run in partnership with universities.
“It’s very important for us to have a growing biotech sector in this region,” says Buck president and CEO Brian Kennedy. “While we’re happy to partner with pharmaceutical companies anywhere if it makes sense, it’s nice to be able to bounce ideas off people who are local and get that exchange of ideas that it’s hard to get at a distance.”
Over time, more companies are expected to spin off from the Buck and BioMarin and even from their spin-offs. Despite all this growth, Marin’s biotech cluster is still far from rivaling the size of the cluster surrounding Genentech in South San Francisco, or even San Diego’s cluster. But it has progressed from the early start-up phase to the second stage of development, says Robert Eyler, chief executive of the Marin Economic Forum.
Growth With Challenges
Many of the smaller companies, like Ultragenyx, are also expanding. The firm grew its staff to more than 100 from 59 this year and is likely to need more space as its products move into later-stage development, says Chief Financial Officer Shalini Sharp. Rounding out the cluster are biotech firms that don’t make drugs, most of them also in Novato, such as Cytograft Tissue Engineering, which repairs diseased cardiovascular tissue using the patient’s own cells; Biosearch Technologies, which makes nucleic-acid-based products for genetic research; XCell Science, which creates human neural cells for research, and Marin Biologic Laboratories, a research contractor.
“You’re seeing a lot of the businesses in Marin County are maturing, but are not yet mature enough to have multiple product lines and multiple years’ worth of contracts. A lot of the companies are still trying to get drugs through the testing process and are in a fundraising phase,” Eyler says.
That applies to Ultragenyx, which has four products in clinical trials, and Raptor, which has one drug on the market and three in clinical trials. BioMarin is more advanced, with five drugs on the market, including Vimizim and Naglazyme, as well as Kuvan (for PKU, the disorder tested in newborns with a heel prick), Aldurazyme and Firdapse (approved in the European Union only). It has five more experimental therapies in clinical trials and two slated to go to trial in 2015. The company has been publicly traded since 1999, reporting revenue that has grown steadily over the years to 2013’s $549 million.
However, BioMarin is not yet profitable. “What we've been communicating (to investors) is that when we reach a billion dollars in revenue, which should be in two to three years, we will be operationally profitable,” Bienaimé says.
The fact that investors are willing to wait through more than a decade of testing and steady growth throws biotech into sharp contrast with high tech. “It tends to be a longer term play than the short bursts you see in tech like mobile apps, social media,” Eyler says. Pair that with its hunger for educated workers, and the industry has the potential to be a good driver of Marin’s economy, he adds.
But biotech firms that would launch or expand in Marin County face challenges. A major hurdle is finding space for laboratories and drug production plants. The vacancy rate for industrial and warehouse space in Marin is only 4.1 percent, meaning that space here is much scarcer than in Oakland, where vacancy is almost 20 percent, or San Mateo, with 11.8 percent, according to the Marin Economic Forum.
When considering if Marin’s biotech cluster could ever rival South San Francisco’s in size, Bienaimé gazes out his office window. BioMarin is constructing a new research laboratory not far from where he is sitting and has drawn up plans for another building across the street. “Maybe it could happen here too. It would take a while. The space is more limited here,” he says, finally. BioMarin has purchased a drug production plant in Ireland, but intends to continue growing in Marin as well.
In the end, it doesn’t matter if Marin’s cluster will ever rival South San Francisco’s. It’s a good thing at any size, industry insiders agree. “We don’t have to get to that level to be successful,” says Kennedy, CEO of the Buck. “These are high-paying jobs, they’re technical jobs, they bring a lot of young exciting people into the region — and we’ve got a nice base to grow from here.”