taking a minute to consider how successful Seattle has been. It’s created companies that are not just successful as venture investments but in fact have helped to change the practice of medicine. Immunex, for one. People’s lives were transformed, and much suffering was relieved by the ability to translate a basic research phenomenon into something that could provide a meaningful change in people’s lives. Seattle has done it repeatedly. That is pretty interesting, considering Seattle’s relative size. It’s had a high hit rate.
“I like the point that Stephen made about interdependence. It’s got to be open to the idea that it is a relatively small community, with tremendous intellectual capital. I think it could attract more venture capital to the community to get some of these ideas off the ground, and maintain a deep interaction with large pharma and large biotech. That’s really the ultimate path biotech will take here.”
Steve Gillis on whether Seattle needs an anchor biotech company: “You can look at other regions and try to say Seattle has lost its big biotech footprint, and woe is Seattle, isn’t that bad. I seriously don’t think it is bad. When a company like Immunex gets acquired for whatever it was, $14 billion to $16 billion of consideration, that’s a success. When Icos was acquired for $2 to $3 billion of consideration, that’s a huge success.
“Then you go around and say ‘Well, what regions have those big anchors?’ San Francisco. Well, Genentech is gone. Maybe Gilead Sciences, right? That’s one. San Diego? Zero. Boston? Biogen Idec, Genzyme. That’s two. I really don’t think that’s a contest that needs to be won. What needs [to emerge] are multiple smaller companies that are hiring people, making breakthrough discoveries, and developing products that will change the face of medicine. Unfortunately, if they are successful—or fortunately—if they are successful, they will be acquired. It’s natural evolution.”
Stephen Friend on the importance of having Big Pharma companies with a Seattle presence: “This past year I’ve been thinking about the auto industry. How GM got to the market cap that it got to for a while. That’s the best way to think of pharma and the future that lies ahead for it. I wouldn’t worry about whether you have large pharma in the backyard.”
Steve Gillis on why Washington’s tax structure handicaps biotechnology companies, by taxing revenues, regardless of whether a company is profitable: “The B&O (business and occupation) tax as it exists for biotech companies is essentially a tax on creativity. I understand we don’t have an income tax in this state, and many of us sitting in the room tonight probably like that. But I might trade an income tax for what is really a penalty on success. That’s the B&O tax on revenues for biotech companies. At the past couple of companies I had the good fortune of building, when it came time to make a huge investment in property and equipment, the state of Washington was one of the last places we thought of doing it, because of the tax structure in the state.”
Steve Gillis on the grim future of venture capital firms that support biotechnology: “At Arch we raised our last fund in December 2007. We are still actively in business. But the No. 1 risk
