Seattle biotech isn’t what it used to be. A decade ago, Seattle was basking in the glory of one of the biggest pharmaceutical success stories ever—etanercept (Enbrel). The region was home to what you could call five major league life sciences companies. I’m talking about locally grown biotech companies with big dreams, a strong foundation in science, and at least $100 million of cash in the bank to try to make something happen for patients.
Today, Seattle has two of those companies—Seattle Genetics (NASDAQ: [[ticker:SGEN]]) and Dendreon (NASDAQ: [[ticker:DNDN]]).
As someone who writes about innovative, newsworthy life sciences companies around the U.S. every day, I have kept a whiteboard in my office the past five years to keep track of companies. I used it to remind me of not just the major leaguers, but all the innovative small fry in our biotech community that I need to follow as well. Every year, that list gets smaller for Seattle companies. Precious few new biotech companies are being built in Seattle that have the desire, the capability, or the resources to play anymore on the national stage. Talented life sciences professionals, young and old, tell me consistently that they can’t find biotech jobs in this town.
This is a story that you don’t hear often told, and probably won’t be emphasized today at the Governor’s Life Science Summit in Bellevue, WA. But I know many of our readers are struggling to understand why Seattle’s once thriving biotech community has taken such a big step backward over the past few years, particularly when other communities—Boston, San Francisco, San Diego—continue to march ahead. There are tremendous scientific assets in this town. There are plenty of smart and creative people. Washington state has some of the best quality of life in the country. And yet, where are the game-changing life sciences companies being started and built? Not here.
As you can see, I’ve been pretty grouchy lately. I was not in the mood to tolerate the usual happy talk the other day when I had a chance to speak for 20 minutes by phone with Gov. Jay Inslee. The Governor, a Democrat elected last year, is a longtime friend of biotech from his days in Congress. He knows the issues better than most public officials. I didn’t want to hear a stump speech. I wanted to ask Inslee about some of the real-world problems in local biotech, I wanted to hear him acknowledge them, and maybe even offer some kind of constructive idea on what the community can do to help lift itself up again. You can take a look at what he had to say.
Here are edited excerpts of the conversation earlier this week with Gov. Inslee.
Xconomy: Why keep doing the Governor’s Life Science summit?
Gov. Jay Inslee: This is one of the main springs of our economic growth in our state. We have 92,000 jobs, $11 billion worth of [economic output] in our state. This, along with aerospace and Internet-based companies, is an absolute pillar of our economic growth. We think the sky is the limit for biotech in our state. The reason that biotech fits our state perfectly is we understand intellectual ecosystems. Having a critical mass of intellectual talent, and understanding of how that critical mass is important in any intellectual-based industry is something we get very deeply in Washington. It’s a tremendous growth opportunity. Anybody who has seen what’s going on in South Lake Union right now, and in other communities around our state, would understand that.
X: What role can the state play here? In the past, your predecessor set up the Life Science Discovery Fund. It’s been cut back pretty severely with the budget cuts. Are you happy with this Fund, and is it something you want to continue?
JI: We can play a role in quite a number of areas. No. 1, we can use our tax structure to create incentives for R&D, which is the lifeblood of this industry. We intend to explore that to focus our R&D tax credits on startup companies, where the real risk-takers are. We think we can help by making sure we have a pipeline of intellectual talent by increasing our STEM education and our tremendous universities. We think we can help in accelerating the pace of commercialization from our colleges. The University of Washington has doubled the pace of commercializing the R&D they are doing. We are having success increasing the rate of commercialization. Fourth, we want to continue to succeed. Once we have startups and they are acquired by larger entities, we want them to maintain their operations here. We don’t want to be victims of our own success. That happened when ZymoGenetics was acquired by Bristol-Myers Squibb. They maintained a vigorous research presence on the shores of Lake Union. We have some other ideas I can’t talk about at just this moment about how to increase the effectiveness of our state [Life Science Discovery Fund] investment.
X: Are you happy with the Life Science Discovery Fund?
JI: Yes. We’re having success, despite some budget challenges here in the state. That’s just one tool in the toolbox. I want to mention one other thing: we think we can increase foreign marketing opportunities for our products. I’ll be in China soon speaking at a biotech summit in Shanghai to increase our opportunities.
X: You mentioned earlier that when you go around South Lake Union, you see biotech. But when I walk around there, as someone who covers biotech, I see mostly Amazon, and a few NIH-supported research centers, and a few Big Pharma research operations, like Bristol-Myers Squibb and like Novo Nordisk. But not homegrown local biotech companies that are big and have ambitions to get bigger. Just a couple weeks ago, I did a story about how many companies our region has that have $100 million of cash in the bank. It’s one measure of a biotech company with big ideas and the resources to pursue them. Seattle has actually gone backwards on that measurement over the past 10 years. There are only a couple left. That compares to 35 and 25 companies of that caliber in the big hubs of Boston and San Francisco. Are you concerned that biotech has gone backwards in Washington state?
JI: It shows there’s some work to be done. But we do
