How pandemic-driven talent migration will change where biotech companies are located
Joel Marcus’ fortunes have risen with those of the life sciences industry. The executive chairman of life sciences builder Alexandria Real Estate Equities first bought laboratory space in Seattle in 1996, two years after founding the company when biotech was still emerging as an industry.
Alexandria is now a publicly traded giant with a market cap of more than $30 billion, millions of square feet of lab space throughout the U.S. and a venture capital arm, Alexandria Venture Investments. And his Pasadena, Calif.-based company has helped make the Seattle area one of the country’s top ten biotech clusters.
Just as Marcus saw the rise of biotech and capitalized on it, he is reading the tea leaves as the pandemic fuels investor interest in biotech and upends business models. He talked about the future of the industry in Seattle and beyond in an interview with Life Science Washington CEO Leslie Alexandre, at the trade group’s annual summit last week.
In Seattle alone, the company’s buildings house Sana Biotechnology, the new headquarters of Adaptive Biotechnologies, and labs for Fred Hutchinson Cancer Research Center, to name a few. It built the headquarters for Juno Therapeutics, the cell therapy biotech acquired by Celgene for $9 billion in 2018, and is developing a life sciences hub at Seattle’s almost three-acre Mercer Mega Block. And its venture arm has backed Seattle companies such as Silverback Therapeutics and cell therapy startup Umoja Biopharma.
Alexandria is also snapping up real estate in nearby Bothell, Wash., where it houses the headquarters of global biotech Seagen.
Marcus spoke with Alexandre about the rise of a “spoke and hub” model of business, the growth of biotech clusters, and the need to shore up supply chains. The pandemic also revealed the need for complex therapeutics, making the Seattle area well positioned to forge the next generation of medicines.
Read one for highlights from the interview below, edited for clarity and brevity.
Biotech clusters will strengthen
Joel Marcus: “The war for talent is where it’s all at. If you’re starting a company, you’re not going to start in a place that doesn’t have a talent pool. You can’t build a company in a new city. You can put a small company together and you can grow it to a certain extent, but you can’t scale it in any meaningful fashion. I think the existing clusters are going to become even more dominant.”
New company structures will rise
“Given that talent is moving around with COVID, I think there are going to be more spoke and hub situations with companies. So you could have a Seattle company that has a San Francisco presence, and maybe a Boston presence. We already see that with a number of companies, Sana is a great example.” (Sana is headquartered in Seattle but is hiring in the Boston and San Francisco biotech clusters, and is building a manufacturing facility in the Bay Area.)
Seattle has brains and talent
“We’ve always felt Seattle was a truly remarkable place and I think today we see it as an amazing region. This intersection of technology and life science is pretty big. It’s a world class location with great science.
Risk capital, there’s a lot of it — but it’s probably not nearly as strong as some of the other regions, so that’s something that needs enhancement.
And then you’re seeing some great waves with management talent creating new companies. People who started and grew up at Juno and so many other companies have now helped seed and start other companies. And that’s a really good thing. But I think governance in Seattle today is a big question.”
Workers are looking beyond urban areas
Related: Are tech employees coming back to downtown Seattle? Here’s what companies are planning for.
“When you look at the greater Puget Sound area, I think you have to recognize that people are nervous about living in urban areas today that are not well governed. And there are some parts of Seattle, you go down to Pioneer Square and it’s a pretty rough area down there, and that’s true of a number of locations.”
Bothell, Wash. has room to grow
“Seagen has been an anchor up there for decades and has done a great job of growing this ecosystem. Bothell’s been an important place. I think today in the world of next-gen manufacturing for gene and cell therapy, Bothell represents a great place for these companies to expand and create these critical facilities that are really needed.”
Shoring up supply chains for the 21st century
“We’re seeing it across the board, supply lines are a problem, and it’s important that we manufacture and keep critical industries here. The infrastructure bill in front of Congress, which was the first bill that seemed somewhat bipartisan oriented … if you look at it, the infrastructure is really is a 20th century infrastructure. It’s not aimed at the 21st century. It doesn’t really go in big ways at next-gen manufacturing for biotech products, or semiconductors.”
Preparing for developing complex therapeutics
“The second part, in addition to what COVID exposed with supply chain issues, is that the future of medicine is complex medicines, next-gen medicines. And it’s in gene therapy, cell therapy and beyond. And we need to have that control [of the supply chain], and I think Washington, and particularly the Puget Sound region, has a great opportunity there.”