Biotech Offshoring Hits Commercial Realtors — and Politicians

There is a worth-reading piece in today’s San Diego U-T on the changing world of biotech, and the implications for everyone from venture capitalists to urban planners. The gist: Repurposing existing drugs is steadily more important than creating new ones, and companies created that way are generally minimally staffed. They’re virtual companies, built around a web of contractors all over the world.

While that might not seem such a bad thing, it is if your local economy is built around catering to biotech booms. Among other things, it makes your lab-heavy commercial real estate mix look skewed; and it changes your anticipated tax base if most of said startup’s employees are elsewhere, not in San Diego County, or wherever people have decided to bet the proverbial farm on biotech.

During the height of the biotech boom in 2000,
about 1.7 million square feet of laboratory space was leased, the
biggest year ever for San Diego. In the first nine months of this year,
375,000 square feet of lab space was leased.

Keeney anticipates that a total of 450,000 to
500,000 square feet of lab space will be leased by the end of year,
roughly on par with the 521,000 square feet leased in 2005.

“Typically, you see a biotech startup raise a
certain amount of money, and the next event would be that they lease
some laboratory space,” Keeney said. “But this is not now the case.”

Related posts:

  1. Happy Biotech Days are Here!
  2. The Biotech Economic Development Bubble
  3. Boxers or Briefs: Biotech versus IT
  4. Basement Biotech
  5. Basement Biotech

Comments

  1. brian says:

    Paul, how do you think this will impact the tech transfer process? If there’s no longer an expectation for every incubating discovery to spin off into a brick-and-mortar startup, might it be easier to commercialize some tech with a little less risk? San Diego still does enough university and institutional research that there won’t be a lack of ideas anytime soon.

  2. Roger Bohn says:

    Interesting article. Are people in San Diego still thinking that biotech has legs? It’s been fundamentally overhyped. Good ideas and some novel products will appear, but fundamental innovations are few and far between. Stem cells are the latest iteration of this medical hype-cycle.
    Admittedly, the goal for VC is salable products, not innovation per se. To the extent they are now figuring out the distinction, the biotech industry could start to make money.