Member News

January 03, 2014

The Bay Area’s biotech industry is showing a middle-age problem: It’s soft in the middle.

With biotech giant Amgen Inc.’s $10 billion acquisition in October of South San Francisco’s Onyx Pharmaceuticals Inc., few companies are ready to fill the Goldilocks role of being just the right size — large enough to make a difference in drug development, but not so large that they are locally aloof.

The region’s biotech industry is dominated by large players — like Genentech Inc. and Gilead Sciences Inc. — and a growing community of early stage companies and startups.

In the middle? The most recognizable company there would be orphan drug developer San Rafael’s BioMarin Pharmaceutical Inc., which is the subject of continuous chatter around its sale to a large drug marketer in need of new products and revenue.

The dearth of mid-size companies risks hurting the long-term balance of the Bay Area’s biotech ecosystem, industry veterans have said, and that’s led to programs from BayBio, the region’s biotech industry trade group, including the Bay Area BioEconomy Initiative.

The multi-faceted program — aimed at helping young companies grow by finding new ways to help them discover and develop drugs faster — was largely championed by Tony Coles, the former CEO of Onyx.

Leaders also are focusing on the region’s small successes: startups, a growing network of incubators and startup-related programs, a wave of drug approvals and a relatively strong capital market that led to a half-dozen biotech IPOs in 2013.

What’s more, the Bay Area is leading the way in emerging areas, including aging, the microbiome, digital health, personalized medicine, HIV, Alzheimer’s and cancer.

Second Genome Inc. CEO Peter DiLaura believes 2014 will be the Year of the Microbiome, where the gut will be increasingly tapped for drug discovery. The tipping point is a growing raft of data that is telling researchers how drugs react and are shaped by the bacterial communities that hang out in the gut.

“There’s a new emphasis by large pharma to incorporate microbiome research across multiple therapeutic areas,” DiLaura said. “The message is, ‘No matter what you’re studying, ignore the microbiome at your own peril.’”