Published in UT San Diego, February 2, 2015
San Diego’s first big biotech success was Hybritech, which was sold to Eli Lilly for about $480 million in 1986. Scientists and executives from Hybritech have gone on to start numerous other companies, creating a massive family tree.
Now, in addition to companies started with homegrown technology from our universities and research institutes, we have the opportunity to attract early-stage companies from other parts of the U.S. The lure is our community of experienced scientists, executives and entrepreneurs, drug-development expertise, knowledgeable service firms and easy access to other relevant services, such as legal support and early-stage capital.
“San Diego is not only a source of innovation, it is a place where companies can be created and grow with technology that comes from outside of San Diego,” said Dan Bradbury, former CEO of Amylin Pharmaceuticals, a company that developed products to treat diabetes and was one of the many companies started by the Hybritech alums.
Bradbury joined Amylin in 1994 (moving here from England) and became CEO in 2007. The San Diego company was sold to New York-based Bristol-Myers Squibb for more than $5 billion in 2012.
After the sale, Bradbury became an active angel investor and is now moving two of his investments — Sensulin (from Oklahoma and Texas) and DiaVacs (from New Jersey) to San Diego. The chickens are coming home to roost.
Mike Moradi, CEO and co-founder of Sensulin, was living in Oklahoma when he talked with Bradbury at a scientific conference in 2012. The company is developing a glucose-responsive insulin that may be able to provide patients with a single daily dose taken with breakfast in contrast with the current regime of four to five injections. After Bradbury invested, Moradi moved the Oklahoma City company’s drug development to San Diego in 2014, and Moradi and his family are planning to move here this summer.
Before making the decision, Moradi looked at other cities including Boston, New York, San Francisco and Houston, where the company’s technology was originally developed. “I felt more at home in San Diego. In Houston, I felt that I would have had the same problem that I have in Oklahoma of recruiting talent. Outside of San Diego, the Bay area was the most promising, but at the end of the day, we chose San Diego because of the number of people (primarily former Amylin employees) who have expertise in commercializing diabetes technology.”
Chris Rhodes is one of those experienced people who make San Diego an attractive place for early-stage biotechs. Recruited by Amylin to serve as head of the drug-delivery program, he moved his family from Baltimore to San Diego in 2004 with the expectation that this community would better support a productive biotech career beyond Amylin. When he left Amylin four years ago, he started consulting so that he could stay here.
“San Diego has a lot of people like me who have 15 to 20 years of experience and who want to stay here. There is a lot of flux with companies getting sold and people getting laid off. So many of us become consultants and work for small companies and startups in part-time roles,” said Rhodes.
“It was my former boss from Amylin who helped me with my first consulting job, and now I’m engaged with former Amylin leadership in two startup companies.”
In 2014, Rhodes started Drug Delivery Experts to provide contract R&D support to many of these small companies that don’t have the money to build or don’t need a full-time staff and facility. The company’s lab in Sorrento Valley employs 10 scientists, most of whom currently work for Sensulin, where Rhodes serves as the company’s (part-time) chief technology officer.
He was able to get the lab started for about $100,000, keeping costs down by purchasing used equipment for which there is an active market in San Diego. “Dan and Mike agreed to help fund the lab setup so that I could start Drug Delivery Experts with the Sensulin project,” said Rhodes.
It is this kind of generosity of spirit and reinvestment in the community that keeps the ecosystem alive.
The “network effect” says that the value of a network is proportional to the number of users squared — think cellphones. As the biotech world in San Diego continues to flourish, its impact is exponential with the increasing number of people who are in the ecosystem. And Bradbury did not have to twist any arms. His protégés want to be here because of the capital, both financial and human.
In other words, San Diego has reached a critical mass in biotech, and in a critical mass environment, the value obtained becomes greater than the price paid.
Rule No. 386
We are family. Pass the test tube.