San Diego’s life sciences sector struggles for financial security

toJOLLA, Calif. – Nearly half a century ago, a barren stretch of ocean began sprouting research institutions, transforming a backwater Navy town into a much-envied symbol of high-tech jobs and biomedical discoveries.

But after years of declining federal grants and nagging national economic difficulties, Torrey Pines Mesa’s independent institutes are at a crossroads. Some are forced to merge or merge with larger organizations in order to survive. Others place risky bets on drug discovery for a fee.

If the new strategies do not work, the financial health of the institutes may be challenged, disrupting the region’s life sciences ecosystem, which could lead to the collapse of the biotech cluster if its traditional strengths fade.

Historically, San Diego’s multiple independent facilities have given the region a distinct advantage: “It’s a more competitive environment, and it creates more opportunities for entrepreneurial researchers,” said Joseph Cortright, an economist who studies biotechnology clusters for the consulting firm Empressa.

However, due to current events, these opportunities may become more limited.

For example, Scripps Research Institute, which has been independent for 25 years, is now looking for a partner with deep pockets. “We don’t hide it,” Scripps President Steve Kay told STAT. “We are in talks with high-quality clinical centers about the merger.”

It’s not the first time. In 2014, Scripps came very close to being recruited by USC Los Angeles. Under the proposed union, Scripps was to receive $15 million annually for 40 years.

But Kay said the agreement could also have led to USC “dissolving the institute and seizing the assets.” Key assets include the Institute’s leased location, an idyllic California location overlooking a world-famous golf course, coral reefs and nudist beach. (Some observers suspect that USC may re-emerge as a white knight, but it is less of a threat to Scripps’ independence.)

Even the university here is not immune to what are seen as academic kidnappings by barbarians at the gate.

Last year, the University of Southern California ran a tricky academic hiring spree, luring neuroscientist Dr. Paul Eisen from UC San Diego with a salary of $500,000. The legal battle continues to determine who gets to control the prestigious, federally funded Alzheimer’s drug research project that Eisen effectively transferred to the University of Southern California.

All of these movements and dealings brought a wave of tension to the research community, as some were relaxing to surf during their lunch hour. And San Diego’s threatened model has national implications — because if the region shrinks, it doesn’t bode well for those seeking to emulate it.

“San Diego has venture capital for new companies because it has multiple, experienced institutional players,” Cortright said. Only Boston and the San Francisco Bay Area rank higher in desirable categories like venture capital, patents, and jobs.

Courtwright is among analysts who have questioned the massive spending of public money in the hope of creating biotech hubs, without the historical infrastructure and culture. “You can bribe someone to set up a research site, but there is very little evidence that these are commercially productive,” Cortright said.

In the mid-2000s, then-Florida Governor Jeb Bush began one of his most ambitious campaigns, giving $1 billion to three San Diego institutes to start operations from scratch: Scripps received $600 million to establish a campus in Jupiter; the $300 million Sanford Burnham Prebys Institute for Medical Discovery in Orlando; and Torrey Pines Institute for Molecular Studies, $100 million to Port St. Lucie.

However, during that period, Florida’s share of venture capital has remained constant — about 1 percent per year, which is Courtright’s research show up. In the face of such findings, Florida officials over the past two years have rejected several new requests for research funding for San Diego institutes.

The expansion of the Sunshine State was once seen as a path to sustainability for these institutes. Now, many of La Jolla’s scientific leaders are scrambling for future successes from philanthropy in a money chase that resembles the free-agent competition in sports, but for the super-rich.

The Sanford Burnham Institute has pursued a big mantra, enlisting select major donors who have helped make the 40-year-old institute’s name resemble that of a law firm. The most recent partner, real estate magnate Konrad Prebis, pledged $100 million last year.

Sources noted that this award followed a failed attempt by Sanford Burnham leaders to establish a partnership with Scripps.

At the Salk Institute for Biological Studies, the board leadership includes at least two billionaires. They led a philanthropic campaign that raised $275 million in various pledges toward a goal of $300 million.

The task of capitalizing on this generosity will fall to the institute’s new president, Elizabeth Blackburn, an aging Nobel Prize-winning researcher who on January 1 became the first female president in the Salk Institute’s 56-year history. Without discussing details, Blackburn said her goal is to “build on what has worked at SALIC.”

Some institutes, which have traditionally relied on federal research grants, are now turning more toward the pharmaceutical industry as a source of financial support.

At Scripps, CEO Peter Schultz, a venture chemist, is focused on securing industrial or philanthropic funding to run large-scale screens of molecules to discover new drugs. At Sanford Burnham, Dr. Perry Nissen, a physician-scientist who became CEO in 2014 after previously shepherding drug candidates to market for GlaxoSmithKline, directs what he calls “professional drug discovery,” with about 80 pharmaceutical-grade researchers doing work. Contractual for GlaxoSmithKline. pharmaceutical companies.

Not to be left out, UC San Diego hopes to “break down isolation” with its neighbors and foster more regional cooperation, said Dr. Gary S. Firestein, the dean who directs the university’s Clinical and Translational Research Institute. He said there has been some success in increasing cooperation, but “we need to really redouble our efforts.”

It won’t be easy.

About a year ago, BIOCOM, the local life sciences trade group, held a community event after opening its new, strategically located office in Torrey Pines Mesa. One attendee recalls that the representatives of the major institutes mostly kept to their own groups, eyeing each other warily across the floor, like children at their first school dance.

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