2015-CHI-PwC-California-Biomedical-Industry-Report_Final
-
Upload
will-zasadny -
Category
Documents
-
view
26 -
download
0
Transcript of 2015-CHI-PwC-California-Biomedical-Industry-Report_Final
California Biomedical Industry Report 2015
Peter J. Claude
Partner, Pharmaceutical & Life Sciences Advisory
PwC
Todd E. Gillenwater
President & CEO
California Healthcare Institute
Jerry Brown
Governor of California
Letter from the GovernorCalifornia leads the nation in the biomedical industry, supporting highly skilled and well-paying jobs in communities across the state. The sector drives improvements in healthcare through the development of new medicines and technologies.
Last year, California enacted several laws to strengthen our life sciences community and maintain our competitive position, including AB 93 and SB 90, which made targeted investments in the sector. This year’s state budget included 20 research grants to support the federal BRAIN Initiative to map the human brain. The budget also set aside $3 million to advance the potential of precision medicine.
The state of California is committed to supporting innovation and fostering the biomedical industry. I look forward to continuing to work with leaders from companies and research institutions throughout the state to find solutions that advance new medical technologies, strengthen our economy and contribute to a healthier society.
Sincerely,
EDMUND G. BROWN JR.
Letter to StakeholdersCalifornia is an innovation machine. From groundbreaking studies at world-class universities, to entrepreneurial startups to global leading corporations, the state has shown the world how to build a thriving life sciences community. Favorable policies have helped make California the world’s leader in biomedical research and development. That success has, in turn, rippled through the state’s economy. In 2013, life sciences companies employed more than 270,000 Californians, with average wages that topped $100,000.
Equally important, this innovation ecosystem permeates the state. In 2014, academic researchers in California are projected to receive 7,400 NIH grants totaling $3.3 billion, by far the most in the nation. Many of the studies funded by these grants will lead to new insights into human biology and possibly new therapies and diagnostics. With 11 of the world’s top 100 universities (according to the Shanghai Index), California is well-positioned to continue this dominance. Ultimately, intellectual discovery attracts venture capital. California companies are projected to receive more than $3.8 billion in VC funding in 2014. These investments, as well as those from the NIH and other groups, have spurred even more innovation and helped the state recover from a devastating recession.
As you read through this report, you will see other statistics that validate the breadth and quality of our life sciences community. However, a word of caution is always in order. Open up any company’s financial report and you will find these words: Past performance does not guarantee future results. The same is true on the state level. While California’s biomedical sector has done well, we face increasing competition from other states and nations. We cannot forget the sound ideas that got us here. But also, we must find new ways to grow the innovation economy and remain world leaders in the life sciences. That future will not get built on its own. The heavy lifting belongs to us.
Sincerely,
Todd E. GillenwaterPresident & CEO California Healthcare Institute
Peter J. ClaudePartner, Pharmaceutical & Life Sciences AdvisoryPwC
CaliforniaNew JerseyNew YorkIndianaPennsylvaniaIllinoisMinnesotaMassachusettsNorth CarolinaFloridaTexasMichiganOhioUtahWisconsin
Biopharmaceutical and Medical Device Employmentby state, 2009-2013
-11%
-4%
-6%
-1%
-4%
0%
4%
-6%
5%
-17%
2013 ranking by employment
Employment growth, 2009-2013
2%
19%6%
7%10%
Employees, change from 2009
119,79541,08938,88335,96735,95632,30931,68031,44930,91127,09025,70121,45717,23516,60515,951
(5,015)(-8,371)(-1,827)(-2,247)(-4,605)
(-72)(-1,385)(-235)(1,371)(-1,799)
(393)(1,864)(1,198)(2,594)(905)
2
8
1
11
14
3
45
6
7
10
9
1213
15
Biomedical Industryin California, 2013 (estimated)
*2014 California Biomedical Industry Report based on 2012 employment data
Public169
Private939
BiopharmaceuticalCompanies
1,108 total
Public84
Private1,444
Device and Diagnostics Companies
1,528 total
Total revenueDirect employmentTotal wages and salariesAverage annual biomedical industry wageTotal NIH grants awardedTotal venture capital investmentsTotal biomedical exportsDirect federal taxesDirect state and local taxes
$101 billion270,300
$27.4 billion$101,540
$3.3 billion$3.8 billion
$22.2 billion$7.2 billion$3.7 billion
Number of life sciences companies 2,636
Direct Employment
Indirect and Induced Employment
Total Direct, Indirect and Induced Jobs: 767,300
497,000*497,000*270,300270,300
The Innovation PipelineCalifornia holds a unique position in the worldwide life sciences community. Golden State companies are leaders, producing some of the world’s most innovative therapies and diagnostics. In turn, these corporations have made the state’s life sciences industry an economic juggernaut. Just a few statistics from 2013 bear that out, as the industry produced:
• $101 billion in total revenues• $27.4 billion in total wages• $101,540 in average wages• $3.8 billion in venture capital investment
California’s successful biomedical industry is the end result of an extensive innovation pipeline. This ecosystem begins in the state’s outstanding academic centers and research institutes, continues with an entrepreneurial, start-up culture that rewards risk-takers and culminates with successful companies that produce hundreds of new drugs, diagnostics and devices.
The sector serves as an increasingly important element of the state’s economy, with the biomedical industry employing 270,300 people in 2013. More importantly, California’s life sciences community helps patients around the world, as innovators from San Francisco to San Diego tackle many of healthcare’s unmet needs.
*Data excludes R&D contracts and projects funded through the American Recovery and Reinvestment Act
Note: 2014 data reflect awards through September 29, 2014
UC Berkeley
$100M
California Institute of Technology$63M
UC Irvine
$113M
UC Davis
$171MUSC
$185MScripps Research Institute
$187M
UCLA$350M
Stanford University$376M
UC San Diego$378M
UC San Francisco$525M
Top 10 California Organizations Receiving NIH Funding2014*
Top 10 States Receiving NIH Funding2013 vs. 2014*
20132014*
California
Massachusetts
New York
Pennsylvania
Texas
Maryland
North Carolina
Washington
Illinois
Ohio
7,554 7,420
4,948 4,780
4,7684,672
3,3193,268
2,1572,063
2,4542,456
2,0591,950
1,5381,529
1,8401,813
1,5791,484
$628M
$614M
$697M
$683M
$776M
$858M
$889M
$877M
$937M
$953M
$922M
$965M
$1.35B
$1.47B
$1.9B
$2.0B
$2.29B$2.29B
$3.21B
$3.29B
*Data excludes R&D contracts and projects funded through the American Recovery and Reinvestment Act
Note: 2014 data reflect awards through September 29, 2014
FundingAwards
Academic ExcellenceCalifornia’s life sciences industry is built on, and fueled by, world-class universities and ground-breaking biomedical research. According to the Shanghai Index, California has 11 of the world’s top 100 schools. New York is the next closest with five.
One of the pillars of the life sciences infrastructure is a well-educated workforce. In 2012, California universities produced more than 6,000 doctorates in the science and engineering fields, including more than 1,200 in the life sciences. These newly minted scientists will be among the next generation of trailblazing entrepreneurs.
In labs throughout the state, California’s academic researchers attract billions of dollars in grants from the
National Institutes of Health (NIH) and other entities. For federal fiscal year 2014, California institutions received more than 7,400 grants, totaling $3.3 billion, a 15.4 percent share of all NIH grants distributed. Massachusetts is the second most active state, with a 10.8 percent share. Among California institutions UC San Francisco, UC San Diego and Stanford lead the pack, bringing in a combined $1.28 billion of NIH funding.
Looking at the top ten Congressional districts for NIH funding, aggregated by region, the San Francisco Bay Area tops the list with more than $1.23 billion. After that, Los Angeles and Orange County come in at $733 million, followed by San Diego at $540 million and Sacramento/Davis at $187 million.
The True Measure of SuccessWhile economic growth is important for any industry, life sciences brings an added dimension to the table — new technologies and treatments that help people worldwide.
In 2014, California companies filed 1,205 investigational new drug (IND) applications.* Many of these emerging therapies are designed to treat cancer, infectious diseases and central nervous system disorders. Overall, the California life sciences industry has an impressive record of developing new treatments that improve survival and quality of life for millions around the world.
*through Sept. 5, 2014
California Products by Therapeutic AreaInvestigational New Drug (IND) products through Phase III clinical trials
California continues to lead the world with the highest number of premier research institutions. The Golden State is home to 11 of the top 100 universities on the Shanghai Index. These institutions include: Stanford University, UC Berkeley, California Institute of Technology, UCLA, UC San Diego, UC San Francisco, UC Santa Barbara, UC Irvine, USC, UC Davis and UC Santa Cruz. New York came in second with five institutions, followed by Pennsylvania and Texas with four apiece.
World Class Research Institutions
Number of Universities in the World Top 100Shanghai Index, 2014 rankings
113
3
4
2
5
2
22
4
CaliforniaNew YorkPennsylvaniaTexasIllinois
115443
MassachusettsArizonaMarylandNew JerseyNorth Carolina
32222
1,228
Total life sciences doctoral degrees
California
874
799
699
572
432
423
438
483
442
New York
Texas
Mass.
Penn.
Maryland
Florida
Ohio
N. Carolina
Illinois
Doctoral Recipients in Life Sciences DisciplinesTop 10 states, 2012
California’s stellar academic prowess was on full display with over 1,228 life science doctorates awarded in 2012. By contrast, New York was awarded less than 900.
Eye/Ear
Miscellaneous
Genitourinary
Gastrointestinal
Cancer
Infectious Diseases (incl. HIV)
Central Nervous System
Hormonal Systems/Nephrology (incl. Diabetes)
Immune System
Cardiovascular
Pain
Musculoskeletal
Hematological
Respiratory
Dermatology
Diagnostic/Imaging Agent/ Delivery 11
6
16
38
141
319
117
78
96
66
57
64
60
45
48
43
Total Biomedical Employment by Clusteras a percent of the total, 2013
Biomedical Employment vs. Other Key Sectorsin California, 2013
Biomedical industry
167,946
71,655Aerospace
357,865Computer and
peripheral equipment mfg.
166,221
Internet, tele- communications,
data processing
138,493Motion pictures
270,289
Other electronic equipment mfg.
Employees
* Includes Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara and Sonoma counties
*** Includes Monterey, Kings, Tulare, Inyo, San Benito, Fresno, Mono, Santa Cruz, Merced, Madera, Stanislaus, Mariposa, Tuolumne, San Joaquin, Calaveras, Alpine, Amador, Mendocino, Lake, Colusa, Sierra, Glenn, Plumas,
Humboldt, Trinity, Tehama, Lassen, Shasta, Del Norte, Siskiyou and Modoc counties
**Includes Sacramento, Butte, El Dorado, Nevada, Placer, Solano, Sutter, Yolo and Yuba counties
Note: Clusters do not sum to total due to omitted counties and data suppresion at the county level.
Total Biomedical Employment by Clusterin California, 2013
Sacramento area**8,501
Ventura and Santa Barbara counties9,840
Riverside and San Bernardino counties11,193
Northern California***
13,729San Diego County 36,731Orange County 40,727Los Angeles County 53,093Bay Area* 60,636
270,289TOTAL
Cluster
22%
3%
4%
14%
20%
15%
4%5%
California Biomedical Wagesby sector, 2013*
Academic research
Biopharmaceuticals
Medical Devices, Instruments, Diagnostics
Research & Development, Testing Labs
Wholesale Trade
TOTAL
Avg. wage Total wages
$65,800
$153,801
$86,901
$110,661
$92,529
$101,538*
$2.69B
$6.94B
$6.49B
$7.20B
$4.13B
$27.4B
* Total average
Driving GrowthThe confluence of innovative thinking, hard work and ample funding has created a life sciences powerhouse, which continues to be a major economic driver throughout California. As noted earlier, in 2013 California’s biomedical industry employed more than 270,000 people, with an average salary of around $101,540.
As a whole, the California life sciences industry produced $101 billion in revenue, paid $7.2 billion in direct federal taxes and $3.7 billion in direct California state and local taxes. California’s biomedical exports in 2013 increased to $22.2 billion from $20.9 billion in 2012.
But the economic impact of the life sciences goes far beyond the companies that develop our drugs, devices and diagnostics. Hundreds of thousands more Californians, in a wide variety of areas, support the industry. As a result, the biomedical sector is a key factor in sustaining growth throughout California.
*2014 data based on projection from first two quarters
2012
2013
2014*
2012
2013
2014*
2012
2013
2014*
2012
2013
2014*
$81M
$9M
$33M
$32M
$52M
$72M
$339M
$365M
$356M
$778M
$634M
$702M
$270M
$132M
$201M
$526M
$302M
$588M
$464M
$477M
$539M
$1.17B
$1.12B
$1.14B
California U.S.
$130M$277M
$122M
$114M
$314M
$245M
$817M
$1.0B
$1.46B
$1.87B
$2.40B
$3.14B
$189M
$191M
$181M
$417M
$328M
$399M
$438M
$612M
$880M
$1.65B
$1.61B
$2.08B
Venture Capital Investment, Biotech and Medical Devicesby stage, U.S. and California, 2012-2014*
Start-up/seed stage
Early stage
Expansion stage
Later stage
MEDICAL DEVICESBIOTECH
*2014 data based on projection from first two quarters
Mass. $1.52B$1.36B
$1.80B
Conn. $93M$113M
$423M
Penn. $238M$224M$310M
Texas $238M$140M
$284M
Wash. $161M$263M$267M
Ill. $183M$43M
$237M
Minn. $166M$161M$234M
Mich. $98M$48M
$195M
N.Y. $109M$134M$124M
Calif. $2.68B$2.91B$3.76B
Top 10 States for Life Sciences Venture Capital Investment2012-2014*
201220132014*
A Magnet for InvestmentCalifornia’s academic excellence generates thousands of life sciences innovations. The basic science discoveries funded by the NIH do not stay in the laboratory. They are often licensed to pharmaceutical companies, biotech firms and start-ups. In many cases, the scientists who make these discoveries start their own companies to carry the research forward.
This constant flow of innovation attracts investment from around the world. It’s estimated that California life sciences companies will have received $3.8 billion from venture capitalists in 2014, or 45 percent of the $8.4 billion VCs are projected to invest in the life sciences nationwide. Especially significant, $1.8 billion will support California’s early stage companies as they work to bring new therapies, devices and diagnostics to market.
These investments, at all stages, are felt throughout the state. Silicon Valley is projected to receive $2.8 billion in 2014. San Diego is projected at $647 million and Los Angeles/Orange County at $254 million.
Life sciences venture capital investment is second only to software in California and is a significant contributor to California’s projected 60.1 percent share of all venture capital investments in the United States in 2014.
Business GrantsThe NIH also invests in California’s life sciences industry through their small business grants. The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs provide significant support for
emerging companies, particularly those who are not yet positioned for venture capital. These grants provide critical seed funding to help small start-ups prove their technologies and grow.
Once again, California leads the nation in NIH small business grants. The state received 391 awards in 2014, which translates into $146 million. Massachusetts is second on the list, with 175 awards for $73 million. While these numbers seem small when compared to venture capital funding, they are critically important investments that help small companies gain a toe hold in the competitive life sciences industry.
Mergers and IPOsAs products come closer to market, smaller firms must often seek more resources through initial public offerings or mergers with larger companies. This process rewards investors for their faith in the company and allows them to recirculate capital, investing in other innovative start-ups.
In 2014, the M&A market is on pace to eclipse 2013. Through late September, there were 70 completed biomedical M&A deals where the target company was located in California, compared to 70 completed deals in all of 2013. Where terms were reported, these 2014 transactions have totaled more than $34 billion.
The IPO side has been equally busy. Through late September, there were 20 IPOs in 2014, bringing $1.5 billion into emerging companies. In 2013, there were 17 initial public offerings.
SOURCES• Bureau of Labor Statistics Quarterly Census of Employment and Wages; 2007 Economic Census; (pages 1, 4, back page)
• Bloomberg (page 1)
• PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters (pages 1, 5)
• National Institutes of Health (pages 1, 2)
• IMPLAN modeling system (page 1)
Report AuthorsTodd E. GillenwaterPresident & CEOCalifornia Healthcare Institute
Peter J. ClaudePartner, Pharmaceutical & Life Sciences AdvisoryPwC
Project TeamWill ZasadnyManager, CommunicationsCalifornia Healthcare Institute
Erin McInerney-PrichardManager, Pharmaceutical & Life Sciences AdvisoryPwC
WritingJosh BaxtBaxt Communications
Graphics and DesignPaul Horn
Economic AnalysisKristen Soderberg BernieManager, Health Policy EconomicsPwC
About California Healthcare InstituteCHI represents more than 275 leading biotechnology, medical device, diagnostics and pharmaceutical companies, and public and private
academic biomedical research organizations. CHI’s mission is to advance biomedical research, investment, and innovation through effective advocacy of policies to improve public health and ensure
the continued vitality of the life sciences sector.
CHI’s website is www.chi.org. Follow us on Twitter @calhealthcare, Facebook, LinkedIn and YouTube.
See methodology and more at www.chi.org/2015biomedreport
About PwCPwC’s Pharmaceutical and Life Sciences Industry group is dedicated to delivering effective solutions to the complex strategic, operational, and financial challenges facing pharmaceutical, biotechnology, and medical
device companies. We provide industry-focused assurance, tax, and advisory services to build public trust and enhance value for our clients and their stakeholders. More than 195,000 people in 157 countries across our global network of firms share their thinking, experience, and solutions
to develop fresh perspectives and practical advice.
For more information visit:www.pwc.com/us/pharma and www.pwc.com/us/medtech
Top Biomedical Employmentin California, 2012 vs. 2013
TOTAL 266,572
Growth rate
270,289 1.4%
44,065
44,605
1.2%Wholesale Trade
63,355
65,081
2.7%Research & Development,
Testing Labs
74,39474,654
0.1%Medical Devices, Instruments, Diagnostics
44,23545,140
2.0%Biopharmaceuticals
Academic research40,52340,809
0.1%
20122013
Moving ForwardCalifornia provides a case study in how to build a robust life sciences industry from scratch. It starts with a world-class academic system. In turn, the innate curiosity nurtured by outstanding education produces waves of innovators. Not satisfied with the status quo, these entrepreneurs often dedicate their lives to making things better. By attracting both public and private investment, their ideas are ultimately transformed into life-saving products.
But this formula didn’t just happen. The innovation pipeline was supported, in large part, by favorable public policies that have allowed creative minds to flourish. That approach has helped California’s life sciences industry become the leader it is today.
However, the world is changing rapidly, and the state cannot afford to rest. Global competition has increased dramatically in the past decade, and will continue to be a challenge. Both the state and nation must always remain one step ahead of these dynamic market forces to ensure continued leadership in biomedical education, research, investment and product development.
• NSF/NIH/USED/USDA/NEH/NASA; Survey of Earned Doctorates, 2012; Shanghai Ranking Consultancy; BioPharm Insight; IND filed through Phase III, Sept. 5, 2014 (page 3)
• Thomson Reuters Financial (page 5)
PHOTO CREDITSDavid Fulmer via Flickr Creative Commons (California capitol photo, cover)David Schexnaydre via Flickr Creative Commons (page 2)
© 2014 California Healthcare Institute
CHI HEADQUARTERS 888 Prospect St., Suite 220 • La Jolla, CA 92037
Tel: 858-551-6677 | Fax: 858-551-6688 [email protected]
CHI SACRAMENTO 1201 K St., Suite 1840 • Sacramento, CA 95814
Tel: 916-233-3497 | Fax: 916-233-3498
CHI WASHINGTON, D.C. 1608 Rhode Island Ave., N.W., 2nd Floor • Washington, D.C. 20036
Tel: 202-974-6313 | Fax: 202-974-6330