Much is made of San Diego’s pharmaceutical industry, what with its reputation for serial entrepreneurship and whopping exits. But there’s a quieter and more insular group on the Torrey Pines Mesa that is essential to the city’s innovation economy: the research institutes.
The research community is said to have a $4.6 billion total economic impact to the region, according to the San Diego Regional Economic Development Corp. (EDC). To put that in perspective, that’s the equivalent of hosting 34 Comic-Cons on an annual basis, or building four convention centers every year.
“The heartbeat of the innovation economy is our research institutes,” said Sean Barr, senior vice president of economic development at the EDC.
Last year was a big year for the research community, as it was loaded with two major policy wins in Washington, D.C. But most in the science community are looking to 2017 with some trepidation.
Political Victories
One of the successes of 2016 was the passage of the 21st Century Cures Act, a biomedical innovation bill that included nearly $5 billion in dedicated funding for a trio of major research initiatives at the National Institutes of Health (NIH). The bill also included a measure to speed the approval of new drugs and medical devices by the U.S. Food and Drug Administration (FDA), which is expected to create a new way to streamline federal regulations that universities and academic researchers regard as burdensome.
The bill was signed into law in mid-December by President Barack Obama.
Rebecca Newman, vice president of external relations at San Diego’s Salk Institute for Biological Studies, said the timing of the bill was perfect.
“I think it came at a positive time, as a lot of people in the science community aren’t sure what will happen with the new administration,” Newman said.
Another happy move in D.C. last year was the approval of a $2 billion boost to the NIH’s budget. This was long awaited by the research community, as NIH funding has largely stayed flat for decades.
“And when you factor in inflation, that means the NIH budget has actually gone down,” said Greg McKee, president of innovation-focused nonprofit CONNECT.
Getting Creative With Capital
McKee said years of low federal dollars has led the research community to find new ways to stay afloat. Last year, he saw a trend of many local institutes looking for new ways to commercialize their research.
The Sanford Burnham Prebys Medical Discovery Institute, for example, started a program with global drugmaker GlaxoSmithKline Plc that will help the institute translate its research into medicines or other products that can be commercialized. The La Jolla Institute for Allergy & Immunology launched an incubator to spin out startups that will commercialize its technology. In 2016, The Scripps Research Institute signed a strategic affiliation with the California Institute for Biomedical Research (Calibr), which integrates TSRI’s basic research with Calibr’s ability to translate that research into medicine and other products that can be commercialized.
These partnerships with big industry pay off when the drugs start selling. For example, dramatic growth is projected in 2017 for TSRI when estimated royalties start rolling in, including royalties on Receptos Inc.’s drug, Ozanimod (San Diego-based Receptos was sold to Celgene Corp. for $7.2 billion in 2015).
Cautiously Entering 2017
Looking forward to 2017, Barr, McKee, and Newman all agree there is some concern about how President Donald Trump’s administration will impact the research community.
“I think the new administration is not going to be good for innovation and startups broadly,” McKee said. “Obviously, we don’t know yet, but all indications point to it. (Trump) has put in a cabinet of science skeptics. They’ll have a very different attitude and perspective about things like NIH funding… I am not seeing it as good macroeconomically.”
Although philanthropic funding and funding from foundations has tried to fill the gaps left by the NIH budget, local research institutes are often left needing more.
Barr said financial support for the research community should be high on San Diego’s priority list.
“(A lack of funding) is very concerning for our community, as research is the lifeblood of our economy,” Barr said.
