San Diego’s life sciences sector contributed $56.6 billion to the regional economy despite limited funding and layoffs – San Diego Union-Tribune

Despite layoffs and limited funding sources, San Diego’s leading life sciences sector contributed $56.6 billion to the region’s economy last year.

Biocom California, the voice of the life sciences industry across the state, released the 2024 Life Sciences Economic Impact Report to paint a picture of a sector that is one of the county’s largest employers and produces life-saving drugs, therapies and medical technologies.

The report tracked employment, financing and economic trends impacting the life sciences industry from October 2022 to October 2023. San Diego’s economic performance declined slightly from the previous year’s report ($57.4 billion in 2022). ), but remained relatively stable.

For years, San Diego has remained one of the three largest life sciences centers in the country, along with Boston and San Francisco. For example, last week, thousands of industry professionals from around the world descended on the San Diego Convention Center for the BIO 2024 International Conference.

“The reason we are doing so well is not something that can be reduced to numbers and data,” said Joe Panetta, CEO of Biocom California.

The report shows that in 2023, the San Diego region had 75,815 employees at 1,966 life sciences facilities.

While there may be more life sciences workers in the Bay Area (156,454), they are spread across multiple clusters, Panetta said. By contrast, Boston boasts a high concentration of workers within about a square mile of Kendall Square, but San Diego County is denser and has room for new development.

“What makes San Diego so unique is the geography, the demographics and the fact that biotech is so densely concentrated in San Diego,” Panetta said. “This allows our companies to work together better and gives employees in the industry a sense of where they work.”

The average annual salary for life sciences workers in San Diego County was $163,177. This average wage is higher than the annual salaries reported in the greater Los Angeles ($109,071) and Orange County ($107,862) areas, but not far from the Bay Area’s offering ($186,982).

“San Diego is becoming a much more attractive location for biotech employment than the Bay Area due to housing and living costs,” Panetta said.

Life sciences employment in the San Diego region is down approximately 2.5 percent from 2022.

Last year saw a wave of layoffs at life sciences companies large and small for a variety of reasons: high interest rates, withdrawal of venture capital financing, and declining demand for products related to the COVID-19 pandemic.

“We cannot ignore the drug pricing provisions of the Inflation Control Act,” Panetta said.

Federal law that goes into effect in 2022 caps the price of insulin, requires Medicare rebates for rising drug costs and requires Medicare prices to negotiate with companies for certain drugs.

“We’re already starting to see pharmaceutical companies looking at their investments, and even some of them scaling back a little bit… as they put pen to paper and calculate what the best return on investment is in discovering and researching certain types of drugs,” he said.

The report divides the life sciences industry into six subsectors: biotechnology, biopharmaceuticals, medical devices and equipment, research and testing, research tools, and food and agricultural biotechnology.

San Diego County’s biopharmaceutical segment, which includes manufacturers of diagnostic tests, saw the largest annual job decline, down 5.3%.

Panetta noted that while there were many layoffs in the industry last year, the report only includes October results. Since then, positive signs have emerged in recent months for 2024, which will be reflected in next year’s report.

The only subsector where employment increased annually was scientific and research tools, which recorded an 8.4% increase in employment. This local segment includes companies that produce laboratory equipment used by businesses and researchers to develop drugs or therapies.

Companies like gene sequencing giant Illumina and San Diego-based Element Biosciences make machines that allow scientists to analyze DNA, for example.

Panetta explained that companies are “looking for more efficient, less time-consuming and more accurate tools that they can use for drug discovery and development,” including artificial intelligence tools.

“The idea is to get work done faster, cheaper and more accurately,” he said.

San Diego also received $2.2 billion in research funding through the National Institutes of Health (NIH) and the National Science Foundation (NSF) – the most in California, just behind the Bay Area ($2.33 billion). Panetta said Biocom spends a lot of time working with the government agency to teach small businesses in San Diego how to apply for NIH grants.

“I think another thing that sets San Diego apart is that when you look around the plateau, you see a lot of research institutions and, of course, the university,” he said. “Here in San Diego, new incubators are being built every six months – I didn’t see that 10 years ago. I think a lot of it is simply because there is so much great research going on in universities, research institutes and other companies.”