Biotech Still Homes in on California

Biotech Still Homes in on California
Report Touts State's Biotech Even as Profits Remain Elusive.
By Paul Elias/AP Biotechnology Writer
TheReporter.Com


SAN FRANCISCO - California remained biotechnology's favorite place of business last year as other states unsuccessfully tried to woo a disease-fighting industry that has yet to turn a profit, according to a report issued Thursday by an industry booster.

The California Healthcare Institute found that biotech, broadly defined to include diagnostic companies and makers of medical equipment and devices, accounted for $62 billion in revenue in the state last year. The report didn't say how much the industry lost in that time.

Nearly half of the $5.9 billion in venture capital invested in the industry nationwide flowed to California companies. Many of the companies are developing so-called biological drugs to combat such diseases as cancer, diabetes and arthritis. These biological drugs are often derived from genetically engineered microbes, rather than chemicals used in traditional pharmaceuticals.

California scientists also landed $3.6 billion in National Institutes of Health grants in fiscal year 2004, the report found.

"California's biomedical industry is a vital and growing component of our state's high-tech economy," Gov. Arnold Schwarzenegger said in a foreword to the report.

With the average salary rising to $70,400 from $60,000 a decade ago, Florida, Arizona and other states have put biotechnology atop their economic development lists.

Yet, for all its prestige, biotechnology remains an unprofitable, niche industry that analysts said can't single-handedly boost a sagging economy. Despite being home to 2,700 companies, most employ fewer than 100 workers.

With 260,000 of California's 15 million workers, it's a bigger employer than the aerospace, movie and computer industries individually but smaller than the labor force in government, manufacturing and services.