How Did San Diego Become a Leading Hub for Biotechnology?

While sunny San Diego is famous for its velvety beaches and pristine weather, the coastal city is also home to a buzzing biotechnology market. With innovation embedded in its roots, how exactly did the southern Californian city become so famous for its start-up culture?

Since the turn of the millennium, San Diego’s Life Sciences industry has grown five times as fast as the local economy, generating $131 billion in economic value and supporting over 1.38 million Californian-based jobs in the process.

In fact, today, San Diego, also distinctively nicknamed Biotech Beach, is the third largest and fastest-growing biotech hub in the US, with over 71,000 direct employees and year-on-year job growth of 18%.

The development within the sector boils down to a hotbed of skilled Life Sciences talent, relatively affordable lab spaces, and access to investors – assets that can’t be easily replicated elsewhere.

But how exactly did San Diego become the go-to destination for biotechnology?

San Diego’s biotech story began back in 1955-1965 when leading research institutions such as the Salk Institute, Scripps, and the University of California San Diego (UCSD) were founded in close proximity to one another. Built overlooking the mighty, majestic Pacific Ocean, the institutions commenced their operations by recruiting renowned Life Scientists across the globe.

As the academic foundations were already in place, business leaders designated the Torrey Pines neighbourhood to scientific research and development to create new industries and build new companies with high-paying jobs.

Tempted by first-rate resources, emerging opportunities, and the region’s Mediterranean climate, crowds of researchers and students flooded the shores, hungry to expand the boundaries of Life Sciences and enhance the capabilities of modern medicine.

But aside from its popularity by those in the industry, in the business world, it was Ivor Royston who really got people talking...

It was 1978, and Royston – then a young assistant professor studying immunology at UCSD – dropped four investors at the airport after showing them around his lab. As they were chatting, he told them he believed his research into monoclonal antibodies could be the future of disease diagnosis. He revealed that he and his assistant, Howard Birndorf, hoped to begin making the antibodies commercially for hepatitis testing.

Not too long after, the San Franciscan venture capitalists gave the pair $300,000 to begin work on the antibodies, and subsequently, Hybritech and San Diego’s multi-billion-dollar biotech industry was born.

By the early 80s, the San Diego area was steeped with complementary firms – patent attorneys, venture capitalists, and PR companies – who were steadfast in supporting entrepreneurial start-ups heading toward medical breakthroughs.

In that same time period, Hybritech went public and commercialised a series of diagnostic kits, including those for anaemia, allergies, and different forms of cancer. By 1985, the business had developed its legacy product: the very first antibody for prostate cancer, which was market-approved just a year later.

After going to market, the PSA test received recognition for being the most accurate way to monitor the disease, which continues to be the second biggest cancer killer among men. The test measures the blood for prostate-specific antigen, a protein that increases in parallel with the disease.

The same year the PSA test went to market, the infamous pharmaceutical giant, Eli Lilly, bought Hybritech for a staggering $400 million, which in turn, produced a league of San Diego biotech millionaires. And yes, it was, in fact, Hybritech’s success that ignited an explosion of venture capitalist funding companies in the San Diego area.

It’s worth noting here that many of Hybritech’s founders and early employees who thrived under the company’s entrepreneurial spirit chose not to work for the much more corporate Eli Lilly. Instead, those who left went on to create or nurture other Life Sciences companies, including one of San Diego’s biggest biotech success stories, Idec (now part of Biogen).

In fact, today, a quarter of San Diego’s Life Sciences organisations have roots that can be traced back to Hybritech, reports Biocom. So, I think it’s safe to say there wouldn’t be such a successful biotech business in San Diego without researchers like Royston, who himself went on to become a venture capitalist to invest in local Life Sciences.

But back to the rich history of San Diego...

Throughout the late 80s and early 90s, when The Cold War was winding down, defence spending in the area had drastically decreased, meaning San Diego-based aerospace companies were closing their doors. As a result, the local economy collapsed, and California faced its gravest recession in over 50 years, with unemployment rates spiralling to nearly 10%!

To secure more business, more specifically biotech business, civic leaders agreed to relax some of the city’s rigid regulations surrounding construction, permits, and zoning. Because of the loosening of rules, along with the research from UCSD, the Salk Institute, the Burnham Institute, and Scripps, a tidal wave of biotech businesses emerged.

It was then, in 1991, that Biocom was formed to be the voice of the Life Sciences industry in California and to rally against proposed water sanctions and promote the industry’s economic growth. To avoid any cuts, and ultimately halt the work of Life Sciences companies within San Diego, Biocom agreed to have all of its members up their reclaimed water usage.

Nowadays, San Diego’s biotech industry is thriving, with the average worker earning $113,602 – that’s roughly 29% more than the average pay for all other jobs in the city.

For us at Meet, from 2021 to 2022, we’ve had an enormous 524% increase in placements in San Diego, with our candidates securing a median wage of $141,250.

So, while San Diego has a rich history that has planted its feet firmly in the sand of Life Sciences, start-ups continue to emerge and grow, expanding economic value, attracting skilled workers, and contributing to the social and cultural vitality of the southern Californian city.

If you’re working within Life Sciences and looking for a new opportunity in Biotech Beach, make sure you reach out to us! Our expert consultants have the knowledge and network to secure your next exciting endeavour.