‘Fertile soil for biotech’: Solano County’s Vacaville preps global pitch for firms to plant roots thereMarch 26 2019
NORTH BAY BUSINESS JOURNAL | March 26, 2019, 10:55AM
Vacaville is hustling to attract more life sciences companies, looking to grow its cluster of such high-paying employers with the pitch of ample buildable land, lower-cost housing and an increasing pool of skilled labor.
As Solano Community College this spring will be turning out the first graduates from its nationally trend-setting biotechnology program, the city’s economic boosters are getting help from local employers for a pitchathon in June at the biggest biotechnology conference in the world. Over 16,000 professionals from around the world are set to attend Bio, held in Philadelphia this year and in San Diego for 2020.
South San Francisco-based Genentech opened its Vacaville plant in the mid-1990s, and its sprawling production facility is the most visible sign of biotech in the northern Solano County city of about 100,000. But the city also has attracted other life sciences manufacturers and product developers.
On the product development side are DesigneRx, which is in clinical trials for treatments after a decade and a half of work, and Novici, a longtime local stalwart whose tech helps accelerate R&D. In manufacturing beyond Genentech is Cupertino-based Durect Corporation, which has a 24,000-square-foot Vacaville facility to complement one of similar size in Birmingham, Alabama.
The latest newcomer, also in biomanufacturing, is RxD Nova Pharmaceuticals. Formed two years ago with the help of Chinese backers, the company is in the process of recertifying the 52-acre former Kairon, Novartis and Eli Lilly plant at 2010 Cessna Drive. The 74,000-square-foot building closed in 2015 and has 28 acres available for expansion.
Biotech is one of four target areas for the city’s newly revamped economic vitality strategy, also including advanced manufacturers such as Icon Aircraft, food processors, and logistics companies such as Amazon. Governments at many levels in California developed such plans after the Great Recession and subsequent loss of redevelopment agency funds to fill budgetary holes in Sacramento in 2012.
“We’re getting the word out that we have fertile soil for biotech,” said Don Burrus, economic development manager.
That soil is both literal and figurative. The city has master-planned over 1,100 acres of land in Interchange Industrial Park, which fronts on Interstate 505 and is a quarter-mile from an exit from Interstate 80, two corridors connecting the Sacramento and San Francisco Bay metropolitan areas. After nearly two decades of little action because municipal services such as water and sewer didn’t extend to that area, the city in the past two years fronted funds to prep 157 acres with needed public infrastructure.
With those improvements going in, Buzz Oates Group of Companies and Sierra Pacific Properties have put roughly 4 million square feet of projects on the boards, with some already under construction, according to Burrus. With little new industrial development on the San Francisco Peninsula south through Silicon Valley, the cost of industrial rents has widened the spread between those of Solano and of the central Bay Area to a few dollars per square foot monthly, Burrus said.
Affordability for entrepreneur and employee was one of the reasons the predecessor of Novici set up shop in Vacaville in the late 1980s as one of the bioneers of the cluster, according to Hal Padgett, Ph.D., chief executive and technical officer.
“That, I think, has remained one of the chief advantages of being out here,” Padgett said. “Homes are easier to obtain. It is more of a suburban, relaxed lifestyle, with a little bit more space. You just don’t have all the pressures of the more urban and money-saturated environments.”
He said he just got off a call with a prospective employee who just purchased a home in Solano and is commuting to South San Francisco.
“I’m not offended that employees say they want to work at Novici because it’s a better life in terms of the commute,” Padgett said. “Part of the bargain is employees have the chance to pursue their professional goals without commuting four hours a day, and they can pursue their personal lives as well.”
And South San Francisco isn’t as far away for conferences and presentations as it used to be, with the emergence of videoconferencing technology, Padgett said.
Padgett first came to Vacaville with BioSource Genetics, which later became publicly traded Large Scale Biology and liquidated in 2005. Padgett and a group of colleagues in court acquired BioSource’s key GRAMMR technology for reshuffling genes and using plant cells to produce pharmaceuticals and other products on an industrial scale. That process has been licensed to others, namely Life Technology.
Major types of facilities in the life sciences industry are research-and-development facilities and manufacturing plants. A key factor for R&D site selection and development of an industry cluster is proximity to an academic center with top scientists and tech, according to Steve Karp. He is executive director of innovation services for the California Life Sciences Institute, the nonprofit education and workforce development arm of the California Life Science Association. While Karp mainly works with advisory groups to small startups, his career includes a stint at Genentech around the time the South San Francisco-based biotech pioneer was building the 450,000-square-foot cell culture plant 2 expansion to its Vacaville manufacturing plant, finished in 2005.
Startups would tend to form and incubate near a research institution such as the University of California, Davis, a top center for agriculture-related pursuits, Karp said.
“They need access to expensive analytical capabilities that small or growing companies can’t afford,” he said. “They are not going to spend $100,000 on an instrument they may use only once a month.”
While renting time in university laboratories is a boon, a bigger boost comes from being able to exchange ideas with scientists with deep knowledge in the startups’ focus areas, Karp said.
For life sciences manufacturing, the cost of doing business in an area is key, he said.
“Inexpensive real estate and a source of inexpensive labor — because it’s all about volume,” Karp said. “Plants are extremely expensive and take years to get certified. There’s a relatively short life to amortize capital, and for part of that life it is sitting empty.”
The other fertile field Vacaville’s and Solano County’s business boosters are cultivating is science education.
Two years ago, Solano Community College became one of 15 California junior colleges to offer baccalaureate degrees, and the first cohort of 14 students is set to march with degrees in May, according to Jim DeKloe, professor of biological sciences and biotechnology as well as coordinator of a national effort by 80 community colleges in 38 states to get $70 million in grants from the National Institute for Innovation in Manufacturing Biopharmaceuticals, or NIIMBL. The second cohort has around 30 students, and the third is being recruited now.
“California has barriers for companies moving here — high housing costs, relatively high real estate costs,” DeKloe said. “We’ll never outcheap North Carolina.”
The Research Triangle area of North Carolina has become a hub for biotech R&D and manufacturing because of the low cost of living and two research universities nearby. Other major clusters for life sciences are in Boston and San Diego.
“The real resources we have are human resources, so that’s what we’re trying to do here at Solano Community College,” DeKloe said.
The four-member biotech faculty focuses on biomanufacturing knowledge and skills, particularly in the industry-standard quality-control standards. Industry backing and a $34 million Measure Q bond in 2012 helped build a high-tech biotech training facility in Vacaville.
In addition to land ready for biotech development, Solano boosters are looking sow seeds for business attraction in existing square footage.
“Companies looking at regions outside the Bay Area want to have ready-to-go lab space,” said Robert Burris, president and CEO of Solano Economic Development Corporation. “In the Sacramento area, there is virtually no available lab space. We know we have small lap spaces in the county, but there is no first-generation lab space for companies to come in.”
Burris said his team in the last six months has been in talks with nine companies out of 30 likely life sciences prospects about relocating or expanding to the county. Those potentials are in agricultural biotech, drug discovery and industrial biotech.
“Some are looking at Solano because of the momentum in biotech,” Burris said. “Some want to be close to UC Davis because of the food and ag focus there. Some want to keep their center of gravity in the East Bay, so they are looking at Vallejo and Benicia to keep key skilled employees.”
While sizable ground-up construction suitable for biotech companies hasn’t happened yet in those two southern Solano cities, it is an area where the county economic group is looking to reach out to real estate agents and property owners that have lab space becoming available to lease or buy. The goal is to get as much opportunity as possible shop the opportunities around to prospective companies before the improvements are removed to make the space as marketable as possible to wide range of users.
“If a broker or owner is not confident they will see another specialized lab user, they might remove the conduits, lab benches and drop ceilings,” Burris said. “Most biotech users say they are not interested then, because the space may not be clean and all the assets that were useful have been removed. Jobs are jobs, but the prize for us is to get above-average wages and provide long-term growth.”
Keeping the specialized improvements in the Novartis/Eli Lilly building in Vacaville ended up being a boon in attracting RxD Nova, Burris said.
While building large warehouses with 28-foot-plus clear height has been a boon to logistics, distribution and general manufacturing that Solano is known for, industrial buildings with lower ceilings and 30,000, 50,000 or 100,000 square feet can appeal to the biotech market, Burris said.
Identifying such buildable and rentable space for biotech in Vacaville and elsewhere in Solano will be part of the marketing pitch at the big Bio conference in June, he said.