Amgen leaves money on the table for other biotechs, experts say

BUSINESS BREAKFAST— From left, moderator Melissa Baffa and panelists Hai Yan, James Treanor and Frank Watanabe at Reagan Library. Courtesy of Brian Stethem/Cal Lutheran

BUSINESS BREAKFAST— From left, moderator Melissa Baffa and panelists Hai Yan, James Treanor and Frank Watanabe at Reagan Library. Courtesy of Brian Stethem/Cal Lutheran

The Conejo Valley has long been home to biotech giant Amgen, and although the company has downsized in recent years, its influence on new players in the sector continues to grow, industry experts said at a business breakfast last week in Simi Valley.

California Lutheran University hosted a Corporate Leaders Breakfast Sept. 15 at Simi Valley’s Reagan Library where a panel of local industry leaders spoke about the emerging challenges and opportunities facing startups in the biotechnology industry.

The 101 corridor from Calabasas to Camarillo remains an attractive destination for both established companies and new ones, the panel said.

“The (Los Angeles) area is really small for drug companies, compared to San Francisco or San Diego,” said Frank Watanabe, chief executive of Kanan Therapeutics, a Westlake Village-based cardiovascular drug development company. “We have a growing micro-cluster of biotech companies in the area. There’s strong research universities in the area, which is good for helping the industry grow locally.”

Watanabe was one of three panelists invited to speak at the event; the other two also head up tech companies in the Conejo Valley area.

Panelist Hai Yan is co-founder of the 6-year-old Camarillo company REMD Biotherapeutics. James Treanor is president and CEO of ADRx, a Thousand Oaks biopharmaceutical company.

The panelists agreed the comparatively low cost of renting business space makes the Conejo Valley more appealing than San Francisco and the expensive Silicon Valley.

Treanor said there are 260 biotech firms in the Bay Area, and for companies that aren’t well established, the twin costs of real estate and research and development can be prohibitive.

In the Conejo Valley where office space is cheaper, businesses have the luxury of devoting more capital to research and development and less toward rent.

“The low cost of setting up out here means there’s more money for the business,” Treanor said. “And innovation in one field draws innovation around it. One person working research and development requires four people working to support them.”

The three panelists, all former Amgen employees, spoke about Amgen’s influence on the biotech community. Yan said that as the firm has downsized it has had to shelve projects. His business works with Amgen to take over research projects that have been mothballed. Yan’s company, REMD, owns equipment that Amgen sold when it shed some of its operations.

The panel said the high cost of drug research is funded by venture capitalists who typically want a quick return on their investment, but that progress in the industry can take a long time.

Treanor said he’s spent 16 years working on a single project, from identifying a specific molecule to developing it into a drug ready for human trials.

Watanabe said the slow pace of R&D is part of the reason behind high drug prices.

“There’s a 90 percent chance of failure getting a drug to clinical trials,” Watanabe said. “A drug can take 10 years to develop and then investors only have 10 years to recoup before the patent expires and companies can start making generic versions.”

When asked where they expected the next biotech breakthrough to come, the panelists said that as human life expectancy continues to grow, more money will be poured into researching the diseases associated with advanced age such as Alzheimer’s and Parkinson’s disease.

Watanabe said corporate focus should be on disease prevention, which has a better cost-benefit return than disease treatment.

“We’re trying to delay death,” Yan said. “To help people have a longer, healthier life. My passion is for solving diseases that are hurting people.”