California's life sciences industry continues to grow and thrive, producing innovative new drugs, devices, diagnostics and digital health technologies. In 2015, the industry employed over 287,000 people and generated $147.7 billion in revenue. California leads the nation in attracting venture capital investment for the life sciences, with $4.4 billion invested in 2016. The state's strong academic research institutions, entrepreneurial culture, and supportive public policies have combined to make California the global epicenter for biomedical innovation and economic growth in this critical sector.
2. Peter Claude
Partner,
Pharmaceutical &
Life Sciences
Advisory
PwC
Sara Radcliffe
President & CEO
California Life
Sciences Association
(CLSA)
Sincerely,
Jerry Brown
Governor of
California
Letter from the Governor
California has a unique history of innovation: from agriculture to the film industry to information technology to
life sciences. As a group, Californians have repeatedly devised new technologies, and better ways to use old
technologies, to solve some of the world’s most intractable problems.
As the birthplace of biotechnology, California prides itself on the innovation born in the life sciences in particular.
Genomic technologies help us detect disease, while new therapies and devices help treat them. Biofuels provide
clean, sustainable energy that will ease our dependence on foreign sources and help solve climate change. Digital
health technologies help prevent disease and give patients better tools to manage their conditions.
The California Life Sciences Association is an important partner in our efforts to foster a stronger biomedical
industry and boost job growth in California. This state is committed to supporting this critical sector, both
economically and through strong public policy. Life Sciences is a cornerstone of California’s economy and I look
forward to working with leaders in this sector as we continue to contribute to a healthier society, strengthen our
economy and advance new medical technologies.
Sincerely,
Letter to Stakeholders
When people envision a vibrant life sciences community, they think of California. It begins
with the state’s public and private research universities and institutes, which produce a
highly trained scientific workforce, invaluable insights into human biology and world-
changing research.
In some cases, these breakthroughs might be developed into a product – a drug that targets
a cancer-driving protein, for example. A pharmaceutical, biotechnology or medical device
company licenses the intellectual property, or the researchers find investors and create
their own start-up. Years and millions of dollars later, the treatment may enter the clinic
and improve patient care.
California succeeds because the state’s political, academic and business leaders are committed
to a strong life sciences ecosystem. Smart policy decisions have played a role in continued
success. Because the state has long supported higher education, California produces more
biology and engineering PhDs than any other state.
In 2004, when national policy shifted away from stem cell research, California voters
approved Proposition 71, which funded the California Institute for Regenerative Medicine
(CIRM). This commitment led to groundbreaking basic and translational research, accelerating
stem cell therapies into clinical trials and making California the epicenter for stem cell
research.
By most measures, the California life sciences industry is strong and growing. There are
3,040 life sciences companies, including industry-leading global corporations, entrepreneurial
startups and everything in-between. California’s life sciences industry directly employs
more than 287,000 people, generated $147.7 billion in revenue in 2015 and has 1,269
medicines – and even more devices and diagnostics – in the pipeline to boost patient care.
This report lays out the many strengths that define the life sciences in California, but the
work must continue. Few industries can do so much to improve quality of life. We must
continuously renew our commitment to these efforts.
3. Direct
Employment
Indirect and Induced
Employment
Total Direct,Indirect and Induced Jobs:
884,200
597,000287,200
Life Sciences Industry
in California,2015 (estimated)
Total revenue
Direct employment
Total wages and salaries
Average annual life sciences industry wage
Total NIH grants awarded (2016)
Total venture capital investments (2016)
Total biomedical exports
Direct federal taxes
Direct state and local taxes
$147.7 billion
287,200
$33.5 billion
$116,484
$3.6 billion
$4.4 billion
$22 billion
$10.5 billion
$5.1 billion
1
California’s life sciences community continues to grow, with
3,040 life sciences companies – 192 more than the previous
year – producing new technologies and boosting the state’s
economy. In 2015, the Golden State’s life sciences industry
employed more than 287,000 people. This highly trained
and diverse workforce helped develop novel drugs, devices
and diagnostics, while also exploring other applications,
such as leveraging biotechnology to produce sustainable
energy.
Life sciences companies have been incredibly successful.
As of September 7, 2016, 1,269 drugs from California
companies were in the FDA pipeline. In 2015, 264 new
devices developed by California companies were approved.
In addition, these companies produced more than $147
billion in revenue, received $4.4 billion in venture capital
funding, drove $22 billion in exports and paid $15.6 billion
in federal and California state and local taxes.
Academic excellence, forward-thinking public policy and
the commitment of thousands of entrepreneurs and business
leaders has translated into new ways to address some of the
world’s most severe medical conditions: cancer, hepatitis,
HIV, rare diseases and many others. These efforts help
power our economy, support job creation and improve health
for millions around the world.
California’s Unique Life Sciences Ecosystem
Top Life Sciences Employment
in California,2011 -2015
2015 2014 2013 2012
ANNUAL
COMPOUND
GROWTH
SOURCES:Bureau of Labor Statistics Quarterly Census of Employment and Wages;
2012 Economic Census; BloombergSOURCES:Bureau of Labor Statistics Quarterly Census of Employment and Wages;
2012 Economic Census
California
New York
New Jersey
Indiana
Pennsylvania
Illinois
Massachusetts
Minnesota
North Carolina
Florida
Texas
Michigan
Utah
Wisconsin
Ohio
Biopharmaceutical and Medical Device Employment
by state,2011-2015
2015 ranking
by employment
Employment growth,
2011-2015
Employees,
change from 2011
122,535
37,556
36,838
35,866
35,539
34,330
33,414
32,897
31,497
29,181
26,721
21,675
18,425
16,000
15,804
7,702
(-1,464)
(-8,473)
695
(-3,131)
2,203
1,924
(-124)
1,721
2,346
1,791
1,324
3,691
(-372)
(-693)
-8%
6%
9%
-<1%
-19%
7%
7%
2%
6%
-4%
7%
7%
25%
-2%
-4%
3
7
1
2
4
5
6
8
10
9
11
14
12
13
15
Medical
Device and
Equipment
Manufacturing
1,714
Biotechnology and
Pharmaceutical
1,326
Number of Life Sciences Companies
in California,2015
TOTAL
3,040
Medical Devices,
Instruments,
Diagnostics
0.1%
74,394
74,642
74,616
74,549
Research &
Development,
Testing Labs
3.7%
62,290
64,007
66,383
69,542
Wholesale Trade
(e.g.distribution of
pharmaceuticals or
hospital equipment)
2.9%
45,795
46,424
48,380
49,884
Biorenewables
(e.g.organic compound
mfg.,ethanol mfg.)
3.1%
3,306
3,320
3,365
3,624
Biopharmaceuticals
2.7%
44,245
45,187
47,171
47,985
Academic Research
1.7%
39,509
40,191
40,850
41,617
4. 2
Producing Drugs, Devices, Diagnostics and
Digital Health Technologies
Even more importantly, the total number of therapies in clinical
trials continues to grow, ultimately providing more choices
for patients and physicians as they work to overcome disease.
One of the many strengths of California’s life sciences
community is its eagerness to embrace new ideas. The digital
healthsectorisonlyafewyearsold,butisshowingtremendous
potential to improve care.
Innovative digital technologies can keep congestive heart
failure patients out of the hospital, help patients comply with
their drug regimens, support treatment for PTSD and much
more. California companies lead the nation in attracting
venture capital (VC) investment for innovative digital health
technologies.
Great ideas often begin in academic labs as scientists research
human biology and look for better ways to diagnose and
treat disease: a new marker to track cancer progression; a
unique molecule that controls an aberrant protein; a digital
device that helps patients better manage their heart disease.
California’s life sciences community does an excellent job
at moving these ideas out of labs, through various regulatory
processes and ultimately to patients. In 2016, California
biopharmaceutical companies had 404 therapies in the FDA
pipeline for cancer, 134 for infectious diseases and 129 for
central nervous system disorders. Similarly, the state’s
medical device sector saw 264 products successfully through
the FDA: 10 premarket approvals (PMA), 250 510(k)
clearances and four de novo’s.
Medical Device Approvals
by companies headquartered in California,2015
SOURCE:EvaluateMedTech®,August 2016
PMA - First Approval
TOTAL: 264
10 250 4
510(k) Clearance De Novo
* 2016 data based on projection from the first two quarters
California
New York
Massachusetts
Texas
Illinois
Top 5 States for Digital Health VC Funding
2015 vs.2016*
2015 2016*
InvestmentInvestment
$2.1B
$540M
$346M
$47M
$117M
$1.6B
$730M
$392M
$231M
$198M
California Medicines by Therapeutic Area
Investigational New Drug (IND) products through Phase III clinical trials
Cardiovascular
Therapies in Pipeline TOTAL: 1,269
Miscellaneous
Genitourinary
Respiratory
Cancer
Infectious Diseases (incl.HIV)
Central Nervous System
Hormonal Systems/Nephrology*
Immune System
Musculoskeletal
Pain
Eye/Ear
Hematological
Gastrointestinal
Dermatology
Diagnostic/Imaging/Delivery
SOURCE:Biopharm Insight,INDs filed through Phase III,Sept.7,2016
*incl.Diabetes
404
134
129
70
100
69
52
41
60
53
43
39
44
16
11
4
Wearables/Biosensing
Consumer Health,Wellness1
Digital Diagnostics,Devices,Therapies
Care Management,Administration2
Analytics/Big Data
Life Sciences Tools3
Personalized Medicine
Other
Remote Patient Monitoring
Telemedicine
California Digital Health VC Investment
by category,2016*
1 Includes consumer health information,enterprise wellness,healthcare consumer
engagement and personal health tools and tracking
* 2016 data based on projection from the first two quarters
2 Includes the care coordination,general care management,hospital administration,
physician practice management,population health management,hospital CRM and
marketing and EHR/clinical workflow categories
3 Includes the life sciences commercialization tools and life sciences R&D tools categories
Investment
$384M
$361M
$312M
$189M
$131M
$90M
$61M
$59M
$36M
$20M
Bay Area**
San Diego County
Los Angeles County
Orange County
Sacramento Area***
** Includes Alameda,Contra Costa,Marin,Napa,San Francisco,San Mateo,Santa Clara and
Sonoma counties
* 2016 data based on projection from the first two quarters
California Digital Health VC Investment
by region,2015 vs.2016*
*** Includes Sacramento,Butte,El Dorado,Nevada,Placer,Solano,Sutter,Yolo andYuba counties
Investment Investment
2015 2016*
$1.6B
$53M
$375M
$72M
$2M
$1.4B
$173M
$68M
$0
$0
SOURCE:Rock Health Digital Health Funding Database
5. 3
Driving Economic Growth
California has a strong and diverse economy, powered by
information technologies, agriculture, energy, tourism and
the life sciences. Second to life-saving products, excellent
jobs may be the biomedical community’s greatest
contribution to the state. In 2015, California life sciences
companies employed more than 287,000 people, a two
percent increase over 2014. These jobs ran the gamut from
academic research to bioengineering to wholesale trade.
Even more impressive, the industry generated 597,000
indirect and induced jobs, bringing the total to 884,200.
In addition, the average wage for California life sciences
employees topped $116,000 and total wages exceeded
$33 billion.
While biomedical growth has been historically stronger in
the San Francisco Bay Area and San Diego, new,
entrepreneurial companies are becoming more prevalent
in Los Angeles, a trend that could bode well for the region
(see Los Angeles insert).
Total Life Sciences
Employment by Cluster
as a percent of the total,2015
SOURCES:Bureau of Labor Statistics Quarterly Census of Employment and Wages; 2012 Economic Census
24%
2%
3%
13%
20%
15%
4%
1%
4%
EMPLOYEES
* Includes Alameda,Contra Costa,Marin,Napa,San Francisco,San Mateo,Santa Clara and Sonoma counties
**** Includes Imperial,Kern and San Luis Obispo counties
***IncludesMonterey,Kings,Tulare,Inyo,SanBenito,Fresno,Mono,SantaCruz,Merced,Madera,Stanislaus,Mariposa,
Tuolumne,San Joaquin,Calaveras,Alpine,Amador,Mendocino,Lake,Colusa,Sierra,Glenn,Plumas,Humboldt,
Trinity,Tehama,Lassen,Shasta,Del Norte,Siskiyou and Modoc counties
**Includes Sacramento,Butte,El Dorado,Nevada,Placer,Solano,Sutter,Yolo andYuba counties
Note: Clusters do not sum to total due to data suppression at the county level
Total Life Sciences Employment by Cluster
in California,2015
Sacramento Area**
2,592
5,874
Ventura and Santa Barbara counties
9,543
Riverside and San Bernardino counties
11,009
Other Southern California****
Other Northern California***
11,628
San Diego County 38,694
Orange County 43,327
Los Angeles County 57,174
Bay Area* 68,313
287,200TOTAL
CLUSTER
Life Sciences Employment vs.
Other High-Tech Sectors
in California,2015
Lifesciences
industry
Aerospace
Computer and
peripheral
equipment mfg.
Motion pictures
Other electronic
equipment mfg.
Internet,telecom-
munications,
data processing
76,032
147,934
163,907
192,069
412,749
287,200
California Life Sciences Wages
by sector,2015*
Academic Research
Biopharmaceuticals
Biorenewables
Medical Devices,
Instruments,
Diagnostics
Research &
Development,
Testing Labs
Wholesale Trade
TOTAL
AVG.WAGE TOTAL WAGES
$71,707
$157,352
$72,831
$95,946
$148,125
$116,484*
$2.98B
$7.55B
$264M
$7.15B
$10.3B
$33.5B
*Total average
$101,022 $5.2B
6. 4
Attracting Major Investments
Because California companies have such a strong track
record of translating lab science into products that help
patients and consumers, the state has long been a magnet
for investment. As in past years, California was the top state
for life sciences venture capital (VC) investment in 2016*
with $4.4 billion: $3.3 billion in biotech and $1.1 billion in
medical devices. Massachusetts was second with $2.9 billion.
The life sciences are second only to software in California
for VC funding.
Across biotech, investment declined in later-stage companies,
but increased dramatically for seed stage startups. Medical
device investment also increased at seed and early stage.
VC investment in digital health in 2016* was significant at
$1.6 billion, but declined from $2.1 billion in 2015. Still,
California led the nation, more than doubling New York’s
$730 million. These investments funded wearables and
biosensors, consumer health and wellness technologies,
digital diagnostics, devices and therapies and other areas.
Mergers and acquisitions slowed considerably through early
Sept. 2016 to 46, compared to 99 in 2015. Life sciences IPOs
also declined to three, compared to 25 in 2015. These
numbers reflect weak national M&A and IPO markets.
*2016 data based on projections from the first two quarters.
Massachusetts
New York
Pennsylvania
North Carolina
Texas
Michigan
Missouri
Minnesota
Kentucky
California
Top 10 States for Life Sciences
Venture Capital Investment
2014-2016*
2016*
2015
2014
$4.43B
$2.94B
$352M
$240M
$237M
$153M
$143M
$102M
$97M
$94M
$4.51B
$2.70B
$173M
$334M
$249M
$234M
$112M
$152M
$135M
$12M
$3.90B
$2.25B
$47M
$286M
$181M
$269M
$129M
$37M
$235M
$19M
SOURCES:PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters; Rock Health Digital Health Funding Database
2014 $731M $1.37B$781M$1.91B
2014 $218M $540M$345M$614M
2014 $380M $774M$1.27B$3.57B
2014 $56M$18M$157M$373M
2016* $534M $1.17B$465M$1.38B
2015 $524M $1.45B$550M$1.49B
2016* $77M $247M$368M$531M
2015 $245M $561M$406M$802M
2016* $462M $621M$1.89B$3.93B
2015 $319M $764M$2.06B$4.76B
2016* $24M $79M$603M$1.44B
2015 $23M $60M$377M$613M
See methodology for full sector definitions*2016 data based on projection from first two quarters
California
U.S.
Venture Capital Investment, Biotech and Medical Devices
by stage,U.S.and California,2014-2016*
Seed
stage
Early
stage
Expansion
stage
Later
stage
MEDICAL DEVICESBIOTECH
$4.5B
$2.1B
SOURCES:PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters; Rock Health Digital Health Funding Database
* 2016 data based on projection from the first two quarters
Digital Health VC Investment
U.S.and California,2015 vs.2016*
$59.8B
$34.3B
$56.0B
$33.2B
$4.1B
$1.6B
2015 2016*
U.S.VC investment Calif.VC investment
TOTAL U.S.VC INVESTMENT TOTAL DIGITAL HEALTH
VC INVESTMENT
2015 2016*
Note:The Los Angeles and Orange County region is comprised of Southern California
(excluding the San Diego region),the Central Coast,and the San Joaquin Valley; the
Sacramento/Northern California region is comprised of Northeastern California; the San
Diego Region is comprised of the San Diego area;and the Bay Area and SiliconValley region
is comprised of Northern California,the Bay Area and the Northern Coastline.
Life Sciences VC Investment
in California,by region,2015 vs.2016*
2016*
2015
$7M
Los Angeles/
Orange County
Sacramento/
Northern Calif.
San Diego
Bay Area &
Silicon Valley
$0
$244M
$426M
$1.1B
$614M
$3.1B
$3.5B
7. 5
Top 5 States Receiving NIH Grants
2015 vs.2016*
2015
California
Massachusetts
New York
Pennsylvania
North Carolina
Funding Awards
7,558
4,853
4,825
3,339
2,060
7,521
4,960
4,866
3,412
2,148
$3.40B
$2.35B
$1.99B
$1.47B
$972M
$3.58B
$2.52B
$2.15B
$1.54B
$1.07B
Note: Data excludes R&D contracts and projects funded through
the American Recovery and Reinvestment Act
*2016 data reflect awards through October 3,2016
SOURCE:National Institutes of Health
UC Berkeley
$112M
Kaiser Foundation Research Institute
$62M
UC Irvine
$125M
UC Davis
$199M
USC
$207M
Scripps Research Institute
$211M
UCLA
$379M
Stanford University
$400M
UC San Diego
$424M
UC San Francisco
$573M
Top 20 California Organizations
Receiving NIH Funding
2016*
California Institute of Technology
Sanford Burnham Prebys Medical Discovery Institute
Cedars-Sinai Medical Center
Beckman Research Institute/City Of Hope
J.David Gladstone Institutes
Salk Institute For Biological Studies
UC Santa Cruz
La Jolla Institute for Allergy and Immunolgy
Northern California Institute for Research and Education
RAND Corporation
$59M
$54M
$47M
$42M
$33M
$33M
$32M
$28M
$27M
$25M
11*
3
2 3
4
4
2
2
2
4
SOURCE:Academic Ranking of World Universities,Shanghai Ranking Consultancy
*Stanford University,UC Berkeley,California Institute of Technology,
UCLA,UC San Diego,UC San Francisco,UC Santa Barbara,USC,UC Irvine,
UC Davis and UC Santa Cruz
SOURCE:NSF/NIH/USED/USDA/NEH/NASA; Survey of Earned Doctorates,2014
Doctoral Recipients in Life Sciences Disciplines
Top 10 states,2014
Total life sciences doctoral degrees
California
New York
Texas
Massachusetts
Pennsylvania
Ohio
Maryland
Florida
North Carolina
Illinois
California’s stellar
academic prowess was
on full display with
more than 1,300 life
science doctorates
awarded in 2014.
1,318
909
904
667
627
463
459
407
451
504
2016*
Academic Excellence
California’s commitment to education is one of the engines
that drive life sciences innovation. The state boasts 11
universities in the world’s top 100, according to the Shanghai
Index. California graduated more science and engineering
PhDs in 2014 than any other state with 4,984. New York
places second with 3,125.
Educational excellence attracts government investment.
California continues to lead the nation in grants from the
National Institutes of Health (NIH): 7,521 awards for nearly
$3.6 billion, 15.4 percent of total NIH grant funding in federal
fiscal year 2016. Of the top 20 California institutions receiving
NIH grants, seven are part of the University of California
(UC) system.
California also led the country in Small Business Innovation
Research (SBIR) and Small Business Technology Transfer
(STTR) funding, receiving 381 awards, totaling $176 million.
Number of Universities in the World Top 100
Shanghai Index,2016 rankings
California
New York
Pennsylvania
Texas
Illinois
11
4
4
4
3
* Massachusetts
Maryland
Minnesota
New Jersey
North Carolina
3
2
2
2
2
8. Emerging Los Angeles
For years, the Bay Area and San Diego have been the two
poles of California’s entrepreneurial life sciences culture.
Despite its size and strength in entertainment, agriculture
and other sectors, Los Angeles has remained relatively
quiet. The city is starting to play catch-up and has made
huge progress in the past few years.
“We’re where San Francisco and San Diego were 20 years
ago,” says Shlomo Melmed, MD, executive vice president
of Academic Affairs and Dean of the medical
faculty at Cedars-Sinai.
Melmed points to several factors that may have
previously slowed LA’s emergence: expensive
real estate, no central research hub, few
academic medical centers. UCLA and USC
graduates have created startups – they’ve just
done it elsewhere.
“Los Angeles metro area produces more biology
graduates than any other city in America,” says
Llewellyn Cox, PhD, who founded Lab Launch, a biotech
incubator network based in Monrovia. “But all these UCLA
and USC spinouts seem to start up in San Francisco or San
Diego. Lab Launch was born out of the frustration of
watching our friends leave town to start businesses.”
This disparity has not gone unnoticed. Led by Supervisor
Mark Ridley-Thomas, the Los Angeles County Board of
Supervisors recently earmarked $3 million to fund another
bioscience incubator, LA BioMed.
Cox is excited by the general business dynamism in Los
Angeles and sees life sciences startups plugging into LA’s
existing industries, such as agriculture.
“Look at cellular agriculture,” says Cox. “The technology
is biotech but once you have a product, you’re in the food
industry, your partners are going to be food
people.”
At a different level, Cedars-Sinai has been spinning
off companies from its research for more than 30
years, developing a test to detect viruses in donated
blood, heart imaging software and therapies for
inflammatory bowel disease. Their tech transfer
has shown continuing growth.
Despite the relative dearth of startups, Los Angeles
County employs around 20 percent of California’s
life sciences workforce. Both Cox and Melmed anticipate
continued expansion.
“I think there’s going to be tremendous life science
investment in population health management: software,
accounting, patient management,” says Melmed. “Cancer
will drive it because of our large, aging population and high
cancer incidence growth rate.”
Los Angeles Spotlight
SOURCES:Bureau of Labor Statistics Quarterly Census of Employment and Wages; 2012 Economic Census
* 2016 data based on projection from the first two quarters
SOURCE:Rock Health Digital Health Funding Database
Los Angeles County Digital Health
Venture Capital Investment
2014-2016*
Investment
2015
2016*
$375M
$68M
2014 $431M
Wholesale Trade
12,858
Research &
Development,
Testing Labs
11,198
Medical Devices,
Instruments,Diagnostics
11,867
Biopharmaceuticals
8,177
Academic Research
12,450
Biorenewables
624
Total Life Sciences Employment
in Los Angeles County,2015
TOTAL
57,174
22%
14%
1%
21%
20%
22%
Average Life Sciences Wages
in Los Angeles County,2015
$73,368
Los Angeles County employed 57,174 in the life sciences fields
in 2015,a 1.7 percent increase over 2014.
The average salary for a life
sciences worker in Los Angeles
County is $73,368; California
average salary for life sciences
workers is $116,484.
Twenty percent
of California’s
287,200 life
sciences employees
work in Los Angeles
County.
Top Los Angeles County NIH Funding
2016* (excludes R&D contracts)
$760.1million*Updated through Oct.3,2016
SOURCE:National Institutes of Health
AWARDS FUNDING
TOTAL:
University of California,Los Angeles
University of Southern California
California Institute of Technology
Cedars-Sinai Medical Center
Beckman Research Institute/City Of Hope
RAND Corporation
$378.8M
$207.2M
$59.4M
$47.4M
$41.9M
$25.4M
824
400
130
105
90
55
Shlomo Melmed,MD