San Francisco chosen as HQ for stem cell research

San Francisco, California, edged out San Diego and Sacramento to become the new headquarters for California’s US$3 billion stem cell research agency referred to as the Institute of Regenerative Medicine. It was originally expected that San Diego would be chosen, but last minute efforts and support from local VCs and universities resulted in San Francisco receiving 16 votes against 11 for San Diego in a two-stage selection process.

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This is not just news – it is a very important illustration of how a network of eminent scientists and investors can club together to ensure that their region becomes the heart of a potentially lucrative future industry. It is an illustration of how people’s passions can lead to the birth of many new start-ups and spinouts in an important or emerging industry sector.

Although the institute in San Francisco might only employ just 50 people, it will oversee the distribution of nearly $3 billion in stem cell research funds. And all because San Francisco was able to offer millions of dollars worth of amenities to become known as the stem cell capital of California, including free rent, convention space, hotel rooms and furniture.

Local VC firm Kleiner Perkins Caufield & Byers with its lead partner Brook Byers, as well as Nobel Laureate and biotech pioneers Paul Berg and Bill Rutter were instrumental in lobbying for the centre to be located in San Francisco. The VC firm had previously benefited from its investments in Genetech. To take advantage of the new opportunities from the new centre the firm has hired Beth Seidenberg, a big biotech player from Amgen, as an ‘executive in residence’. Her background includes senior level experience at Amgen, Bristol Myers Squibb and Merck. The firm claims to have brought her on because she has fresh ideas about translational medicine that can lead to exciting start-ups.

As pointed out by The Chilli in our article about how start-ups form the bedrock of the biotech industry and stem cell research (click here to see article), the passing of Resolution 71 in November last year authorises the state of California to raise $3 billion in new state bonds to allow for the formation of a central stem cell research programme for a ten year period.

The biggest initial beneficiaries from this programme will be local universities and laboratories, which will attract the best biotech researchers from around the globe. An example is the arrival of two top researchers who announced their intention to play a key part in the nearby Stanford University School of Medicine: Stefan Heller, PhD, associate professor of otolaryngology at Harvard Medical School, and Michael Clarke, MD, professor of internal medicine at the University of Michigan Medical School in Ann Arbor; both announced last week that they are joining the Stanford Institute for cancer/stem cell biology and medicine.

The dean of the Stanford school, Philip Pizzo, hailed the two researchers as important additions to Stanford's growing stem cell research effort. "We are thrilled to have Drs. Clarke and Heller join Stanford," Pizzo said. "I am confident that they will contribute to the important role that Stanford will play in biomedical research and, specifically, our agenda in stem cell and regenerative medicine research."

Both Clarke and Heller said the state's new institute for regenerative medicine, which was established to award the stem cell money, wasn't the only reason they chose to come west to Stanford, but that it certainly played a part in their decision-making. "I think with the new California Institute for Regenerative Medicine it's a tremendous opportunity for stem cell research," Clarke said. While his current work doesn't involve embryonic stem cells, he said the state's commitment to stem cell research would create a rich community for all stem cell researchers. Clarke added that his future work may involve embryonic stem cells, making increased funding in California a powerful incentive for moving west.

VCs must be salivating as they can see the potential for numerous new biotech spinouts in the region that will emerge from the new research HQ, its local infrastructure and skills base. Many large pharmaceuticals, genetics, and neutrogenomics firms will also establish local units in order to leverage from the new cluster effect.

One of the greatest assets that California has over other regions is how local leaders rise to the challenge and all row together in the same direction with a single aim and vision. We hope that other regional development agencies can learn some important lessons from this, especially how everyone had chipped in and pulled together to create a new centre which no doubt will handsomely pay back to the state many times more than what they put in – especially in terms of new jobs, new firms, paying local and commercial taxes, as well as creating local wealth, which will create the waterfall to fund more similar ventures.

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