San Francisco North Bay life science business revenues total $18.5 billion in 2020

Life science companies — which include drug makers like San Rafael’s BioMarin Pharmaceutical and medical device companies like Santa Rosa’s Medtronic — are part of industry in Calfornia that directly employed about 490,000 and generated sales of $405 billion, a new report shows.

Prepared by Biocom California, the trade association for California, the research also gave a unique look at the industry’s influence in the North Bay, as well as nearby San Francisco, showing where it landed economically in 2020, as well as forecasting for 2022 and raising red flags on what will limit the industry, as well as all other businesses.

Industry subsectors include biotechnology, research and manufacturing, scientific and research tools, food and agriculture biotech, medical devices manufacturing, and biopharmaceutics. In 2020, the first three categories saw modest growth (5% to 1.2%), while the other three reported losses of 4.2% to 2.1%.

The life science sector in California countered some of the year’s negative economic forces that damaged large parts of the state’s economy due to the COVID-19 pandemic. Job growth was slow, but venture capital surged.

In 2020, total real gross domestic product dropped substantially, while key funding sources for the industry, the National Institute of Health and the National Institute of Health, grant funding dipped modestly.

A robust gain in Nasdaq stock index coupled with a sharply more expansive monetary policy in terms of a lower federal funds target offset those negatives. The net result was a 0.5% gain in life science employment in the state, the group determined.

Report writers included information from areas in the state, including the Bay Area counties of Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano and Sonoma.

Nearly 179,000 people in the Bay Area were directly employed by life sciences companies in 2020. Average annual earnings exceeded $179,000. Research and manufacturing represented about 43% of life sciences direct employment, with medical devices and equipment following at 20%. Biotechnology represented 17%; biopharmaceuticals, 14%, scientific research and tools, 6%; and food and agriculture, 0.1%.

What type of bio and life science industries are located in Marin County? Report writers found, not surprisingly, in the home location of companies like BioMarin, 64% of the sector businesses were in biopharmaceutical, while research and manufacturing made up 23% and medical devices and equipment 8%.

The industry in Marin generated $7.7 billion in sales in 2020, according to the report while Marin’s 150 “unique” biolife sciences businesses employed 4,760 workers in 2020.

There’s a bit more of a business for biolife science in nearby San Francisco, according to the research. The city’s major life sciences cluster is in the Mission Bay redevelopment area.

The city’s number of companies in the field reaches 438 and employs about 17,300 people. Sales in the industry totaled $10.8 billion in 2020. Unlike Marin, which has a bias in work focus by companies in that area to biopharmaceutics, the San Francisco area’s industry at mostly (55%) into research and manufacturing.

By comparison, the Bay Area’s birthplace of life sciences firms, San Mateo County, and the region’s current larger cluster of such companies, Santa Clara County, have about $40 billion in revenues each from the sector.

Report writers provided insight into the research on the education level of the workforce in the area. Among the North Bay counties researched, Marin County at 23% had the highest level of people holding a graduate or professional degrees, while Sonoma and Napa counties each had 14% and Solano 10%.

In Sonoma County, about 140 businesses are described as being connected to the bio life sciences industry, employing about 5,500 workers with an average annual salary of $125,363. Napa County’s much smaller bio industry footprint was reported at 45 companies and 720 employees with an annual wage at $67,449. Solano County — home to major production facilities for the likes of Gennetech — posted higher numbers – 93 firms, 4,329 employees and an annual take home of $213,500.

Uncertainty abounds for 2021, the report writers founded, citing patent uncertainty, specifically some who have suggested government waive patents on COVID vaccines, which “could dampen confidence in long-term investments for the sector” also with price controls and regulatory restrictions or hinderances on mergers.

The trade association pointedly also focused on housing and its link to hiring – an issue shared across the board by business. “ Further sizable increases in California housing prices will make expansion difficult for current firms operating in the State and weigh on new firms considering locating and recruiting talent in/to California, unless regions commit to significant new housing construction. For the Life Sciences sector, the lack of affordable middle-income housing presents a particular problem.”

Despite policy and regulatory uncertainties along with other constraints, 2021 promises to be a strong year for the Life Science sector in California, it concluded. “The general economy, financial markets, and federal funding will all help drive the sector forward. The nation and the world will also increasingly look to the Life Science nucleus in California to provide the solutions for some of its most pressing issues involving the environment, medicine, and health care.