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*OPINION: Orange County Poised to Become the Life Sciences Capital of the World

This was first published by University Lab Partners, an independent, nonprofit program of the Beall Family Foundation. It was founded in partnership with UCI Beall Applied Innovation.

Here’s the article: The life sciences industry is one that encompasses a wide range of branches and areas of focus that primarily involves the study of organisms and life. Some of the branches of the life science industry that are prevalent among the startup community in Orange County include biomedical science, bioengineering, medical imaging, medical devices and environmental health.

The life sciences industry is a booming one that has become highly attractive to investors in and around Orange County, due to its high rate-of-returns as well as the fact that the breakthrough technologies from this industry have made the world a better place — improving quality of life for generations to come.

With the vast number of innovations that have happened in recent years, the attractiveness of the life sciences industry has grown rapidly. New medicines and medical devices are being researched and created nearly every day in this industry, many of which are developed in Orange County.

Southern California has long been the home of numerous medical device and life science industry leaders that are headquartered in Orange County and throughout the rest of Southern California. Some of the top industry leaders that have placed their headquarters in this area include Allergan, Medtronic, Abbott, and Edwards Lifesciences. The exponential growth in the life science industry that has occurred within Orange County over the past decade makes it clear that this Southern California county is poised to become the life sciences capital of the world.

Scientist working in lab

Consistent Economic Growth in the Life Sciences Industry

The life sciences industry has been displaying consistent economic growth for many years. The data that displays this economic growth is overwhelming and clearly indicates a trend that will likely continue for quite some time.

When taking a look at the Life Sciences Industry Report for 2019, the number of biopharmaceutical and medical device employees in California grew by over 11 percent between 2013-2017. From 2016-2017 alone, the number of employees grew from around 127,000 to over 133,000, which is a substantial year-over-year increase. The number of life science companies in California has also increased from 3,140 to 3,249 in the same time period.

It’s also important to look at the amount of revenue that was brought in by the life sciences industry in recent years. In 2016, the total estimated revenue for the life sciences industry was right at $169 billion. This number increased to $177.7 billion in 2017, which is a sizable increase that isn’t solely explained by the creation of more life science companies in the state. For both 2016 and 2017, Orange County has had around 45,000 employees within the life sciences sector, which is the fourth most in the state and only behind San Diego County, Los Angeles County, and the Bay Area.

At the moment, Orange County is relatively close to surpassing both San Diego County and Los Angeles County in total number of life science employees, which could indicate a change in rankings as Orange County continues to grow over the next few years. All of this data is clear in what it shows, which is that Orange County and California as a whole are seeing consistent economic growth within the life sciences industry. It’s also important to note that there are no signs that this growth will be slowing down in the near future, which gives life science companies more incentive to move their headquarters to Orange County and the surrounding areas.

Growth Attracting International Investors and VC Firms

The continual growth that’s seen within the life sciences industry in Orange County has been attracting an increasing number of international investors and VC firms. Because of the success that California companies have seen in translating science into quantifiable products that help consumers and patients all over the world, the state of California as well as Orange County has always received a high amount of investment into the life sciences industry by VC firms and international investors. These investors are interested primarily because of the high returns and positive growth that have been attributed to the life sciences industry as of late, which means that the investments that they make may have less risk and higher returns associated with them.

Venture capital firms have set their sights on the Southern California life sciences industry, which is displayed by the fact that the amount of venture capital investment for 2018 was right around $7.6 billion for biotech and medical devices. The $7.6 billion in investment was a substantial increase from $6.1 billion from 2017. It’s also essential to look at these investments compared to other states throughout the U.S.

In 2018, California received the highest amount of investments for biotech and medical devices at the previously mentioned $7.6 billion, which is much higher than the next highest state of Massachusetts at $6.2 billion. More than $3 billion of these investments have been provided to biotech and medical device companies that are in the expansion stage of growth.

It should also be noted that an additional $3.9 billion in VC investment was provided to digital health companies in 2018, which is a large component of the life sciences industry. New York was the next closest state at investments of $998 million. The $3.9 billion total in 2018 was also much higher than the 2017 total of $2.2 billion.

When focusing specifically on Orange County, it has received a total of $348 million in investments throughout 2018, which is a marked increase from $269 million in 2017. Some of the emerging life science companies that have benefited from these investments include Spinal Singularity, Tagnos, and Sonnendo.

Microscopes in lab

Orange County as a Growing Hub for Life Sciences Technology & Innovation

Orange County has long been a leader within the medical device industry, which is displayed by the fact that such giants in the industry as Edwards Lifesciences and Medtronic (to name a few) have placed their headquarters in and around the area. Their presence as a hub for the life sciences industry makes it appealing for similar companies to place their base of operations in Orange County. Along with the fact that Orange County has an ample amount of local life science influence, there are also numerous industry leaders currently headquartered in the county, which has caused established businesses, aspiring startups, and eager life science students to flock to Orange County.

As an increasing number of startups and life science students choose to settle in Orange County, the life science ecosystem in the area becomes stronger and healthier fostering a bustling life science ecosystem.

The inroads that Orange County has made within this industry over the past few decades has allowed it to be in position to become the life sciences capital of the world. This is clearly evident when taking a look at the medical device industry in Orange County. A medical device worker who operates out of Orange County makes an average of $120,000, which is somewhat high when compared to the state average. Orange County is also considered to be the largest hub for medical devices and other aspects of the life sciences industry in all of Southern California. In fact, the medical device industry within Orange County produces more economic activity than Riverside, Imperial, and San Diego counties combined.

In total, Orange County was directly responsible for the generation of $5.3 billion of economic activity for 2014. The biopharmaceuticals in Orange County was responsible for $11.6 billion in total economic activity in 2014. As a whole, the life sciences industry in Orange County is responsible for over $35 billion in annual economic activity, which is an exceedingly high number that only continues to grow with each passing year. While the Bay Area around San Francisco has been very popular in the life sciences industry for many years, there has been a surge in life science presence in Los Angeles and San Diego with Orange County being the hub of growth in Southern California.

Growth through Collaboration, Academic Support & NIH Grants

Along with the growth displayed in total revenue in the life sciences industry as well the growth found in VC investments, there has also been a sizable amount of growth through collaboration, academic support, and NIH grants, the latter of which refers to funding by the National Institutes of Health.

California’s university system is a stellar one that has driven some of the life sciences growth throughout Orange County. Many students who graduate from these schools with medical or science degrees end up working in or around Orange County due to its position in the life science industry.

Among the top academic rankings in the world is the Shanghai Index, which performs an annual academic ranking of world universities. For 2018, a total of 10 universities in California were placed on this list. The next closest states are New York, Pennsylvania, and Texas with only four universities apiece.

California is also the top-ranked state of doctoral recipients in sciences and engineering with nearly 5,000 earned doctorates in 2016. New York was positioned in second place of all states with around 3,000 earned doctorates in the same time period. The academic support provided by these universities has allowed Orange County to be the economic engine of Southern California when it comes to life sciences. When looking specifically at NIH grants that were awarded to research institutions throughout Southern California in 2018, the amount grew to $3.9 billion in that year, which is much higher than Massachusetts at $2.7 billion.

The research institutes in California also received over $170 million in grants from the California Institute of Regenerative Medicine, which was mostly awarded as a means of advancing stem cell research. The University of California, Irvine was in the top 10 universities for grant funding by the NIH with a total of $138 million in 2018, which was an increase of more than $20 million from the previous year. This funding allows for continued research in the life sciences industry, which leads to the successful development of usable products as well as growth in the life science industry throughout Orange County and the greater Southern California region.

In this year’s Life Sciences Industry Report for California, Orange County has even been denoted as a research hub that has been seeing rapid growth in this specific industry, a primary driver of which is the university ecosystem throughout Southern California.

Conclusion

There is no doubt that Orange County has become a central hub for innovation due to its location between both Los Angeles and San Diego but also in part due to the growing ecosystem of entrepreneurship and innovation. California’s bay area has been a leader in the life science industry but if the industry stays on trend, we may see Orange County quickly become the life science capital of the world.

University Lab Partners is the first wet-lab incubator for the medtech industry in OC. Its goal is to accelerate the growth of the biomedical industry via an open platform that provides economical lab and office space, valuable technical resources and a network of strategic partnerships. Please visit universitylabpartners.org for more information.

About The Author

Deirdre Newman is a long-time journalist, who's covered OC startups for a few years.

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