Biotech companies boosted spending on research and development for a second year in a row, according to a new report. That’s good news for San Diego’s economy, where biotech plays an important role.
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Biotech companies boosted spending on research and development for a second year in a row, according to a new report. That’s good news for San Diego’s economy, where biotech plays an important role. KPBS reporter Claire Trageser has more.
Last year in San Diego, a few types of funding for biotech companies increased. One, venture capital funding, provides money for new companies that are not yet traded on the stock market. The other, called follow-on public equity, is a type of second-round stock options for companies that have already made their stock market debut.
Steve Hoey (HOY), a director at the technology trade group CONNECT, said whatever the funding type, more money is good news for San Diego.
“Economically, the immediate impact is on jobs. So this funding that was received enables the company to continue its business, to hire additional employees, to retain staff and employees as well. If there’s a lack of funding, that’s one of the reasons why companies oftentimes fail, that they don’t continue to receive sufficient funding to continue to develop and grow the company moving forward, and so the company downsizes.”
But Hoey said not everything is rosy for biotechs. Government grants, which new science companies often use to get their start, are in serious decline thanks to budget cuts sent from Washington D.C.
“Unfortunately, just in the fourth quarter and the early part of 2012, there was a marked decrease in NIH funding overall nationwide and to San Diego.”
Hoey said about 140 new San Diego biotechs opened their doors in the last two years, and those companies created about 300 new jobs.
Claire Trageser, KPBS News