San Diego's Homegrown Public Companies Now Leasing 6.4 Million Square Feet....Part 1

 By David Gross

As the life sciences industry continues to grow, it’s spawning new publicly traded companies at ever increasing rates.  In San Diego alone, there have been 22 biotech IPOs (Including one SPAC merger) in the 2020s, compared to 46 during the entire 2010s, 26 during the 2000s, and 9 before 2000.  But I wanted to determine what this meant for lab space absorption and how consumption might be changing.  

In total, San Diego life sciences companies that have IPO’d going back to the 80s currently occupy nearly 6.4 million square feet of space in the region.  The breakout below shows how much IPOs from each decade are using.

The big drop off from the 2000s to the 2010s is largely due to Illumina, which went public in 2000 and now occupies 1.25 million square feet in San Diego.  Negating its outsized impact would have left the 2000s at around 50,000 per foot, same as the 2010s.   However, there is also a survivor impact holding up the 2010s averages.  Of the 45 companies that went public in the 2010s, 38 are still leasing space, either on their own or through a company that acquired them.  However just 13 of the 26 companies that IPO’d in the 2000s are still leasing space in a former or current corporate entity.     As a result, square feet per surviving company fell off noticeably between the 2000s and 2010s.

CAR-T and -OMICs Lead the Way

While it can be tempting to come up with generalizations of square feet per dollar raised, or other broad metrics, to do so overlooks industry subsectors that naturally lease more space, notably cell therapy, gene therapy, CDMOs, -Omics, and diagnostics.  At 83,000 square feet, CAR-T developer Poseida Therapeutics has one of the largest footprints among San Diego companies that have gone public this decade, due to sensitive clinical manufacturing needs.  Meanwhile, preclinical Design Therapeutics had a larger IPO than Poseida, raising nearly $300 million, but currently has just 12,000 square feet in facilities.    

In addition to cell and gene therapy, -omics companies lease greater amounts of space per dollar of funding.  Sequencing company Singular Genomics raised nearly the same amount as Design Therapeutics but has 77,000 feet of space and added 50 people between March 2020 and March 2021 as it prepared to scale up its manufacturing operations.  Privately held sequencing provider Element Biosciences recently took 101,000 square feet.  These areas remain some of the most capital-intensive in the industry.

At 6.4 million square feet, San Diego’s hometown public companies are now leasing nearly three times as much as the 2.2 million square feet big pharma is leasing there, which includes 30,000 feet at J&J’s JLabs incubator.  I’ll have more analysis on San Diego leasing trends in Part 2 of this series.