Life-sciences sector sees tightening real estate

Things are getting tight in the region’s life-sciences market, as local companies are vying now not only in the marketplace, but in real estate as well.

“Our industry is continuing to grow quickly, and currently accounts for about 16,000 direct jobs (statewide),” said Jennifer Jones, vice president for the Colorado Bioscience Association. “We’re ranked 11th in the nation, and for medical devices, we’re ranked sixth in the nation.”

While biotech companies are reaching into other parts of the Front Range, there’s little doubt that the Boulder Valley continues to lead the way in employment for the life-sciences fields. According to the 2016 edition of Life Science Outlook, published by JLL, Boulder and Broomfield counties account for the largest share of medical-device and diagnostic employment along the Front Range, including one of every three sector jobs.

While the report noted that national biopharma spending saw a slight decrease in 2015, that apparently did not hit the Boulder market, despite its wealth in biopharma firms. According to the report, the Boulder commercial space available for biotech continued to tighten.

“During the last 12 month, this market has tightened considerably with vacancy rates in major lab space trending sharply downward, currently settling at 11.8 percent,” the report states. “Available options for users seeking lab space are believed to be notably tighter than the recorded vacancy rate figure. Longmont and Gunbarrel are beginning to be good, low-cost alternatives with access to the Boulder workforce.”

Jones said that sharp upward trend in medical devices will probably only strengthen this year. Job growth here seems to develop in concentrated clusters (a high location quotient), and that seems particularly true in the Denver metro and the Boulder Valley areas.

“We see the medical-device sector growing the most,” she said. “In fact, according to BIO (the Biotechnology Innovation Organization), Colorado has a highly specialized employment concentration in medical device and equipment manufacturing. Its location quotient is 60 percent more concentrated relative to the national average. “

In terms of direct employment in the Denver metro market, the medical-device sector was responsible for 11,160 jobs, compared with 4,700 in biopharma, according to the Metro Denver Economic Development Corp.. There were 340 classified as medical device, compared with 330 companies classified as biopharma, and over the last five years, the former saw a 10.8 percent growth in jobs, compared with a 2.5 percent job loss in biopharma.

Certainly, none of these medical-device companies measures bigger than Medtronic, which has more than 1,100 employees in the state and more than 900 in Boulder and Louisville, according Jeff Trauring, the corporate public-relations manager.

“In Boulder, Medtronic conducts R&D and manufacturing for advanced and general surgical energy products including vessel sealing and electro-surgical devices,” said Trauring in a written message. “This falls under our Surgical Solutions business within the Minimally Invasive Therapies Group. We also conduct R&D and manufacturing for patient monitoring products such as pulse oximeters. This falls under our Patient Monitoring and Recovery business.”

Medtronic’s earliest advances were largely in the cardiovascular and diabetes technology, but since acquiring Covidien in 2014, the company has vastly expanded its technological reach. According to a presentation delivered by Chairman and CEO Omar Ishrak in January, Medtronic has two major projects in the near-term pipeline for the MIT group; LigaSure Vessel Sealing and the company’s Surgical Robotics System.

In the biopharma market, certainly no one had a more interesting ride than Clovis Oncology Inc. (Nasdaq: CLVS) over the last year. Company stock in late January was up 137 percent over the last three months, up 316 over the last six months and up 213 percent over the last year.

Of course, biopharma is a volatile market. Clovis’ rollercoaster ride was set up by a huge hit due to the fact that its first drug candidate for lung cancer was pulled back early last year, forcing the company to let go about one-third of its estimated 130-person workforce, about 50 of whom worked in the Boulder Valley. However a subsequent candidate for advanced ovarian cancer, rucaparib, saw a profoundly positive reaction from the FDA, leading to the stock advance.

Clovis has found itself in direct competition with drug candidates from another company with a big Boulder Valley presence, AstraZeneca. The company bought Amgen’s LakeCentre manufacturing facility in Boulder in late 2015, and hopes were high that the site eventually could employ as many as 400 people. That was seen as a welcome replacement to the more than 600 jobs lost to the county biopharmaceutical workforce by the closing of two Amgen facilities that year.

The company followed up that acquisition by acquiring Amgen’s Longmont facility in October 2016 for $64.5 million.

While AstraZeneca said last year that it would begin staffing in 2017, it doesn’t appear that effort is going full blast as of yet. Company officials did not comment on their local workforce.

At Array BioPharma Inc., which has partnered with Clovis on some research, the local workforce is believed to be about 160 employees. “We expect our employee numbers to trend upwards this year as we prepare for potential commercialization,” said company spokeswoman Tricia Haugeto.

Agilent Technologies Inc. announced last fall that it will build a new manufacturing facility on a 20-acre property in Frederick, about 30 miles north of Denver, which may house 150 to 200 skilled workers. Construction was expected to be completed on the 130,000-square-foot plant this year.

One company some experts are looking to hear great things from in 2017, is miRagen Therapeutics, led by President and CEO William S. Marshall, formerly of Thermo Fisher Scientific. The company is involved in clinical-stage biopharmaceutical discovery and development of innovative microRNA-targeting therapies.

The company recently added Paul Rubin to the position of executive vice president of research and development.  A seasoned biopharmaceutical executive with expertise across a range of drug modalities and therapeutic areas, Rubin was also a grad student with the founder.

“There are some people who have moved here to work for our company, but many of our employees were already part of the Colorado life-sciences community,” said chief business officer Adam Levy. His company has about 45 total employees, all of them in the Gunbarrel location.

“As a company we have tried to support hiring local people,” Levy said.

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