October Recap + A Look At Where The Biotech Market May Be Going

“AI in biopharma is like sex in high school. Many of the people who say they're doing it really aren't, and the ones who really are aren't talking about it.”

― Andrew Satz, CEO, EVQLV, Episode 168 

Thought that might get your attention!

In this issue, I highlight some available lab space in great locations, recap some real estate transaction highlights, share some funding news, highlight a couple of takes on what some investors and companies think about the state of the biotech market, and more.

Enjoy!

FEATURED AVAILABLE LAB SPACE

As always, if you see something you like, let’s schedule a tour.

4503 Glencoe Ave. | Marina Del Rey, CA

This sublease is a 35,000 square foot purpose-built facility with heavy lab infrastructure located in a very walkable, amenity-rich location in Marina Del Rey. Formerly home to Amrata Pharmaceuticals.

Why You Might Be Interested:

• Term: through 12/31/2031

• Monthly asking rent: $5.50, NNN

• Second-generation Wet Lab/GMP and office space

• Only fully built-out lab space in the market

• Back-up generator

• Close proximity to LAX and the beach

5210 Pacific Concourse Dr. | Los Angeles, CA

5210 Pacific Concourse possesses all the base building characteristics (floor size, ceiling heights, ability to vent, and above standard power) valued by the most discerning Life Science tenants that are comparable with purpose-built life science buildings. The property's two-story, low-rise construction, coupled with the below building attributes, offers tenants a unique ability to deliver a true life science campus.

Why You Might Be Interested:

Existing Lab Buildout. Existing lab improvements, infrastructure, and equipment in Siemens first floor premises and part of the second floor used previously as a lab for Siemens life science needs. (Includes many existing 6' fume hoods, house air and vacuum systems, liquid nitrogen system, D.I./R.O. water system, numerous cold rooms, and existing case work).

Essential MEP Systems. Equipped with accurately sized specialty plumbing and HVAC systems including deionized water (DI), liquid nitrogen, compressed air and vacuum systems, and existing exhaust infrastructure for required fume hoods.

Zoning. MPD zone allows for any use permitted in Scientific Research & Development.

Tax Savings. Unincorporated Los Angeles County location provides a Los Angeles address with significant business license tax savings.

REAL ESTATE HIGHLIGHTS

Avid Bioservices, Inc. (NASDAQ:CDMO) announced that it has completed construction of CGMP manufacturing suites within its new, world-class cell and gene therapy (CGT) development and CGMP manufacturing facility as scheduled. The purpose-built 53,000 square foot CGT development and manufacturing facility will support early-stage development through commercial manufacturing and is located in Orange County, CA, just five miles from Avid’s mammalian development and manufacturing operations. The recently completed manufacturing suites join the CGT facility’s analytical and process development labs, which were launched in 2022. (source: AvidBioservices.com)

Pliant Therapeutics, a developer of treatments for fibrotic diseases, agreed with Healthpeak Properties late last month to relocate its headquarters to a more than 100,900-square-foot space in the landlord's Britannia Oyster Point campus in South San Francisco, California, according to a person familiar with the situation. The deal gives the biotech company the ability to terminate its existing lease for the roughly 33,000-square-foot building at 260 Littlefield Ave., which is also owned by Healthpeak and located in South San Francisco. (source: Costar)

San Francisco-based Nurix Technologies, which is developing cancer fighting therapies, has moved into a 46,000-square-foot space in the $112 million Alexandria Center for Advanced Technologies in Houston. Nurix said it could hire more than 100 to work at the campus at 8800 Technology Forest Place, the former Lexicon Pharmaceuticals campus recently redeveloped by Pasadena, California-based real estate firm Alexandria Real Estate Equities. (source: Houston Chronicle)

NOTABLE FUNDINGS + HIGHLIGHTS

Thousand Oaks-based Atara Biotherapeutics has reached an agreement with the Food and Drug Administration that clears the way for the company to submit to the agency clinical trial data for its drug to treat a rare blood cancer. (source: Los Angeles Business Journal)

Westwood-based Puma Biotechnology has received an orphan drug designation from the federal Food and Drug Administration for one of its drug candidates for the treatment of small-cell lung cancer. Puma’s drug candidate targets small-cell lung cancer, an aggressive form of lung cancer with a poor prognosis and with limited treatment options, especially for patients whose chemotherapy was unsuccessful. (source: Los Angeles Business Journal)

San Diego-based Iambic Therapeutics (formerly Entos), closed a $100 million Series B financing co-led by Ascenta Capital and Abingworth. The biotech firm is developing new therapeutics from its generative AI discovery platform, which may explain why Nvidia also was an investor. Founded in 2019, the company has raised $153 million, per Crunchbase. (source: BusinessWire)

Next-generation biologics developer Rampart Bioscience, locked up an $85 million Series A led by Forbion Capital Partners. The La Jolla-based company has developed a proprietary DNA-based medicines platform — called HALO — which is designed to produce highly potent and redosable therapies. The company’s current lead program is for the treatment of hypophosphatasia, an often fatal genetic disease that prevents bone mineralization. Founded in 2019, the company has raised $125 million, per Crunchbase. (source: Crunchbase)

San Diego-based VedaBio, a biotech company focused on molecular detection, launched with more than $40 million in funding led by OMX Ventures. (source: San Diego Business Journal)

A LOOK BACK

As we begin to look back on 2023, I thought the below facts regarding biotech’s relative success in the VC world, plus a major pickup in M&A activity, are positive signs for the biotech world.

As of August 25, more than 130 U.S.-based companies have raised rounds of $100 million or more in 2023, per The Crunchbase Megadeals Board. Biotech startups raised 34 of those rounds — the most of any sector — while artificial intelligence startups received 13 such rounds. (source: Crunchbase)

According to Stifel Financial, global biotech M&A deal value totaled $93 billion in the first half of 2023 and is on track to reach the highest full-year level of M&A activity since 2019’s total of $328 billion. This comes as venture funding for startup firms has recently been rebounding but remains below pre-pandemic levels. (source: Costar)

THE LOOK AHEAD

These three articles give a good look at the current economic climate in the life science commercial real estate market and where investors and companies see it going.

Alexandria Doubles Down On Asset Sales, Megacampus Strategy Amid Biotech Headwinds. With lab space availability increasing and economic uncertainties piling up, Alexandria Real Estate Equities is doubling down on its strategy to sell underperforming properties and plow the cash into its megacampuses, executives said during a third-quarter earnings call. You can read the rest of the earnings call recap on Bisnow.

Alexandria Real Estate Equities executives said rising merger and acquisition activity involving big pharmaceutical tenants points to strong demand ahead for biotech laboratories, even as speculative space needs among smaller firms waned this year. As a slowdown in demand for coronavirus vaccines and treatment has waned, new demand is being fueled by enhanced research into areas such as obesity, cancer and dementia. A resetting of research priorities has helped fuel a wave of recent biotech deals including Bristol Myers Squibb’s $4.8 billion acquisition of San Diego-based Mirati Therapeutics, which develops commercial drugs to treat cancer. (source: Costar)

U.S. Life Sciences Real Estate Investors Say The Market Will Improve. Few Are Willing To Bet On When. Without active capital markets, tenant demand in life sciences real estate vanishes, and investors aren't certain when it will return. You can read the whole article on Bisnow.

BIOTECH BEACH

I thought this map from BioSpace was a good way to visualize all of the biotech activity in San Diego.

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And, as always, we're here to help you with your real estate needs.

Ted Simpson
Founder and CEO
Commercial Real Estate Advisors
(c) +1 310.384.6512
(e) [email protected]
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