2019 Life Sciences Industry Report from CLSA Shows Strong Growth in Jobs, Investments and Therapeutic Pipeline in California
California’s life sciences sector continues to lead the nation in economic growth and innovative activity:
Directly employed 311,226 Californians with an average wage of $119,000
Generated $178 billion in revenue
Projected to attract $7.6 billion in venture capital and $3.9 billion in NIH investment
Over 1,300 new medicines in clinical trials
SAN FRANCISCO, SACRAMENTO, SAN DIEGO & WASHINGTON, DC – Nov. 14, 2018 – California Life Sciences Association (CLSA), the trade association representing California’s life sciences industry, today released the 2019 California Life Sciences Industry Report, which shows that California’s life sciences sector directly employed 311,226 people, generated $178 billion in revenue, is projected to attract $7.6 billion in venture capital (VC) and received $3.9 billion in funding from the NIH. Produced with PwC US, the 2019 snapshot highlights the strength of California’s biomedical industry – the largest cluster in the world – as evidenced by significant increases in employment, earnings, graduating science and engineering PhDs, VC investment and potential drugs in the pipeline.
Key Highlights from 2019 California Life Sciences Industry Report
- 4.2% increase in total life sciences jobs (up 12,500 from prior year), with companies directly employing 311,226 people in California – the most in the nation – with wages averaging $119,000.
- Total jobs created by the industry in California surpassed 958,000 including approximately 647,000 indirect and induced employment.
- There are 3,418 life sciences companies (up 169 from the prior year) in California, that have 1,332 new therapies in the development pipeline.
- California biomedical companies are projected to attract more than $7.6 billion from the VC community, an increase of approximately nearly $1.5 billion from 2017. California has a 54.7% share of the nation’s total VC investment.
- The state’s universities graduated over 4,900 science and engineering PhDs, leading the nation by a wide margin. Universities and research institutes also brought in $3.9 billion in NIH grants, which also led the nation.
California Governor Jerry Brown commented: “California’s thriving life sciences industry continues to grow thanks to the contributions of companies that have developed groundbreaking therapies to help treat many serious illnesses – including cancer, hepatitis and heart disease – and engineered more sustainable materials, smarter agriculture and cleaner chemicals. Our innovative life sciences sector is a source of great pride for Californians and brings with it an impressive positive economic impact – more than 300,000 Californians are directly employed by life sciences companies, particularly in world-famous hubs in San Francisco, San Diego, Los Angeles and Orange County.”
Sara Radcliffe, President and CEO of California Life Sciences Association, added: “The California life sciences industry continues to show tremendous growth and leads the nation in top universities and doctoral degree recipients, NIH grants, and life sciences VC investments. Our industry’s companies, universities and research institutes are providing new therapies to help patients, excellent jobs and other economic benefits for the people of California. As the trade association representing the industry, CLSA will continue to foster strong relationships with officials locally, in Sacramento and in Congress to ensure that California continues to foster biomedical research, economic investment and job creation.”
Employment and Wages
- 1 in jobs: Biopharma and medical device employment in California combined grew 11.2% between 2013 and 2017. By contrast, those numbers declined by nearly 2% in the second-ranked state New York for the second year in a row.
- The Bay Area led the state with over 82,500 direct life sciences jobs (increase of nearly 11,200 from prior year). Los Angeles County following closely with 57,100 (increase of 7,700), while San Diego County directly employed 48,400 (increase of 6,500) and Orange County reported 45,000 direct life sciences jobs (increase of 4,500).
- The industry paid workers $37.1 billion ($3.1 billion increase) in salaries and wages during 2017 with the average annual wage of $119,000 (up from $114,000).
- No. 1 in venture capital life sciences investments: California is projected to secure the most VC life sciences funding in the nation, with $7.6 billion expected in 2018, an increase of approximately $1.5 billion from the previous year. This is 39% of the nation’s entire expected life sciences VC investment in 2018. Massachusetts is projected to be second with nearly $6.2 billion.
- 1 in NIH grants: California scientists received over $3.9 billion in NIH research grants (7,922 awards) in federal fiscal year 2018—the most of any state in the nation. Massachusetts received $2.7 billion, over $1 billion less.
- No. 1 in digital health VC investment: California’s digital health sector is projected to attract $3.9 billion in VC investment for 2018, an increase of $1.6 billion from the prior year, leading the nation. New York is projected to be second, receiving $988 million. Over $1.7 billion of the digital health VC funding flowed to the Bay Area.
Total Number of Life Sciences Firms & Economic Impact
- An enormous economic plus, California life sciences companies earned revenues of $178 billion in 2017, up from $169 billion the previous year. Biomedical exports increased to $25.2 billion (an increase of $2.5 billion from prior year) and the industry and employees paid $19 billion in federal, California state and local taxes.
- Home to 1,848 medical device and equipment manufacturing firms, and 1,570 biotechnology and pharmaceutical companies, California’s total 3,418 life sciences companies– 169 more than the previous year – produce new technologies to improve patient care and boost the state’s economy.
Peter Claude, Partner, Pharmaceutical & Life Sciences Advisory, PwC, remarked: “When we look at the numbers for the statewide life sciences industry, we’ve seen really consistent increases over the past few years in California. We are seeing remarkable success in all aspects of the industry in California, and with continued investment, we can see more breakthrough technologies reach patients everywhere.”
Regional Spotlight: Orange County
- The report spotlights the burgeoning life sciences community in Orange County. With large-capital anchors and hundreds of nearby startups, the region has also shown incredible growth, particularly in medical devices.
- In 2017, Orange County directly employed nearly 45,000 (an increase of 4,500 from the previous year) people in the life sciences industry, up 11% over the previous year. Of those, more than 23,000 were employed by medical device, instrument and diagnostic companies, which led the state.
- The average wage was $91,500, and the region attracted nearly $320 million in life sciences and digital health venture funding.
“Orange County is a microcosm for California as a whole,” said Radcliffe. “We are seeing major innovation in Orange County driven by increasing investment particularly from investors in New York or Boston, a collaborative atmosphere committed to growth and supported by a productive university ecosystem, and a strong focus on entrepreneurship.”
Click here to download the full 2019 California Life Sciences Industry Report.
About California Life Sciences Association (CLSA)
California Life Sciences Association (CLSA) is the state’s largest and most influential life sciences advocacy and business leadership organization. With offices in Sacramento, San Diego, South San Francisco, Los Angeles and Washington DC, CLSA works closely with industry, government, academia and others to shape public policy, improve access to innovative technologies and grow California’s life sciences economy. CLSA serves biotechnology, pharmaceutical, medical device and diagnostics companies, research universities and institutes, investors and service providers throughout the Golden State. CLSA was founded in 2015 when the Bay Area Bioscience Association (BayBio) and the California Healthcare Institute (CHI) merged. Visit CLSA at www.califesciences.org, and follow us on Twitter @CALifeSciences, Facebook, Instagram, LinkedIn and YouTube.
PwC’s Pharmaceutical and Life Sciences Industry Group helps organizations – from biopharmaceutical and medical technology firms to generic manufacturers – better connect to consumer needs to develop and deliver the treatments of tomorrow. We work with clients to uncover their most valuable strengths, identify complementary relationships and keep up with the latest advances in technology, so they can better compete in an evolving health market and improve cost-efficiency and profitability. For more information visit: www.pwc.com/us/pharma.
Data Source: CLSA/PwC 2019 California Life Sciences Industry Report
California Life Sciences Association (CLSA)
Will Zasadny | Director, Communications
Wzasadny@califesciences.org | 619-961-8848