Biotech Companies Filling the Vacuum in Novato

Over the past eight months, a troubling number of high-profile businesses have announced their departure from Novato. What started with the closure of Hamilton Landing-based  and the loss of their 400 employees in December 2010 has continued into the first half of 2011 with rising vacancies in Novato's commercial spaces.

Downsizing was the reason for the impending move to San Rafael while the need for more space and a booming commercial lease market made gourmet food retailer  select Petaluma over Novato. 

A report in Friday’s North Bay Business Journal of the departure of bedding company, , to an 80,000-square-foot space in Petaluma leaves another 30,000 square-foot-hole in Bel Marin Keys’ commercial real estate landscape.

Despite these losses, the city’s redevelopment manager Ron Gerber is optimistic about Novato’s ability to attract and retain businesses in other industries.

“Software, biotech and healthcare have really grown over this last nine to 12  months,” Gerber said.

Leading the growth is , which employs 750 in Novato and announced Thursday that it would be acquiring a manufacturing firm in Ireland from Pfizer for $48.5 million as reported in the Marin Independent Journal.

But Gerber points to two spinoff biomed companies, Ultragenyx Pharmaceutical Inc. and Raptor Pharmaceutical Corp. with three factors in common. Both were formed by former executives of BioMarin; both focus on developing therapies for rare diseases, sometimes referred to as “orphan” products; and most importantly both are headquartered in Bel Marin Keys, along with Bio Marin.

Privately-held Ultragenyx Pharaceutical Inc., a start-up biotech company, announced this week the closing of a $45 million Series A financing. The company is focusing on developing protein or small molecule therapies for rare genetic disorders.

“I am pleased and excited to have found a set of investors with the insight to support the development of a new rare disease company with multiple product candidates,” Dr. Emil D. Kakkis, CEO and president of Ultragenyx, said in a company statement.

Gerber suggests that Ultragenyx has the potential to become a significant employer over the next three years.

“[Kakkis] formed and partnered with a Japanese manufacturer and is hiring 10 people in Novato but it could have 100 employees in three years,” he said.

Kakkis started Ultragenyx in April 2011 after 11 years at BioMarin, where he served as the chief medical officer. 

Gerber said Raptor Pharmaceuticals is another promising biomed spinoff that he said is doing well but has not received a lot of media attention. Three members of its senior management were also former executives and scientists at BioMarin, including CEO and co-founder Christopher Stark, chief scientific officer and  co-founder Todd Zankel and CFO Kim Tsuchimoto.

This month the company announced that it was beginning Phase 3 of clinical trials of its delayed-release oral formulation of cysteamine bitartrate (“DR Cysteamin) which is developed primarily for patients who have an inborn metabolic error called nephropathic cystinosis which can result in renal failure. 

Raptor Pharmaceutical is also focusing on "underserved patients" and expanding the therapies for disorders including Huntington’s disease and non-alcoholic steatohepatitis.

“We are please to see our final patients complete the Phase 3 clinical trial and are gratified that 40 of the 41 patients completing the study have elected to enter our long-term extension study...” said Dr. Patrice Rioux, chief medical officer of Raptor.

Raptor is a public company (NASDAQ: RPTP) that was formed in September 2005.  As of Friday, June 24 its stock closed at $6.32.