[WildCowboy]

Can't say this a complete surprise given some of the events over the last six months, but still...not good.

Pfizer drops planned biotech research center
Tom Abate, Chronicle Staff Writer
Tuesday, July 7, 2009

(07-06) 20:57 PDT SAN FRANCISCO -- New York drug giant Pfizer has pulled the plug on plans to open a biotech research center near UCSF's Mission Bay Campus, a move that deals a blow to San Francisco's hope of becoming a major biotechnology hub.

"We're in discussions now with the landlord to exit the lease," Pfizer spokeswoman Joan Campion said Monday, reversing a decision that had been announced with great fanfare in August.

At that time, Mayor Gavin Newsom had called the planned Pfizer research center a "significant win" for San Francisco.

Newsom press secretary Nathan Ballard said Monday that the mayor was disappointed by Pfizer's change of plans but remained confident that UCSF eventually will become a magnet for industrial activity.

"This doesn't change what makes Mission Bay a good location for biotech companies," Ballard said.

The city's expectations for the Pfizer deal had been fueled by the fact that the new center was to have been headed by Bay Area biotech entrepreneur Corey Goodman.

But in January, Pfizer made a $68 billion bid for Wyeth Pharmaceuticals, a drugmaker with its own large biotech research group. Once that transaction closes later this year, Wyeth executive Mikael Dolsten will head biotech research at the combined companies. Meanwhile, Goodman, the city's champion, has left the company.

When those post-merger executive changes were revealed in April, Pfizer initially said it still planned to occupy 105,000 square feet of research space in a building under construction at Mission Bay.

But Campion said Monday that Pfizer now thinks it makes more sense to keep its 100 Bay Area employees at Rinat Neuroscience, a South San Francisco startup it acquired in 2006, rather than moving them to Mission Bay as planned. The company did not disclose what, if any, financial penalty would be associated with the change in plans.

Despite Pfizer's pullout, Ballard said, a dozen biotech companies already have located near Mission Bay, including the Sirna division of Merck, another large drug company.

"As an observer of that project over the last 15 years, I think Mission Bay is finally reaching critical mass," said Rodney Ferguson with the venture investment firm Panorama Capital.

"I don't really think Pfizer's coming or not coming really affects the success of Mission Bay," said Michael Schuppenhauer, a biotech consultant in Half Moon Bay.

He said Pfizer could have been to Mission Bay like the anchor tenant at a shopping mall. But the research park could still succeed as a district of smaller biotech firms focused on niche medical products, Schuppenhauer said.

Skip Whitney, with the biotech real estate brokerage firm GVA Kidder Mathews, said that is already happening.

"I have half a dozen clients actively looking at Mission Bay right now," Whitney said.

The fact that incoming UCSF Chancellor Susan Desmond-Hellman is a former Genentech executive can only help Mission Bay's commercial appeal, Whitney said.

But Pfizer's about-face is a blow to San Francisco's pride, and if success means attracting a major drug company research center, that milestone could be years away.

Regis Kelly, director of QB3, the California Institute for Quantitative Biosciences at Mission Bay, said drug companies tend to locate research centers near hospitals where they can translate lab work into medical practice. UCSF plans to build a medical center at Mission Bay, but that is at least five years away.

"The key thing is when we have the hospital in place," Kelly said.

Source: http://www.sfgate.com/cgi-bin/articl...BURR18JSOJ.DTL