So financial realities that drive decisions in more traditional industries -- quarterly profits and losses -- aren't such a force with biotech. In biotech, what matters is how much money is raised from private and public offerings, the rate at which it's spent, and how much longer it will take to get a product to market.
In some crucial areas, the biotech industry may even face additional employee shortages in coming months. Locally, about 6.5 percent of the biotech work force is imported -- foreign professionals with hard-to-find skills who enter the country on H-1B visas.
"We've had calls from some who say Biocom should be more cautious about supporting the H-1B visa program in the wake of the terrorist situation -- that we should support more of a home-grown constituency," concedes [Joseph Panetta]. "It doesn't sound good anymore to talk about it (the H-1B program)."
Though few industries can claim to be recession-proof, the biotechnology sector is shaping up to be more resistant to pink slips than most.
The already teetering economy, hit hard by the Sept. 11 terrorist attacks, has pushed some struggling industries to the brink and beyond. High-tech or low -- from the telecom to the travel industry - - many companies are laying off employees or imposing hiring freezes.
Yet the local and national market for skilled biotech workers remains strong, and in select areas -- such as chemistry and bioinformatics -- there are more jobs than people to fill them, say industry experts.
Biotech companies are posting job positions in newspapers and trade journals, mounting career fairs, and paying executive search firms to fill positions at a time when other industries are hunkering down.
At BioSpace.com, a leading Web site for biotech industry news, job postings continue to flourish. The San Francisco company hosts a popular online "career center" where U.S. biotech companies post an average of 2,500 job openings each month.
In the past six months, through the growing economic malaise and terrorist attacks, those job postings have dropped off only 1 percent, said BioSpace spokeswoman Lisa Roth.
"Biotech is one of the few industries still actively hiring," said Roth, whose Web site attracts 800,000 visitors and 4 million page views each month. "Companies are still getting funded, research and development is strong."
Cushioning the biotech industry from the larger downturn are factors that would make conservative investors shudder: most biotechs don't have a product or make a profit, and don't have a prayer of getting either for years.
So financial realities that drive decisions in more traditional industries -- quarterly profits and losses -- aren't such a force with biotech. In biotech, what matters is how much money is raised from private and public offerings, the rate at which it's spent, and how much longer it will take to get a product to market.
And on those fronts, the biotechnology sector is relatively well positioned, industry observers agree. Many biotechs are flush with cash from record financings and initial public offerings completed last year, and the number of drugs and medical products in late- stage development are at a peak.
Still, there are warning signs that biotech may be headed for some financially humbling times, particularly among startups that rely on venture capital funding.
Venture capital companies are investing less money in biotech firms this year, in part because their ability to cash out has dimmed with the public's aversion for initial public offerings.
"There is smart money sitting out there looking for good business plans and management, and those companies will get money," said Tom Murphy, who heads the biotech unit of R.J. Watkins & Co., a San Diego executive recruitment company. "But venture capital is more cautious and judicious in the deals that they do, and that will influence what young companies can do."
Yet despite a slowdown in venture capital that will cramp many biotechs' plans, the sector is still capturing a larger percentage of overall venture capital investment, according to the National Venture Capital Association.
The biotech industry raised $3 billion in venture capital last year, about 3 percent of the total $100 billion. This year, the biotech industry is expected to raise about $2 billion, or 4 percent of the anticipated $50 billion in venture capital distributed.
Meanwhile, biotech companies are expanding as corporate partnerships get forged and products are approved. Locally, Isis Pharmaceuticals, which recently signed a $200 million deal with Eli Lilly, expects to hire as many as 100 new employees in the coming year.
Both Invitrogen Corp. and Idec Pharmaceuticals are adding significantly to their work forces. And several large pharmaceutical companies are expanding in the area, including Novartis, Pfizer and Elan Pharmaceuticals, which is hosting a hiring fair next month.
"There's no indication that employment is down at all. In fact, it's just the other way around," said Joseph Panetta, president of Biocom, the local biotech industry association that represents 216 San Diego County companies.
In some crucial areas, the biotech industry may even face additional employee shortages in coming months. Locally, about 6.5 percent of the biotech work force is imported -- foreign professionals with hard-to-find skills who enter the country on H-1B visas.
With the recent terrorist attacks, the mood on Capital Hill has cooled toward some immigration programs. According to a survey last week by Lawyers Weekly, H-1B and other visa applications that were routinely approved in the past may now face long delays or rejections.
"We've had calls from some who say Biocom should be more cautious about supporting the H-1B visa program in the wake of the terrorist situation -- that we should support more of a home-grown constituency," concedes Panetta. "It doesn't sound good anymore to talk about it (the H-1B program)."
Penni Crabtree's e-mail address is [email protected]. Her phone number is (619) 293-1237.
Credit: STAFF WRITER