Sonoma Biotherapeutics, a life sciences company developing treatments for autoimmune diseases, announced this week it raised $265 million to grow its operations in Seattle and the San Francisco Bay Area.
Sonoma is one of many life science companies building operations in multiple cities. Last year, Sonoma signed a lease for an 11,000-square-foot lab facility in Seattle. The company’s founders and employees are split between Washington and California.
The trend of splitting research and operations between cities has become “relatively commonplace,” according to Leslie Alexandre, president and CEO of Life Science Washington.
Nautilus Biotechnology, a company founded by Seattle entrepreneur Sujal Patel, is conducting much of its lab research in the Bay Area. Seattle’s Sana Biotechnology recently announced plans to build a 160,000-square-foot facility in the Bay Area.
Both Seattle and San Francisco are academic hubs for life science research, said David Tan, an associate management professor at the University of Washington. Many life science companies will end up locating in regions where founders already have academic affiliations or prior experiences doing research at local universities, he said.
In the case of Nautilus, chief scientist Parag Mallick — who developed the idea for the company’s protein-counting machine — has done extensive research at Stanford University.
Some cities are better known for certain types of talent. For example, Alexandre said Seattle has become well known for immunology, oncology and virology, among other disciplines. The region is also well known for cell therapy research, the class of treatments Sonoma is focusing on.
Having labs in two biotech hubs, coupled with the recent funding, will help Sonoma continue its research with new and existing products, and also “develop a manufacturing capability ourselves,” said Fred Ramsdell, chief scientific officer of Sonoma, who previously has worked at Seattle-based Immunex and ZymoGenetics.
“I wouldn’t say it’s because one (city) is particularly better than the other,” said Ramsdell. There are no “hard and fast rules” about where Sonoma chooses to base certain parts of its operations. “There is an enormous amount of collaboration between the two sites and the two groups.”
Sonoma is developing a treatment that leverages “cell therapy,” a process that involves using a patient’s own cells as a cure for disease. First, diseased cells are extracted from a patient, then modified with added ingredients so they can combat autoimmune and inflammatory diseases. Next, the cells are replicated by the thousands, and finally, they are injected back into a patient.
The financing had participation from more than a dozen investors, bringing the company’s total funding to $335 million. Sonoma was founded in 2019 by San Francisco’s Jeffrey Bluestone and Bainbridge Island’s Ramsdell, among other researchers.
The company is currently testing its cell therapy in mice and plans to begin testing in humans late next year, with a specific focus on rheumatoid arthritis. It is also developing a more generic, protein-based drug for Type 1 diabetes that it will test in humans later this year.
Practical matters such as the cost of doing business are also a factor for co-location. Cheaper rents in the Seattle area have led some California companies to look north.
Lyell Immunopharma, a San Francisco-based life science company, has labs in Seattle and Bothell. According to data compiled by CBRE, a commercial real estate company, rents for lab spaces in Seattle are approximately 40% the cost of those in the Bay Area.
Zymeworks, based in Vancouver, B.C., has established its United States headquarters in Seattle, with approximately half its 460 employees located here.
“You can’t build a world-class biotech in a vacuum,” said Kathryn O’Driscoll, chief people officer for Zymeworks. It requires “the power of community and expertise, and there’s a lot of that in the Pacific Northwest.”
O’Driscoll acknowledged that Washington not having a state income tax is attractive for people. But she said that wasn’t as big a factor as Seattleites’ affinity for the outdoors, nature and work-life balance, a mentality that helps breed innovation in the workplace.