Sarepta Moves From Seattle to Boston for the Talent

9/7/12Follow @xconomy

Just when it looked like Seattle might be getting another emerging biotech company in Sarepta Therapeutics, it has picked up and moved East.

Sarepta (NASDAQ: SRPT), the company formerly known as AVI Biopharma, has moved its headquarters from Bothell, WA, to Cambridge, MA, CEO Chris Garabedian said yesterday in a phone interview. The company currently has about 110 employees, with about 40 in Bothell and the rest in Cambridge and Corvallis, OR. Sarepta hasn’t made a final decision about what to do with its Bothell site, but Garabedian says the company’s lease expires near the end of 2012 and Bothell staff are being evaluated and may be offered transfers to one of the two other locations.

“It was a decision we made with a lot of thought,” Garabedian says. “As we have focused in more on rare diseases, and looked for people with necessary skills in development, biostats, regulatory affairs, we found that many of the people we were interested in were already living in Boston, and not interested in moving to Seattle.” Some candidates Sarepta has been recruiting from elsewhere in the U.S. were also more interested in moving to Boston, he says.

Chris Garabedian, CEO of Sarepta Therapeutics

Sarepta, founded in Oregon back in 1980, has burned through more than $320 million of investor money in its history without ever getting close to introducing a marketable drug in the U.S. The company originally moved its headquarters to the Seattle area in 2009, saying at the time it wanted to advance to the next level as a drug developer, and that it needed to tap into a deeper biotech talent pool to achieve that goal. But the management team that made that decision was swept aside a year later in a shareholder revolt, and Garabedian was brought in to turn around the struggling company at the start of 2011.

Garabedian, a former executive at biotech powerhouses Celgene (NASDAQ: CELG) and Gilead Sciences (NASDAQ: GILD), vowed in his first major interview as Sarepta CEO that he wanted to build another breakout independent biotech company in the Seattle area. The company endured some hard times in his first year as CEO, seeing its stock dip below $1. Despite the tough stretch, Sarepta did find some excellent people in the Seattle area, particularly with expertise in infectious diseases, Garabedian says. But ultimately, there weren’t enough people with the right skills to execute on its strategy to become a rare-disease drugmaker, he says.

The Boston area, by contrast, is loaded with people who know the rare-disease business because of the regional history with Genzyme, Shire, and many small biotech companies and Big Pharma operations.

Chris Rivera, the president of the Washington Biotechnology & Biomedical Association, said he’s “a little surprised, and disappointed” to hear that Sarepta’s headquarters has moved out of town. Sarepta didn’t seek help with recruiting from the local trade group, and it might have been able to help, he says. “I hope they succeed for the patients and for the company,” Rivera says. “I wish they had given it a little further shot here.”

It’s too early to say yet if Sarepta really has the right stuff to grow into a major player in the rare disease category, modeled after Cheshire, CT-based Alexion Pharmaceuticals (NASDAQ: ALXN)—which was just featured this week in Forbes. But the company has been revitalized since July, when it reported interim data from a study of 12 boys that said its experimental drug for Duchenne Muscular Dystrophy was able to outperform a placebo after 36 weeks of follow up. Final study data, which includes a more rigorous evaluation of the drug’s impact on walking ability at 48 weeks, is expected to be available next month.

Even though the results are preliminary, and Sarepta will almost surely have to reproduce the findings in a larger, longer-term clinical trial to begin next year, investors have been virtually screaming about this being a breakthrough for Duchenne Muscular Dystrophy and the company. Sarepta shares have skyrocketed from $3.46 a share on July 23—the day before the 36-week analysis was released—to $14.55 a share at yesterday’s close. That bullish run has given the company a market valuation of about $330 million.

Sarepta’s technology is for making drugs that specifically shut down certain biological processes at the level of RNA, so at least in theory it ought to be useful against far more than just Duchenne Muscular Dystrophy. Besides that lead drug candidate, the company has been putting its chemistry to work on making antivirals for the Ebola and Marburg viruses, under a pair of contracts with the U.S. Department of Defense. Last month, the government issued a “stop work” order to Sarepta on its Ebola program, saying it may end up terminating that contract as it re-assesses budgets. The Ebola program represents about half of Sarepta’s potential $291 million worth of defense contracts against hemorrhagic viruses. The status of the Ebola contract is still up in the air, according to a recent regulatory filing Sarepta made with the Securities & Exchange Commission.

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  • Boston Joe

    That’s too bad. I really do believe that this is the best place to live in the US, all things considered. Boston is my hometown and a wonderful city, but moving here after 35 years there has allowed me a much better quality of life. If you can’t get “talent” to come out here, I am guessing that you are not trying hard enough with recruitment and incentives. Microsoft and Amazon have no problem getting people to move to the area. For Sarepta employees, get ready to pay 20% more to live with the same salary. In Boston I have seen winters hit -5oF and summers top out at 105oF, and 3 feet of snow over 2 days, at sea level. :) No nice mountains to stare at either. Disclaimer- I have spent 13 years in the Boston biotech scene, including Shire HGT, prior to coming out here.

  • Jimbo

    Very curious why they wouldn’t just move down to San Francisco, where the biotech cluster is bigger and the talent pool is stronger than Boston. IN addition the rare disease talent is especially strong in SF area due to Biomarin, Ultragenyx, Raptor, Actelion, etc

    • Boston Joe

      Sounds like an unsubstantiated opinion. I disagree that it is much
      stronger than Boston. If you ran the numbers- number of employees,
      companies, technical schools, etc. are about the same. If you want to
      factor in quality of life, SF loses against Boston for a potential
      corporate location only because housing is even more money. Companies
      have been closing down in the Bay Area. For instance, Chiron has moved
      out, MedImmune is shutting down, and Xoma’s assets were just sold-off.

      • Jimbo

        Suggest Doing a little more research on the biotech hubs.
        The number of registered biotech companies at the end of 2011 was 251 for SF compared to 189 for Boston (33% more). The totla jobs are similar, but When sanofi, Pfizer and novartis (big pharma) are excluded from Boston , san francisco has 2x the number of employees. I don’t think they should be included since we are talking about biotech.

        THe amount of venture capital spent in 2011 was 2.7 B for SF and 1.4B for Boston. As for your examples, medimmune is a wash DC company and chiron was bought by NVS nearly 10 yrs ago.

        THe bay area is the foremost home of the innovation economy, including tech, venture capital, biotech. the area has the most experienced industry veterans to help with incubation, and a lot of tech crossovers. It has 2 of the top 5 medical schools (stanford and UCSF) and 3 of the top 6 science grad schools (Stanford, Berkeley, UCSF).

        Boston is clearly 2nd over anyone else, but a pretty distant second. Honestly, this is the 1st time i’ve heard anyone state that it is nearly equivalent.

        Anyway, my point was just that if Sarepta was looking for better talent, the trip down the west coast might have been an easier move. I can’t imagine many of the Sarepta employees will make the move to boston. the QOL, as you state, in places like Seattle and SF are far superior to boston, for the weather, the outdoor activities, friendlier people, better coffee :), etc. It’s nice to surf in the morning, work a 12 hour day at a top biotech, go for a jog on the coast, and then ski the next day.

        • Boston Joe

          Okay, agree on some of those numbers. What defines biotech. then? Size of the company only? Maybe we should remove Roche then (formerly known as Genentech).

          Pfizer was Wyeth BioPharma, and Genetics Institute before that. They have a world-class biologics team over there in Andover/Cambridge. No small molecule work is done there outside of maybe only very early discovery. For me, I’d define biotech. (in the drug world) as a company that creates biological processes designed to make biological therapies. “Biotechnology” is a broad term often misused- it can also apply to biofuels companies and other bio-comodity ventures.

          As far as Sanofi (i.e. Genzyme) goes, same situation as Pfizer. Novartis has a huge biologics presence in their Cambridge location so I wouldn’t ignore them either. We are not talking about Lipitor manufacturing here.

          I (and I bet many) disagree with your distant second remark; maybe true with regards to venture capital spent. Though is lots of venture capital being dumped into failing start-ups always a good thing? Also, the references to the broader innovation economy and so-called “tech.”
          companies such as FB, Google, LinkedIn, Apple, etc. are irrelevant here.

          As having both East Coast and West Coast experience (you may as well), Boston would offer, in my opinion a better QOL than anywhere in CA. Cost of living and commuting nightmares in CA (both significantly higher than in eastern MA) far outweigh better weather, scenery, and attitude for many. Also, most would not consider a 12 hour work day an indicator of great quality of life. The “surf and ski within 24 hours” West Coast myth is the most overused selling point on our part of the world; it just never happens. :)

          My view is Seattle would offer Sarepta plenty of advantages long-term if they had tried a little harder. In all seriousness though I love SF; keep up the good work.

          • Jimbo

            “The “surf and ski within 24 hours” West Coast myth is the most overused selling point on our part of the world; it just never happens. :)”

            I do it, as long as many of my friends. I also sail and road cycle. The best cycling in America is in Marin county, just across the bridge. And the best sailing is here as well.

            I don’t think anyone would agree that the QOL in Boston is better. Yes, the housing costs are higher in SF, but SF traffic is NOT bad. The amount of outdoor activities is 10x that of Boston. I also consider biotech as biologics, which makes SF even a stronger winner over Boston. Everything was spurred off Genentech, even those companies in Boston. The top biologics engineers are here, and was as well as the most biologics manufacturing (whcih is a bigger part of the process than with small molecules) is also here. I did work in the Boston area for several years. I am now head of R&D for a 300 person biotech. The amount of capital, the talent pool, the amount of experience are all better her. And the QOL if WAY WAY better. I wouldn’t move to Boston for ANY job.

          • Boston Joe

            That’s great- but, isn’t skiing a 4 hour drive away in Lake Tahoe area? That isn’t the definition of close. For instance, I could ski anywhere in New England within a 4 hour drive from Boston. From Seattle, I can have world-record setting snow a 2 hour drive away at Baker or 1.5 hour drive away at Crystal. Don’t get started on which has better snow either- Tahoe was pathetic last season.

            Best cycling in America by who’s opinion? Is that something people quantify?

            The cost of living in Bay Area is SIGNIFICANTLY higher. For most people, this is the bulk of their monthly costs. If I were to move from Boston to San Francisco (which I looked into a few years back), and purchase an equivalent home in an equivalent neighborhood/location, it would have run me me 60% more! …and that is coming from an already expensive housing market. Imagine how Sarepta employees would feel coming from reasonably affordable Seattle?

            Oh, and don’t forget the income tax increase- 0.0% to 9.3% Seattle – > Bay area. I remember equivalent positions were only paying about +15% Bay Area versus Boston. I would have taken a MAJOR effective pay cut.

            If you are are head of R&D for a 300 person company, no wonder why QOL is great for you in the Bay Area. The Bay Area has become a playground for the wealthy, much like Vancouver, BC, where young families and even young professional couples are having trouble affording life. I have had friends (dual income professionals) leave great jobs at Genentech and the Bay Area because they didn’t want to rent for the rest of their lives, or raise two kids in a two bedroom condominium.

            Traffic- I was just down there in July. I thought it was terrible, but the numbers can speak for themselves:

            http://www.forbes.com/pictures/ehmk45hedf/3-san-francisco/#gallerycontent

            Also, the BART and the VTA act as glorified commuter rail services. If you want to live and wok in the city, SF has little to offer. I am walking distance to work here in Seattle, and taking the subway to your biotech. job in Boston is not uncommon.

            Boston-area has plenty of biologics manufacturing. If you want to play apples-to-apples as far as land area is concerned, you can even throw in East Greenwich, RI, Worcester, MA, and Portsmouth, NH, to be equivalent to the entire Bay Area. Either case, how does it stack up? What if you left out Genentech (largest owner of biologics capacity in the world), how much capacity would be left?

            So Genentech invented Boston’s biotech. drug scene directly? They formed Transkaryotic Therapies, Genetics Institute, Genzyme, and Biogen with former employees?

            Plenty of people out there agree with me. Many people love living and working in the Boston area. It’s obviously not for everyone. Meanwhile, people are leaving the Bay Area en masse:
            http://www.baycitizen.org/census-2010/story/bay-area-residents-leaving-droves/

            Now you are just shouting off a whole lot of “We’re better than them!” Put up some real numbers. The only thing I have seen captivating so far is the venture capital figure that you mentioned earlier.

            Sounds like you did move to Boston for a job.

          • Jimbo

            point by point is getting tiring. I did put up the numbers. You didn’t like the employment, number of companies numbers.

            I get to tahoe in 3 hrs and i know you are not comparing neg england ice to sierra snow.

            the point was about which hub has more talent and is bigger. It sounds like you don’t have an argument there, and I think 95% of people in the industry would agree that SF is #1 and Boston a distant 2nd.

            I am from DC area. I did move to boston for a job, but would never consider it again. The QOL and job opportunities in SF make it impossible to go to a less desirable area.

            I also am pretty sure that Seattle residents would choose moving to SF over Boston. The culture and lifestyle is much more similar

            Despite Roche, Genentech is still the #1 powerhouse biotech. They are mostly still functioning independently and Roche has cowtowed to GNE’s culture (even closing east coast office) instead of the other way around. They are still pumping out the most 1st in class biologics

          • Boston Joe
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  • Jon Doh

    Maybe it’s that no one from Seattle wants to work for such a crappy little company. (They’re already working for a larger crappy company, DNDN)