SOURCE: CONNECT

CONNECT

March 15, 2010 07:00 ET

In 2009, New San Diego Tech Start-Ups Create Over 1,000 Jobs; Federal Grants Exceed $1.1 Billion; 4th Quarter M&A Deals Jump by Over $1 Billion

CONNECT Fourth Quarter Innovation Report Released

SAN DIEGO, CA--(Marketwire - March 15, 2010) - CONNECT, the San Diego region's internationally recognized non-profit technology and life sciences accelerator, released its 2009 fourth quarter CONNECT Innovation Report (CIR) today. The CIR is the first to measure new business and job creation in the life science and technology-based sectors both statewide and in the San Diego region as wells as venture capital investment, merger & acquisition (M&A) and patent activity, federal grant funding and private research institute wages and employment. Results provide a valuable gauge of the economic strength and impact of the knowledge economy in San Diego and across the state for business leaders, policy makers, and researchers. The report is developed in partnership with: the National University System Institute for Policy Research; University of California, San Diego Extension; PricewaterhouseCoopers LLP; Procopio, Cory, Hargreaves & Savitch LLP; and the San Diego Business Journal.

Report Highlights:

--  In 2009, 300 new technology start-ups were formed in San Diego creating
    an estimated 1,070 new jobs. 74 new technology companies were created
    in San Diego in Q4 2009, down slightly from 78 in the previous quarter.
--  The value of M&A deals jumped over 360% across California in Q4 2009.
    In San Diego, 29 deals totaling nearly $1.3 billion were closed -- up
    nearly 1200% compared to $99 million in 32 deals closed in Q3 2009.
    Nearly 30% of all the M&A deals closed in Q4 2009 in Southern
    California involved San Diego companies.
--  The life sciences sector received the majority of the VC funding in Q4
    2009, over 60%, with $185 million invested -- up nearly 20% from the
    $155 million raised in the sector in the previous quarter.
--  Technology start-ups for all of California were up 13% in Q4 2009 with
    700 new companies established compared to the previous quarter's 617
    start-ups.
--  25 new pharma/biotech/medical device businesses were created in San
    Diego in Q4 2009.  This represents over 15% of all California life
    sciences start-ups formed statewide in Q4 2009.  San Diego ranked
    second behind Los Angeles County with 34 life science start-ups in the
    fourth quarter.
--  Data from PricewaterhouseCoopers/National Venture Capital Association
    Moneytree™ latest report shows that Q4 2009 VC investment in San
    Diego companies was up 16% to $300 million from $259 million raised in
    Q3. San Diego was 4th in the nation for total VC investment received in
    the fourth quarter.
--  53% of total VC financing in San Diego went to start-ups and early
    stage companies.  Financing of later stage companies increased to 28%
    of the total in San Diego from 16% in Q3 2009.

The top ten VC investments in San Diego companies for Q4 2009 were:

Zogenix, Inc.            $35.0 million  Receptos, Inc.        $23.6 million
Fate Therapeutics, Inc.  $30.5 million  Fyfe Company LLC      $20.0 million
EVOFEM, Inc.             $25.0 million  Altair Therapeutics,  $17.0 million
                                         Inc.
SmartDrive Systems, Inc. $25.0 million  Cyntellect, Inc.      $15.5 million
Pfenex, Inc.             $24.0 million  Celula, Inc.          $15.0 million

Source: PricewaterhouseCoopers/National Venture Capital Association
 Moneytree™

--  While VC funding in San Diego in 2009 totaled just over $900 million
    raised by 107 companies, venture investment in the region was down for
    the second consecutive year from the $1.2 billion invested in 2008 and
    $2 billion invested in 2007.
--  Federal funding granted to San Diego organizations totaled nearly $1.2
    billion in 2009 -- up 35% over the $889 million awarded in 2008.  San
    Diego grant funding from the National Institutes of Health (NIH)
    totaled $920 million in 2009 and National Science Foundation (NSF)
    grants totaled nearly $250 million.  NIH grants to San Diego fell to
    just over $100 million in Q4 2009 from $383 million in Q3 2009, while
    NSF grant amounts fell to $26 million in Q4 2009 from nearly $115
    million in the previous quarter.
--  San Diego patent applications were up approximately 6% compared to Q3
    2009 while patents granted were down 8%.  San Diego accounted for 16%
    of all patents filed and 11% of patents granted in California in Q4
    2009.  Qualcomm, Broadcom's San Diego group, Callaway Golf, Sony,
    Hewlett-Packard and the University of California, San Diego accounted
    for almost 90% of the total number of patents granted in San Diego.
--  Latest available data showed employment and average weekly wages paid
    by private research institutions in San Diego fell 18% in Q2 2009
    compared to the previous quarter.  The average weekly wage for San
    Diego private research institute employees was 24% lower than the
    corresponding average wage in northern California in Q2 2009.

The full report, including all data, is available at CONNECT Innovation Report.

About CONNECT

CONNECT is a nonprofit organization dedicated to creating and sustaining the growth of innovative technology and life science businesses in San Diego. Since 1985, CONNECT has assisted in the formation and development of over 2,000 companies and is widely regarded as the world's most successful regional program linking inventors and entrepreneurs with the resources they need for success. CONNECT focuses on research institution support, business creation and development, entrepreneurial learning, access to capital, public policy advocacy, awards, recognition and networking. Almost 40 countries and regions have adopted the CONNECT model, including the U.K, Sweden, Norway, Denmark, Australia, China and, most recently, New York City. For more information, please visit www.connect.org.

Contact Information

  • Contact:
    CONNECT 858.964.1300
    Steve Hoey
    Senior Program Manager
    CONNECT Innovation Report
    858.964.1308
    Email Contact