1. Why and How Life Science Companies Look for Space And what it means for the economic development officers in California Misha Tsirulnikov Director, Development & Program Strategy BayBio

5. Research and Development: 91% of surveyed companies have R&D Labs in CA 55% intend to keep R&D Labs in CA 18% intend to expand R&D outside the state Pilot Scale Manufacturing: 50% of surveyed companies have Pilot Facilities in CA 33% have them outside the state 50% intend to expand Pilot Facilities outside the state Commercial Production: 14% of surveyed companies have Commercial Production in CA 38% have facilities out‐of‐state 57% intend to expand commercial production out‐of‐state Distribution/Logistics: 30% have product distribution/logistics in CA 25% have these out‐of‐state 40% intend to expand out‐of‐state

6. The Good News: none of the respondents are looking to move their HQ, few plan to move key research facilities outside of California The Bad News: significant number of respondents are looking outside of California markets for manufacturing and logistics The most frequently specified reasons that respondents consider conducting commercial production outside of California include: 1. Cost of doing business: Taxes (55% of respondents) 2. Cost of doing business: Salaries (55% of respondents) 3. Cost of doing business: Rents (50% of respondents) 4. Regulatory environment (45% of respondents) 5. Incentives from other states (40% of respondents)

8. Opportunities: Workforce development: work with high schools to encourage science education, partner with community colleges to design appropriate programs and to produce specialists in most need by the bioscience companies Build community: create environment attractive to upper middle class (good schools, access to public transportation, modern conveniences). Employees/talent is the biggest asset of the life science companies. Grow your own biotech start-ups: provide incubators and subsidized space for companies in order to attract companies. Make sure to have expansion space available. Companies don’t have capital to build their own facilities. Create pro-business environment: work to eliminate red tape and duplicative regulation on state and municipal levels, help to shorten bench to consumer cycle, help to reduce financial burden on the companies Enterprise development funding: look for ways to provide tax abatements and rebates, cash assistance with relocating or building new facilities Play off natural strength: California-based companies would prefer to locate manufacturing next to their headquarters and R&D facilities.