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Snohomish County business
Biotech becomes big business in Bothell

By Luke Timmerman
Seattle Times business reporter

	MIKE SIEGEL / THE SEATTLE TIMES, 2002 A research scientist at Seattle Genetics examines a solution. The company has Seattle in its name but Bothell as its base.
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Six years ago, when she was hired as Snohomish County's economic-development booster, Deborah Knutson had lunch with George Rathmann, the legendary biotech figure running Icos at the time.

Knutson wanted to know why he started the company in Bothell, not Seattle, where it was recruiting bright young scientists from the Fred Hutchinson Cancer Research Center in the early 1990s.

The answers were simple: Land was cheaper. Office space was available immediately. Bothell was a short drive from the region's biomedical research giants — the University of Washington and "The Hutch," among others.

No one had a grand public policy for recruiting or nurturing the company, but it didn't matter. Icos raised loads of cash from Microsoft co-founder Bill Gates and other investors, and parlayed it into Cialis, an impotence drug to rival Viagra. In the process, it has become the largest biotech company based in the Puget Sound area, with 475 local employees and a market capitalization of $2.3 billion.

"It's happened here without a (public) plan," Knutson said. "We've been lucky."

Now that officials are touting biotech as the region's economic future — led by Seattle Mayor Greg Nickels' push in South Lake Union — other parts of the region want a piece of the pie. Snohomish County still has no biotech strategy on the books, but it is recruiting and has attracted one-fourth of the state's biotech and medical-device companies, according to a survey sponsored by the Washington Biotechnology and Biomedical Association.

	DEAN RUTZ / THE SEATTLE TIMES, 2003 This DNA Microarray chip, developed by Mukilteo biotech company CombiMatrix, can be used in germ- and biological-warfare detection.

The biggest such employer in the county is an arm of global electronics conglomerate Philips, which has a four-building campus and 1,700 employees in Bothell who make and sell high-priced medical equipment such as ultrasound machines.

Several smaller, growing companies have also moved into Snohomish County over the past five years, including a developer of nasal-spray drugs for obesity and sexual dysfunction (Nastech Pharmaceutical), and one making microchips for biological experiments (CombiMatrix). The Bothell biotech cluster, like Seattle's, has been around long enough to have flameouts — Celltech R&D, Prolinx and Northwest Biotherapeutics, for example.

One of the region's stronger emerging biotech companies, Seattle Genetics, is not in Seattle but in Bothell. Clay Siegall, the company's chief executive, said he considered the suburbs a better place to start the business in 1997.

The rent for lab space was one-third less in Bothell, he said, and the city offered recruiting advantages: Employee parking was free and abundant. The commute was easier for most. The area had room for the company to grow. A cluster of like-minded biotechies worked at nearby Icos. When Siegall wants to wine and dine a job candidate or business partner or be in the thick of the creative energy, he drives to Seattle — about once a week.

Because biotech companies lose money for years while they're developing drugs, he wanted to save cash on rent and have more to spend on research and development. Siegall and his partner decided to keep Seattle in the company name because the city is known for innovation and appeals to investors on the East Coast.

"When the buildings at South Lake Union are done, they will be fabulous, but they will be expensive," Siegall said. "Here you get the benefits of being in the Seattle region with one-third less cost."

Pamela Dunlap, the chief financial officer of Philips Ultrasound in Bothell, said the global electronics company liked the location so much it chose to move about 500 employees in sales and marketing of medical equipment to Bothell after it bought ATL Ultrasound's Bothell campus in 1998.

Philips made the move for some of the same reasons as Seattle Genetics — low rent, available space, the ability to recruit engineers. Relationships with local governments have been warm, Dunlap said.

Knutson said Bothell could benefit by becoming home to small biotech factories for Seattle research companies as they start making drugs.

Many of the companies aren't ready to invest in manufacturing plants because their drugs aren't ready for large-scale human trials.

But there is precedent: Seattle's one-time biotech leader, Immunex, built small manufacturing plants in Bothell in 1992 and 2001, and since Amgen bought Immunex two years ago, it has kept the plants running with about 200 employees.

Greg Weaver, the chief financial officer of Nastech Pharmaceutical, said his company moved to Bothell in 2002 from Long Island, N.Y., largely to recruit. It also looked at other biotech hubs on the West Coast in San Francisco and San Diego. The company seriously considered the South Lake Union neighborhood, too, but turned away after looking at the traffic flow and high rents.

"Financially, it's been more feasible for us to do it in the suburbs as opposed to downtown," Weaver said.

Luke Timmerman: 206-515-5644 or ltimmerman@seattletimes.com

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