Amgen's presence puts local biotech sector on map.

It may be small, but it's profitable--thanks to Amgen Inc.

The Los Angeles area is among the top 10 regions in the nation for biotechnology, despite having just 51 companies, nine of which are publicly traded, according to Ernst & Young's annual biotechnology report.

Public companies reported net income of $2.3 billion and revenue totaling $11.2 billion. By contrast, the 330 publicly held biotech companies in the nation surveyed by the consulting firm had a collective loss of $4.3 billion.

Of course, the region's biotech sector wouldn't amount to much without Thousand Oaks-based Amgen, which accounts for the entire profit in the local sector and nearly all its revenues, reporting net income of $2.36 billion in 2004 and revenue of $10.55 billion.

"Amgen is a good look into the future," said Mike Hildreth, director of Ernst & Young's "Americas" biotechnology practice, based in Palo Alto. "If you look at the 330 public companies in the United States, there are 66 that are profitable. On average, it took 15 years from the date the company was first financed to the first year it reported profits."

Most biotech firms still lose money, but that could change in the coming decade as products move beyond the research and development stage.

R&D for the Los Angeles-Orange County region jumped 46 percent, to $2.8 billion, compared with the nationwide increase of 16 percent. "You're at this critical stage when companies are investing heavily," Hildreth said.

Gene Scene

Thousand Oaks-based Amgen Inc. is the nation's
largest biotech firm. *

                   L.A. Region   Nation

Public Companies        9         330
Market Cap            $84.1      $330.3
Revenue               $11.2      $42.7
Net Income            $2.3       ($4.3)
R&D                   $2.7       $15.7

* All figures in billions except for company category.

Source: Ernst & Young's 2005 Annual Global Biotechnology
Report