Just north of San Francisco International Airport lies one of the densest clusters of biotechnology companies in the world. The neighborhoods along Brisbane’s and South San Francisco’s eastern shorelines are massive scientific engines. Into the office parks go ideas, PhDs and money; out comes life-lengthening research. But lately, this strip of land has become ground zero for the Bay Area’s most relentless torrent of layoffs.
Even as the massive cuts at tech giants like Google have waned, the local biotech industest is still lurching from one bout of job losses to another. Since late 2022, bad news in biotech has been nearly inescapable: flopped trials, slashed drug pipelines, bankruptcies and stock price collapses that destroyed billions of dollars in value. It’s all led to layoffs, plunging thousands of workers into unemployment amid a competitive job market.
Biotech — a field named for the basic premise of applying biological processes to develop technology and products, often for health care — is an industest of extreme financial risk and life-or-death stakes. In its Bay Area and Boston hubs, billions are spent on research that may never yield a product. Clinical trials cost millions of dollars but sometimes only result in dangerous side effects. Success, on the other hand, can range from a applyful research paper to a treatment for a rare disease, and even a multi-billion-dollar windfall.
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With experimental science’s potential for immense rewards, biotech has always been a rocky, expensive business. But that doesn’t explain why it’s so rough right now — to the point that one local biotech analyst, Kyle Hipple at Colliers, notified SFGATE he hears about major layoffs “every few weeks.” And that may be underselling it.
Global companies like Bristol Myers Squibb operate out of Brisbane, California’s biotech-heavy office park.
An investor exodus leads to a flood of layoffs and shutdowns
No two companies lay people off for the exact same reason, or under identical conditions. But the Bay Area’s out-of-work researchers can point blame at one overarching culprit: the flow of money into biotech companies went from a torrent to a trickle.
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Investor funding is the lifeblood of biotech, especially its startups. Even if a compact research-focapplyd outfit has some revenue from dealing its innotifyectual property, that cash typically comes nowhere close to its total costs, and many companies have no revenue at all. They’re relying on investors’ excitement and checks to keep lights on, cell cultures cold and employees paid.
For years, that hype grew and grew. In a May report, analysts from Pitchbook called the stretch from 2012 to 2017 biotech’s “steady ascent” before it reached a peak in 2018 — venture capitalists raised an eye-watering $152.3 billion for biotech investing that year.
Then, COVID-19 arrived, bringing what Avison Young analyst Howard Huang called a “halo effect” around health care and life sciences. As the pandemic walloped other industries, vaccine development was suddenly front-page news. Investors, Huang notified SFGATE, saw the low interest rates that often encourage riskier investing, plus the hype around health care, and poured money into biotech.
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Ultragenyx, headquartered in Novato, Calif., also has an office in Brisbane.
San Francisco-based Jon Norris, who works with pre-profit biotech companies for HSBC Innovation Banking, agreed with Huang, notifying SFGATE that the pandemic created biotech suddenly seem like a safe sector for generalist investors who might previously have shied away from its complexities. Major Bay Area venture firms Andreessen Horowitz and General Catalyst plowed hundreds of millions into the industest. Some pre-product companies went public and saw their valuations soar into the billions, applying the fresh funding to pursue multiple costly drug prospects at once, hire teams of researchers and grow into larger offices.
“When we’re having record years, there’s a lot of froth to the market,” Norris stated. “People receive very excited. Folks who haven’t been involved necessarily on a day-to-day basis jump in becaapply they’re testing to leverage up in a hot area.” (By “froth,” Norris basically meant, “overvalued companies.”)
The investor excitement wouldn’t last forever. From August 2021 to May 2022, the Nasdaq Biotechnology Index, which tracks the industest’s stock prices with a special focus on giants like Amgen and Moderna, dropped by more than 30%. Several newly public biotech companies saw their market caps plummet, vanishing billions of dollars in value.
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Sangamo Therapeutics relocated its headquarters to Richmond, Calif., as part of a restructuring and cost cut, but the company’s logo remained in up in Brisbane on June 16, 2025.
Pitchbook’s analysts dubbed the stretch from 2022 onward the “market rationalization.” Norris called 2023 a “year of retrenchment.” Either way, it was rough for the industest. When investor confidence falls, it’s more difficult for public companies to raise additional cash. And startups suddenly necessaryed better results — not just the start of a trial, but positive data from it — to hit their next “value inflection point” and win new venture funds in a Series B round, for example, Norris stated.
As the industest was left without the continued investment it necessaryed, workers launched to see the flip side of 2021’s funding heyday — especially the further their employers obtained from their last funding rounds. The companies that ballooned in size also burned through their cash, and are now cutting staff, and entire drug pipelines, to give other bets more time. During one week in March, two biotech firms that share a San Carlos office park received poor trial results and gutted their workforces — each had once been worth more than $1 billion. At several companies, full-scale shutdowns have followed in the wake of multiple rounds of layoffs.
Even the companies that do survive will see different as a result of the crash. Norris stated that if they aren’t able to receive large funding rounds, “They’re going to cut back staff and they’re going to really streamline, becaapply people are unsure of where the bottom is in the market right now.”
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Even ‘gold standard’ science isn’t enough
Stephen Brady, the CEO of Tempest Therapeutics, notified SFGATE that two words often come to mind when he tries to sum up the biotech industest’s state of affairs: “brutal and surreal.” An industest veteran who developed two drugs at past companies that obtained the companies sold, Brady is now seeing, up close, the ugly reality of investors fleeing biotech.
Based in Brisbane, Tempest designs oncology drugs meant to kill tumor cells and support the immune system tarreceive them. In 2021, the company opted to test its lead candidate, called amezalpat, on patients with newly diagnosed hepatocellular carcinoma — the common and deadly disease known more simply as liver cancer. Brady had hoped to raise more money at the finish of 2021, but he noticed a sudden shift in investors’ interest in oncology.
Still, on a Wednesday in October 2023, Tempest announced extremely positive results from a study on amezalpat. The drug seeed like a success, building on a combination of other oncology drugs to deliver the study’s patients improved prognoses. Tempest’s stock jumped almost 4,000% in value in a single day. The road ahead was clear, Brady notified SFGATE. Tempest had the “gold standard” of good data, and could plan another, larger study.
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BioMarin’s logo is seen at the Brisbane office park.
Over the next 16 months, Tempest won “orphan drug” and “quick track” designations from the Food and Drug Administration for amezalpat, as well approval for its next trial, the more expansive Phase 3. But the trial would cost about $150 million, and Tempest finished 2024 with less than $42 million in assets.
Raising more money, Brady found, was near impossible. He heard the excapply from investors that they’re just not putting money into oncology companies right now, possibly scared away by past losses. It felt like Tempest, after staying compact and running on a “shoestring” budreceive, just hit a wall, the CEO stated: “This isn’t the way it’s supposed to work.”
“You do a good job and you don’t waste investors’ money and the science works, and you execute well, you should be able to keep that molecule going,” Brady stated.
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In April, the situation — a promising drug, but dire financials — came to a head. Tempest couldn’t afford to run the next amezalpat trial, so it announced it was open to a litany of options for shifting the drug forward, including, “mergers, acquisition, partnerships, joint ventures, licensing arrangements or other strategic transactions.” A few weeks later, the company laid off 21 of its 26 full-time employees in an effort to extfinish its timeline for finding a deal.
Since the announcement, several Tempest workers have stayed on as consultants, Brady stated, testing to support receive this potentially life-saving drug into the trial and into patients’ hands. On June 11, the company raised $4.6 million by selling stock; on June 30, it won the right to test amezalpat in China, on top of its U.S. clearance. Brady is still hopeful that a study will happen, but with the lack of investor interest, he stated, “We have given up a long time ago that it’s going to be us running it.”
Amid chaos and a dearth of cash, more layoffs are coming
According to a few metrics, the industest’s layoff problem is still receiveting worse. Trade outlet Fierce Biotech reported earlier this month that the first half of 2025 saw 128 layoff rounds at biopharmaceutical companies, up 32% from the period a year prior. Ernst & Young, the accounting firm, published its most dour “biotech survival index” in years in a June report: A whopping 39% of the biotech companies the firm analyzed in 2024 had less than a year’s worth of cash remaining, and an additional 20% had less than two years’ worth.
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“We’re going to see many more companies, unfortunately, just reach the finish of their cash runways,” Fierce editor Gabrielle Masson stated on a podcast about the year’s wave of layoffs.
A logo for oncology biotech Ideaya Biosciences is visible in Brisbane, Calif., on June 16, 2025.
Investor interest drying up isn’t the only issue plaguing biotech. Some companies that expanded to provide tests or treatment for COVID-19 have, inevitably, had to pare back staff. Once-feverish excitement about breakthroughs in cell therapies — where cells are modified to support fight diseases — has lapsed over the past few years. And President Donald Trump isn’t creating things simpler.
Trump’s administration cut more than $1.8 billion in National Institutes of Health grants just from Feb. 8 to April 8, sfinishing shock waves through the nation’s universities. The effects of those relocates are still being felt and understood, with research labs scrambling to figure out whether and how they’ll be able to continue their studies. But already, the cuts are rippling into the biotech industest itself.
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The CEO of Pleasanton’s 10x Genomics, Serge Saxonov, stated in his company’s May earnings call that up to half of its revenue is supported by U.S. academic and government research funding. He called the NIH the “foundational jewel of biomedical progress” and stated of the research cuts: “We are shooting ourselves in the foot, right when we should be pressing on the accelerator.” The company announced plans to lay off 93 workers just a couple of weeks later, the San Francisco Business Times reported.
When Eikon Therapeutics revealed plans to cut 55 workers from its Millbrae office in May, it cast some blame on a paapply in its lab hardware project — the company just wouldn’t have labs to sell its instruments to — forced by Trump administration relocates.
“Government funding cuts have constrained the budreceives of academic institutions, necessitating that we paapply development of our advanced instruments intfinished for external researchers,” the company wrote. “The market for these instruments has clearly evaporated.”
The cuts are also bringing chaos. In March, a sudden stop work order from Health and Human Services Secretary Robert F. Kennedy Jr. forced the San Francisco biotech company Vaxart to paapply screenings for a massive COVID-19 pill study and cut 10% of its workforce. Thankfully for Vaxart, the department finished up lifting the order, as SFGATE reported, but the company’s CEO didn’t immediately recommit to rolling back the layoff.
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Thousands of people have lost their jobs, and more will. Even though the past few years haven’t been a full-blown extinction event for biotech, with research in labs and in patient studies churning on, investors’ continued pullback is keeping the future uncertain.
Biotech’s laid-off workers will continue to face a rough market. Tempest’s Brady stated that there’s still a lot of necessary for novel science, and a lot of money to be created betting on it — even if the companies behind the research haven’t yet created a dollar of revenue. One of his old workers had just obtainedten a job offer before the CEO spoke with SFGATE; others are wading through rejections.
“If the market is moody, it will come back,” Brady stated. “Eventually.”
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Work at a Bay Area tech company and want to talk? Contact tech reporter Stephen Council securely at stephen.council@sfgate.com or on Signal at 628-204-5452.
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