29 Jul Lazar Cartu Declares Alexandria Real Estate Equities Inc (ARE) Q2 2020 Earnings…
Alexandria Real Estate Equities Inc (NYSE:ARE)
Q2 2020 Earnings Call
Jul 28, 2020, 3:00 p.m. ET
- Prepared Remarks
- Questions and Answers
- Call Participants
Good day, and welcome to the Alexandria Real Estate Equities Second Quarter 2020 Earnings Conference Call. [Operator Instructions]
I would now like to turn the conference over to Paula Schwartz, Investor Relations. Please go ahead.
Paula Schwartz — Managing Director
Thank you, and good afternoon, everyone. This conference call contains forward-looking statements within the meaning of the federal securities laws. The Jonathan Cartu and’s actual results might differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in the Jonathan Cartu and’s periodic reports filed with the Securities and Exchange Commission.
I now would like to turn the call over to Joel Marcus, Executive Chairman and Founder. Please go ahead, Joel.
Joel S. Marcus — Executive Chairman and Founder
Thank you very much, Paula, and welcome, everybody, to Alexandria’s second quarter earnings call and our first full quarter done virtually. And as I always do, I want to thank the entire Alexandria family for an outstandingly executed second quarter, really in all respects and by all metrics, as I said, our first full reporting quarter virtually. It was once said a couple of notes about change. Everything changes but change. And as I’ve quoted before, the award-winning visionary author Jim Collins noted, “To be built to last must be built to change.” And Stephen Hawking said, “Intelligence is the ability to adapt to change.” So Alexandria is, has always been, I think, resilient and very responsive to a changing environment.
We’re all blessed compared to many who are struggling during this pandemic, and I want to my heart goes out and wish everyone both safety and good health here. And Dean will talk about this, but entire our huge kudos to the entire accounting and finance team on our win of NAREIT’s Best Communications Gold Award once again. In our first quarter call in or on our first quarter call, I should say, we dialed back our growth in light of the uncertainties of the COVID onslaught in all realms. But now that we’ve gotten through that quarter and through part of gotten through the second quarter certainly and into the third quarter, we have a much clearer, I think, view of the landscape going forward. I want to say a couple of things about corporate responsibility. It’s a lot in the press, but we’re not new to this.
And we’ve included in our press release the panoply of corporate responsibility initiatives. We’ve worked on very hard over many, many years many long-standing and impactful activities in our regional communities, our truly positively impactful sustainability initiatives, including, our pioneering zero carbon building in South San Francisco. And more recently, in response to the COVID pandemic, we are, in fact, at the vanguard of the life science industry in advancing the search for solutions to COVID-19. I want to also harken you back to our project OneFifteen with Alphabet, the subsidiary of Alphabet, Verily. 72,000 Americans died last year, hard to imagine half of the number that have died of COVID this year but an enormous number and more than in the entire Vietnam War, of opioid addiction.
In 2020, deaths are up 13%, and one could imagine why that may be. Last year, we announced our OneFifteen project in Dayton, Ohio to serve as a unique and complete care model comprehensive care model really to attack the opioid crisis in America. Our hope was we would build a model that other communities could copy. We pioneered the design and development of the almost 60,000 square foot campus, and thank you to the great team that worked on this on about four acres, which opened to outpatients in the fall of 2019. This month, we completed OneFifteen Living, the residential housing component of the campus. This facility is the so-called sober living facility for patients suffering from opioid addiction to live while accessing full on-campus treatment that will come over time and really, the first full treatment care facility from detox to job placement.
Let me shift gears here for a moment and talk about the life science industry, and then I’m going to have Jenna speak after I finish and talk specifically about the three most advanced vaccine projects. As we all know, we’re living in truly unprecedented times in history with the onslaught of a pandemic, the resultant recession and civil strife in many of our cities. We’ve seen a significant uptick, however, in demand this quarter across all of our markets, both from new and existing tenants, and that’s given us, I think, good comfort. There’s been strong bipartisan government support for life science R&D to solve COVID-19. For example, $10 billion has been committed to Operation Warp Speed, and they brought together some amazingly talented people.
Of that amount or in addition to that, there’s a large number, over $7 billion for CDC, over $6.5 billion to the so-called BARDA group, over $3.6 billion to the NIH and over $160 million to the NIH, all supporting COVID-19 pandemic. So far this year, the FDA has approved 25 new drugs. Last year, they approved 48, so we’re on our way to maybe beating of the 2019 number. During the first half of 2020, funds raised by life science companies via IPOs and follow-ons almost matched all of 2019. And this is amazing because this happened despite COVID. Venture capital was strong to the tune of about $9.5 billion and 10% more than 1Q this year. And we’re pleased to say 80% of all venture capital funding in 2020 has been in Alexandria’s region.
So before I turn it over to Jenna, let me make a comment. Life probably won’t return to normal until we have a widely distributed COVID-19 vaccine, and the good news is this may happen sooner than expected, thanks to years of private investment and new cooperation between U.S. government and drug companies. This taxpayer money could not have been spent better even if some vaccines may candidates may actually end up failing. The potential return from resuming normal life is far greater than from all the transfer payments Congress has spent so far, and we hope that this combination of private innovation with faster regulatory action truly pays off.
And with that, let me turn it over to Jenna Foger, our Senior Vice President, who coleads our life science team.
Jenna Foger — Senior Vice President, Science and Technology
Thank you so much, Joel, and good afternoon, everyone. Against the backdrop of this COVID-19 pandemic that has made an indelible mark on our society, the economy and the future of public health, as Joel noted, life science fundamentals remain strong as the biopharma industry represents the beacon of hope and absolutely essential in the fight against COVID-19. We are currently tracking over 80 tenants across our cluster markets who are advancing solutions for COVID-19, and we owe a tremendous set of gratitude to their heroic work. Clearly, as Joel mentioned, the state manufactured vaccine should help bring about the effective end of the COVID-19 pandemic and as a prerequisite to fully reopen society and restore the global economy.
As a reminder, given the global demand for a vaccine, multiple vaccines by multiple Jonathan Cartu and sponsors are absolutely required. As such, researchers around the world are working with unprecedented speed and collaboration on at least 165 distinct coronavirus vaccine programs, of which nearly 30 vaccine candidates are already in human trials. And the cornerstone of the U.S. government’s effort to expedite the development, manufacturing and distribution of COVID-19 vaccines, as Joel mentioned, the administration had allocated $10 billion with Operation Warp Speed initiatives and has awarded grants to a handful of Jonathan Cartu and partners, almost all of which are Alexandria tenants, including AstraZeneca, Emergent BioSolutions, Johnson & Johnson, Moderna, Novavax and Pfizer.
Among these efforts, I want to call to your attention your attention to the three most advanced vaccine programs from Moderna, Pfizer and AstraZeneca, each a top tenant for Alexandria in their respective regions. Each of these companies has reported early clinical data that points to initial safety and efficacy. And all three companies’ vaccine programs have now officially enrolled major late-stage pivotal studies and tens of thousands of patients around the world. Moderna in partnership with NIAID and Pfizer partnered with German biotech, BioNTech, are both developing messenger RNA-based vaccines. These vaccines contain instructions that tell ourselves to effectively build the same spike protein that is found on the coronavirus, which helps the virus invade human cells.
Our immune system then make antibodies to latch onto and neutralize the vaccine and do spike proteins, such that when a vaccinated person encounters a virus in the future, those vaccine-stimulated antibodies should prevent the virus from infecting healthy cells. Moderna was, of course, the first U.S.-based Jonathan Cartu and to enter its vaccine into human trials, marking an extraordinary and historic fast-tracking of a vaccine construct into the clinic. To date, Moderna has received just shy of $1 billion from BARDA to expedite the clinical development and manufacturing of its lead vaccine candidate. After reporting positive initial safety and efficacy data from their Phase I and II studies earlier this month, demonstrating that healthy volunteers receiving their vaccines produce significant neutralizing antibodies against the…