Alexandria Real Estate Equities, Inc.

Good day and welcome to the Alexandria Real Estate Equity's third quarter 2020 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Paula Schwartz with Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone. This conference call contains forward-looking statements within the meaning of the Federal Securities Law. The company'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 company's periodic reports filed with the Securities and Exchange Commission. And now I'd like to turn the call over to Joel Marcus, Executive Chairman and Founder. Please go ahead, Joel.

Thank you, Paula, and welcome everybody to Alexandria's third quarter call. With me today are Dean Shigenaga, Steve Richardson, Peter Moglia, and Jenna Foger. I'd like to welcome everybody from the Alexandria team and family, hoping you're all well. safe and COVID-free. As all of us know, 2020 has been an astounding year of the never-imagined confluence of an international pandemic from Wuhan, China, a deep shutdown recession, civil strife, coupled with a heated and complex election upcoming here next week. 2020 started off very sadly with the untimely death of Kobe Bryant, not only a great athlete, but a special human being. And I want to make just a brief quote from one of his great sayings. He often said that great things come from hard work and perseverance. And those of you who knew or watched or admired Kobe, always he was the last guy to finish up and the first guy to start and was one of the hardest working people anyone could ever imagine. And that really exemplifies our team. And want to thank our team from the bottom of my heart and our team's heart for doing such a great job. Alexandria has really uniquely achieved three outputs that are very rare in corporate America today that define a truly great company. Continuing superior results, continuing distinctive impact, and lasting endurance. And again, we want to thank our entire team for a stellar third quarter. As we are all building the future of life-changing innovation literally during COVID-19, one could never imagine that. So a couple of different comments. I wanted to comment on the recent Blackstone transaction where Blackstone announced the recapitalization of its life science real estate business. And it only serves, I think, to reconfirm once again the great vote of confidence in the life science real estate niche we pioneered in 1994. The transaction implies an approximate $1,070 price per square foot for that 13 million square foot portfolio. And I think compared to where Alexandria trades more or less today at about $950 a square foot, I think that I think, very good benchmark for us. Blackstone timed its, I think, 2015 purchase really quite ideally as the biotech industry was emerging from about a five- or six-year bear market in the 2013 and 2014 timeframe. And at that time, when they acquired the assets, they were, by and large, most of the buildings were older than Alexandria's, and they were not in as strong locations as we were. clearly enhanced that portfolio since, and kudos to them for doing that. I want to take particular mention on third quarter activity on our Research Triangle acquisition, which is really a particular note, a large acquisition, about $590 million purchase price, about $265 a square foot, 2.2 million square feet over about 300 acres, 20 buildings with very high credit tenants. but also significant value-add. This acquisition substantially increased our footprint in Research Triangle and particularly was motivated by our need to accommodate numerous inbound substantial tenant requirements, both who needed existing solutions and bill-to-suit capabilities. We now have three mega-campuses in the Triangle, this newly branded campus, the Alexandria Center at Life Science Durham, the Alexandria Center for Ag Tech, and the Alexandria Center for Advanced Technologies. We see continuing strong demand for Life Science Base across our markets, but particularly pointed are the many requirements from our own tenant base within. Also, it's important to remember two key truths have really been revealed by COVID-19. One is the resilience of and the need for domestic medical supply chains to be here based in the United States, crucial for national security and for medical supply. And I think it only reinforces that complex medicines are really the future of healthcare, and I guess the famous COVID-19 antibody cocktails would be a good example of that. I wanted to mention a little bit about Operation Warp Speed. This was initiated by the Trump administration and supported by more than $10 billion in funding through the CARES Act. Operation Warp Speed, led by really a legendary, probably one of the most skilled vaccine developers in the entire world, Moncef Slaoui, aims to deliver 300 million doses of a safe and effective COVID-19 vaccine in the first quarter as part of a broader strategy to accelerate the development, manufacturing, and distribution of COVID-19 vaccines, therapeutics, and diagnostics, really all in tandem, very different than the government has ever operated before, and really a great credit to public-private partnerships. The Warp Speed Partnership is between selected biopharma companies and key federal science agencies, including BARDA, CDC, DOD, FDA, HHS, and the NIH. As of October 21st, the initiative announced funding decisions totaling Over $13 billion for 10 companies, more than 10 companies to support vaccine therapy and manufacturing efforts. These included virtually all of which, maybe except one, are tenants of Alexandria. Moderna, GSK Sanofi, Pfizer, Novavax, AstraZeneca, J&J, Merck, Regeneron, Emergent Bio, and Fujifilm. So quite a humongous feat, I think. given the onset of this pandemic in a pretty odd fashion. I think to this date, there is certainly speculation that this was not a natural occurring virus, but one that was manmade in a lab in Wuhan. A couple of comments about the life science industry. And again, a real shout out to the great private company private public partnerships that have been formed in so many different fashions. Life science fundamentals throughout 2020 have remained fundamentally strong, especially given the critical nature of the fight against COVID-19. This has helped lead to substantial progress and acceleration, including late stage vaccine trials and therapeutics, along with improved and expanded testing. The life science industry has not slowed down its pace. It's important to remember of investment in innovation well beyond COVID-19. The industry's commitment and investment in innovation, along with the FDA's ability to continue to operate at a high level despite the pandemic, has led to 40 new drug approvals as of the end of September, which puts us on a pace to meet or exceed the 51 average of the past couple of years. I was on a call last week with Commissioner Hahn And it's great credit to he and the entire professional workforce at the FDA for their really 24-7 effort in this time. Life science venture funding has continued to flow at a strong pace in the third quarter, setting new quarterly records at almost 12 billion, with more than 30 billion raised through the first three quarters, really surpassing all previous annual totals. It's important to remember that most of this investment, 80%, comes from Alexandria's core markets, and especially greater Boston and San Francisco, which capture about 60%. Capital flows to early-stage companies, and the public markets continue at a fast pace. There have been 47 pharma and biotech IPOs in the first three quarters of this year, raising almost $9 billion, larger than any previous year. And the companies have been able to access capital markets at historic levels, approximating almost $35 billion in follow-on offerings, surpassing the previous high of about $29 billion in 2015. So all in all, it's been a pretty strong tailwind for the industry and what we're doing. So with that, I'd like to turn it over to Jenna Foger, our Senior VP of our Science and Tech team. And she's going to talk about the latest developments in the vaccine therapeutic area. So, Jenna, please.