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The Colorado Institute for Drug, Device and Diagnostic Development (CID4), for one, is looking at more creative ways to draw capital to Colorado’s life-science industry, said Lauren Constantini, the nonprofit’s vice president of therapeutics and device development.
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Constantini was one of several panelists who discussed challenges facing the industry at a meeting of the region’s life-science industry leaders and researchers earlier this month.
The audience filled a room at the Fort Collins technology incubator the Rocky Mountain Innosphere to listen to the panelists’ suggestions, ask questions and voice concerns. The Innosphere has 34 “clients,” or tenants, including some life-science companies.
Despite the challenge of raising capital, life-science companies seem to be doing well at the moment.
The life-science industry grew 4.6 percent last year, attributed mostly to the device sector, said April Giles, CEO of the Colorado BioScience Association.
Deanna Scott, the new head of the Northern Colorado Bioscience Cluster, expressed optimism for the coming year.
“This is going to be our breakout year,” said Scott, director of regulatory affairs for CSU’s School of Biomedical Engineering.
But the problem of a lack of financing remains. Venture capital in Colorado has declined in the past decade. The industry pumped $4.1 billion into Colorado companies in 2000; VC investments in the state amounted to just $610.6 million in 2011, according to PricewaterhouseCoopers.
People in the industry commonly complain that venture capitalists draw successful Colorado companies to other states.
“You’ve got great biology here,” said Greg Miknis of the Colorado Center for Drug Discovery (C2D2). But companies that start in Colorado “often go elsewhere: They go back to Boston.”
Innosphere CEO Mike Freeman said the region lacks a physician-investor group that understands startups’ technology.
While panelists lamented the financial situation, they pointed out the availability of resources for companies.
CID4, which recently agreed to join the Innosphere to nurture Northern Colorado startups, offers seed money for companies that have shown proof-of-concept, meaning feasibility. The funding can range from $150,000 to $600,000 in exchange for equity.
The nonprofit C2D2 offers $40,000 proof-of-concept grants for researchers to do studies, Miknis said.
Beyond opportunities for capital, some panelists offered additional assistance to startups.
C2D2, for example, is working to compile a collection of chemical compounds from university scientists for use by the research community to develop drugs. “We’re trying to put together a database,” Miknis said.
CID4 helps life-science startups develop business plans to entice investors, Constantini said. It also helps mentor researchers with backgrounds in academia on how to run their companies or it recruits successful, experienced CEOs for the job.
Additionally, CID4 can assist by refining a company’s pitch to investors, she said. The nonprofit even represents companies at investor conferences.
Other encouraging news came from Dr. Gary Luckasen of Medical Center of the Rockies, who told the audience that UC Health wanted to develop better partnerships with CSU and life-science companies. He promised to link companies with physicians who could help with their operations as well as help startups start drug trials.
Panelists also held out hope for a new bill, the Advanced Industries Accelerator Act, introduced by Rep. Dave Young, D-Greeley. The measure would offer as much as $15 million a year for as many as 10 years to companies in several industries, including life-science.
Colorado-based tech companies would be eligible for proof-of-concept grants capped at $150,000; early-stage capital and retention grants of as much as $250,000; and infrastructure grants of no more than $500,000.
The bill is co-sponsored by Rep. Cheri Gerou, R-Evergreen, as well as Sens. Rollie Heath, D-Boulder; and Pat Steadman, D-Denver. It also has Gov. John Hickenlooper’s support.
Steve Lynn covers technology for the Northern Colorado Business Report. He can be reached at 970-232-3147, firstname.lastname@example.org or twitter.com/SteveLynnNCBR.