Bioscience initiative hatched to raise profile of Fort Collins

FORT COLLINS — A coalition of business, research and economic development interests has launched a campaign to make Fort Collins a destination for the biotechnology industry.

The newly hatched Fort Collins Bioscience Initiative has held three meetings since January to discuss development of a strategic plan. Early participants in the process include Colorado State University, the Fort Collins Virtual Business Incubator, the city of Fort Collins, the Northern Colorado Economic Development Corp., and multiple private bioscience firms.

“Everybody is seeing this as the next big wave of explosive growth and high-paying jobs,´ said Ken Deines, owner of Capital Funding Strategies, a Fort Collins firm that advises biotech start-up companies.

Deines, a veteran of the bioscience and pharmaceutical industry, is playing a lead role in the bioscience initiative. He’s also taken his own steps to inject life into the local biotech sector.

Deines and CFS recently drafted plans to start a biosciences incubator facility in Fort Collins, and arranged to relocate one CFS start-up client — ZymeX of Athens, Ga. — to the city later this year. ZymeX is researching new drugs that utilize protease activators and inhibitors for treatment of autoimmune diseases.

The motivation for creating a bioscience cluster in Fort Collins is clear.

Bioscience sectors — research and testing, medical devices, pharmaceuticals and chemicals — all deliver average annual wages well above the Colorado norm of $37,553.

Such companies also tend to attract research funding and generate spinoff businesses and jobs. In San Diego, Calif., one of the hotbeds for bioscience companies in the United States, 45 different bioscience firms traced to their origins to one company.

One step at a time

Step one in the bioscience initiative, Deines said, is to measure the industry’s existing footprint in the Fort Collins area, including academic and government research laboratories and private biotech ventures.

The self-assessment can create an inventory of known assets, and show what’s lacking to make Fort Collins a biosciences magnet. Next, the bioscience initiative can determine which segments of the biosciences industry to target, said Paul Hudnut, director of venture development at CSU.

“The university is involved in kind of that same thing,” said Hudnut, also a veteran of two local biotech firms, Heska Corp. and PR Pharmaceutical. “We’re looking at what our research areas are and what we think are the most likely areas to produce commercially viable ideas.”

At the same time, the Colorado Bioscience Association has joined the picture. The state trade organization has agreed to let Fort Collins use the CBA’s strategic plan as a template, said Kathy Kregel, executive director of the Fort Collins Virtual Business Incubator.

Among the features of the state plan is a list of key factors for a successful bioscience cluster.

While the inventory process is ongoing, two shortcomings already appear obvious to Deines and the members of bioscience initiative committee.

“We’re missing two things in Colorado as far as really getting the biotech industry up and going,” he said. “One is a critical mass. A second is funding for start-up companies.”

But the two components prompt a “chicken or egg” dilemma.

“You’ve got to have companies where highly qualified people can work, but companies can’t get launched unless you have funding,” he said.

The biotechnology incubator could begin to address the critical mass issue.

“We’re bringing candidate companies through the space,´ said Deines, who has identified a 20,000-square-foot building for an incubator. “I would say we’re within a few months of being able to make some announcement.”

The incubator would likely house up to 10 companies.

The funding piece of the puzzle is another matter.

“Typically the funding that’s available is through angel investors and through venture financing,” Deines said. “At the present time there is limited venture financing available.”

Funding options have been discussed at the previous bioscience initiative committee meetings, Deines acknowledged. “But at this point no one’s been asked for a financial commitment,” he said.

Competition from coast to coast

Fort Collins would appear to have a springboard for biosciences expansion.

A handful of bioscience companies in the city — Atrix Laboratories, Dako Cytomation, Heska, PR Pharmaceutical and XY Inc. — have shown signs of success.

At the same time, Colorado State University is home to various research projects on infectious disease, such as West Nile virus, Lyme disease and hantaviruses.

The National Institutes of Health recently granted $22 million to the school to build a new regional biocontainment laboratory. And the federal Centers for Disease Control has launched a $75 million expansion of its existing lab at CSU.

“I think of the university as almost a popcorn machine of ideas,´ said CSU’s Hudnut. “It’s part of my job to find ways for those kernels to get developed.”

Despite the biotech foothold here, the competition to attract biotechnology firms is raging across the country and even on the Front Range.

The state of Florida, for instance, recently committed $310 million to lure Scripps Research Institute out of California to Palm Beach. Florida’s goal is to have Scripps serve as an anchor to biotech cluster in the state.

Locally, the Fitzsimmons Redevelopment Authority is turning the former Amy medical center in Denver into a biotechnology park, banking on its proximity to the University of Colorado’s Health Science Center in Denver.

Additionally, established research clusters, such as the San Francisco Bay Area, San Diego and the Research Triangle in North Carolina are already entrenched in the biotech business.

One school of thought advanced by Joseph Cortright, co-author of a 2002 Brookings Institution report on the biotech industry, is that biotech has settled into the established clusters.

“People think that biotech is like Krispy Kremes: it starts somewhere and spreads everywhere else,” Cortright told the Palm Beach Post in a recent interview. “The thing about the biotech industry is that as it has grown, it has not dispersed.”

Backers of the Fort Collins Bioscience Initiative will take their shot at proving him wrong.

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