BOULDER — Venture-capital investment in life-science and biotechnology companies nationwide, according to MoneyTree data dating back to 1995, hit its highest level ever during that period in 2015.
What concerns David Traylor — senior managing director for investment banking firm Golden Eagle Partners active in those sectors — is that from a Colorado standpoint, the amount of investment in those spaces accounts for only a small proportion of the overall VC flowing into the state.
- Participants in Wednesday’s CEO Roundtable on bioscience:
- Tom Cech, distinguished professor/director of BioFrontiers Institute, University of Colorado Boulder
- Robin Cowie, vice president of finance, Biodesix Inc.
- Byron Hewett, CEO, SomaLogic Inc.
- Hans Hinrichs, managing director, Silicon Valley Bank
- Kyle Lefkoff, founder & general partner, Boulder Ventures Ltd.
- Misha Plam, CEO, AmideBio LLC
- Brynmor Rees, interim director of technology transfer, CU Boulder
- Charles Stacey, president & CEO, Accera Inc.
- David Traylor, senior managing director, Golden Eagle Partners
- Moderator: Christopher Wood, editor/co-publisher, BizWest
- Sponsors: Hy Harris, EKS&H; Brent Peterson, EKS&H; Patrick Haines, Berg Hill Greenleaf Ruscitti
“Nationally, you have this number going up but here in Colorado, it seems like it’s going the wrong direction,” Traylor said Wednesday.
Traylor was one of several executives gathered for BizWest’s CEO Roundtable event on the bioscience industry held at the University of Colorado Boulder’s Jenny Smoly Caruthers Biotechnology Building. One common theme was how to attract more venture capital to Colorado’s bioscience companies.
But Kyle Lefkoff — partner of VC firm Boulder Ventures Ltd. and chairman of Boulder-based Array BioPharma Inc. — said that the dollar value invested in Colorado bioscience companies isn’t necessarily a knock on the state’s sector. Boulder in particular, he said, has traditionally been much more of a drug-discovery town than a development town, where companies are ramping toward commercialization like local players Array and Clovis Oncology Inc. are now with some of their cancer drugs. Development costs exponentially more than discovery, and most of the companies doing it are on the coasts, meaning the investments going to those places are comparatively larger than those in Colorado companies.
“Just because there is one-tenth the money going into Colorado doesn’t mean there’s not a lot of stuff going on,” Lefkoff said.
Lefkoff said one way to attract those development dollars to the state — and maybe even get other development companies to relocate here — is for a company like Array or Clovis to go to market and plant a flag as an “indigenous anchor tenant” for Colorado’s bioscience industry. Most companies that could have done that in the past, he said, have been bought or acquired and lost their identity as Colorado firms.
Hans Hinrichs, a managing director at Silicon Valley Bank, said raising capital is always tricky in bioscience. For investors, he said there is massive potential for growth returns as the industry tackles pressing problems for society. Biotech is at the “top of the heap for opportunities in capital deployment,” he said.
“But it also sits at the top of the risk stack for capital deployment,” Hinrichs said, noting the often longer and unsure road to returns.
Other topics covered at Wednesday’s roundtable included:
ATTRACTING TALENT: Just like VC, bioscience talent is concentrated heavily on the coasts. Charles Stacey, president and CEO at Boulder-based Accera Inc., said he was skeptical when he joined the company 18 months ago about whether the firm could do development here as it advances its therapies for Alzheimer’s disease. But he said he believes it’s doable and that Colorado companies simply must work harder at things like attracting talent from the coasts, where workers have more job opportunities available if a company’s technology doesn’t pan out.
Stacey said he’s employed a combination of strategies in recruiting, including hiring employees from the East Coast who have stayed there while working remotely for Accera. That includes the company’s chief financial officer.
“If you want to succeed in Colorado, you need to accept these things,” Stacey said.
TALENT PART 2 (CU): Asked how much of a challenge CU faces in having its own talent poached from larger or more prestigious universities due to drops in state funding for higher education, Tom Cech — distinguished professor and director of CU’s BioFrontiers Institute — said that from a bioscience standpoint, CU is largely unfazed.
“We are always competing with the top places in the country for talent,” said Cech, a Nobel Prize-winning chemist. “We steal from them, and they steal from us. That’s part of being successful,” he added, noting that CU is among the top 15 schools in the country for biology and biochemistry.
In some respects, Cech said, the fact that state funding for higher ed in Colorado has nearly bottomed has made CU more resilient in figuring out how to deal with that reality. That’s a learning curve many of CU’s peers, he said, will have to play catch-up on as their own state funds dwindle.
“Sure, we lose some (top faculty and students to other schools),” Cech said. “But look at the building around campus. We’ve got world-class facilities, world-class faculty, world-class students. So I’m not depressed about that.”
Boulder’s entrepreneurial ecosystem is one thing CU officials are finding is helping to attract top talent in the bioscience arena, added Brynmor Rees, interim director of CU’s Technology Transfer Office.
“I think what Boulder can offer is our ability to turn out startup companies and to have an entrepreneurial student body,” Rees said. “So there are some things that Boulder and Colorado offer that are unique here and position us well with other schools.”
DOING BUSINESS IN CHINA: Boulder-based SomaLogic Inc., which makes tests for analyzing biological samples for use in both research and development as well as diagnostics, is planning to open a lab in China where some of the world’s major pharmaceutical brands operating in the country can send samples for testing. SomaLogic is also forming a joint venture in China to begin gaining regulatory approval in the country for the use of its tests in diagnostics by clinics and hospitals.
Many around the table Wednesday said there has been less worry in recent years from bioscience firms about doing business in China due to the threat of small companies there stealing their intellectual property.
SomaLogic CEO Byron Hewett said because of some of the fraud that’s gone on in the country, there has been a movement toward more trusted brands in China. And companies that have patents filed in China can count on the country to protect their IP.
“As a result, trusted brands are coveted there more than you think,” he said. “They’re really trying to stop the fly-by-night ripoff companies.”