Life-sciences leaders: Pfizer’s exit means opportunity
BOULDER — The Boulder Valley’s economic outlook may have taken a punch to the gut this month when biopharmaceutical giant Pfizer announced that it plans to shutter its research and development operations in Boulder by the middle of this year, eliminating an enterprise that at one point employed nearly 300 people at its Walnut Street facility.
But leaders of the area’s life-sciences community who gathered Tuesday at the BioFrontiers Institute at the University of Colorado Boulder for a BizWest CEO Roundtable said they also saw Pfizer’s departure as a lucrative opportunity.
For Kyle Lefkoff, founder and general partner at Boulder Ventures Ltd., the news was nothing new and will provide just another example of Boulder’s resiliency.
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Pfizer, which acquired Boulder’s Array Biopharma for more than $11 billion in July 2019, represents a major loss for the community, Lefkoff said, “150 chemists and biologists lost their jobs. That’s not good for the Boulder ecosystem. We lost our anchor tenant.”
Similarly, California genetics-testing company Invitae Corp.’s purchase of ArcherDX Inc. in 2020 resulted in a loss for the community. ArcherDX developed genetic assays for cancer patients, but Invitae filed for bankruptcy.
But Boulder’s an entrepreneurial town, Lefkoff noted. . “A whole ecosystem of companies grew up here out of the capital and money that was made at Archer,” he said.
Lefkoff listed “six identifiable spinoffs since Pfizer bought Array, four of which are publicly traded companies. They’re all doing very well.
“That’s what you want to see in an ecosystem like ours,” he said. “Nobody leaves, nobody’s freaking out. They’re all going to find jobs and start companies. In the long term, that’s good. That’s the way it’s been here for 40 years. There’s nothing different about any of that story.”
Marvin Caruthers, a distinguished professor at CU Boulder, agreed.
“The loss of Pfizer isn’t the big story,” he said. “The big story is the number of companies that have spun out of that acquisition. I read about all the new development going on here, buildings that are being put up around biosciences. So somebody out there knows that there’s activity here that’s going to expand.”
Pfizer’s move “is a great outcome for this area,” said Timothy Joy, chairman and chief operating officer of Neva Analytics LLC. “The Pfizer event happened. It’s happened forever. But the seeds have to land in fertile ground. If we have space available, it makes that event even better because there’s places to land immediately.
“This is a good thing,” he said. “If you get a chance, go to work for a small company, help them be successful, and you’re going to also be a commodity yourself. Everybody should aspire to grow up, become something bigger and then be part of a seed that gets spread around.”
Boulder, Joy said, “has the benefit of not being in the wrong place. Don’t build a company on the edge of your natural ecosystem.”
A lot of the Boulder area’s resilience is fed by research being done at CU Boulder, including work at the building where Tuesday’s roundtable was held. The Jennie Smoly Caruthers Biotechnology Building, home to the BioFrontiers Institute, was named in posthumous honor of Caruthers’ wife, and Roy Parker, the institute’s director, attended the roundtable.
That kind of infrastructure can’t help but attract investment, the life-sciences executives said.
“New businesses attract capital wherever you are, but Boulder just happens to be pretty unique insofar as we’ve got an anchor university, anchor talent,” said Trey Foskett, CEO of Watchmaker Genomics. “Investment in biomed here, that’s not a short-term play. That’s a 20-, 30-year view.”
To avoid losing such “anchor tenants” as Pfizer in the future, one life-sciences leader suggested that “we need to remember the consumer.
“Pfizer left. I don’t know why,” said Amy Beckley, CEO of MFB Fertility, which does business as Proov and offers consumer-facing in vitro diagnostics. “There was so much media about vaccines being bad, don’t do it, so much stuff, and maybe that shrink of Pfizer happened because of consumers.”
Her diagnostic company, she said, realizes that consumers “don’t want to talk to their doctor about certain things, and that’s our entire motive, ‘Let’s educate consumers. Let’s tell them what they should be talking to the doctor about.’ That’s where we’re seeing a lot of these explosions of biotech, of med devices.
“This community needs to remember the consumer because they are going to have the power and they’re going to get more power as we go on,” Beckley said. “And if big biotech isn’t realizing that, it’s going to impact them because it’s going to shape how companies survive.”
Joseph Hovancak, executive director of the Boulder Economic Council, based at the Boulder Chamber, agreed that part of bolstering the economic ecosystem “is asking the community to tell us what we should be focusing on.”
Despite Pfizer’s looming departure, “we do still have anchor tenants here,” said Elyse Blazevich, president and CEO of the Colorado Bioscience Association. “We have Medtronics, which just invested a tremendous amount of money in a 42-acre campus in Lafayette. We have Agilent Technologies, which is spending $725 million on their manufacturing facility.”
She listed others as well, and noted that a recent survey indicated that “a majority of respondents do expect to grow their workforce over the next 24 months.”
One of those companies is Biodesix Inc., whose president and CEO, Scott Hutton, told the roundtable, “We’re going to grow our workforce by 20% each year over the next two years.”
Those who worked at such companies as Pfizer and Array “are just churning,” he said. “They’re going to find jobs. We continue to strive to elevate that talent pool.”
“From an ecosystem perspective, you need the keystone species” such as Pfizer, Foskett said, “but also you need that diversity of company sizes and scales. Places like Boulder and the Front Range will continue to attract a lot of capital regardless of their location.
“A lot of applications are attracted to this area who are leaving the Bay Area or Boston,” he said. “You have to be strategic in paying for relocation, but you can get applicants from all over the country” who are attracted to research universities such as CU, Colorado State University and “the level of the talent there,” he said.
Caruthers offered an example of that talent. “In our research program, we have a new approach for solving rare genetic diseases,” he said. “I’ve got maybe 20 or 25 collaborations going on.”
The university plays a key role in research as well as technology transfer, said Brynmor Rees, associate vice chancellor for research and innovation and director of Venture Partners at CU Boulder, the university’s technology transfer office. A good example, he said, is the emerging field of quantum computing.
That’s “a really long-term” endeavor, he said, but “that’s what a university is for, thinking very long term and serving as the top of the funnel. We’re wanting to stock the top of the funnel so that we have those companies in 10 years, in 15 years. We are disproportionately ahead of everyone else in the country. There’s been some big federal funding to support that, and we’re a finalist right now for a quantum tech hub. It’s us against Chicago.
“There’s not a lot of venture-stage, growth-stage companies in quantum yet,” Rees said, “but we’ve got multiple ones here in Boulder, and I think it’s a natural fit with bioscience.
“If I think of our portfolio right now, we’ve got several clinical-stage programs that could be really successful for the ecosystem in the next 18 months. That would be awesome.”
A partner in that effort is Chris Malme, director of the school’s industry relations.
“Think of me as a connector,” he said. “I’m kind of the starting-point conversation when it comes to industry engagement with CU Boulder. My job is to bring the right people to the table and kind of help steward the conversation to make sure the partnership, the relationship is moving forward.”
Boulder’s major challenge remains housing costs, Hutton said.
“Where we struggled, and one of the reasons we moved out of Boulder, was that we looked at our workforce. Nobody lived in Boulder,” he said. When his company plotted where its employees lived, he said, “the center of the workforce was Louisville, and so for us that’s where we started the search.”
The answer was a space in Louisville that had held a former Kohl’s department store, he said.
“When we were in Boulder, we couldn’t get people from Denver,” Hutton said. “Now that we’re in Louisville – it’s only 10, 15 minutes from Boulder – we’re attracting people from Denver. These subtle changes are opening windows for us, and a new facility will draw a lot of attention and hopefully attract talent.”
Beckley said her company “exploded during COVID because everything was closed and we could still ship to the house, and people still wanted to learn about their fertility and their hormones and all those things.
“We went virtual and we stayed virtual” after the pandemic’s restrictions were lifted, she said, “and it was because my employees didn’t want to deal with the traffic.”
Hutton said his workforce “never returned until we went to Louisville.” Now, in the post-pandemic world, “teams are pushing back, so we offer a more flexible workspace. We’re probably 50% full on any given workday. We’re still accommodating that virtual remote, but when you come to that office, your experience is going to be way different.”
In terms of finding space for startup biotech companies, “Colorado is still one of the markets that has not overbuilt,” Blazevich said, and Beau Gamble, president of the Dean Callan & Co. real-estate firm, added that “It’s just a matter of where do you want to see your dollars go” and even offered a “shameless plug” for one he’s listing on Wilderness Place.
“It’s also been a challenging economic time for companies to raise capital,” Blazevich said. “The data shows that Colorado’s been really resilient. That doesn’t mean that the individual entrepreneurs out there raising money aren’t having to beat the streets hard.”
When trying to close a fundraising round, Hutton said, “the big question was, ‘Are you still going to be around?’ In the middle of the pandemic, it shifted from ‘What are you doing?’ and ‘What does the future look like?’ to ‘Can you survive?’”
Joey Azofeifa, founder and CEO of Arpeggio Biosciences, noted that “investors are valuing clinical-stage programs at a much higher premium than discovery work, and I understand why that is the case. But for companies like Arpeggio or for other discovery-stage companies, we’re caught between the challenge of how do you embrace really fascinating technology like quantum while still trying to do your program really, really quickly.”
Lefkoff observed that “the best deals in Boulder have always been funded by national venture capitalists,” but Rees also hailed “the emergence of local funds.”
Even so, Rees said, “some of our federal agencies are embracing the gap in capital and saying we need to take some of these federally funded innovations and get them closer to the market, closer to being investor ready, and we’ll create new opportunities to do that.
“Colorado is winning,” he said. “We’re not just watching it going to the centers that have historically got all the investing.
“This is really a glass-half-full story, not a glass-half-empty story,” added Foskett. “The next 25 years of life-sciences development here is being set up right now.”
Also attending the roundtable were sponsors David Kerr of Berg Hill Greenleaf Ruscitti; Annsley Dylla, Jeremy Wilson and Becky Potts of Plante Moran; and Aaron Spear, Boulder market president for Bank of Colorado.
