Colorado Biotech Searches for a Few More Investors, Anchor Tenants
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to a Seattle or San Diego-type hub with a lot of advantages and differentiation,” Squarer said.
Squarer is relatively new to the area, moving to Colorado to become Array’s CEO last year.
He said one of the most impressive things to him is the legacy local researchers and entrepreneurs have of creating successful discovery-focused startups that thrive as independent companies before attracting the attention of industry giants.
“I’d say the track record is almost phenomenal. The number of biotech companies that have formed, been successful, and had an exit, or have generated important assets for bigger companies like Amgen, is excellent,” Squarer said.
Amgen (NASDAQ: AMGN) is a telling example. While Amgen is based in southern California, University of Colorado-Boulder professor Marvin Caruthers was one of Amgen’s founding scientists and did significant research work for the company in the Centennial State.
Amgen also bought Synergen, a Boulder-based biotech, in 1994 for $239 million. The deal set a precedent, as global biotechs have bought a number of important companies that started in Colorado. Notable examples include Pharmion (bought by Celgene in 2007 for $2.9 billion), Myogen (bought by Gilead Sciences for $2.5 billion in 2006), and Nexstar Pharmaceuticals (bought by Gilead Sciences in 1999 for $550 million).
[Clovis might be the next company added to the above list, according to a recent report by Bloomberg News. The company reportedly was looking for suitors this summer. Mahaffy did not comment on the story, saying he had to limit his comments about Clovis to what the company has publicly disclosed.]
IPOs followed by billion-dollar acquisitions seem to be the ceiling for the most successful Colorado biotech startups, but the leaders of those startups have a tendency to stick around the state. An example is Mahaffy, who cofounded and was CEO of Pharmion and was Nexstar’s CEO.
The successful acquisitions have created a talent pool the runs through several companies, Boulder Ventures general partner Kyle Lefkoff said. Boulder Ventures is a Boulder-based venture capital firm that primarily invests in Boulder-area companies IT and life sciences companies, including Array BioPharma.
“We’ve got some anchor companies, and we have some evidence of success. We have a couple, but not a lot, of renowned serial entrepreneurs who can aggregate capital wherever they are,” Lefkoff said.
The talent pool is especially deep for drug discovery, Mahaffy said, with many quality researchers coming out of the University of Colorado. But the state lacks people with expertise in developing drugs and fully realizing their commercial potential, he said.
“There aren’t a large number of medical developers here, and we’ve made the decision to not even try [to do development work in Colorado]. Our clinical team is based in an office we have in San Francisco,” Mahaffy said.
The best developers tend to be concentrated in hubs like San Francisco and Boston, Mahaffy said. Drug developers, he says, are drawn to places where they’ll have good prospects if their companies don’t work out. They tend to be cautious about joining startups.
That’s where having a global heavyweight in town or a startup that makes it big and stays is so important.
“I’ve often thought it would be great if at [the Fitzsimons Life Sciences district], Pfizer or Merck or someone would put in a big anchor [like an R&D center]. It would be really great for the local biotech community. Absent that, … Next Page »