Can New York Take on Boston, California as a Biotech Hub? Thoughts from Xconomy’s Reinventing Biotech Forum
When you think of biotech hubs in the U.S. you think of South San Francisco, Boston, San Diego and…Brooklyn? Well, maybe not yet for Brooklyn, but a core group of investors, entrepreneurs, and scientists, with the support of Mayor Michael Bloomberg, are working to turn the Borough of Kings, along with two sites in Manhattan, into a New York-centric biotech center that could rival those in California and Massachusetts.
As Xconomy’s newly arrived East Coast Biotech and New York editor (and a Brooklyn resident), I was encouraged by the enthusiasm shown for New York’s nascent biotech sector at Xconomy’s October 4 forum, Reinventing Biotech’s Business Model for the Big Apple. There are a lot of obstacles to overcome, however—and given that the average sales price of an apartment in Manhattan has reached a gasp-inducing $1.48 million, the biggest problem is, of course, the cost.
The city has more than a dozen world-class research institutions, among them Columbia University, Rockefeller University, and Memorial Sloan-Kettering Cancer Center. As the world’s leading financial and philanthropic center, it’s where the money is. But there is no deep well of venture capitalists that support biotech, no history of startups, no tradition of the city’s universities licensing their discoveries to local firms.
Samuel Waksal keynoted the forum, fitting since back in 1984 he founded ImClone, the most successful biotech firm to get its start in Manhattan (though admittedly it was pretty much the only one). Two years ago, after a well-documented fall from grace, Waksal started Kadmon, also headquartered in Manhattan, and he is perhaps the Big Apple’s biggest biotech booster. “There is great science here, it’s a great place to do business,” he told the audience. Nevertheless, there is the ongoing problem of “access to land and labs.”
A public-private partnership called the NYC Bioscience Initiative is trying to ensure that affordable lab and office space is available in four biotech incubators already established in the city—the Audubon Center in uptown Manhattan by Columbia University; the lovely Alexandria Center for Life Science in Midtown, hard by the East River (and where our event took place); and in Brooklyn the Advanced Biotechnology Park in the Flatbush section, by SUNY-Downstate Medical Center, and at the Brooklyn Army Terminal on New York harbor.
There’s still the problem of the money, though. After Waksal’s talk, the event featured a high-powered panel of other key players helping to reinvent biotech: Kevin Kinsella, founder and Managing Director of Avalon Ventures; Jill O’Donnell-Tormey, CEO and director of scientific affairs for the Cancer Research Institute; Dennis Purcell, Managing Partner of Aisling Capital; and Arthur Tinkelenberg, CEO of Enumeral Biomedical. Panel moderator Purcell, who’s Aisling Partners is a life sciences investment firm based in NYC, said it is difficult for startups to fundraise in the city because “we don’t have a good VC community here that funds early stage innovation.” While VCs on the West Coast are used to taking chances on the earliest stages of development, NY investors like to wait a bit and get in on a later stage, he said. O’Donnell-Tormey agreed, saying “biotech in NY needs new models of financing.” Her non-profit Cancer Research Institute engages in venture philanthropy, a funding model that NYC is particularly well-suited for given the large number of non-profits, and large donors, in the city.
Still, New York matches up well with California and Boston on its underlying strengths. A report last year by the Business Council of New York found that the state graduates the nation’s fourth highest number of bioscience majors, is second only to California in the number of clinical trials conducted, and hosts academic institutions that spend some $2.7 billion a year on biological research and development—only California spends more.
Besides, noted several panelists, New York is, well, New York! California and Boston can’t measure up. “When we fundraise, we have the best time in New York—start biotech companies during the day and go to the theater at night,” said Kinsella, a pioneer in building San Diego’s biotech cluster (Avalon is based in La Jolla, CA). Kinsella knows whereof he speaks—he’s the lead producer of the hit Broadway show Jersey Boys.
Added Tinkelenberg, a long time life sciences VC now running a startup headquartered in New York with R&D operations in Cambridge, MA: “When I’m in Cambridge during the week, I go out to lunch, there’s nobody on the street. Here it’s much more fun. New York is great.” As a 12-year Brooklyn native, I’d have to agree. Those other places? Fuggedaboutit.