New Pfizer Incubator Chief Looks Far and Wide for New Science, But Backs Off Plans for Boston Site
Mark Benedyk follows a broad charter for The Pfizer Incubator (TPI): to find and nurture the best science in the world to feed the R&D machine for its parent company, global drug giant Pfizer (NYSE:PFE). Benedyk, a biotech industry veteran, took the reins of TPI in January, and he has plans to expand the reach of the incubator beyond its physical location at Pfizer’s Biotherapeutics and Bioinnovation Center in La Jolla, CA.
Benedyk’s approach differs from that of former TPI head Alex Polinsky, who made noise in a Boston newspaper last year about launching a second Pfizer incubator in the Hub. Benedyk wants the incubator to be a virtual entity in markets outside of the San Diego area and has put to rest the plans to open shop in Boston. Yet he says he is considering investments there as well as in Philadelphia and the Bay Area.
“In a sense, the original charter of The Pfizer Incubator hasn’t changed,” Benedyk says. “[But] it’s more of a virtual entity rather than some place that is going to have a physical plant here, there, and everywhere.”
In its second full year of operation, TPI houses three companies—antibody-screening firm Fabrus, RNA-drug-delivery startup RGo Bioscience, and cancer-drug-discovery firm Wintherix— of which all have scientific co-founders with faculty appoints at the University of California, San Diego, or the Scripps Research Institute. In general, the incubator typically backs its startups to the tune of $2 million annually for two years, after which Pfizer plans to either acquire the companies or set them free to decide their own fate. (The minutia of its investment criteria are on the incubator’s website, but Benedyk cautions that the site is being revamped in December and not to take information there as gospel.)
A business experiment in its own right, TPI has a funding commitment from Pfizer of $10 million per year for the five years beginning in 2007. In fact, the incubator is one of several approaches that Pfizer uses (including its venture fund) to tap outside technologies with the potential to bolster its internal pipeline of future products. It’s well chronicled that Pfizer faces patent expirations on blockbuster drugs such as Lipitor, Xalatan, and Viagra over the next five years. Cholesterol-lowering drug Lipitor, the U.S. patent on which expires in 2011, alone accounted for $12.7 billion of the company’s $48.4 billion in total revenue last year.
Pfizer isn’t the only drug company experimenting with the incubator model. Biotech firm Biogen Idec (NASDAQ:BIIB) has launched what it calls the Biogen Idec Innovation Incubator in the same neighborhood as its headquarters in Cambridge, MA. That incubator (which Xconomy featured in this story last year) has very specific goals to invest up to $10 million in startups developing drugs that complement Biogen’s focus on drugs for cancer, neurological disorders, and other disease categories.
Benedyk says that venture capitalists’ move away from making investments in early stage life sciences companies in favor of more mature firms has created a wealth of opportunities for TPI, and he believes the incubator enables entrepreneurs to retain a greater share of equity in their companies than VC firms typically offer. To close deals with young firms, Benedyk says he is drawing on his contacts and experience from his days as vice president of business development at Malvern, PA-based Ascenta Therapeutics and as a business development executive at Optimer Pharmaceuticals, headquartered here in San Diego.