Full house at MBI
Big pharma fuels growth of small startups
Massachusetts Biomedical Initiatives has a record 18 companies under its incubative wing. While MBI President Kevin O’Sullivan says his organization doesn’t measure success by such a number, he and others in the industry point to a growing trend that is making it easier for biomedical entrepreneurs to start their own companies – stemming from, of all places, their big pharmaceutical counterparts.
Long-time MBI tenant Blue Sky Biotech, soon to become an anchor in a new MBI facility at Gateway Park in Worcester now under construction, is an example of the start-up sea change. Co-founder and President Paul Wengender says Blue Sky, a biomedical contract researcher started in 2003, is leveraging the fact that more big pharmaceutical companies are collaborating with smaller firms like his than ever before.
Blue Sky provides one-stop research services for the first three years of the drug discovery process, from working with genes to cell lines to proteins, explains Wengender. The company has grown its business from three research contracts three years ago to more than 50 currently, he notes, including work for the top 10 pharmaceutical companies. Profitable in its first year, Blue Sky has also grown its revenues to $1.3 million in 2005, with 2006 revenues expected to approach $2 million, and its staff from two to 16.
Wengender, who previously coordinated research outsourcing for Pfizer Pharmaceutical Co., says the growing reliance of big firms on smaller researchers makes it "the best time ever" to launch a biomedical startup. Fledgling companies, he says, which face an uphill challenge attracting venture capital, can do contract work to get much-needed capital to eventually pursue their own products. They’re using big pharma and biotech as their investors, he says, leading to an increase in capital resources for smaller startups.
Blue Sky plans to begin selling its own biomedical research products - which Wengender describes as "picks and shovels for the drug research industry" - within two years.
A much newer MBI tenant, EpigenDX, which provides molecular laboratory services, is also relying on contract research clients to fund its startup before launching an R&D effort of its own in a year or so. Founder and President Liying Yan, like Wendenger, comes from the private sector.
EpigenDX is among five new life-science companies which recently joined the MBI tenant mix. Most fellow newcomers provide what O’Sullivan calls biotech boutique services. Attogen Biomedical Research provides cancer researchers with unique antibody products. WesaGen Inc. offers technology for cancer research and notes on its website its plans to ally with major pharmas and biotech companies to grow. ProFolden provides tools and services for the preparation of active proteins in research.
O’Sullivan says pharma collaboration trend bodes well for MBI’s goal of becoming the life sciences incubator capital of the state. While MBI has a record number of companies, O’Sullivan says, the number of jobs those companies provide - now at 75 - is below the alltime record of 90 people.
"At the end of the day, we’re helping people get started," O’Sullivan says. "You never know which ones are going to pop."
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