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Disadvantage, McEnroe.

October 12, 2011

 “You cannot be serious!”  Oh yeah, I’m serious.  Following up to my last post, posing the question, “are life science companies in Louisville at a disadvantage for receiving funding?”

Thanks to Bruce Booth (“Undoubtedly yes. Risk capital flows to clusters with biotech, pharma, academia, hospitals, & entrepreneurs all co-mingling.”) and Daphne Zohar (“Yes definitely from traditional sources but you may have access to econ. devt or other funding…”) for the comments via Twitter. 

That experienced n of 2 thinks we are.  I tend to agree.

Let me point to a specific example, somewhat magnified in the news today.

From a Sand Hill Road venture firm everyone would know; “We agree that the nature of genomic data demands a specialized solution for storage & analysis and believe that Intrepid [a local company] is developing the right solution for this problem.”  They get it.  They aren’t investing for other issues (they said, not me).  Yet here at home, while we’ve been able to raise some money, it’s certainly not been easy.  And one of the hurdles has been lack of acknowledgement of a market need.
And then boom, today we see a competitor, DNAnexus, Inc., announce that they have secured $15 million in funding led by Google Ventures and TPG Biotech.  Tip of the hat to DNAnexus!  Which happens to be in Mountain View, CA.  Now, I can’t say that if Intrepid were in Mountain View it would be funded to the tune of $15 million, too.  But, I have a hunch it would at least be easier.  Not easy.  Easier.
I’m also working with an immunotherapy company–ApoVax, Inc.  “If this company were in Boston, it would have been funded years ago.”  Yep, I’ve said it.  Although in this case I might change Boston to Seattle.  Seattle seems to have a thing for the adjuvant, vaccine, immunotherapy space.  So I’m trying to open some doors up there.  The Company has had a pre-IND meeting, we know our path to the clinic.  We need approx. $5 million to get through a Phase 1 study which, in addition to safety, might get us a look at efficacy.  $5 million is kind of chump change in the grand scheme of biotechnology.  Work with me (it’s less than the average first round reported in Bruce’s recent post).  But sitting in Louisville, KY, where there’s really no indigenous life science venture capital, $5 million can look like $500 million.
In that post Bruce also says, “You can’t starve your way to growth.”  But we try to every day!  And he’s right, you really can’t pull it off effectively.  
Yes, we do have access to funds via the Commonwealth–economic development oriented.  And the University of Louisville Foundation, Inc. has stepped up.  That’s great!  The downside is that their capacity is limited and, as important, they don’t have a syndicate network that can continue to fund growth.
Capital is constrained everywhere right now.  I get that.  It’s magnified here in the life sciences.
We’re at a disadvantage.  So, we’ve got to be more creative and hustle!
Working on that. 

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  1. It goes not just for life sciences but all kinds of ventures. There are, in any business, centers where those businesses are well understood. You want to make a movie; you go to Hollywood. You want to fund an oil exploration; you go to Houston. You want to do life sciences?

    In those centers are not just capital, but also expertise and a trained workforce. When I made TV shows in LA, it was easy to staff-out a project. Make a couple of calls and have 20 experienced segment producers to choose from. I came to Louisville to make TV shows (go figure) and staffing was nearly impossible. No one knew how to do anything but local news.

    I see it now in the branch of the life sciences I work in. How many med techs are there in town who are both looking for a job and fully trained in PCR-based genetic testing?

    The grand vision is that Louisville develop itself as a center of something and then build on that strength. I don’t think we’ve hit a critical mass yet. I don’t think our something has emerged. For a while, we will have to make-do with feeding ideas and basic research into development pipelines that lead to other centers in other places.

    You’re right to be out trying to forge the relationships to get those other places to take notice.

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