Biotech Incubator Aims To Match Scientists With Savvy Co-Founders

By Lisa Eckelbecker Telegram & Gazette, Worcester, Mass.

WWR Article Summary (tl;dr)  With plans to help scientists find savvy co-founders, "Massachusetts Biomedical Initiatives" is creating a new shared laboratory center with the goal of linking small operations to investors.

WORCESTER

One of the tiniest economic development organizations in the region is thinking big about the future of life sciences in Central Massachusetts.

Massachusetts Biomedical Initiatives, a nonprofit that dates to the early days of biotechnology in Worcester, is rethinking what it needs to do to help entrepreneurs start and build local companies to treat disease, diagnose health problems and create new medical devices.

With plans to help scientists find savvy co-founders, a new shared laboratory center in the works and hopes of linking small operations to investors, MBI is aiming not just to launch companies but to keep them alive.

"The goal is to see them all succeed," said Jon Weaver, MBI president and chief executive. "If a company fails because the science failed or was flawed, that's one thing. It happens. Science is really complicated. But if it fails because they didn't have the right business support or strategy or person, to me, that's the failure we're trying to avoid."

MBI regularly rethinks its mission, but its current shift comes as Mr. Weaver takes over leadership of the organization. He replaces Kevin O'Sullivan, who stepped down at the end of 2018 after 20 years as president and CEO.

MBI will be discussing more about its new goals at a 5 p.m. forum Monday at Mechanics Hall in Worcester.

With four employees and an annual budget of about $1.5 million, MBI is best known for operating business incubators for life science startups. The incubators are places where multiple enterprises can rent tiny laboratories to work out whether an idea holds promise.

Since 2000, MBI has been involved with 135 companies, including 95 that "graduated," or expanded out of the centers. Among those, 73 companies were acquired or successfully operated on their own for at least five years.

MBI currently has 29 tenant companies plus 11 businesses that are affiliated but do not rent space. The organization estimates its annual economic impact at $20 million.

Although it has occupied different spaces since its founding in 1985, MBI is currently running two incubators, both in Worcester -- an older industrial building off Barber Avenue and a building owned by Worcester Polytechnic Institute in the Gateway Park complex off Prescott Street. It also leases a third site in Gateway Park to one company.

Among the successful companies to emerge from MBI facilities was Blue Sky Bioservices. Starting out as a small vendor performing research for bigger entities, Blue Sky grew until it was acquired in 2016 by privately held LakePharma Inc. of San Carlos, California. LakePharma continues to operate in Worcester and has also taken over a site in Hopkinton for contract manufacturing.

But while MBI's tenants, including Blue Sky, were once mostly service providers, about 65 percent are now involved in drug discovery.

The two industries are starkly different. A research company could begin posting revenue as soon as it opens. A drug developer may not see revenue for years.

During those early years, researchers can make business mistakes, according to Robert Anderson, MBI chairman. He was general counsel for the former BASF Bioresearch and the former Abbott Bioresearch, which helped develop the blockbuster immune system treatment Humira in Worcester.

"Sometimes we would walk away from the deal because there would be an underlying agreement that was so, I would call it catastrophic, that it gave away rights that they didn't know they gave away, and the companies that they gave them to weren't going to give them back," Mr. Anderson said. "We're trying to make sure that they (MBI tenants) don't have those type of transactions in their history."

MBI's new strategy includes working to find business savvy co-founders for tenants who might benefit and developing professional mentors for the tenants.

Another change: MBI wants to help promote the development of new lab space. It's starting by taking on a new space of its own. With a $3.5 million grant from the Massachusetts Life Sciences Center, MBI plans to lease and develop a 20,000- to 25,000-square-foot incubator in a building owned by Coghlin Companies Inc. at 17 Briden St. It sits just steps from MBI's existing incubator in Gateway Park.

MBI plans to create about 20 standard 100- to 300-square-foot incubator labs on one of the site's two levels. On the second level, it plans to create fewer but larger labs for tenants that are more mature.

"What we're looking to do is create these labs of between 1,000 and 3,000 square feet that would house these growing and scaling companies that still aren't really ready to be an anchor tenant in the next building in Gateway (Park), aren't really ready for 10,000 square feet in Marlboro or wherever else, but that we still very much believe in," Mr. Weaver said. Then "put them in the stage two-incubator, allow them to grow and scale a little bit longer, and then have the ability for them to then be more ready when they move into new space."

In addition, Mr. Weaver said, MBI wants to work on supporting the development of more lab space in the region between Worcester and Boston. It's an issue because supply of space is tight in many communities.

When commercial real estate firm Colliers International surveyed lab space in Boston and its suburbs during winter 2019, it found about 28.8 million square feet of lab space and only about 6 percent of it vacant. In Worcester, the entire supply of 863,741 square feet was filled.

New construction is planned in Boston, but Worcester could also provide space for smaller operations, local companies and manufacturing, according to Aaron Jodka, director of research for Colliers in Boston.

"We still have a tremendous amount of demand in the life science corridor, Boston out to Worcester," Mr. Jodka said. "That demand is concentrated primarily in Kendall Square (Cambridge). When Kendall Square is full, like it is now, we start to see spillover."

To address funding issues among MBI's startup companies, MBI also wants to get more involved with investors. That includes institutional investors, pharmaceutical developers, venture capital, private equity and "angel," or early-stage investors, according to Mr. Weaver.

The idea would be for MBI officials to connect with investors, determine their interests and, if appropriate, make introductions to entrepreneurs who are prepared to seek investments.

"We want to spend some time preparing them (companies), making sure that they're ready, making sure they're investable, and then connecting them to investors," said Mr. Weaver.

It's a model that could give investors early and ongoing access to entrepreneurs, which is important, said Charlie Hipwood, a vice president with the venture capital firm MassVentures.

"Raising capital is a process, it's not a one-time thing," Mr. Hipwood said.

Taking on these goals means MBI is sort of layering a business accelerator program on top of incubator services, a move that Mr. Weaver said is necessary.

"If we've found a gap that exists in more than a couple of our companies, and we're not trying to do something to fill it in with them, well then we're not really fulfilling our mission," he said. ___ Distributed by Tribune Content Agency, LLC.

Related News

Leave a Reply

Your email address will not be published. Required fields are marked *