there are a lot of companies like Synergen that were great but didn’t become that anchor, in the way that Genentech did (in San Francisco) or Biogen has in Boston. They were good companies that were here that have been acquired away,” Mahaffy said.
Without that key anchor, it’s really hard for an area to get bigger.
“We don’t yet have the critical mass, and I don’t know when we will, or how easy it will be to have it,” Mahaffy said.
The money problem
But there’s one other piece of the puzzle that’s missing.
“You have everything you need here for success, except frankly for the money or the people who want to take the risks,” Squarer said.
But that’s just a fact of life, both for Colorado and startups in the biotech industry.
“We’ve got to be capital importers to Colorado. We always have been, but more so than anytime I can recall in the past,” Lefkoff said. “The capital lives today in the early-stage biotech businesses — what’s left of it, and there’s not very much left of it — what’s left lives in Boston and San Francisco.”
While the amount of VC has diminished, there are encouraging signs. Mahaffy and Squarer pointed to an uptick in the number of successful IPOs by discovery stage companies. [Read Luke’s thoughts on that trend here.]
“We’ve seen impressive valuations for discovery-based companies,” Squarer said. “I think there’s an interest in marrying good science with efficient companies that have access to capital and can do things quickly, whether with partners or on their own.”
But that doesn’t work for everyone. Globeimmune, which is developing cancer and infectious disease treatments, tried that route last year. It filed for an IPO and was supposed to begin trading in September, but ultimately cancelled it the day its shares were supposed to start trading.
The bar there is pretty high, and while companies might move toward IPOs faster than in the past, they still need that initial private investment.
