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Jul 1, 2009 (Vol. 29, No. 13)

Building a Successful Biotech Incubator

Proximity to Academic Hubs and Capital Remains a Crucial Factor in Hatching a Thriving Cluster

  • Private Incubators

    Private incubators are a relatively new addition. They can be a boon of innovation for pharmaceutical firms and help ensure early sales for young companies. The catch is that the sponsoring company has the right of first refusal regarding the output from companies in the incubators. The question then is whether the young company can become viable.

    “Pfizer has an incubator here in San Diego,” Panetta says. Likewise, according to Johnson, “Biogen Idec is establishing an incubator in New York.” With an anchor tenant and emerging companies, the initiative helps Biogen Idec develop projects at lower costs and with less risk, integrate promising projects into its pipeline, and benefit from the cross-fertilization of ideas.

  • Capital

    Very good companies can acquire capital regardless of where they are located. That said, it’s easier when the company is near the money because venture capital companies tend to concentrate on the dominant industries. Firms in biotech hubs like Cambridge, San Diego, or San Francisco can access local venture funds. Biotech companies starting in less biotech-intensive locations such as Oregon and Oklahoma will find that local firms are focused on other industries, so venture capital will be harder to attract.

    Colorado is succeeding in this endeavor. Since committing the state to bioscience in 2003, bioscience investments through 2008 totaled $1.3 billion, ranking Colorado number 11 in the U.S. for bioscience venture capital investments, according to the just-released Colorado BioScience Association study. This was accomplished through state funding for proof-of-concept activities and through proceedings to strengthen bioscience infrastructure with increased university competency and business networks.

Readers' Comments

Posted 09/03/2009 by BioTech Student

Thank you so much for this wonderful article. I am involved in a project and this article helped me a lot in understanding incubators!

Posted 07/09/2009 by Biotech Entrepreneur

Does anyone have advice on the first steps to forming a new biotech incubator? I am a computational biotech consultant who is also a serial entrepreneur. I am looking to form a biotech incubator in NJ that leverages the academic talent in NJ (Princeton, Rutgers, etc.) as well as Pennsylvania (University of Pennsylvania, etc.) This incubator would act as a bridge between the early discovery results from academic research efforts and the abundant pharma and biotech companies located in NJ, PA, NY, DE. If you have any ideas please contact me at my computational biotechnology website www.bio-teck.com

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