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May 17, 2018

NYC, NY State Promote Cluster-Building with $1B+ in Incentives, New Startup Spaces

Source: © Ilja Mašík/Fotolia.com

  • With more than $1 billion set aside for incentives, new early-stage spaces opening, and a shared commitment to industry-building despite political differences, New York City and New York State are finally poised to emerge as top-tier biopharma meccas after years of lagging behind Boston/Cambridge, MA, and the San Francisco Bay Area, key stakeholders in and outside government agree.

    Today at 4 p.m. ET is the deadline set by the New York City Economic Development Corp. (NYCEDC) for receiving responses to its “Request for Expressions of Interest” (registration required) for a $100 million “Applied Life Sciences Hub.”

    The Hub would be the centerpiece of New York City Mayor Bill de Blasio (D)’s LifeSci NYC, a 10-year, $500 million effort to make the Big Apple big in biopharma, with 16,000 new life sciences jobs and up to 3 million square feet of new space for life-sci companies and institutions.

    “The intent here was to activate the community to create a commercial R&D-focused innovation district throughout New York City, where companies can continue to grow and spin out more toward company creations, medicines, products, and pills toward patient care,” said Doug Thiede, SVP of Life Sciences and Healthcare with the NYCEDC. “For a long time, the academic community has done a phenomenal job in raising funding for National Institutes of Health (NIH) grants for basic biomedical research. What we haven’t been able to do is build companies that scale.”

    Thiede was among six stakeholders who discussed the life-sci initiatives of New York City and New York State at “Welcome and What’s Up New York,” a panel discussion yesterday at life-sci trade group NewYorkBIO’s 2018 Annual Meeting, held at 10 on the Park in New York City.

    Three of those initiatives consist of spaces projected to accommodate a combined 60-or-so biopharma startups. Next month will mark the formal opening of [email protected], a 30,000-square-foot facility at the New York Genome Center (NYGC), 101 6th Avenue. The facility is designed for up to 30 life-sci startups focused on biopharma, medical devices, and consumer and digital health.

    JLABS is receiving $17 million from New York state’s $620 million life-sci initiative, shepherded by Gov. Andrew Cuomo (D) and approved by state lawmakers last year. The initiative includes $100 million to expand the “Excelsior Jobs Program” of refundable tax credits; $100 million for a new life-sci R&D tax credit; and $320 million in state grants to support the development of wet-lab and innovation space, support operations, and investment capital for early-stage life sciences companies—with the remaining $100 million to consist of matching funds from private partners.

  • Early-Stage Spaces and Capital

    Two other early-stage spaces have opened in Manhattan within the past year. Last year Alexandria Real Estate Equities opened its Alexandria LaunchLabs® co-working space, occupying 15,000 square feet within its urban campus for life science companies, the Alexandria Center® for Life Science–New York City.

    And in November, BioLabs New York, part of a membership-based network of shared lab facilities in top biopharma clusters, opened a coworking and event space with four startups on the fifth floor of 180 Varick Street.

    [email protected] has attracted NYU Langone Health, Bristol-Myers Squibb, and the NYCEDC as founding sponsors—the EDC awarded BioLabs a $5 million grant—with additional sponsors that include three biopharma giants, Boehringer Ingelheim, Sanofi, and Eli Lilly. [email protected] expects to complete renovation of its 50,000 square feet space by year’s end. The state has also awarded $2 million to BioLabs.

    “Without that support, and the support of our sponsors and equipment providers, we couldn’t do what we do, which is cater to these companies that are desperate to get investment for their technologies and commercialization,” said Nicole McKnight, Ph.D., managing director of BioLabs New York. “It’s such a great opportunity to not only keep our academic spinouts here in New York City, but also recruit companies from other parts of the country, even other parts of the world.”

    Among the initial four startups at [email protected] are EpiVax Oncology, a spinout of Providence, RI-based EpiVax launched last year to develop personalized cancer vaccines. The spinout’s CEO, Gad Berdugo MScEng., MBA, is a New Yorker who persuaded EpiVax to develop the offshoot business in the Big Apple rather than Providence, McKnight recalled.

    “People are starting to take notice that there’s good science and commercialization happening here in New York,” said Sonia Gulati, Ph.D., assistant director of New York Ventures, the state’s venture capital arm. New York Ventures was created in 2015 to fill the funding gap in life sciences and other high-growth sectors whose early-stage startups had traditionally been underfunded by venture capital firms.

    Since last year, Dr. Gulati said, New York Ventures has funded five life-sci companies: “Some of them have been large high-profile investments. But some of them have been as small as $1 million or $2 million rounds.

    “We’ve definitely seen an uptick, not only in deal flow, but companies are reaching that stage where they’re prepared to raise that money. But we’ve also seen an uptick in interest from investors, not just New York but from Boston, from abroad, from California,” Dr. Gulati added.

  • Expansion Spaces and Accelerators

    Keeping startups growing is the purpose new city and state life-sci programs in the works. Thiede noted that NYCEDC has created the Life Sciences Expansion Space Fund, through which up to $10 million is set to be spent over the next five years for expanding early-stage companies.

    “There are flight risks within New York City” absent such funding, Thiele said. “We want companies to have the opportunity to stay here, so the expansion space funds program is one near-term intervention that may be able to help with that.”

    As for the state, last fall, the state’s economic development agency Empire State Development has solicited a request for qualifications, followed by a request for proposals, by would-be partners in creating a statewide network of “accelerators” designed to help startups commercialize their products and attract investors.

    “We will be making decisions and contracting with a couple of companies that I think everybody will be pleased to know about, both in New York City and several clusters around the state, so that we can really capture and help those early startup companies, and scientists who are thinking about, ‘Is this what I really want to do? Do I have something here?’” said Maria Mitchell, Ph.D., who is overseeing the state’s $620 million life-sci effort as SVP of Life Sciences with Empire State Development.

    Added Dr. Gulati: “What’s so great about the accelerator program is that it’s actually giving scientists the resources and tools necessary for them to make that transition from being a scientist to being an entrepreneur.

    Dr. Mitchell said the state also aims to build biopharma by marketing available resources better—a “one-stop shop” website is in the works, she disclosed—and by promoting partnerships with private entities centered around state assets. The state has set aside $150 million in this year’s budget toward redeveloping its Wadsworth Center laboratories in Albany, NY—whose public health purposes range from serving as a surveillance hub for antimicrobial resistance pathogens, to acting as a Centers for Disease Control and Prevention (CDC) independent testing lab, to being the sole state facility for newborn screening.

    A report prepared for the state by Deloitte and released last month concluded that the Empire State should spend up to $750 million in a rebuilt lab and other related projects—and that the new Wadsworth can anchor public–private partnerships focused on population genomics, infectious disease diagnostics and therapeutics, bioinformatics and IT, and small-molecule detection and characterization.

    “We need to think about how we bring industry, and connect industry,” Dr. Mitchell said. “Our goal for this coming year, that we just have been embarking on, is to really look at the state as a whole: What are the major resources across the state? And how can the state not only invest and contribute to the strengths that are happening? How do we grow each of those clusters?”

    In New York City, she and Thiede said, growing biopharma has required cooperation between the city and state—no small feat given the rivalry between NYC Mayor de Blasio and Gov. Cuomo, who announced their multimillion-dollar incentive programs within a day of each other in December 2016 .

    Joining Thiede, McKnight, and Drs. Mitchell and Gulati as panelists for “Welcome and What’s Up New York” were NYCEDC VP Carlo Yuvienco, Ph.D., and Christina Orsi, assistant VP for Economic Development, University of Buffalo.

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