Four Colorado Storylines to Watch as 2015 Gets Underway
Whether on the floor of the New York Stock Exchange or in orbit around the Earth, Colorado entrepreneurs, engineers, and investors made a mark last year, and more big things are sure to come in the year ahead. Here’s a quick look at some of the top storylines from 2014 that will carry over into this year, broken down by industry.
What’s next for Colorado’s software and IT All Stars?
—What happened in 2014: Colorado’s top tier of tech companies raised large growth or late-stage rounds. Among them were SolidFire ($82 million), Craftsy ($50 million), Welltok ($47 million in two rounds), Ping Identity ($35 million), and LogRhythm ($40 million).
—Looking ahead: At the least, the investment rounds give the companies the option to “control our own destiny,” as SolidFire CEO David Wright said. LogRhythm CEO Andy Grolnick went farther, saying this round should be the company’s last before it goes public.
The money gives the companies the chance to expand internationally, build their sales teams, and continue their tough fights against competitors. It also gives them a chance to quietly lay the groundwork for going public.
But will the recent class of Colorado’s top tech companies make it to the IPO finish line, either this year or in the near future? That remains a question. First off, the companies might not have what it takes to finish the marathon, or competitors might be better. The stock market could take an unexpected turn.
Finally, Colorado has a history of seeing its leading tech companies bought by outsiders, with the most recent example being Oracle’s purchase of Datalogix in December. Two other standard bearers and trendsetters, Gnip and SpotXchange, also were acquired in 2014. Twitter bought Gnip for $134 million, while European media company RTL Group paid $144 million for a 65 percent stake in SpotXchange.
So history continues to repeat itself, and one or more of the companies could prove too attractive to a buyer that offers a deal that’s too good to turn down. So while the finish line might be in sight for some of the companies, there’s still a long way to go.
The space race: is Sierra Nevada’s dream dead, or just deferred?
—What happened in 2014: It was a good year for two of the leaders in Colorado’s aerospace industry, and a very, very bad one for another. Lockheed Martin Space Systems and the United Launch Alliance, which are both located south of Denver, collaborated on the launch of the Orion spacecraft in December. The unmanned test flight could be the first step toward a manned mission to Mars.
On the other hand, 2014 was not kind to Sierra Nevada Corp. The company was building its Dream Chaser spacecraft at its facility in Louisville, just outside of Boulder. NASA was considering the Dream Chaser as a possible replacement for the retired Space Shuttle, along with vehicles from Boeing and SpaceX. In September, NASA gave Sierra Nevada some very bad news, announcing the Dream Chaser was out of the running for new contracts. At the same time, it gave Boeing a $4.2 billion contract and SpaceX a $2.6 billion contract to continue developing their spacecraft.
—Looking ahead: Sierra Nevada executives have said the company will continue work on the Dream Chaser, and the company performed additional tests after NASA’s decision was announced. The company all along said it planned to make the vehicle available for use by foreign governments and private companies, and that could keep the Dream Chaser alive.
Sierra Nevada also appealed NASA’s decision, saying it should remain in the running for NASA contracts because the Dream Chaser would be cheaper than Boeing’s craft while offering a wider range of capabilities. A federal agency rejected the appeal on Monday.
Lockheed Martin will continue testing the Orion. It also opened a new facility in Littleton that will be the home of its commercial satellite division program and bring an estimated 350 new jobs to Colorado.
Big moves in biotech?
—What happened in 2014? Clovis Oncology continued its high-stakes rivalry with international pharmaceutical giant AstraZeneca to see which company could have the best new drug for lung cancer. Array BioPharma got a gift from Novartis, and GlobeImmune went public.
—Looking ahead: Expect more of the same from Clovis and AstraZeneca. The drug candidates each company is developing are moving through the FDA approval process, and investors and analysts will scrutinize each new trial result to see which drug is the better bet.
Array also has pivotal trials underway for its drug that would treat melanoma and ovarian cancer. Array was developing it with Novartis, but in December Novartis gave up rights to the drug because it obtained a similar one when acquiring GlaxoSmithKline’s portfolio of oncology drugs. Novartis will pay for ongoing studies and gave Array an $85 million up-front payment.
One company to watch is N30 Pharmaceuticals. The Boulder-based company is developing a drug for cystic fibrosis, and in November it raised $30 million. The company also has a new CEO, and a spokesperson said it could have an IPO this year.
Will the cleantech industry’s second wind last?
—What happened in 2014: Colorado’s renewable energy industry got a second wind. The year was particularly good for Vestas, a Denmark-based wind turbine manufacturer that has three large manufacturing plants along Colorado’s Front Range. The company said it received U.S. and foreign orders for enough turbines to generate 5,864 megawatts of energy, which led the company to hire and rehire 800 Colorado employees. Broomfield-based RES Americas also had a strong year. The company designs and builds utility-scale wind, solar, and energy storage systems, and it announced the start or completion of several new projects.
—Looking ahead: Whether the good times will last is unclear. Companies in the wind industry are sure to be affected if Congress does not extend the renewable energy production tax credit, which lapsed at the end of 2014. The industry considers it a crucial tool that has helped make wind energy cost competitive and spurred utilities to build large wind farms. If the credit isn’t renewed, it could mean the industry is becalmed once again.