Boston’s biotech cluster is light years ahead of the one the Big Apple is hoping to form. But the two geographic rivals are both getting help from big pharmaceutical companies to bolster their respective life sciences ecosystems.
In Manhattan, the New York City Economic Development Corp., a local government entity, and three big life sciences entities—Celgene, Eli Lilly, and GE Ventures—have formed the NYC Early-Stage Life Sciences Funding Initiative. It’s a fund that is meant to amass more than $100 million and use it to establish 15 to 20 new local startups by 2020. The startups would pursue new therapeutics, medical devices, diagnostics, or digital life sciences technologies.
The initiative is in its early stages. So far, the NYCEDC, Celgene, Eli Lilly, and GE Ventures have agreed to invest at least $50 million in Series A cash in the fund. According to a report from the Wall Street Journal, the NYCEDC is responsible for $10 million of that cash, with the other companies on the hook for the remaining $40 million.
But that cash represents only half the total. The NYCEDC is looking for a VC partner to match that $50 million, and says on its site that eight institutional VC investors from around the company are under consideration. The plan is to pick a partner by the end of the year, and make the first biotech investments early next year.
The planned fund is just one of several things New York City is trying to do to capitalize on its bevy of local research institutions and create the foundation for a life sciences cluster. In October, Roche opened up the Translational and Clinical Research Center, a new facility in the Alexandria Center for Life Science overlooking Manhattan’s East River. That’s meant to serve as a conduit for Roche in New York City to tap into the network of institutions on the city’s East Side. The Alexandria Center already houses labs for ImClone Systems and Pfizer. Weeks before that, the New York Genome Center, a collaborative effort between many of Manhattan’s research institutions, opened up on the island’s West Side.
Harlem Biospace and Keystone for Incubating Innovation in Life Sciences — NYC are also trying to fashion incubators to help provide affordable lab space to startups in the city. (Harlem Biospace’s incubator in West Harlem opened up on Nov. 1.) Outgoing Mayor Michael Bloomberg’s administration has also helped develop a startup incubator at the Brooklyn Army Terminal.
In the Boston area, meanwhile, Boehringer Ingelheim has become the latest member of Big Pharma to plunk down a bunch of cash and get in on the buzzing biotech scene in Cambridge, MA. Boehringer Ingelheim Venture Fund, a private equity fund established by the German pharmaceutical giant, has opened a new office in Kendall Square. Boehringer Ingelheim plans to invest up to $130 million in new Boston biotech startups, or up to $13 million per company.
The German drugmaker is just one of several companies and VC firms that have made a beeline for Boston of late. Just last month, for instance, the big VC firm New Enterprise Associates opened an office in Kendall Square to serve as a home base for local dealmaking. And GlaxoSmithKline, the British pharmaceutical giant, is planning to open a new R&D facility in Cambridge next year. A number of others, like Novartis, Johnson & Johnson, and Pfizer, have all recently either boosted their presence or put a stake in the ground to get in on the action.