Big Apple Biotech “Bootstraps” Forward at NewYorkBio Meeting

Xconomy New York — 

Tom Cirrito was dining out at a Mexican restaurant in midtown Manhattan over a decade ago when he overheard something that piqued his interest. At a table next to him, someone was talking about biotech. Cirrito, then an analyst at Piper Jaffray, was intrigued. He butted in, and his life changed.

His restaurant neighbor was Ivan Bergstein, the CEO of a biotech startup called Stemline Therapeutics. And starting with that conversation, Cirrito and Bergstein formed a relationship that helped build Stemline. Cirrito became the company’s second employee, and worked there for almost a decade. Stemline (NASDAQ: STML) is now a publicly traded developer of stem cell cancer drugs.

“My whole career is basically running into the right guy at the right time, and taking advantage of the situation and turning it into something I never would’ve anticipated,” Cirrito said.

That story is emblematic of New York biotech. Cirrito was sharing it at NewYorkBio’s annual gathering in Manhattan, during a talk about what it takes to build a biotech in the big city. A theme emerged that permeated the meeting, which brought together the entrepreneurs, investors, government agencies, and others on the front lines of life sciences in New York: this is a boostrapping biotech community, and it has to be to claw its way forward. New York isn’t an established life sciences hub like Cambridge, San Diego, or San Francisco, which all churn out venture-funded biotech startups by the day.

“Here, it’s very different,” Cirrito said. “There’s a lot more bootstrapping. It’s a lot more—I don’t want to say ‘rough and tumble,’ though I am from Queens—but it’s very much about the networking.”

There were other examples. Kate Rochlin, for instance, was getting her PhD at Weill Cornell Medical College and was interested in entrepreneurship, but didn’t have a project she could turn into a company. She started attending local networking and pitch events for startups, heard a pitch she liked, and started “stalking” the scientific founder of the fledgling company. That got her in talks with a few executives, and she helped form a startup called Immunovent, which went through the Entrepreneurship Lab NYC program and is now in the Harlem Biospace incubator developing an allergy diagnostic. (Incidentally, Rochlin along the way also met Cirrito, who is now an Immunovent advisor, not to mention the founder of another New York startup, Filament Biosolutions.)

“Immunovent is kind of a poster child for a lot of these programs that New York has to offer,” she said.

Then there’s the collaborative mindset—something New York’s institutions weren’t known for in the past. As Accelerator Corp.’s David Schubert said, it was “very hard to do business here from a venture perspective” because the institutions “were not known for being cooperative.” That’s reflected in lagging venture statistics. In 2013, venture firms invested just $135 million in New York biotech startups; just over a tenth of the total garnered by those in San Francisco ($1.15 billion), according to the National Venture Capital Association.

A big reason why: scarce wet lab space. New York City Economic Development Corp. executive vice president Eric Gertler pointed to a slide showing there was less than 1 million square feet of lab space in New York city in 2013, compared to 10 million in Boston/Cambridge and almost 30 million in San Francisco.

“We look at those comparisons every day,” Gertler said. “Clearly there’s work to be done.”

Indeed, those statistics are a testament of just how long the road ahead is for New York biotech. Now local government forces, institutions, and others are trying to change that by banding together. The New York Genome Center was formed in 2013 via a collaboration between 12 institutions. The NYCEDC’s $150 million life sciences fund is a partnership between local industry names, government agencies, and VC firms. Accelerator needed the backing of a variety of industry and venture sources to open up an office here last year. There’s a sense of, as Schubert said, an “untapped” pool of talent and research that those on the front lines are trying to foster.

The NYCEDC is also undertaking a massive effort to solve the city’s lab space problem. Gertler noted the agency is looking for space for a “step out” incubator, so biotech startups can stay local while they grow and hire more employees. It recently announced plans to redevelop a 14-story city-owned building on the lower east side of Manhattan into a bioscience research center with more than 100,000 square feet of lab space. The NYCEDC is also compiling a study of all of the city’s real estate assets to try to figure out “how we go from less than a million square feet of wet lab space into the multi-millions,” Gertler said.

All of this activity is being spurred on by necessity. New York has been lagging in biotech for decades. Amidst what’s been an unprecedented bull run in biotechnology, the city has a lot of ground to cover. “There’s a bit of a realization that if it doesn’t happen this time, it ain’t gonna happen,” Schubert said.

With that, here are a few of the Big Apple biotechs that pitched at NewYorkBio’s gathering on Monday, looking to make it happen.

VentriNova: This is a gene therapy startup spun out of the work of Hina Chaudhry, Icahn School of Medicine at Mount Sinai’s regenerative medicine director, that I profiled in 2014. It’s developing a therapy known as VN-100 that would help regenerate the heart’s muscle cells (known as cardiomyocytes) in patients who have suffered heart attacks. Chaudhry said VentriNova is in “late stage negotiations” with several VC firms for a Series A round, but the company isn’t “quite there yet.” VentriNova is looking for about $32 million, which would get the company through Phase 2a trials of VN-100. It’s also aiming to hire a full-time CEO and executive chairman.

EpiBone: This startup, based out of Harlem Biospace, is developing a method of regenerating bones from a patient’s own stem cells. Currently, bone grafts are done either by taking bone from another part of the body and implanting it into the injured site; or via cadaver bones. EpiBone instead uses a personalized, three-step process: it images the area to see the size and shape of bone needed; extracts stem cells from a sample of fat tissue (collected via liposuction); and seeds those stem cells to a custom-made bioreactor and scaffold, on which the new bone is grown. The whole process takes about three weeks. EpiBone has raised about $4.5 million to date, and is raising $6 million more.

Codagenix: I wrote a short piece about this Long Island startup in 2014. It’s one of the biotechs seeded by Accelerate Long Island and the Long Island Emerging Technologies Fund. Spun out of Stony Brook University, it is developing a method of making vaccines called “synthetic-attenuated virus engineering,” or SAVE. It’s a twist on the traditional “live attenuated vaccine” approach, in which viruses are weakened and injected into the body. Codagenix uses computer algorithms to create viruses with genomes that are altered in some specific way, and then uses those blueprints to genetically engineer synthetic versions of those viruses from scratch. Chief operating officer J. Robert Coleman said that the platform has the unique ability “to work for any virus.” To prove it, Codagenix is starting with an influenza vaccine—which it can test in healthy volunteers—and behind that, a program for respiratory syncytial virus. Coleman said the startup aims to raise a $4 million Series A round.

Allovate: Immunotherapy for allergies has yet to really catch on in the U.S. Allovate CEO Erick Berglund says part of the challenge is adherence—people have to get weekly shots for a few years to see a lasting effect (or apply therapeutic drops under the tongue), and instead prefer pills like Claritin for symptomatic relief. Allovate’s answer? Immunotherapeutic toothpaste. It’s formulated toothpaste, named “Allerdent,” that’s supposed to work the same way allergy shots do—by exposing the body to tiny doses of an allergen over a long period of time (in this case, with each brushing). The idea is, as long as patients brush with Allerdent daily, they should see long-term relief. Berglund said the company is looking for a $2 million to $3 million round to help build a sales force.

Genomic Expression: As Illumina and its ever-increasing share price can attest, next-generation sequencing is getting more and more prevalent. Manhattan startup Genomic Expression is one of the companies trying to capitalize. It’s developed a kit and software package meant to help researchers and companies perform RNA sequencing more quickly. CEO Gitte Pedersen—a former NovoZymes executive—say she aims to use her company’s technology to partner with and develop companion diagnostics for pharmaceutical companies. She’s raising a $10 million round to create a pipeline of these diagnostics.

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One response to “Big Apple Biotech “Bootstraps” Forward at NewYorkBio Meeting”

  1. realposter says:

    30 million square feet of lab space in San Fran??? Are you sure that’s not the entire Bay Area..??