Versant Ventures is about to launch its latest biotech incubator. And it’s picked the emerging New York life sciences scene as its home.
This morning, Versant, the San Francisco Bay Area VC firm, is announcing the formation of what’s being called “Highline Therapeutics.” Named after the elevated walkway and park that runs along the lower west side of Manhattan, Highline will be Versant’s third biotech incubator. Its office, in fact, will be a few avenues away from the actual High Line: in Chelsea, on 21st St. and 6th Ave.
“We felt like we had to at least be in the general vicinity of it,” says Carlo Rizzuto, a Long Island native who will run Highline. He previously headed Versant’s European headquarters in Switzerland. (In case you’re wondering, he’s not related to famous Yankee shortstop Phil “the Scooter” Rizzuto.)
Versant’s incubators aren’t incubators in the traditional sense. They’re not co-working spaces for startups. Rather, as my colleague Alex Lash has written, Versant has used them as regional outposts to work directly with academic institutions and create small, nimble biotechs—companies often created around a single drug with a prearranged buyer. The other two of these incubator-like entities are Inception Sciences, of San Diego, Vancouver, and Montreal; and Blueline Biosciences of Toronto.
In similar fashion, Highline will work with the city’s big research institutions to create new companies that will take two forms. Some will be spinouts of academic research that is what Rizzuto calls “company ready.” One such startup that could be announced soon, for instance, is the result of a collaboration between Versant and Columbia University professor Brent Stockwell.
Highline aims to do one to two of these deals per year.
The second type of effort will center around research in even earlier stages that needs translational funding—which would come from Versant—to see whether it’s worth turning into a company. Versant is already doing this type of work with Weill Cornell Medical College, Rizzuto says, and is in advanced talks to do something similar with NYU. Highline should do 4 to 5 of these projects each year, he adds.
With Highline, Versant also wants to tap into academic centers south of Boston in places like Connecticut (Yale University), Pennsylvania (UPenn), and Maryland (Johns Hopkins University).
But the incubator will remain New York-centric, which is a big deal for the area. I’ve written extensively about the past and current struggles of the Big Apple’s life sciences scene. It has been hamstrung by academic institutions’ formerly combative mindset, a dearth of biotech VC funding, and the seemingly never-ending struggle to secure and develop affordable lab space.
But the past few years have brought change and new initiatives. For example, The New York Genome Center and Tri-Institutional Therapeutics Discovery Institute were formed in 2013 via collaborations between a number of the region’s institutions.
The New York City Economic Development Corp. formed a $150 million life sciences fund with the help of local companies, government agencies, and VC firms Flagship Ventures and Arch Venture Partners. The NYCEDC also has a separate “infrastructure initiative” underway to battle the city’s lab space problem. Accelerator, a 12-year-old incubator that has seeded Seattle with several startups, opened up a New York branch last year. Manhattan’s first biotech incubator, Harlem Biospace, started up in 2013, adding to one already up and running in Brooklyn. As Flagship CEO Noubar Afeyan told me earlier this year, there’s a sense among the city’s research institutions—places like Memorial Sloan-Kettering Cancer Center, Weill Cornell, Rockefeller University and others—that they are “under leveraged” in the startup world.
Rizzuto had similar thoughts: “We’ve found we like being in an atypical geography, and this really seemed like an untapped opportunity.”
There’s still a long way to go. Despite being in the top tier in National Institutes of Health grants every year, New York academic institutions still draw a fraction of the venture dollars enjoyed by their counterparts in Boston and San Francisco. And there hasn’t been the lab space or the experienced biotech company creators in place to create a thriving startup culture.
To solve the experience problem, Rizzuto says he aims to convince some New York “ex-pats”—biotech pros who grew up or studied in and around the city but moved off to Boston or San Francisco—to come back.
He also claims that 100,000 square feet of commercial lab space should be available in Manhattan starting next year. The Alexandria Center for Life Science on the East Side is building out more floors, Harlem Biospace is expanding, and two other initiatives are underway “that collectively should add about another 40,000 square feet,” he says (without identifying them).
What’s more, many of the new leaders at New York’s research centers are biopharma veterans. Mark Tessier-Lavigne is president of Rockefeller and spent many year’s as a top Genentech scientist. Craig Thompson is the president of Sloan-Kettering, and a founder of Agios Pharmaceuticals (NASDAQ: AGIO). And Laurie Glimcher is the dean of Weill Cornell, and has been a board member of Bristol-Myers Squibb for almost two decades.
But the industry savvy of New York’s top academic researchers isn’t necessarily the cure-all for the city’s biotech drought. When Arch, Flagship, and Tessier-Lavigne—all with big vested interests in building the New York scene—teamed up to launch a massively funded neuroscience startup, Denali Therapeutics, they located it in San Francisco, not New York.
The Denali example is an unfair bar to set, however, for Highline, because Versant’s modus operandi tends to be to start small. That type of modest scale might be the right fit for New York these days.
“There’s no doubt it’s far, far less mature than Boston or San Francisco, but the city has actually been quite effective in catalyzing a number of things on the biotech front,” Rizzuto says.
Photo courtesy of The High Line in Manhattan courtesy of flickr user David Shankbone via a Creative Commons license.