I was a management consultant in a former life, and was trained in that role to always have three arguments to support any conclusion. But having spent the last six months living and breathing biotech in New York City, I am convinced there are only two strategic challenges holding this city back from becoming a biotech hub. Good thing I’m a venture capitalist now and no longer a management consultant.
This is a genuinely exciting time for NYC biotech. The city has always had a wealth of world-class science, but for the first time, many other key elements have come together to support a local biotech ecosystem. These include a new generation of university leadership, a supportive city government, and most recently, a critical mass of early-stage investors. Indeed, it is a testament to the efforts of leaders like Rockefeller University president Marc Tessier-Lavigne, the New York City Economic Development Corp. and the Partnership Fund for New York City that the city can count new entrants like Versant Ventures, Flagship Ventures, Arch Venture Partners, and Accelerator Corp. among the VCs seeking to invest in NYC biotech.
With all these positive elements in place, NYC biotech is at an inflection point. If we can overcome the remaining challenges and start to build a critical mass of companies, a sustainable biotech ecosystem will emerge. But if we fail now, it may be a very long time before such an opportunity re-emerges. Addressing just two strategic issues will enable us to succeed: a lack of commercial lab space and experienced management talent.
Considerable efforts have been directed at ameliorating the local lab space shortage, and yet we currently stand on the brink of exhausting the city’s supply of commercial lab space. Despite high occupancy rates at pioneers like the Alexandria Center for Life Science, Harlem Biospace, and SUNY Downstate Medical Center’s biotech incubator, developers have generally not perceived the demand for lab space. As a result, there is insufficient supply, or in other words, a market failure.
While much is happening under the radar to provide long-term solutions, I am very concerned about the next 36 months. The good news is that we can do something about the short-term challenge. Call me crazy, but I would love to retrofit a surplus Navy ship with labs and dock it next to the Intrepid! More practically, a coalition of prospective tenants could guarantee leased space to a developer that steps forward to convert an existing building into lab space within the next twelve months. The city could help by expediting reviews and approvals. Working together, there is no reason why we cannot make this happen and these discussions are already underway.
Experienced people are essential to the success of a biotech company, but there are very few biotech veterans here in the NYC area. That said, there is a large quantity of experienced pharmaceutical industry talent just across the Hudson river in New Jersey, so another key to success for NYC biotech will be to identify the pharma vets who have the skills and the appetite to thrive in a biotech environment. A complementary approach will be to focus on the “New York Ex-Pats”: biotech vets who grew up or went to school in NYC, and would love to come back now that their kids are out of the house. We also have to think strategically about a new company’s operating model, and the balance between which tasks to do in-house and which to outsource (the latter of which also helps with space requirements since you don’t need lab benches for clinical research organizations).
We’ve all heard the apocryphal Chinese curse, “May you live in interesting times.” There is no question we are living in interesting times for NYC biotech, but I am optimistic we are on the verge of something great. If we succeed in addressing the lab space and talent challenges, NYC has a great chance to make its mark as a biotech hub.