Varmus, Sato on Steering De Blasio’s $500M Plan to Grow NY Biotech

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research director and co-founder of stealthy Manhattan startup Quentis Therapeutics: “You almost need a philosophical or a psychological change in the city, because we have so many grad students and postdocs here and I think a lot of people just assume that it can’t be done in New York.”

LifeSci NY is the most ambitious plan by the city yet to try to tackle these problems. Xconomy spoke with separately with Varmus and Sato to get their thoughts on the initiative and biotech in New York. Edited excerpts from those two conversations follow below:

Xconomy: What drew you to take part in LifeSci NY?

Vicki Sato: The [NYCEDC] found me in Boston and asked for my perspective on some of the opportunities and challenges in NY, and those conversations continued to just be interesting for both of us. So when they decided to form an advisory council to the mayor’s office they asked me if I would be interested in co-chairing it with Harold. Working with Harold and having the chance to create something exciting with him just seemed like a terrific opportunity.

Harold Varmus: I did something like this at a lower scale [about] 10 years ago with a somewhat different set of partners who were working together to try to entice biotech companies to come here. We knew that space was a problem, and we got the Alexandria Center done—that was important and I’d say it’s been a moderate success. We’re a powerhouse in life sciences research and I think that’s reflected more on the non-profit academic side than it is on the commercial side, but the commercial side could expand dramatically. And it’s not that there isn’t any low-cost space and reasonable living conditions in the city, it’s a matter of concentrating efforts in places where things are affordable and competitive with other places in the country.

X: What is your role going to be?

VS: The advisory council which Harold and I are co co-chairing is a committee with a mandate to provide the mayor’s office and the [NYCEDC] with advice and judgment on what kinds of things to invest in, how to invest it, and where to invest it. Harold and I are talking now about creating that council, as well as subgroups in that group that can bring to bear more specific advice on matters as diverse as real estate and talent development and venture investment. This is something that the [NYCEDC] has been doing on its own in a way, but I think they realize that if they really want to create some momentum, creating some type of community with people who are invested in the area from all of its many different perspectives would be a way of perhaps being more organized and efficient about it.

X: How would you assess where New York biotech is right now?

VS: I don’t think it’s in its infancy. I think we’re seeing an increased interest in the economic potential of the innovation that’s coming out [of local institutions]. I’m feeling right now that there’s kind of a catalytic momentum and we can take advantage of it.

X: What are some of the biggest things that have held New York back over the years?

HV: One is the history: biotech got started in San Francisco then spread rapidly to Boston where there’s a very high concentration of biomedical scientists, and companies like to settle not only where there is a strong center of academic activity but also other biotechs. Secondly, it’s the cost of living, space for laboratories, cost of housing. Third, people just don’t think of New York when they think about biotech.

I also think New York has gotten a slightly inappropriate reputation as being a place where the health centers are competing with each other. There’s no doubt they compete with each other for patients, but if you look at what happens at the research level, I think there’s perfectly good spirit. I’ve worked in San Francisco for a long time, I’ve worked at the NIH—New York is terrific with respect to the interactions among scientists who are at these different institutions.

X: Was there a moment of realization when research centers saw they needed to work together?

HV: I think that’s too simplistic. There is still some competition, and competition can be good. But if you look at the New York Structural Biology Center, that has a 20-year history. And there was a time back in the 1990s even before I got to Sloan-Kettering when the institutions realized they would be cost savings if they put all their [nuclear magnetic resonance] devices together and did mass spectrometry at one place. So when there’s a benefit, people get together. Whatever competition that exists is not limiting to the kinds of things that can happen anywhere. There’s competition amongst institutions in Boston. Nevertheless they get things done in a consensual way when they benefit from doing so.

X: Are there any lessons in particular that you take from your time watching Boston and Kendall Square evolve that can help with LifeSci NY?

VS: This kind of marshaling of resources across different demographics was an important part of Boston building its own biotech center way back in the 1980s. At that point it centered around a few companies that aspired to be important, but who knew if they were going to be? But [I point to] the creation of the Massachusetts Biotechnology Council which was a place where leaders could gather, support each other, and interact with the various municipal and state authorities that were important in getting permits granted and understanding what the real estate needs were. Building wet laboratories is a very different proposition than most cities back then had ever participated in, aside from supporting university laboratories. So I think there’s a good example there.

X: Has the missing piece in New York been organized government support?

HV: It’s really hard to say. It’s hard to know whether this is going to work too, let’s face it. It’s the most detailed plan and it’s one that’s very responsive to failures of the past, but I think the fact that the De Blasio administration is willing to put some money on the table, and some real incentives on the table—it’s certainly the most complete plan I’ve ever seen from the city. The Bloomberg administration was very supportive of this kind of thing, but there wasn’t a plan that was ever as detailed as this.

X: How are you going to measure progress, and what are your near-term goals?

VS: I will personally measure progress in terms of company starts. And I don’t mean that we need to start 30 companies, but I think we need to show that there is exciting innovation coming out of the institutions in New York, there’s a willingness to form enterprise around that, a capacity for doing that, and that we can attract the right around of management talent to it.

X: During the announcement for LifeSci NY, the Applied Life Science Campus was mentioned several times as a linchpin. But that’s a big, long-term undertaking. How important is that to the vision here?

VS:  The campus is an attractant, but there can be legitimate debate about whether a campus is a necessity.  I think what’s a necessity is space, and I think what a campus loosely defines and provides is a community of critical mass. But I certainly don’t think that the creation of the campus is the only benchmark around which to judge success here, it’s really around creating enterprise. So I’m going to be very focused on identifying some near term opportunities where innovators are interested in creating enterprise and where we can attract the right kind of investment in space and leadership to make it happen. That’s not going to happen in 2 weeks either, but I think that can happen in a timeframe that is more immediate than the complex building of a campus.

X: How do you ensure that this isn’t just a government announcement, and that LifeSci NY amounts to something?

VS: I think it’s easy to be cynical about that and I’m as cynical as anyone—I’ve avoided government work, so to speak, because of some skepticism around that. At some point you just have to get in there and try to make it happen. And there’s precedent for this kind of multi-disciplinary initiative having an impact in getting things over the activation energy barrier, if you will.

HV: People have to be realistic, you can’t expect all the stuff to spring up overnight. But there already are requests for proposals [to develop lab space] out there, and we’ll put together advisory committees, and work on more detailed planning at city hall. If the mayor is re-elected three or four years from now and there’s nothing really to look at, people would be dismayed. But I think everybody is reasonable enough to say well give the guy a year to show that this has some real horsepower to it.

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