If you had $100 million to create an epicenter for New York biotech, what would you do with it?
The New York City Economic Development Corp., a quasi-governmental agency supporting job growth in New York, has put that question to the private sector. The NYCEDC has called for proposals asking a “mission-driven organization or joint venture” how to use up to $100 million and, possibly, some city-owned land to develop what it’s been calling the “Applied Life Science Hub.”
The proposed hub was first mentioned in December 2016 as a critical part of LifeSci NYC, the 10-year, $500 million plan to spur biotech investment in New York City. It’s been an abstraction since; conceptually, a spacious campus connecting venture investors, university researchers, startups, and pharma companies. “It’s a long-term strategic play,” says Doug Thiede, the NYCEDC’s senior vice president of life sciences and healthcare.
Tuesday’s announcement marks the first tangible step forward for the project. The NYCEDC has put $100 million on the table and identified three city-owned sites for the hub: one in Long Island City, another in midtown Manhattan, and a third in East Harlem. All of these sites have logistical issues to resolve before construction could start—tenants that will have to relocate, for instance—so the agency is asking candidates to offer up privately owned sites as well, says NYCEDC vice president of real estate transactional services Joshua Mitchell.
The agency is well aware that up to $100 million in city money, on its own, isn’t nearly enough to get the job done. So it’s put that money up as leverage to fish out a matching investment from the private sector through a request for bids. A similar process led to the creation of the Jacobs Technion-Cornell Institute, a tech-centric joint venture between Cornell University and the Technion-Israel Institute of Technology that opened in September on Roosevelt Island.
The NYCEDC is taking initial proposals through May 17. It could pick a deal through the initial search, but more likely, those proposals will lead to a targeted, second-round search for the winner, Mitchell says.
The idea is for the hub to be a minimum of 300,000 square feet; feature an anchor tenant conducting in-house research and development—a major pharmaceutical or med tech company, for instance; have expansion space for young biotechs; and activities and programs that help foster the growth of life sciences entrepreneurship. “We [wanted] more of a campus feel,” says NYCEDC director Raphael Farzan-Kashani.
“The way they describe it is appealing,” says Carlo Rizzuto, a Versant Ventures partner starting biotechs via a New York City startup incubator, Highline Therapeutics. “But it needs to be convenient. That’s more important than everything being in one place.”
For a number of reasons, New York has long struggled to turn its wealth of academic institutions and financial firepower into a buzzing biotech ecosystem. There has been progress made in recent years, particularly with the arrival of more venture firms on the ground amid a greater recognition of New York as an untapped biotech resource. Orin Herskowitz, the senior VP of intellectual property and tech transfer at Columbia Technology Ventures, says, for example, that Columbia University has gone from churning out about five startups a year roughly a decade ago to between 22 and 27 in each of the past few years, “a clear demonstration of the momentum.”
Yet New York is still nowhere close to established hubs like Boston and San Francisco, particularly when it comes to creating high-profile startup biotech companies and keeping them in New York. 2017, for instance, was almost bereft of new startups with large Series A rounds, and a $150 million biotech fund from the NYCEDC—announced in 2013 and managed by Arch Venture Partners and Flagship Pioneering, two well-known startup creators—still remains untapped. Long-standing problems persist, from a combination of factors, such as lack of space to grow or access to senior talent, Herskowitz, says. LifeSci NYC, and a dovetailing $650 million statewide initiative, are the biggest signs that local governments are trying to fix the problem.
Turning New York City into a life sciences scene comparable to Cambridge, MA, or South San Francisco will “take a generation,” Farzan-Kashani says. In the first year of LifeSci NYC, the most tangible progress has been more biotech incubators to help startups get off the ground. In 2017, Taconic Investment Partners and Silverstein Properties, announced plans to put $20 million into the “Hudson Research Center,” a life sciences facility being developed on the West Side. Alexandria Real Estate Equities debuted LaunchLabs with 13 startups in tow, and another biotech incubator, [email protected], officially opened in December with four startups in the fold. A third, JLabs, is expected to open at the New York Genome Center this year.
“But now the question everybody’s asking is, where do they go after the incubators?” says Maria Gotsch, president and CEO of the Partnership Fund for New York City.
Indeed, New York City biotech, right now, is largely a sprawl of academic centers and startup incubators spread around Manhattan and Brooklyn. The Alexandria Center for Life Science, the city’s largest operational life sciences complex, is one piece of the puzzle, but it is too expensive for many startups to afford. Brooklyn’s BioBAT, a step-up facility in South Brooklyn for growing biotechs, is another, but it is far flung from the academic institutions lining the East Side of Manhattan and elsewhere. “We want to hit critical mass,” says Farzan-Kashani. “That’s our objective.”
The hub is seen as a key feature toward this effort, and a few things are on the wish list of those invested in growing companies in New York City.
Rizzuto says the campus has to have two important features. The first is a large pharmaceutical company conducting research within the campus. (Big Pharma companies like Pfizer and Bristol-Myers Squibb have corporate offices in New York, but not labs.) This would be a “magnet” for talent and a safety net for those looking for biotech jobs in the city. The second need is “a larger footprint” of more affordable lab space, he says.
Lux Capital partner Adam Goulburn is encouraged by the city’s efforts, calling it a “positive move.” But he adds that what is needed are multiple Alexandria Center-style buildings in an area that can mimic a Cambridge or a South San Francisco; a dense place where people are bumping into each other. “The ecosystem needs to think outside the box about where that will be,” he says.
That will be up to the group with the best idea of how to spend $100 million. “Once we know what the private sector is prepared to do,” Gotsch says, “then we can have a better sense of what we think is possible.”
Photo by Flickr user Jens karlsson via a Creative Commons license.