San Diego’s HardTech Labs has named Michael Mendez as CTO and managing partner—a move that immediately raises the profile of a new life sciences accelerator taking shape at the La Jolla Institute for Allergy and Immunology.
The La Jolla Institute and HardTech Labs said in December they are working together to establish the startup accelerator HTL Life in the institute itself, and that it would provide space for as many as 15 startups.
As the CTO and managing partner, Mendez will play a major role in selecting startups for the accelerator. He was a co-founder and key scientist in multiple California biotechs, including the San Diego industrial biotech Sapphire Energy, Syrrx, a San Diego biotech acquired by Japan’s Takeda, and Fremont, CA-based Abgenix
“Having an accelerator inside the institute is a brilliant model,” Mendez told Xconomy yesterday. At HTL Life, Mendez said he wants to improve “the Silicon Valley model” for accelerators that has been applied to biotech startups. That model, as exemplified by programs like Y Combinator and Techstars, was developed for tech startups, especially for Web-based companies that can develop online services and products, in a few months and at relatively low cost, while simultaneously refining their business strategy.
It’s not a model that’s well-suited for life sciences startups, which can take years to develop their core technology and easily require more than $50 million just to prove a concept.
But Mendez said the biotech industry’s ability to raise startup capital “the classical way” has fundamentally changed over the past decade, and he believes the Silicon Valley model is here to stay. “It just needs to be done better,” he said.
Mendez is hardly alone in such thinking. The pharmaceutical giant Johnson & Johnson has established a “no strings attached” program to house early stage biotechs at its JLabs facilities in San Diego, Houston, Toronto, Boston, San Francisco, and South San Francisco. San Diego’s Avalon Ventures formed a strategic partnership with the British pharmaceutical giant GSK to germinate seed-stage biotech startups at COI, its San Diego-based Community of Innovation. And San Francisco’s Versant Ventures has been seeding new startups under the auspices of Inception Sciences, a “drug discovery engine” with research sites in the U.S. in Canada.
The HTL Life accelerator doesn’t have comparable resources, at least initially. The La Jolla Institute is a biomedical research facility, not a pharmaceutical company, funded mostly by research grants from the National Institutes of Health and the Japanese pharmaceutical company Kyowa Hakko Kirin.
HardTech Labs founder Derek Footer said in December that HTL Life would provide as much as $250,000 in seed funding for each startup enrolled in the accelerator. Footer also said he intends to eventually raise a $40 million fund to support the program. But Footer does not have deep experience as a life sciences VC. He’s more familiar with the media business, and in seed stage funding for mobile and consumer Internet products.
So Mendez will be playing a key role in screening the startups, and providing guidance on which companies to admit to the program.
Mendez said he was a pioneer in the development of fully human antibodies, and was co-inventor of the Xenomouse platform technology that formed Abgenix (acquired by Amgen for $2.2 billion in 2005). He also created the viral vectors in the cancer vaccine technology known as GVAX. As a co-founder and vice-president of technology at Sapphire Energy, Mendez helped demonstrate that algae grown in ponds could be turned into “green crude” and used to make algal-based gasoline, diesel, and jet fuel.
After leaving Sapphire in 2011, Mendez co-founded Pareto Biotechnologies with CEO Jamie Bacher and developed new methods to produce “designer molecules” used to make fragrances and flavors. Mendez said he now wants to parlay the insights he’s gained at Pareto to the HTL Life accelerator.
“We had difficulty raising money in the classical [biotech] way,” Mendez explained. “Jamie was pushing for us to do a funding deal with Breakout Labs,” the grant-making arm of the Thiel Foundation (established by PayPal co-founder Peter Thiel). “I was totally against it. I was very negative on the idea. But our experience with Breakout Labs was phenomenal. I had to eat my words. It was a great way, a smart way to start a biotech.”