Milwaukee’s small life sciences scene doesn’t usually grab the attention of big venture capital firms, so it’s perhaps surprising that a recent event attracted investors from the likes of Novartis and OrbiMed.
The draw was the first healthcare innovation pitch event put on by Bridge to Cures—a Milwaukee-area nonprofit accelerator for healthcare companies spun out of local universities—and its partners, the Clinical and Translational Science Institute of Southeast Wisconsin, Medical College of Wisconsin, and Concordia University Wisconsin. The Dec. 4 event was the culmination of Bridge to Cures’ first accelerator session, which began in late September and included a series of business training workshops.
The nine teams that completed the program vied for $110,000, a mixture of cash, convertible debt funding, and legal services, says Bridge to Cures co-founder Daniel Sem. Essential Biotechnology, which is developing a biologic treatment for pancreatic cancer, won the $50,000 top prize. ReNeuroGen, which is working on a new treatment for stroke and brain injuries, and personalized medicine startup Microlitics won $25,000 each. Angio360 Diagnostics, which is developing cancer diagnostic products for animals and humans, won $10,000.
Those prizes are just a drop in the bucket for any startup trying to commercialize new healthcare technology. It’ll likely take millions of dollars and years for most of the nine companies to get to market, and the same can be said about Bridge to Cures’ efforts to help create a thriving life sciences hub in the Milwaukee area.
But Sem thinks Bridge to Cures has already made progress with its first session, which showed that there are interesting life sciences ideas coming out of Milwaukee-area campuses, and that organizations like his can help provide the push those ideas need to get off the ground, he says.
“There were people that told me that we don’t have enough, I don’t want to say talent, but ideas or products that are far enough advanced that would even be worth presenting to investors like this,” says Sem, an Xconomist. “And they were wrong.”
The pitch competition’s judges included investors and biotech industry professionals from around the nation and the world. (Two Skyped in from Belgium and the Netherlands, Bridge to Cures says.) Besides Novartis and OrbiMed, there were representatives from Madison, WI-based Venture Investors, Mercury Fund in Houston, Netherlands-based Ppm Oost NV, and more.
“We don’t have a gathering of that kind of investor pool very often,” Sem says of Wisconsin.
Although Sem isn’t aware of any deals that have come out of the pitch event, he says several of the investors on the judges’ panel and in the audience expressed interest in talking more with some of the companies. He found that encouraging, along with the success Bridge to Cures had in coaxing academic researchers to think about their ideas’ business potential—something that has been a struggle for local tech transfer offices, Sem says. He would know, since he directs tech transfer at Concordia University Wisconsin and is also dean of its business school.
“There really are a lot of good ideas here,” Sem says. “I think we increased the odds and decreased the time frame for a lot of these innovative ideas to turn into products.”
Bridge to Cures is one example of a broader entrepreneurship push by Milwaukee-area nonprofits and educational institutions over the past few years. The idea is to strengthen regional partnerships and boost university spinouts in sectors like healthcare, in order to form a stronger startup hub. Milwaukee often gets overshadowed by its neighbor 80 miles to the west, Madison.
One of Bridge to Cures’ biggest challenges has been fundraising. The organization raised $50,000 from the Wisconsin Economic Development Corp., $25,000 each from the Medical College of Wisconsin and Concordia University Wisconsin, and $10,000 worth of legal services from Andrus Intellectual Property Law, Sem says. All of that money went toward the prizes for the pitch event.
Fundraising should come easier, after Bridge to Cures was granted 501c3 status by the Internal Revenue Service two months ago, Sem says. Bridge to Cures takes small equity stakes in the startups it invests in, and any returns on those investments will be pumped back into the fund. This venture philanthropy model is similar to another Milwaukee-area nonprofit investor, the BrightStar Wisconsin Foundation. Bridge to Cures convinced the IRS it deserved to be tax-exempt because its mission involves educating and spurring startups that want to improve society, Sem says.
“Now we’re in a position where we can actually seek donors and sponsors that want to have a positive social impact in healthcare in a sustainable way,” Sem says.
Bridge to Cures had planned to hold the accelerator program and investor pitch event every other year, and that’s still the plan. But Sem isn’t ruling out a program in 2016. Either way, he expects the next session to be larger, and he wants to expand it to university spinouts from beyond the Milwaukee region, such as the University of Wisconsin-Madison.
“I slowly want to grow this,” he says. “I think it’s an interesting business model.”