Corporate Venture Capital: the answer for New York’s biotech start-ups?

New York City has nearly everything a city needs to become a biotech hub: heaps of academic innovation, world class medical and academic institutions and the allure of Wall Street capital. But unless biotech start-ups and small caps have access to sufficient early stage capital, the ball won’t get rolling, and The Big Apple will remain unpicked from the tree of life science entrepreneurism.

The city’s lack of early stage venture capital specialists is a real limiting factor here – in terms of access to capital for early stage ventures, but also critically the access to human capital and commercialisation expertise.

Most agree that corporate venture capital is an increasingly vital part of the solution to this problem. Attracting corporate vc money to the city, and incentivising them to provide their capital and expertise to help create and build the next billion dollar life science companies that will grow and develop in the city will be key to the success of NYC’s mission to become the next big hub.

Corporate Venture Capital in New York

Most large pharmaceutical companies possess thriving venture capital arms, whose portfolios span everything from biotech and therapeutics through to medtech, diagnostics and even healthcare-relevant IT. Although few of the largest pharmas’ venture arms are based in New York itself, they all have their fingers firmly embedded in various Big Apple pies. Here are some of the front-runners:

1. Pfizer Venture

With its world headquarters right in the heart of Manhattan, Pfizer are poised to make a big impact on the New York life sciences scene in the coming years. In particular, Pfizer Ventures has a large stake in Accelerator Corp, who identify, manage and finance up-and-coming biotechs. Based in the Alexandria Centre for Life in downtown Manhattan, Accelerator finds itself in prestigious company, as many large healthcare companies base their R&D operations here.

Pfizer Venture’s portfolio spans not only a large portion of the US, but the entire globe; including ventures in Shanghai, The Netherlands and both Cambridge MA and Cambridge England.

2. SR One

With offices in London, Cambridge MA, San Francisco and Conshohocken PA, GlaxoSmithKline’s venture arm’s venture portfolio of thirty five public and private companies spans Switzerland, Austria and Israel, as well as numerous ventures in the UK and US. Having invested $830 million in promising healthcare companies since starting in 1985, SR One are definitely one to keep an eye on.

Current New York based investments include Progyny, Inc. – a combined entity of Auxogyn, Inc. and Fertility Authority, LLC. – which provides fertility patients with easy access to high quality doctors; and River Vision, who raised $17 million in series A funding in 2012 for their research into therapy for Grave’s Orbitopathy, an orphan autoimmune condition affecting tissues behind the eye.

3. MedImmune

Based in California Maryland, AstraZeneca’s venture arm invests in a variety of therapeutics and medical platforms, and sequesters $400 million of its assets in an evergreen fund. MedImmune focuses mainly on North American companies, although it will consider companies from anywhere in the world with which it has a strong local relationship.

Whilst none of its current investment portfolio are based in New York, MedImmune has invested in two exciting companies in nearby New Jersey: Elusys, whose antibody research is aimed at fighting anthrax used in bioterror, and VaxInnate, who pride themselves in their quick twelve-week turnaround period for new infectious disease vaccines – a coveted skill in wake of any new pandemic.

4. Roche Ventures

With a $500 million evergreen fund and offices in Switzerland and San Francisco, Roche’s venture arm runs a similar sized operation to AstraZeneca’s, with investment currently in thirty life science companies. Notable ventures include Symphogen, a European leader in antibody base therapeutics, who aim to target multiple tumour types with a single drug. Symphogen is based both in Ballerup, Denmark, and Somerville, New Jersey.

5. Global Health Innovation

Merck’s investment arm is run by president Bill Taranto, whose past experience includes eight years as an investment banker and eighteen years as a venture capitalist for Johnson and Johnson. GHI boast they can bring a venture mentality along with the benefits of a strategic investor, and have a particular focus on digital healthcare.

New York based portfolio members include MedCPU, who provide an integrated patient management system, and Physicians Interactive, who provide digital marketing and data analytics solutions to a wide network of healthcare professionals.

6. Eli Lilly

Lilly haven’t invested in any New York based companies yet, but they have taken a strong interest in New York’s developing scene by investing in the NYCEDC’s early stage life sciences funding initiative: a $150 million fund for biotech start-ups that also sees participation from biopharmaceutical firm Celgene and venture capitalists ARCH Ventures and Flagship Ventures.

With only $200 million currently under investment and focus narrowed towards North America and Europe, Lilly Ventures may not be as big as some of the previously mentioned companies, but with a finger on the pulse in New York (Lilly also have R&D projects based in the Alexandria Centre for Life), Lilly have put themselves in good stead for the future in anticipation of the city’s inevitable rise up the biotech ladder.

On the 17th of November 2015, Biotech and Money will host its prestigious New York conference.

Attracting some of the biggest names in life sciences, pharma and investment, this event promises to be a unique opportunity to gain a fresh perspective on the life sciences scene in one of the US’s fastest growing biotech hubs. Confirmed speakers include Brian Gallagher, Partner at SR-One; Bernard Davitian, VP and Managing Director at Sanofi-Genzyme BioVentures; Marian Nakada, Vice President of Venture Investments at Johnson & Johnson Development Corporation; and Barbara Dalton, Vice President of Pfizer Venture Investments.

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