Last Thursday, I attended BluePrint Health’s Demo Day and Xconomy’s Reinventing Biotech’s Business Model for the Big Apple.
Here are a few of notes:
In Manhattan’s Soho, around the block from the shopping mall that-is-called-Broadway, a creaky staircase bathed in blinking fluorescents leads up to a gigantic, raw Soho loft. Inside, rows of folding chairs had been arranged to face a stage where one after another, BluePrint Health‘s second graduating class would introduce themselves to healthcare entrepreneurs, investors, and technology fans.
BluePrint Health is a relatively new accelerator, modeled on technology incubators and accelerators across the country, but focused exclusively on healthcare IT. The companies presenting last Thursday were the second group to graduate.
My friend, Dr. Venkat Gullapalli, was the first to present. He told the story of how and why he developed Medikly, a software platform to help marketers better understand, engage and measure their success with healthcare providers. (Full disclosure: I’m a Medikly advisor)
Every company presented a new solution to problems plaguing our healthcare system. DaisyBill, for example, makes it easy to process workers’ comp medical bills. AdhereTech and AllazoHealth presented solutions to patients not adhering to their meds. Enhatch developed a tool to help medical device companies sell more products to surgeons (important because hospitals — like doctors offices — are increasingly restricting access to sales people). GeriJoy demonstrated a virtual pet to keep seniors focused.
You could feel the excitement in the room as each company took the stage, told their story, thanked their team and investors. As each presenter left, the room filled with applause and cheers. I was reminded of my time in dotcom day lofts and tech presentations today.
The posh Alexandria Center for Life Sciences on the far east side of Manhattan was the venue for Xconomy’s Reinventing Biotech Business models event. The tower is the first of two planned life science facilities, with anchor tenants Pfizer and Kadmon. To enter, you pass through a stark and expansive marble lobby decorated with ultra-modern woven bamboo sofas that look like waves.
ImClone founder, Sam Wacksal (wiki), now of Kadmon, warmed up the crowd with stories of ImClone’s early days. He admitted the reason he located Imclone in New York City was didn’t want to travel 90 minutes each way to a labspace in New Jersey. Instead, he set up the labs on Varick Street in what had been a shoe factory. He secured the space for an unheard of $50,000 for 10 years because the owner had gone bankrupt.
Wacksal was joined onstage by Cancer Research Institute CEO Jill O’Donnell-Tormey; Arthur Tinkelenberg, CEO of virtual NY biotech Enumeral Biomedica; Kevin Kinsella, founder and managing director of Avalon Ventures; and Dennis Purcell of Ainsling Capital
Wacksal’s antecdotes were the night’s highlight, since the panel spent most of its time discussing the pros and cons of starting and locating biotech companies in NYC. Unfortunately, they brought up the same decade-old arguments on why the city is a tough place for biotech startup: Great human capital. Outrageous rents.
I would’ve liked to hear more from Tinkelenberg, ex-geneticist turned investment banker-VC, who splits his time between NYC and Boston, where Enumeral is based. He explained Boston was the current location because his scientists are located there; however, he would prefer to and will eventually move the company to NYC.
Kinsella admitted he had attended the BluePrint Health event and noted the atmosphere was much different. None of the companies that presented, he said, would likely fit his fund’s investment criteria because they were too small (really?).
I could tell people around me had opinions and wanted to express them. Those would have to wait until the networking since moderator Purcell only took two questions from the audience.
In a way, the event was a downer (especially compared to last year’s Xconomy event, which had a tremendous panel discussing the state-of-the-state of biotech in NYC). Of late, VCs have been fleeing early stage biotech investments and funding part of the sector has been very difficult. Kinsella mentioned that his partners at Avalon had recently spoken to pharmaceutical companies about how they could better work together. (He previously called out the entire pharmaceutical industry for its unfair dealings with early-stage biotech companies, at a time when pipelines are drying up and pharma needs biotech more than ever.)
In a brief conversation with Wacksal after the event, he agreed that the scarity of early stage investments provides a great investment opportunity for savvy investors.
The discussion around new business models is happening. Early in September, Bruce Booth wrote a blog posts called New Biotech Corporate Structures, Albert Sokol, a partner at Edwards Wildman Palmer, discussed the conversion of C-corps to LLCs in the Wall Street Journal, and novel models will be discussed at this weeks BIO Investor Forum. In the device world, there has been an active discussion on changing business models (which I’ll write about soon). It’s a wonder there wasn’t a more active discussion on this last Thursday.
Personally, I’ve heard enough “NYC doesn’t help biotechnology companies enough” stories to last a lifetime. My impression is the City is doing plenty and it’s up to the entrepreneurs to start and build their companies.
It’s always easy to point fingers and say that it’s easier in tech. Maybe it is and maybe it isn’t. I doubt there will ever be the type of excitement I saw at BluePrint or at Tech events because biotech is much more complicated and fewer people understand it.
tl;dr BluePrint Health’s 2nd class of graduates presented in a sweaty Soho Loft. List of companies and demos here. Xconomy’s Reinventing NYC business models focused more on building biotech businesses in NYC than novel business models, yet novel business models are being discussed all around.