Editor’s note: Joan Siefert Rose is CEO of LaunchBio, a national nonprofit that identifies, counsels and supports high-growth, high-impact life science and biotechnology companies. LaunchBio organizes “Larger Than Life Science,” a monthly networking event with programs, demonstrations, and panel discussions. Larger Than Life Science is held the first Thursday of each month at The Chesterfield Building in downtown Durham.
DURHAM – What will the coming year hold for the biotech and life sciences industry in North Carolina? Based on the momentum we’re seeing at the end of this year, we should be in for a promising start to 2018.
A strong market for initial public offerings:
The biotech industry begins 2018 with some wind at its back, following a good year for IPOs – 46 in all for 2017, including North Carolina’s G1 Therapeutics, Argos Therapeutics and Dova Pharmaceuticals. G1 will join the NASDAQ Biotechnology Index, after a healthy rise in market capitalization following its May debut on the exchange. Dova’s stock price has jumped in value by more than 67 percent, making it one of the top performers of the IPO Class of 2017.
Many analysts think that 2018 will continue the trend, at least in the first quarter, as valuations are up but the market is not too “frothy.” This should help early stage investors earn solid returns, while helping companies here and elsewhere access new capital to advance their technologies.
Gene editing continues to take center stage:
CRISPR genome editing was developed in 2012, making it cheap and relatively easy for scientists to target specific gene sequences. Ever since, there has been the hope of producing new treatments or even cures for a wide range of genetic diseases, including cancer, HIV, and rare diseases, such as Duchenne muscular dystrophy. Now more than 2 dozen clinical trials in humans involving CRISPR and other gene editing technologies are planned. Many of them are in China, and a few in the US. But the technology remains unproven, and raises a host of ethical questions.
Some of North Carolina’s hottest biotech startups, including Locus Biosciences, Precision Biosciences, and StrideBio, are developing genome editing platforms to address both human health and food production. LaunchBio is hosting a panel discussion with these companies February 1 as part of the monthly “Larger Than Life Science” program at The Chesterfield in Durham, with New York-based Kevin Davies, co-founder of the soon-to-be-launched CRISPR Journal, as moderator. It promises to be a lively conversation.
Tech entrepreneurs jump into biotech:
The lead investor in the first-announced US CRISPR clinical trial is not a traditional biotech fund – it’s Internet billionaire Sean Parker, former Facebook president and founder of Napster. Parker made big news when he announced he will give up to $250 million to fund a “Manhattan project for curing cancer with the immune system.” Now other tech pioneers are following his lead, with Andreesen Horowitz announcing this month that it has raised a $450 million “bio” fund to focus on the intersection of computer science and biology, with the goal of bringing engineering principles to speed up the discovery process in medical research.
It may be a combination of looking for new mountains to climb, or a sense of getting older – but tech entrepreneurs now have sizeable fortunes to invest in basic medical research and commercialization, which could bring new opportunities to North Carolina’s dynamic life science sector.
Capital efficiency leads to more shots on goal:
The cost of starting a biotech company has been prohibitively expensive – between leasing space, buying equipment, and setting up a lab, an entrepreneur may spend $500,000-$1 million and work for 6-9 months before doing a single experiment. Now with co-working spaces like BioLabs North Carolina, a partner organization to LaunchBio, a company can rent a few benches in a co-working wet lab, have access to state-of-the-art equipment, and begin doing research right away – all for about one-fifth the cost of the traditional model. University spinouts now have a cost-effective setting to produce data quickly, and determine whether an idea has promise – or not – with no long-term financial “hangovers.”
Another notable addition soon to come on line is First Flight Venture Center’s Hangar 6, a shared, rapid prototyping facility to be open to all North Carolina science-based businesses. This will be a big advantage to medical device companies that want to test and refine their products without breaking the bank.
Go big, or go home:
The healthcare and medical research industry is increasingly a global business, which is why we’ve seen an unprecedented wave of consolidations affecting North Carolina enterprises that show few signs of letting up. From the Quintiles-IMS merger to form IQVIA, to Patheon’s acquisition by ThermoFisher Scientific, to the announced partnership between UNC Health Care and Carolinas HealthCare System, the trend is toward securing a bigger share of the market.
The good news for entrepreneurs is that large corporations are finding it more efficient and productive to outsource innovation to small, emerging companies. Look for more interest – even in very early stage startups – from pharma and healthcare companies in 2018.