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Though challenges in space and affordability remain, New York City is emerging as a hotspot for biotech incubators, including one unique startup based in the city’s fast-growing innovation center, whose CEO, like many C-suite veterans, made the career leap from the big pharma world to forging new discoveries in medical science.
Though challenges in space and affordability remain, New York City is emerging as a hot spot for biotech incubators, including one unique startup based in the city’s fast-growing innovation center whose CEO, like many C-suite veterans, made the career leap from the pharma world to forging new discoveries in medical science
When Nancy Thornberry, CEO of Kallyope, stands in her company’s lab inside the Alexandria Center for Life Science, floors above the streets of Manhattan with an expansive view of the New York City skyline, it is one of the last places the industry veteran pictured herself after she left big pharma.
“With the continued growth in biotech, there are an incredible number of opportunities for individuals with deep pharma experience, including operational roles, BoD, and SAB positions, and consulting for both biotech
and venture capital firms,” says Thornberry, who departed Merck & Co. in July of 2013 after 30 years at the pharmaceutical giant. “I didn’t see myself in an operational role when I left Merck, and my goal was to learn more about biotech in general and BoD and advisory opportunities that might play to my strengths.” During her career at Merck, Thornberry initiated the program that resulted in the discovery of Januvia and had the rare privilege of remaining involved with the development, commercialization, and life-cycle management of the diabetes drug for the last 10-plus years of her tenure there.
“I joined boards of a couple of private companies I was excited about, and also did some advisory work for some early stage biotechs,” she told Pharm Exec. “I really enjoyed the work, but periodically missed having more skin in the game.”
From time to time, Thornberry “checked out new opportunities,” but as she describes it, “nothing really excited me.” That is, until she learned about Kallyope, the platform biotech firm.
“Kallyope ticked every box for me,” recalls Thornberry. “First, I was seduced by the science and tremendous potential for the company. The gut-brain axis was an untapped area of biology, and the highly sophisticated platform technologies had the potential to reveal novel biology that could enable the discovery of fundamentally new approaches to diseases of high unmet need. Second, the people involved, including the founders from Columbia University, founding scientists, and investors, were among the best in their respective fields and had a shared vision for the company.”
And, last, but definitely not least, location was also a factor in Thornberry’s transition.
“The company was to be based at the Alexandria Center in NYC, and I thought it would be advantageous for the company and exciting to be part of the emerging NYC biotech scene,” she says.
In November of 2015, Thornberry decided to join Kallyope, just as it was launching. (Learn more about the biotech scene in NY and the city’s quest to become a major biotech player in our podcast with Thornberry.)
Starting something from scratch is never easy, but Thornberry used her experience at Merck to help set the foundation for this next chapter of her career, especially her experience with Januvia, which, today, is Merck’s second-best-selling medicine.
“This end-to-end experience, and exposure to other discovery and development programs [at Merck] has given me an excellent perspective on the challenges in our business and a good sense of what ‘good’ looks like to physicians, regulatory agencies, and payers,” says Thornberry. “This has been very helpful as we think about new targets in the early space. In addition, the network I developed while at Merck, both internally and externally, has been hugely valuable in tapping into expertise that is needed to advance the company and establish partnerships.”
The pharma experience has also aided Thornberry and her team in building a unique culture at Kallyope. “Collaboration is in the DNA of successful pharmaceutical companies, and this same mindset is needed for success in biotech and to build a team that is second to none,” she says.
But Thornberry acknowledges there are some things pharma doesn’t prepare you for, in her view. “Pharma provides virtually no training in the business side of biotech,” she says. “Recognizing what you know and don’t know, and asking for help from investors and my broader biotech network, has been critical in helping me advance and finance the company.”
Thornberry is a big believer in humility and fully leveraging talent, both internal and external, and working together to advance programs and solve problems. But, with such a high rate of failure in drug development practice, taking science out of the academic world and putting it into biotech with the goal of commercializing it can be extremely difficult.
“I think it’s very important for academic entrepreneurs and tech transfer offices to have a good ‘gut feeling’ for which opportunities truly have translational potential, and also have a realistic view of the value of their discoveries,” she says. “It is important for academic centers and emerging companies to bring individuals on board with proven success in pharma and biotech as early as possible to assess the opportunity and get the company off the ground.”
Thornberry is not just at the forefront of gut-brain health, but she is also part of building an elaborate biotech ecosystem in New York City.
The Alexandria Center for Life Science is a collaborative urban campus developed by Alexandria Real Estate Equities, Inc. One could argue it was this building, strategically placed on the Lower East Side of Manhattan, known as Manhattan’s East Side Medical Corridor, that helped put New York City on the biotech map.
Joel S. Marcus, executive chairman and founder, Alexandria Real Estate Equities/Alexandria Venture Investments, co-founded Alexandria Real Estate Equities as a garage startup with $19 million in Series A capital. As it began to build out its offerings to support companies in their development of lifesaving therapies, Marcus’s group saw the life science sector’s need for strategic risk capital and established Alexandria Venture Investments in 1996.
Marcus views his company, which has buildings like the one in New York City all over the country, as much more than just a real-estate provider.
“We are a key and integrated member of the life science industry,” he says. “Our mission to advance human health, overcome global hunger, and improve the quality of people’s lives has shaped our differentiated business model, and it is the unifying basis around which we’ve built our four strategic verticals-real estate, venture investments, thought leadership, and corporate responsibility.”
When Alexandria was selected to construct New York City’s first life science campus in 2005, it took a big gamble in shifting its focus from acquiring single assets to pursuing an urban cluster campus strategy. When Alexandria Center’s East Tower opened in 2010, the urban office REIT was at the very early stages of New York City’s biotech scene.
“Creating successful urban innovation clusters takes time,” says Marcus. “For example, in the New York City cluster, we are now eight years into what is about a 20-to-25-year process to build a world-class innovation cluster.”
Because it sees itself as more than a real estate company and has expanded interests to reflect that, Alexandria is very intuitive about what its tenants will need at different stages, and in a place like New York City where space is at a premium, the company has worked to make it as easy as possible for those organizations within its walls to grow-physically and metaphorically.
“Having the ability to grow our space quickly has been critical, and we are in near continuous dialog with the Alexandria Center to anticipate and enable this expansion,” says Thornberry, adding that Kallyope has grown from a startup of six people to a small company of nearly 50 employees. “The Alexandria Center also has an on-site vivarium, which is critical for the research conducted at Kallyope and other biotechs,” notes Thornberry.
For a C-suite leader, it’s more than just the physical space.
“Being in a place like the Alexandria Center has been particularly important to me as a new CEO, and because we are in NYC, where the biotech scene is just starting to emerge,” says Thornberry. “Having access to other CEOs in the center, and meeting others in NYC biotech during their networking events, has been helpful in identifying people, core facilities, potential partners and investors, and other resources that we need to tap into to advance the company.”
It takes more than a single building to develop a sustainable life science innovation hub.
“At a basic level, hubs must combine ‘anchor’ institutions with capital and managerial talent to create talent mobility,” Sarah Kaulfuss, manager, Deloitte Consulting, told Pharm Exec. “This is a high-risk industry, especially at the early stages, so hubs need sufficient talent mobility for people to find a new job if their venture fails.”
New York City has an advantage when it comes to attracting talent, says Thornberry.
“The founders of Kallyope are from Columbia University, and the desire to have them remain deeply involved with the company was a key consideration in the decision to stay in NYC,” she explains. “Proximity to several world-class research and translational institutions was another important factor. Finally, although I’m not sure this was fully appreciated at the time of launch, NYC has a significant edge over other biotech hubs from a recruiting perspective. It is a relatively untapped talent pool and there are outstanding scientists from NYC and
beyond who are interested in living in NYC and working in biotech.”
Thornberry notes as well that the city can be attractive to experienced drug discovery scientists from the New Jersey pharma corridor who are interested in making the transition from pharma to biotech. Having incredible science, beautiful spaces, extensive talent, and funding is not always enough, however. A silent but critical driving force to innovation hub success is economic support.
“We have a tremendous ecosystem here, but it didn’t happen overnight,” said Massachusetts Gov. Charlie Baker during a speech at the June BIO International Convention in Boston. “If you create two great research institutions and wait 200 years, good things happen.”
Although his humorous remark resulted in loud eruption of belly laughs from the thousands in attendance, Baker followed it up with a laundry list of public and private investments the government has made over a number of years to make Boston and the state a premier innovation hub for biopharma.
Massachusetts’s success was not lost on leaders in New York City, who knew they had a double-edged sword when it came to the life sciences.
“Through in-depth research and interviews with stakeholders, we determined that many young, promising life sciences companies eventually leave the city and move elsewhere primarily because of the difficulties associated with finding affordable, suitable space for long-term expansion,” says Doug Thiede, senior vice president of life sciences and healthcare for the NYC Economic Development Corporation. “New York has always had an incredible pool of talent in scientific discovery, but one of the biggest challenges we see as a city is developing space for that talent to be able to develop their innovations.”
The Alexandria Center for Life Science was one of the first major contributions to helping combat this problem. According to Thiede, by the end of 2018, BioLabs, JLABS, and Alexandria LaunchLabs will all be open, creating a total of 100,000-square-feet of wet lab incubators in the city to help address this spatial issue.
In December 2016, New York City Mayor Bill de Blasio announced a $500 million initiative, LifeSci NYC, with the goal to spur an estimated 16,000 new, good-paying jobs, and establish New York City as a global leader in life science research and innovation. Through a portfolio of 10 initiatives, LifeSci NYC is expected to generate a critical mass of activity by enabling the organic growth of top-tier R&D companies and attracting established R&D organizations that can accelerate a cycle of growth for NYC’s life sciences industry.
And with continual funding of the ecosystem, the hope is that it will expand and grow. The city committed $10 million toward developing affordable wet lab incubator space, with the first $5 million grant awarded to BioLabs@NYULangone in 2017. Located in SoHo, it will open its doors later this year. Additionally, JLABS @ NYC, also located in SoHo, opened its facility in June and received $17 million in funding from New York State’s Life Sciences Initiative.
“The biotech industry in New York City is constantly evolving,” says Thiede. “From companies working on innovative medicines like Kallyope, who is working on the gut-brain axis, to Lodo Therapeutics developing drug discoveries through the power of nature, to Epibone growing bones through tissue engineering for skeletal repair. We believe New York City will continue to be on the cutting edge of scientific discoveries in the years to come.”
Thornberry shares the same belief. “There is clearly good momentum in building a biotech presence in NYC,” she says. “Space has historically been a significant barrier, but the commitment of the state and local governments to this issue is clear, and I’m optimistic that affordable space will be available for new companies going forward. Access to C-suite talent has been highlighted as another issue; however, I believe there is a relatively large pool of biotech CEOs and CSOs who could be recruited to NYC for the right opportunity, and together with the proximity to pharma talent, this challenge can be addressed.
“NYC has a substantial edge over other biotech hubs in recruiting scientists for their new companies. What remains is for the venture investor community to continue to work with local entrepreneurs and academic tech transfer offices to identify exciting translational opportunities to attract key talent and money and fuel continued growth in biotech in NYC.”
Michelle Maskaly is Pharm Exec’s Senior Editor. She can be reached at firstname.lastname@example.org and on Twitter at @mmaskaly