What is Pennsylvania Biotechnology Center’s main role as a life sciences incubator?
Our structure is unique. At the heart of our biotech center, we have three shared nonprofits, each with a different mission but the same DNA. The parent organization is the Hepatitis B Foundation, which is a small but impactful advocacy & public-policy organization that started 30 years ago. Eventually, it grew so much that we decided to open a second nonprofit: the Baruch Blumberg Institute. This research institute has 80 employees now (doubled in size since 2018) and is mainly working on liver cancer and Hep B, while also diversifying into other platforms like mRNA. The third nonprofit—and the reason why we are gathered here today—is the Pennsylvania Biotechnology Center, which is managed by the Blumberg institute.
What is particular to our structure – and what I call the blueprint for our success – is the relationship between our organizations and the Pennsylvania Biotechnology Center’s commitment to the success of each company under our umbrella. We have been at full capacity since 2015 and we now have 50 life sciences companies on site, and nearly 90 member companies in total. The model focuses on an ecosystem that is diverse, and the most crucial part is the company selection process. According to national statistics, only one in 20 biotechs succeed, whereas we have not seen one of our companies fail. We attribute these unique triumphs to our thorough selection process, where we look at the science, CEO, CSO, the funding mechanisms, and many other factors.
Success or failure is a human attribute - how are your companies fairing from a human resources perspective, a most fought over resource?
Many players in the biotech space do not have an HR department or a CFO – bear in mind that in Pennsylvania the average size of a biotech is less than 10 people, consisting typically of a CEO and a few researchers. Therefore, when a company comes in, we assist them with HR, accounting, funding, etc. which goes a long way. We are also fortunate that within 100 miles we have 80% of U.S. biopharma - hence if we need to look for scientists or HR, or even academia, it is all right at our doorstep. Being in the pharma belt is a fact biotech leaders in our region should definitely leverage more. From North New Jersey down to Philadelphia, I would argue we have more scientific talent than anywhere else in the country. It is also very interesting to see that the CEOs and executives in pharma are not living in San Diego, Boston or New York City -- they are living here in Southeastern Pennsylvania.
You had a $20 million expansion and recently received a $5 million grant from the government - how will this be implemented?
The last six years we generated more than $7.3 billion worth of economic impact in our area.
With this in mind, our local state authorities gave us $5 million they had set aside to invest in the life sciences for early stage companies. We are using this capital to take technologies from the universities, spin them out, hire a CEO and CSO, cover the IP, business expenses, staffing, and put them in one of our two incubators. We already have some ideas as to how to return the trust the state gave us through jobs in the region.
For spin outs and raises, the climate is currently tough, and this is not a great time for IPOs either. Acquisitions and mergers seem to be becoming increasingly popular. All in all, it does seem that for the coming year everyone is taking the pedal off the gas a little. Last quarter in the Greater Philadelphia area, VC funds went down 77%, which is problematic.
Given the other hat you wear with the Hepatitis B Foundation, how much progress did we make in the fight against the deadly disease?
Over the last year or two we have seen some incredible technological developments. We have some of the world’s best scientists working for us right now on hepatitis B, which definitely promises a lot. Another very positive sign is that large pharma companies are now also making it a priority and a ray of hope for the 300 million people suffering from the illness around the globe.
When it comes to the amount of time till we find a cure, I would estimate it could take five to ten more years - with a considerable deal of uncertainty around these figures. If we get more funding and donations and add a few more scientists to our team, the process would accelerate and the time until finding the cure would be reduced dramatically.
Pennsylvania Biotechnology Center is now experiencing a growth phase - what are your ambitions for the incubator model in the coming years?
Indeed we have now proven our success and replicability. First and foremost, we wish to execute well on the $5 million grant and contribute further to job creation in our state. The goal is to have 1,000 people in our biotech quarter. Philadelphia currently ranks in the 5th to the 9th tier of life sciences clusters in the United States, and our ambition is to shortly move into the top three. In the medium term we wish to replicate the PABC’s proven incubator model and open five more centers around the country, helping hundreds of biotechnology startups with an initial boost to propel them towards success.
