Three Big Pharma companies have helped come up with some seed money to start growing the first crop of biotechs in New York. Pfizer ($PFE), Eli Lilly ($LLY) and J&J ($JNJ) all chipped in to a $51 million fund from Accelerator Corp., which will now expand on the work it's been doing in Seattle to the East Side of Manhattan, recruiting upstarts to join investigators at the Alexandria Center for Life Science.
New York has a well-earned rep for top-level scientific work, but the biotech industry never really managed to take off there--at least not in the big way that Boston and San Francisco have enjoyed. Alexandria Real Estate Equities laid the groundwork for a hub when it built the East Side research complex, which drew in the survivors from Roche's shutdown in Nutley, NJ, as well as Eli Lilly, which houses ImClone Systems at the center. Accelerator now has some tens of millions to attract much, much smaller companies to the center while continuing their work in Seattle.
It's not a lot of money by biotech standards, but startups can often get seeded with a few million dollars as they get set up and start to pursue their dreams. Once in business, they can lay the groundwork for the science and attract a core team before raising more capital in a drive to the clinic. And in New York they'll be at the epicenter of a wide range of investigative work at nearby institutions like Memorial Sloan-Kettering and the Icahn School of Medicine at Mount Sinai.
The Accelerator fund--which will be used to assist fledgling biotechs in Seattle as well as New York--isn't the only startup project on the scene. During the final days of the Bloomberg administration, Celgene ($CELG) and Eli Lilly also committed themselves to a $100 million effort to help foster a biotech hub. And in addition to the gleaming new East Side center there were high hopes of attracting biotechs to a complex at the old Brooklyn Army Terminal--though that prioject has yet to take off.
"There is a funding gap for innovators looking to build new companies, as more and more venture investors are turning their attention to de-risked, later-stage developmental therapies instead of early research," said Thong Le, chief executive officer of Accelerator, in a statement. "We have had tremendous success in bridging this gap in Seattle, with more than half of our companies graduating to successful venture rounds and achieving development successes. We recognize a similar gap in New York City where funding is available for developed companies but in short supply for early-stage research, and we look forward to this strategic expansion with our new round of committed capital."
Accelerator's fourth fund includes return investors Alexandria Venture Investments, ARCH Venture Partners, and WRF Capital, alongside the pharma companies Harris & Harris Group and the Partnership Fund for New York City.
- here's the release