New York City's nascent biotech investment fund is ready to get rolling, recruiting some venture capital partners to join Eli Lilly ($LLY), Celgene ($CELG) and GE Ventures ($GE) with hopes of pouring $150 million into the local life sciences startup scene.
The effort, kicked off by ex-Mayor Michael Bloomberg in 2013, began as a $50 million purse, with the city's economic development organization putting up $10 million and Celgene, Lilly and GE kicking in the rest. The plan was to find a partner in the venture world to put up another $50 million and help steer investments in 15 to 20 biotech upstarts.
Now, under Bill de Blasio's administration, the so-called Early-Stage Life Sciences Funding Initiative has found its VCs in Flagship Ventures and Arch Venture Partners, and the group dialed up its committed capital to $150 million. The plan is to split the project in two, with Flagship calling the shots on all investments in therapeutics and Arch managing its efforts in med tech and other areas. The goal, according to the city, is to seed a new generation of startups that will create 2,000 jobs by 2020 and put New York on the map among biotech's many hotbeds.
The initiative has its work cut out for it. New York is home to world-class research institutions, including Memorial Sloan Kettering Cancer Center and Weill Cornell Medical College, and it's the financial capital of the world's largest economy. Yet the city has never evolved into an epicenter for biotech, frustrating local business leaders who dream of a bubbling ecosystem like the one up I-95 in Cambridge, MA.
Part of the problem is lab space, bountiful in other parts of the country but hard to come by in New York, where available real estate can more lucratively be transformed into commercial and residential units. But the city wants to change that, officials said, and part of the funding initiative is an effort to help develop affordable space for companies to grow within the 5 boroughs. The local government is promising to redevelop an unused, 14-story building into a bioscience research center with 100,000 square feet of lab space, and officials name-checked the Alexandria Center for Life Science, a Manhattan outpost that's home to Roche's ($RHHBY) stateside R&D group and is soon to span 1.1 million square feet.
"New York's institutions and people are making the discoveries that will be the basis for thriving, innovative life science companies," Flagship Managing Partner Douglas Cole said in a statement. "The community is poised to become a world leader in translating breakthrough science into therapies that will improve people's lives."
- read the statement