Good times ahead for NoCo bioscience businesses

In the next three years, Northern Colorado's bioscience companies expect to grow their work forces by about 35 percent, according to a recent survey of the industry.

Kathy Kregel, Fort Collins' bioscience industry liaison, conducted a survey of about half of all the bioscience companies in the region. The survey was done in preparation for an update to the Larimer County Bioscience Initiative strategic plan, which Kregel hopes to see completed by the end of the year.

"Essentially, it was to broaden the base of industry input prior to revising the strategic plan," she said.

The survey included 15 Northern Colorado companies working in medical devices, biotechnology, pharmaceuticals and biofuels. In all, the 15 companies employ 547 in the region and expect to add a total of 196 new positions in the next three years. In line with that, 67 percent of the companies surveyed expect to need a physical expansion of their facilities.

"To me, the most positive part was the optimism from the CEOs;" Kregel said.

The optimism extended to sales. During the last three years, the average annual sales growth for the companies was 42.5 percent. During the next three years, the companies anticipate an average annual growth of 77 percent The companies hope to launch a total of 33 new products within three years and 88 products within five years.

Kregel said that she was pleased to hear that all of the companies foresee growth in the next few years; however, there is still a long way to go.

"The really good news is the ones that are here are very optimistic about their growth;" she said. "The flipside of that coin is that there aren't enough (companies here)."

In an industry where merger and acquisition activity is bustling, a cluster of companies can quickly dwindle. Many small bioscience companies are built on the premise that their technologies will some day be purchased and commercialized by a large industry leader.

"We're a little short of a critical mass here," said Wayne Jensen, director of business development for Heska Corp. Jensen represents the veterinary health and pharmaceutical company on the Larimer County Bioscience Initiative board. The board, armed with the survey results, will begin to review the strategic plan formed two years ago to boost the industry.

"Most of the bioscience is happening on one coast or the other," Jensen said. Because of that, Colorado, and Northern Colorado especially, suffers from a misperception that it is remote.

For Jensen, the strategy for growing Northern Colorado's bioscience industry has two key components--growing and supporting the companies that are here andattracting companies to relocate to the region.

Access to capital key

That might be tough, though. One of the biggest challenges for many bioscience companies is one that plagues startups in most industries--access to capital.

Jensen explained that having an increased number of venture capital firms in the area would be beneficial to the industry. However, there needs to be a strong industry in order to attract the VC firms. The chicken-or-egg situation can be frustrating.

"I think that's why the process (of building the industry) is so slow," Jensen said.

The companies Kregel surveyed have raised $305.4 million to date and are currently seeking $53.9 million.

Funding for bioscience companies can be hard to come by. The processes involved in taking a technology to market are time consuming and relatively expensive, so returns are usually not seen as quickly as in other industries.

Dan Stinchcomb, CEO of InViragen LLC, is seeing some success in his capital-raising efforts. In November, InViragen received a grant of at least $1.7 million from

the National Institutes of Health, moving it one step closer to commercialization of a vaccine against dengue viruses. InViragen is focused on creating vaccines for diseases that affect third-world countries while many companies have shied away from these markets, for economic reasons.

Dengue viruses -- there are four different strains -- are a public health problem in Southeast Asia, the Pacific Islands, the Caribbean, Mexico, Central and South America and parts of Africa. Dengue fever threatens more than 2.5 billion people throughout the world, with around 100 million to 150 million coming down with the disease annually.

Stinchcomb said that the company is moving toward the manufacturing scale form of its vaccine, which is needed to move into clinical trials. He hopes to have the trials under way by next year.

The company is also developing vaccines for the plague and West Nile Virus. Stinchcomb said both programs are making good progress in the pre-clinical phase.

InViragen is one of the companies that is expecting to expand its work force and facilities in the near future. The company, with six employees in Fort Collins and two in Madison, Wis., could outgrow its current office within the year.

Stinchcomb isn't just optimistic about InViragen. He is seeing strides for the whole industry.

"I think the bioscience industry in Colorado in general is showing renewed vigor," he said.

The aspect of Northern Colorado's industry that Stinchcomb and the other survey respondents commonly pointed to as a shining star was Colorado State University.

The CSU factor

The Larimer County Bioscience Initiative Strategic Plan focused on CSU as an anchor for the region. Increasing the partnership between the university and the community was one of the main action items included in the plan.

CSU has not kept quiet about its interest in advancing the university's research into commercialization.

In February, the university introduced MicroRx, a first-of-its-kind entity aimed at speeding up the commercialization of research on infectious diseases into the global marketplace. MicroRx operates as a private, nonprofit entity focused on infectious disease and biomedical research and development.

MicroRx is the business arm of the first of CSU's "Superclusters, defined as alliances of academic researchers, economists and business experts designed to encourage collaboration and bridge the vastly different worlds of business and academia.

"I think we're seeing a whole new era at CSU with the Superclusters," Kregel said.

Development of CSU's Superclusters model, which is expected to help CSU to enhance its business development efforts, began in 2004. The goal is to enhance technology transfer by looking at marketability and commercialization at an earlier stage of research.

"The Superclusters enterprise will allow Colorado State University to more than double the number of inventions and start-ups resulting from all scientific findings in the next five years," said Mark Wdowik, vice president for technology transfer at the CSU Research Foundation and CEO of CSU Ventures. CSU Ventures is a not-for-profit subsidiary of CSURF, charged with overseeing the Supercluster model.

"It will help spur additional companies like InViragen," Stinchcomb said of the CSU Supercluster program. He added that in the few short years that the region has focused on bioscience as an industry cluster, strides have been made.

"If I was starting InViragen fresh today, it would have been a lot easier," he said.