Yesterday, the Rivard Report published an article on how biotech companies differentiate themselves from other tech startups and gave insight to our city’s biotech ecosystem’s origins. Here’s Part II in the series on San Antonio’s biotech industry and what it will take for it to grow it into a thriving ecosystem.
Boston. North Carolina’s Research Triangle Park. Philadelphia.
San Antonio has stiff competition in the biotech arena. So, what are the critical factors in growing a biotech ecosystem? Turns out research and innovation, the private sector, and venture capital are all essential.
Research and Innovation Fuel Biotech
The University of Texas Health Science Center at San Antonio (UTHSCSA) anchors the local biomedical research community, ranking in the top three percent of institutions worldwide receiving National Institutes of Health (NIH) funding. UTHSCSA’s Cancer Therapy & Research Center (CTRC) is one of four National Cancer Institute-designated cancer centers in Texas and home to one of the world’s largest Phase I human clinical trial networks for testing new cancer drugs.
The University of Texas at San Antonio (UTSA) also is heavily invested in biomedical research, has one of the largest science-related educational facilities in Texas, and is currently pursuing its goal of becoming a Tier One research university.
San Antonio’s very first scientific research institution, Texas Biomedical Research Institute, operates the world’s largest computing center for genetics and genomics research. The center is the only privately operated, maximum containment Biosafety Level 4 (BSL-4) laboratory in the U.S. and one of the nation’s few primate research centers.
Meanwhile, Texas Biomed’s sister institution, Southwest Research Institute, is one of the nation’s largest providers of applied research and development, performing biomedical research along with other types of science for both government and industry clients.
Entrepreneurship is Key to Biotech Innovation
Biotech research alone, however, is not enough to grow an ecosystem. Like San Antonio, Philadelphia has a strong medical education base, an academic research community, and a vested interest in growing the biotech industry, yet the “City of Brotherly Love” is steadily losing biotech jobs.
What Boston has that Philadelphia lacks – and what’s failing to create and sustain biotech jobs in Philadelphia – is a community of innovation. Because academic institutions in Philadelphia tend to focus more on pure science rather than biomedical entrepreneurship, the lack of pathways from science to commercial application is driving biotech innovation to Boston.
San Antonio is better positioned with its increasing emphasis on biomedical entrepreneurship. The Health Cell’s pilot “how to” workshop series, Developing and Clinically Introducing Medical Technologies, is a step in the right direction. The workshops are designed to help scientists and other members of the biotech ecosystem learn what it takes to develop a medical technology device from concept to market and, ultimately, to the patient’s bedside.
During a City Council meeting in June, UTHSCSA President Dr. William Henrich presented a plan to the Economic and Human Development Committee requesting support for an 8,000 sq. ft. on-campus science incubator, a facility with lab space and resources to accommodate four to five companies per year.
Such a campus incubator would allow UTHSCSA’s funded researchers to work on scientific research and development in close collaboration with private biomedical companies. Dubbed a “Geekdom for scientists,” the incubator would allow scientists from various fields to cross-pollinate and develop new procedures, therapies, drugs, and other innovations, a strategy that has proven highly effective in other markets.
In 2010, UTSA opened its New Venture Incubator (NVI) on its main campus, providing laboratory and office spaces for biotech startups in San Antonio. The NVI was designed to serve as a bridge between researchers and companies commercializing UTSA intellectual property. However, it currently houses only one or two companies.
Although UTSA has other entrepreneurship programs like The Center for Innovation, Technology, and Entrepreneurship (CITE) in place, there is still ample room for growth and innovation. At the same City Council meeting in June, UTSA Dean of Sciences George Perry discussed UTSA’s planned accelerator and innovation center that aims to serve the university’s areas of academic focus, including the biomedical field.
In addition to academic and military research, members of the healthcare community – be it private physician practices or local hospital groups such as Methodist, University, Christus Santa Rosa, and Baptist health systems – all conduct biomedical research within their own organizations.
This scratches the surface of San Antonio’s bioscience research community and its biomedical entrepreneurship. If the biotech ecosystem is to grow, San Antonio must support innovation and entrepreneurship to motivate biotech researchers to stay, or it risks losing scientists and their discoveries to other cities with stronger support bases.
Biotech innovation and research also must stay rooted in the private sector if a sustainable bioscience ecosystem is to take hold in San Antonio.
Private Sector Boosts San Antonio’s Biotech Cluster
Over the past few years, San Antonio has been able to attract operations of several global biomedical companies. In 2009, the San Antonio Economic Development Foundation (SAEDF) spearheaded the recruitment of the Minnesota-based medical technology giant Medtronic to the city to help advance diabetes therapy management and education. A year later, SAEDF successfully recruited the North American professional services headquarters of Becton Dickinson (BD), another global biotech company based in Franklin Lakes, New Jersey.
In 2010, the City of San Antonio for the first time decided to invest in a private bioscience company to help grow San Antonio’s capacity for biotech innovation. InCube Labs, an applied research laboratory focused on commercializing biomedical breakthroughs for patient care, expanded into San Antonio with its first incubator facility outside of California. InCube relocated three biotech startup companies from the Silicon Valley in the process: Corhythm Inc., Neurolink Inc., and Fe3 Medical, Inc., and went on to create additional companies – Theracle and iBridge Medical.
The Texas Emerging Technology Fund – which no longer exists – gave InCube $9.2 million to open a new facility in Texas. InCube’s CEO Mir Imran told the Rivard Report he had originally planned to set up operations in Dallas but former Mayor Henry Cisneros, City Manager Sheryl Sculley, and other industry leaders convinced him to move InCube to San Antonio instead.
InCube’s move to San Antonio was advantageous for both sides: Imran discovered the wealth of locally-generated intellectual property as well as the extensive collaboration within the biotech market, and San Antonio was able to address one of the biggest challenges facing emerging bioscience companies – the lack of venture capital.
“There was a significant lack of venture capital available in San Antonio at the time, and we all hoped the presence of InCube would help expand the innovation ecosystem and stimulate more investment in San Antonio’s homegrown life science startups,” BioMed SA President Ann Stevens recalled.
Also in 2010, San Antonio’s City Council created the San Antonio Economic Development Corporation (SAEDC) with the intent of supporting local startup companies and entrepreneurs as well as economic development projects like recruiting InCube. SAEDC Director Ed Davis explained how it takes a different kind of investor to invest in biotech.
“Typically, a biotech investor is someone not looking for short-term gains,” Davis said. “Biotech venture capitalists are people with money, interested in a particular biomedicine application and in philanthropy because they want the cure or therapy to be available for society, sometimes because of personal experience with a disease.
“In short, folks interested in both IT and biomedicine who can wait for return on their investment are the people looking at biotech,” Davis said.
San Antonio continues to provide incentives for companies to relocate. In 2015, City Council voted unanimously to fund a $1 million incentive for Cytocentrics, a biotech and robotics company, to move from Rostock, Germany to San Antonio to set up a robotics assembly and biotech research facility employing more than 300 locally-trained people.
Why is the private sector just as important in building a robust biotech sector?
“In Boston, a PhD joins another company in the city if a biotech startup fails,” StemBioSys CEO Bob Hutchens said. “If you come to a city with only one or two biotech companies and no infrastructure, it’s hard for science professionals to get other jobs.
“We need to keep growing the numbers of life science researchers and employers in San Antonio to achieve critical mass.”
Tomorrow, the Rivard Report will continue its biotech series with Part III on funding the biotech ecosystem in San Antonio.
Top image: Scientists at Texas Biomedical Research Institute work in the “hot zone” lab with highly lethal agents for which there are no vaccines or cures. Photo by Clem Spalding, courtesy of Texas Biomedical Research Institute.