Editor's note: This is the first of a two-part series on the state's bioscience industry. Next week, we profile one of the state's most successful startups, Alexion Pharmaceuticals. View a video about another up-and-coming company, Achillion Pharmaceuticals below.
Nourished by brainpower and public and private dollars, bioscience has long been touted as an economic beacon for 21st century Connecticut.
More than three dozen startups in the last 20 years have attracted billions in state, federal and private investment and opened doors to 63,000 Connecticut jobs, ranking the state as New England's most active bioscience cluster outside powerhouse Boston-Cambridge.
Such home-grown biopharmaceutical companies as Alexion Pharmaceuticals in Cheshire — the first Connecticut startup to win federal approval to market its drug — and Achillion Pharmaceuticals and Kolltan Pharmaceuticals in New Haven, are ambitiously trying to replicate the therapeutic and financial successes of '70s and '80s bioscience pioneers Genentech and Amgen.
"There's a lot of assets driving the biotechnology industry in Connecticut,'' said Mark Van Allen, the University of Connecticut's point-man for bioscience startups. "The normal Joe may not know how vibrant it is, but people working in it know how strong it is — and getting stronger.''
But the recent struggles of CuraGen Corp. and Neurogen Corp., two once-promising Branford bioscience companies whose research never advanced beyond clinical trials, are reminders that success is far from assured. Alexion, for instance, chewed through nearly $1 billion before the feds approved its Soliris blood-disorder treatment in 2007 — 15 years after the company started.
The long timetables to research and test drug prototypes consume large sums of cash, which recession-wary investors are reluctant to provide nowadays. That is forcing some bioscience firms to shelve their drug-development models or, in the case of CuraGen and Neurogen, seek a merger.
Bioscience firms, too, are engulfed in uncertainty over the Obama administration's efforts at reforming health care. The major concern is whether a revamped U.S. health care system can afford to financially reward innovative treatments for everything from birth defects to cancer to aging-related ailments.
Yale University has been Connecticut's leading incubator — approximately 40 bioscience companies have sprung up there since 1994. At least 25 of those are still operating as independent entities. These biosciences firms are devising treatments for disorders few in the human population ever knew existed.
Moreover, with $100 million in state seed money, observers say Connecticut's nascent stem-cell sector could spawn even more groundbreaking medical products and jobs, particularly in the Hartford area.
"It's one of the strongest sectors in the state, one with huge potential,'' said Commissioner Joan McDonald of the state Department of Economic and Community Development.
Connecticut's crop of bioscientists and investors hope to create a pipeline of new drug discoveries — research that for decades was the province of pharmaceutical titans such as Pfizer, Bristol-Myers Squibb and Boehringer Ingelheim, all of which have research and development operations in Connecticut.
Pressures on big pharma from the recession, along with expiring drug patents that leave them vulnerable to competition from generics, has forced them to lay off many of the same scientists now pursuing state-of-the-art health therapies at many of Connecticut's bioscience startups, observers say.
A capital shortage isn't the only hurdle for bioscience startups. Some critics question whether state and federal policymakers are committed enough to leveraging the state's bioscience assets — chiefly people and technology — to ensure its vitality long term. One solution, they say, is for the state to double or triple the number of startups in which it invests, along with enhancing tax credits and other incentives to spur greater investment and innovation.
"I don't disagree with that,'' said McDonald, the state's economic development commissioner whose other hat is chairing the technology promoter, Connecticut Innovations Inc. (CI) "It's always a balancing act. There's never going to be enough, but we can always invest more.''
Indeed, the state's economic strategic plan unveiled last week proposes an "angel investor tax credit'' for individuals, corporations or institutions that invest in biotechnology, digital media and "green" technology.
Financial and policy support is important to Connecticut biosciences that are competing with larger, more established regions of the U.S. — among them Boston; San Diego; San Francisco; North Carolina's "Research Trangle" — that are much larger and have a bigger head start.
"Every state is looking to develop their (biotech) industry,'' said Stamford consultant Michael Eckstut, author of the March 2009 Archstone Consulting analysis the Connecticut and U.S. bioscience industries.
With Yale and UConn leading the way in commercializing medical research, observers say Connecticut may some day break into the upper tier of bioscience clusters.
"I don't think it's hyperbole,'' said Harry Penner, an investor in more than a half-dozen Connecticut bioscience startups, including Neurogen and Celldex Therapaeutics, a Massachusetts company preparing to acquire CuraGen. "I'm involved right now with two companies, both with ties to Yale. There's a wealth of new drug possibilities coming out of these.''
In Connecticut's favor, Penner and others say, is it has a biosciences infrastructure of skilled scientists, technicians, lab space, plus a supplier network for everything from rubber gloves to medical-waste disposal.
Much of the lab space is in proximity to Yale, the epicenter of pharmacological and medical research in Connecticut. These include Science Park, New Haven's oldest lab-incubator complex and Yale's 136-acre bioscience park once owned by Bayer.
In addition, there is 300 George St., a one-time phone company building that landlord Winstanley Enterprises converted to office-lab space now teeming with bioscience tenants. Achillion and Kolltan are housed there, as is a satellite of UConn's biomedical technology transfer office.
Venture investor Arthur Altschul and Yale professor Joseph Schlesinger reteamed in 2007 to start Kolltan, their third pharmaceutical company in a decade. The other two — one of which is now part of Pfizer — were launched on the West Coast because, Altschul said, the belief then was that being close to Silicon Valley helped lure investors and scientific talent.
Upon meeting with Yale officials who embraced Kolltan's proposal for a novel therapy for targeting cancerous cells, Altschul said he realized the involvement of Schlessinger and Yale were magnets enough. In January, Kolltan raised $40 million in private equity — $5 million more than it originally sought — from a hand-picked roster of investors.
"I now understand why more people are looking at New Haven and the attractive draws that exist there.''
Other outsiders are seizing on Connecticut's bioscience allure. Irish pharmaceutical maker Amarin Corp. moved its R&D operations to New London last year, immersed amid scientific talent and affordable lab space. But there was one more reason to locate there:
"Because I live here,'' said Dr. Declan Doogan, a Harvard instructor and ex-Pfizer scientist Amarin hired to research cardiovascular treatments.
To a lesser extent, UConn's campuses in Storrs, Stamford and Avery Point, Wesleyan University in Middletown, and the University of Hartford, are emerging as research hubs.
In Farmington, UConn is spending $52 million to transform a former production plant in the shadow of its medical center into 117,000 square feet devoted to stem cell research.
Due to open next summer, the facility is being marketed across the U.S. to research-entrepreneurs and has drawn interest from as far away as France, said Rita Zangari, who runs UConn's technology incubation program.
"It'll mean a great deal to jump-starting bioscience'' in central Connecticut, Zangari said. "No place exists in greater Hartford for starter companies like this.''
Connecticut is betting on biopharma. Forty percent of the state's $44 million venture capital portfolio managed by CI is invested in biosciences. Another 50 percent are information technology companies, and the rest are clean-energy firms, CI said.
"Clearly, we believe that Connecticut has the intellectual capacity to develop these [bioscience] companies,'' said CI Chief Executive Peter Longo. "It's one of the key sectors for Connecticut to foster and develop.''
Yan Huang, a scientist for Alexion Pharmaceuticals in Cheshire, prepares a DNA sample for testing.
Here are some of the more than 40 bioscience startups in which Yale has had a direct hand in starting in the last two decades:
Alexion Pharmaceuticals — approved treatment for a rare blood disorder
Achillion Pharmaceuticals — hepatitis, HIV research
Rib-X Pharmaceuticals — antibiotics research
Cellular Genomics Pharmaceuticals (CGI) — cancer, immunology research
Optherion — aging eye-related disease research
Proteolix — cancer research
Source: Yale University, Office of Cooperative Research