Today's Denver Post includes a feature about the challenges of securing funding for bioscience startups. CID4's President & CEO Richard (Rick) Duke shared these thoughts:
"Venture capital is going to proven winners or those with clinical trial results rather than startups armed only with a promising idea backed by research and early lab tests, said Richard Duke, co-founder of Denver-based GlobeImmune, which is developing treatments for infectious diseases and cancer. The deals tend to be bigger than in the past, he said.
Getting a drug candidate to the level where venture-capital firms will step in can cost $5 million or more. Some companies are able to attract angel investors or government grants to make the jump. This gap is known in the biotech industry as the "valley of death" because so many companies perish there, Duke said.'
The regional early-stage companies have really gotten killed,' he said...
Duke should know. After taking GlobeImmune through early-stage funding, he left to start other ventures. GlobeImmune received $17.5 million in later-stage financing earlier this year, while Duke's new company, ApopLogic Pharmaceuticals, has been unable to attract the $2 million to $5 million in early-stage capital it needs to attract the attention of venture-capital firms.'
Today we'd never be able to get GlobeImmune off the ground. It would be very difficult,' Duke said.
To combat the problem, Duke and former Gambro president Kevin Smith launched the Colorado Institute for Drug, Device and Diagnostic Development (CID4) last year. Based in the Fitzsimons Life Science District in Aurora, CID4 provides funding and management expertise to small biotech companies.
The state backed CID4 with a five-year, $3.75 million grant and the Fitzsimons Redevelopment Authority kicked in $1 million. The institute's goal is to create jobs and provide returns while helping bridge the gap for early-stage companies.CID4 is one of a handful of state or state-backed programs to bolster bioscience, which is one of four target industries designated by the Colorado Office of Economic Development and International Trade for funding to promote growth. The others are aerospace, renewable energy and tourism.
In 2008, the state created a $26.5 million fund to make grants of $150,000 to research institutions and $250,000 to companies in early stages of research and development through 2013. Another important development for Colorado biosciences is the Colorado Initiative in Molecular Biotechnology at the University of Colorado, which is headed by Nobel laureate Tom Cech and has a $145 million facility under construction."
Link to the Sunday Denver Post article