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The right people, policies, and funding fuel the growth of Colorado’s bioscience cluster.

In 2003, Colorado was home to a total of 230 bioscience companies. In 2008, that number grew to 430. Employment in the industry during this time increased 50%, from 12,000 direct jobs to over 18,000. Earlier this decade, Colorado’s research institutions were spinning out one to three bioscience companies each year, at best. Since 2006, this number has mushroomed to almost 15 each year. Venture capital investment averaged $80 million annually in 2003, and for the last several years the average has been over $350 million. All of these growth indicators exceed national average growth rates. So, what has happened in Colorado?

Colorado began this century with many of the ingredients of a successful bioscience cluster:  some strong, large, established companies; a well-funded and competitive basic science research enterprise across multiple, highly-ranked institutions; a growing understanding by policy makers that the industry could provide desirable jobs; a long and strong cadre of highly-specialized professionals to support the industry; and some notable successful entrepreneurs. But, the sector seemed to stall. Early-stage companies were being moved almost right after their formation to more mature clusters by investors; research discoveries were not being commercialized within the state; there was no articulated place for the industry in the economic development agenda; and the industry itself was comprised of many isolated companies along a 120-mile corridor.

A group of leaders from Colorado’s research institutions, investors, and visionary entrepreneurs founded the Colorado BioScience Association (CBSA) in 2003 to create a single, coordinated organization to represent the industry, develop strategies for its growth, and track its development. In the five years it has been active, CBSA has provided the central convening point for all of the diverse stakeholders to develop and follow through on an intentional and aggressive agenda to increase the size of the industry in the state. The CBSA convenes the industry both through its own governance process and by organizing over 60 technical, education, and networking events that are attended by over 5,000 people each year. CBSA successfully initiated over $30 million in new legislation that brings resources to early-stage commercialization within research institutions and young companies.

The leadership of the association helped merge the interests of researchers, technology transfer, and company formation, resulting in impressive increases in locally-grown companies. Rather than being strictly a “start-up” state, Colorado has grown into a mature cluster with critical mass of R&D companies, manufacturers, and is home to a very diverse portfolio of successful companies. Within the last two years, several deals valued at over $1 billion have put the state on the business map.

The experience of several companies highlights the impact of a strong, unified, and aggressive industry association. Sierra Neuropharmaceuticals, located in Aurora, CO, was co-founded by Daniel J. Abrams, MD, Assistant Clinical Professor at the University of Colorado, Thomas J. Anchordoguy, and Karen Stevens, PhD.  The company’s technology offers a novel approach to treating medically-refractory neurological conditions by using an implantable infusion pump as a direct delivery system for treatment of brain disorders. While the technology looked promising to investors, Dr. Abrams and his co-founder had to produce additional research results for them to get serious. They successfully applied for a $190,000 state-funded, matching grant from a new program established pursuant to legislation initiated by CBSA in 2006. In 2008, the company announced a successful Series A funding round of $21.5 million, which came about, in great part, because the state grant allowed them to demonstrate research milestones that were required before the marketplace deemed them financeable.  

Out of the 26 proof-of-concept grants funded through this program, over 10 new companies will be created in Colorado from technologies within the state research institutions, all of whom were starved for funds to demonstrate the value of their discoveries to entrepreneurs and investors.  CBSA followed through the next year at the legislature and was successful in getting funds for the next stage of development—early-stage companies. To date, six companies have received matching grants up to $250,000. For example, Apoplogic, a company co-founded by Richard Duke, PhD, and located in Aurora, CO received one of these grants. The company is focused on the discovery, development, and commercialization of therapeutic products that target apoptotic cell death pathways found in cancers, leukemias, and lymphomas. Advanced MicroLabs is a chemical analytical instrumentation company dedicated to pioneering microchip measurement techniques. Dr. Charles Henry, professor, Colorado State University in Fort Collins is one of five co-founders at the company, which has received $1.7 million of external funding.

There is a definite theme in all of these examples. New state programs, advanced by CBSA, are dedicated to strategic funding gaps that have prevented the successful commercialization of research technologies discovered at Colorado institutions. The intellectual property that is generated from these discoveries are assets of the people of the state and, therefore, merit public investments so that the greatest possible return to the public is generated in terms of new jobs and new applications to improve health. These first two programs have been so successful that in 2008, the State Legislature, with the support of Governor Bill Ritter, Jr., extended these programs for the next five years at funding for a total of $26.5 million. A minimum of 16 technologies will be advanced every year that would not have had resources without this legislation. It is fair to say that these developments, which are significant by any measure, would not have emerged without the CBSA coordinating the industry sector, economic development agencies, universities, and others to make the case for the investments.

About the Author
Denise Brown led the Colorado BioScience Association until her retirement from the position in September 2008. Brown brought 27 years experience in the public sector to the CBSA, including positions in government, health care, and higher education.