Seattle’s biotechnology industry yesterday received another booster shot.<\/p>\n
Three of the country’s top-tier venture capital firms joined with Alexandria Real Estate Equities and Leroy Hood’s Institute for Systems Biology to create Accelerator Corp., a Seattle firm that will incubate new biotechnology start-ups in the South Lake Union neighborhood.<\/p>\n
Accelerator, which is backed with $15 million from MPM Capital, Arch Venture Partners and Versant Ventures, will provide money, management, laboratory space and the expertise of the Institute for Systems Biology, a 3-year-old non-profit research organization founded by some of the world’s leading scientists.<\/p>\n
Through the incubation process, Accelerator will try to help researchers turn promising technologies into powerful businesses. Some of those scientists will be recruited globally, while others will be home-grown from research institutions such as the Institute for Systems Biology and the Fred Hutchinson Cancer Research Center, said Bob Nelsen, managing director of Arch Venture Partners.<\/p>\n
One of the start-ups being considered is NanoString Technologies, a genomics company that was spun out of the Institute for Systems Biology last year and won the University of Washington Business Plan Competition this week. A second company is from outside the area, Nelsen said.<\/p>\n
At a time when many states are vigorously attempting to build biotechnology centers, Nelsen said, Accelerator is “bait for the best ideas” in the industry.<\/p>\n
“One of the weaknesses that Seattle has had in the past is that investors look at it as if you have to grow everything here,” Nelsen said. “To be a great regional leader, we are going to have to import management and import technology that complements what we already have.”<\/p>\n
Accelerator’s formation comes on the heels of some positive developments in Seattle’s biotechnology industry. Last month, Bill Gates donated $70 million to the University of Washington to create a new center for genomics research. And billionaire Paul Allen, who co-founded Microsoft with Gates, continues to push forward with plans to transform South Lake Union into a major biotechnology hub.<\/p>\n
Those projects have occurred despite the fact that life science investing has slowed in recent months, with venture capital dollars decreasing by 35 percent in the first quarter.<\/p>\n
MPM Capital’s Carl Weissman, who serves as president and CEO of Accelerator, said the Boston firm could have set up a life science incubator in a number of regions. But it chose Seattle for one reason: Leroy Hood.<\/p>\n
“Lee Hood has had the Midas touch,” Weissman said. “The litany of Amgen, ABI, Rosetta, Darwin – every company that he gets involved in founding turns into a huge, very profitable, very successful operation.”<\/p>\n
For that reason alone, Weissman said, the concept was “a no brainer.”<\/p>\n
Hood, who was recruited to the UW in 1992 and left in 2000 to form the Institute for Systems Biology, played a critical role in the mapping the human genome. The winner of the 2002 Kyoto Prize and the 2003 Lemelson-MIT Prize, Hood is known as a leader in computational biology. The Institute for Systems Biology, which employs more than 170 people, has attracted $130 million in funding.<\/p>\n
Accelerator’s facility will be located at 1616 Eastlake Ave. E. in a five-story building bought by Alexandria Real Estate. Alexandria, which paid $34.7 million for the 165,000-square-foot building two months ago, also owns the nearby ZymoGenetics campus. One of Alexandria’s hopes is that the small start-ups fueled by Accelerator will one day grow into large enterprises with appetites for lab space in the area.<\/p>\n
The idea behind Accelerator is not unique. During the late 1990s, dozens of high-tech incubators were formed to provide entrepreneurs with capital, management, office space and other services. Most of the incubators, which backed Internet and software companies, fizzled out.<\/p>\n
But the leaders of Accelerator say their concept is different. Because it brings together three heavyweights from the venture capital industry and is affiliated with one of the world’s leading biology organizations, Nelsen believes, Accelerator can succeed where other business incubators have failed. Together, the three venture firms have almost $2 billion of active funds.<\/p>\n
“It is risky and it is an experiment,” Nelsen said. “But it is very promising.”<\/p>\n
Nelsen, who says he is “as skeptical of the average incubator as anyone else,” believes the new organization has the right mix of investment and scientific expertise.<\/p>\n
“What is interesting about this is that it is very much idea- focused and there is a very rigorous threshold for getting the best ideas,” he said. “Most incubators are just (office) space.” Ideas considered by Accelerator will have to be approved unanimously by the board, he said.<\/p>\n
Accelerator’s team plans to build six companies in the next three years. It will invest about $10 million, with the remainder of the money being used for operating expenses. By providing services such as accounting, human resources, business development and scientific advice, Weissman said, Accelerator will help start-ups avoid the typical mistakes made in the early stages of a business.<\/p>\n
“We want to alleviate any need for them to do anything other than to go into the lab and develop the technology,” Weissman said.<\/p>\n
P-I reporter John Cook<\/p>\n
can be reached at 206-448-8075<\/p>\n
or johncook@seattlepi.com<\/p>\n","protected":false},"excerpt":{"rendered":"
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