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State’s biotech sector needs more lab space, talent and money

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Delaware has a lot to celebrate when it comes to the burgeoning biotechnology sector. In the pages ahead, you’ll read about an expansion at the Delaware Innovation Space that will accommodate more small, innovative firms, and a partnership between a local startup and a larger company that has the potential to realign the global market for fish feed.

Still, the innovators behind Delaware’s biotech boom have their discontents. Common complaints include a lack of lab space for startups and companies looking to expand; too few local investors in the sector; and the ongoing struggle of attracting talent to a tiny state on the fringes of bigger markets. 

These barriers present Delaware with challenges as well as opportunities. To better understand the landscape of this still-young industry, we talked with a handful of the sector’s biggest champions to get their take on what’s gumming up the works and what could be done to clear the way for greater business attraction, retention, and growth in the biotechnology sector.

More lab space, please

Despite the recent expansion of the Delaware Innovation Space, there is a lack of lab space for upstart companies in need of a flexible, well-equipped home base for their research and development work. 

Incubators such as the Delaware Innovation Space and DTP@STAR at the Delaware Technology Park only fill that role for so long. Designed for startups in the early stages of their development, existing firms looking to relocate or rapidly scale up have to look elsewhere for space.

“If somebody wants to start a small business on their own, or if they have gotten to a certain size and need to get out of the incubator, there are no buildings or facilities with labs in Delaware,” said Helen Stimson, president and CEO of the Delaware Bioscience Association, an industry trade group.

This means companies have to either build the facility themselves, shouldering all the costs, or work with a developer and likely enter an extended lease that is limiting in its own right. Both of these options are out of the realm of possibility for upstart firms, Stimson added. 

What’s needed instead, she said, are developers with an express interest in building flexible, high-end lab space that will attract both outside firms and startups looking to stay in Delaware. So far, however, that mentality of build-it-and-they-will-come has not taken hold among local developers.

Delaware Innovation Space

Bill Provine, president and CEO of the Delaware Innovation Space, points to developers like Alexandria Real Estate, which has established a national reputation for building dynamic lab space.

One example closer to home is MLP Ventures, which launched The Discovery Labs in King of Prussia, Pennsylvania. The company acquires and renovates large pre-existing lab facilities, turning them into specialized co-working spaces for health-care, life-science, and tech companies.

“Delaware is not in the game yet, from that perspective,” Provine said. He added that making sure facilities exhibit a certain “glitz and glamour” is also important when it comes to attracting companies in the biotech sector.

One possible answer to the problem could reside within the state. In a viewpoint for Delaware Business Times, Stimson called on stakeholders such as the Delaware Technology Park, Delaware Innovation Space, and the Delaware Prosperity Partnership to come together to work on a solution.

More talent, more money

In general, Delaware struggles to attract talent in the shadow of larger metros like Baltimore and Philadelphia. But in the science-centered biotech world, there is a specific need for professional business leadership.

“A lot of times you have really great scientists who have a great idea and are launching a company, but they’re not necessarily CEO material,” Stimson said. “They may be CTO material, but they’ve never done sales and marketing of a company before.”

Part of this deficit comes out of startup founders not seeing the value-added in budgeting for an experienced CEO, but Stimson says the investment is worth it in the long run if they want to achieve profitability, not to mention venture capital from investors fixated on individuals as much as concepts.

“What you’ll find with venture funds is that they bet on the team. They don’t really bet on the science,” she said. 

One such business pro is Jeb Connor, the CEO and co-founder of Genome Profiling LLC (GenPro), a biotech firm based in Newark, who says the biggest obstacle here in Delaware is the lack of available capital.

“The reality is that Delaware is a modestly sized state, and in that regard a niche market for innovative ventures,” he said.

For its size, he added, Delaware performs well, but it pales in comparison to larger states that have a sustained commitment to bringing capital and infrastructure to the biotech sector. 

“Access to the kind of capital we need doesn’t exist in Delaware,” he said. “For the most part, we look elsewhere.”

On the bright side, the state government has recently stepped up with the launch of EDGE grants. The first round sent $748,000 in matching grants to 10 firms, a number of which fall within the biotech sector. This kind of early support is crucial, according to Provine, even if it can’t make up for the lack of venture capital.

“Until a few months ago, Delaware had basically nothing,” he said. “It’s not sufficient in the long term for what our ambitions probably are, but it’s a great next step.” 

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