$15 million set to support launching of biotech ideas
Seattle Times business reporter
Three deep-pocketed venture investors and a real-estate developer are sinking $15 million to incubate startup biotech companies in Seattle and attract scientists from around the world with business ideas.
The new company, called Accelerator, is tailored to take advantage of the connections and scientific brains of biotech pioneer Dr. Leroy Hood and his Institute for Systems Biology.
Investments are coming from MPM Capital, Arch Venture Partners and Versant Ventures — firms which together manage $3.5 billion of capital. Alexandria Real Estate Equities will provide fully equipped lab space at 1616 Eastlake Ave.
All parties say they have something to gain. As Accelerator creates new companies, the nonprofit institute will receive company shares it can plow into its endowment.
The venture investors get first crack at promising ideas, plus access to Hood and his discerning eye for technologies. Hood is a co-founder of hit biotech companies like Amgen, Applied Biosystems and Rosetta Inpharmatics. Alexandria gets an inside track as landlord for young companies that aspire to become big-ticket tenants.
"We're looking for the best ideas in the world, and we're using the (Institute) and Lee (Hood) and the money as bait," said Robert Nelsen, managing director with Arch Venture Partners.
The announcement comes during one of the worst market downturns in biotech history, when venture investors have become extremely reluctant to bankroll startups that are years from honing moneymaking drugs or technologies. It also shows an unusual willingness for a landlord to spend money on tiny lab operations.
But it also comes at a moment of big ambition in Seattle's biotech scene. Bill Gates gave $70 million last month to the University of Washington to strengthen it as a center of genomic sciences, and Paul Allen's Vulcan is planning $500 million of real-estate investment to house biotechnology at South Lake Union.
"I see this as a building block, like what Paul Allen is doing in South Lake Union," Hood said. "I see all of these things creating Seattle as one of the top two or three biotech hubs in the world. This is a small part of the puzzle."
The key to making Accelerator succeed, Hood said, will be choosing its investments wisely. Accelerator expects to start between six and eight companies over the next three years. Carl Wiessman, a venture partner with MPM Capital, will be Accelerator's president and chief executive. He and his staff will handle business operations for the scientists.
Accelerator will have a four-member board of directors, including Hood, which will decide which ideas deserve a shot.
Joel Marcus, chief executive of Pasadena, Calif.-based Alexandria, said his company is focused solely on laboratory space. It already is the landlord for some of Seattle's more established biotech companies, such as ZymoGenetics, Corixa and Dendreon. He downplayed notions that his company is trying to get a leg up on Vulcan with biotech tenants, saying "as they do things, it will be a benefit to the whole area."
Arch Venture Partners' Nelsen said global investors are willing to bet on Seattle largely because of Hood's record, and a desire to be close to him and his team. Hood led an earlier team at the California Institute of Technology that developed high-speed gene-sequencing machines that helped make possible the Human Genome Project, the worldwide effort to decode the human genetic code.
Nelsen said the startups represent a desire to go after high-risk, high-reward ideas. The ideas will be based on the growing realization, espoused by Hood, that future biological understanding depends on a multidisciplinary, computerized way of looking at genes, proteins and cells in concert, instead of studying one gene or one protein in isolation at a time. Companies may come from Hood and his institute or anywhere in the world, he said.
Luke Timmerman: 206-515-5644 or firstname.lastname@example.org
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