The Dirty Little Secret About Biotech
Biotech companies follow the money
By THOMAS LEE, Star Tribune
January 11, 2009
When Lisa Jansa, CEO of Exsulin Corp., meets with potential local investors these days, she usually gets the same response: "We just don't do pharmaceuticals," Jansa recalls, "We do devices."
That's not entirely surprising. Minnesota boasts a strong medical device industry. And given the poor economic climate, any available money will unlikely stray far from investors' comfort zones.
"We need to get some investors in Minnesota if we are going to be able to stay a Minnesota company," Jansa said. "Otherwise, we are going to have to leave. Our preference is not to do that. But you have to do what you need to do to get your financing in place."
"If investors [in San Jose, Calif.] say they would like you to [move] to San Jose, the company goes to San Jose," said Jay Hare, a Minneapolis-based analyst with PricewaterhouseCoopers who tracks venture capital investments.
In some ways, Exsulin represents a stubborn problem in Minnesota made worse by the recession: the lack of venture money for early- to mid-stage start-up companies, especially those that don't specialize in medical devices.
Exsulin's "situation is not unique at all," said Dale Wahlstrom, CEO of BioBusiness Alliance of Minnesota, an industry group. "There are many companies in biotechnology and pharmaceutical companies that have good ideas that can be commercialized. But they have a difficult time getting funded in Minnesota. We don't have VCs [venture capitalists] active in that area. We don't have that reputation."
So when OurLeaders try to justify investment in biotech as a means of job creation, please consider the above before buying the argument...
Recall that Dr. Furcht's famous ten million dollar stem cell patent was sold to - a company in Cleveland.