How A Colorado Town's Med-Tech Startups Thrive On Shoestring Budgets, Stem Cells

In most cities, academic researchers have to drive across town, or even through other cities, to reach an industry incubator. In Aurora, they just walk across the street.

Taiga Biotechnologies may wipe out blood banks as we know them. The Aurora, Colorado-based startup has developed and licensed stem-cell technologies that can grow an almost limitless supply of red blood cells. If they work (and it’s looking likely) the technologies could be used to provide blood where it's needed the most--ambulances and disaster sites, for instance. Eventually, they could even replace some or all of the 39,000 units of blood transfused into patients every day.

And so far, Taiga has done it without venture capital.

How? The answer lies along Montview Boulevard, an unassuming stretch of Aurora road, with a golf course next door and distant views of the mountains to the west. On Montview’s south side, cranes are building a new Veterans Administration hospital on the 217-acre Anschutz Medical Campus, home to the University of Colorado Cancer Center, University of Colorado Medical School, and other academic and research buildings. On Montview’s north side, cranes are adding to the Fitzsimons Life Sciences District, a 160-acre bioscience park that some call an industry incubator and others call a garage. Literally, Montview is the dividing line between academia and industry, and it’s across this line that Taiga and an increasing cohort of academic researchers with companies strapped to their backs, spend their afternoons.

"Being across the street is critical," says Yosef Refaeli, cofounder and CEO of Taiga and a faculty member at the University of Colorado School of Medicine. (He’s also an affiliate at the CU Cancer Center and The Charles C. Gates Center for Regenerative Medicine and Stem Cell Biology.) "The key point is capital optimization, both money and opportunity cost. As a startup, you can't pay the overhead for a lab and an office and an animal facility. And half an hour spent driving from the university to your offices becomes an hour you could've spent doing something else. It’s sunk opportunity costs. At that point, you might as well be in another city."

Colorado incubates a little differently from QB3 across from the University of California, San Francisco, or the cluster of Cambridge biotechs that sit on the north bank of the Charles River. With low overhead for shared meeting rooms, a mail room, a receptionist, and a bare-bones lab space where you might wrangle a free autoclave and hoods (left over from the days when the academic campus was an army base), the Fitzsimons Life Sciences District is like an incubator for incubators--a place where startups can rightfully claim the street cred of the garage.

"80 % of the technologies we license go to existing companies like Merck, Pfizer, and Amgen," says Rick Silva, director of the Technology Transfer Office at the University of Colorado, Denver. "But the other 20% go to startups--researchers with an innovation--and these startups are leveraging whatever friends, family, federal, and state grants and angel money they can cobble together and taking up residence in the incubator."

In addition to a cost per square foot that's about 1/20th that of QB3 or Cambridge, Colorado has another surprising advantage over the well-heeled incubators on the coasts. "Other places, everybody knows what everybody else is doing. Here, you fly under the radar," says Refaeli. "At an early stage, you don't want to shout what you're doing. Then when you show up, the companies with VC funding don't have enough time to beat you to market."

Also, "we're not landlocked at our medical campus," says E. David Crawford, MD, also at the CU Cancer Center and head of urologic oncology at University of Colorado Hospital. "As much as I hate to see the golf course go, we have room to expand that other places don't have," he says. (Thus the cranes.) His company, Precision Biopsy, offers a device in which light is inserted into prostate biopsy needles to improve tumor detection. Light reflects differently off tumor tissue than healthy tissue. Only when Crawford's device senses a tumor does it take a punch biopsy for confirmation, all with the same needle. Next, he hopes the device will be used for breast cancer screenings.

"I don't want to sugarcoat this," Refaeli says. "This isn't QB3 where venture capital owns the top floor and the money trickles down. The companies who have succeeded here have done so despite the lack of some of the now standard incubator infrastructure."

But one company's lack of infrastructure may be another company’s best shot at success. For a researcher with a great idea and the intellectual-property license to back it up, the unique combination of low overhead and the ability to incubate literally across the street from a top academic medical campus might be just the thing needed to get a fundable foot in the door.

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[Image: Sashkin via Shutterstock]

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1 Comments

  • Kaspar Mossman

    It’s good to hear that biotech entrepreneurship is vibrant across the country. Each region has its own resources and challenges. At QB3 we benefit from the cluster of research universities in the Bay Area as well as the nearby venture capital in Silicon Valley. One of the challenges of our region—the high cost of real estate—turned out to be an opportunity to provide tiny amounts of space in our incubators, which are located both on campus at UCSF  and UC Berkeley as well as in privately-owned buildings. Based on the long waiting list, we have found an unmet need. Another challenge is the miserly funding environment for life science startups. To address this, we launched our own seed-stage venture capital fund that specializes in making smaller investments that VCs shy away from. It turns out, however, that due diligence is a lot of work! Just to clear up a point in the story, the only venture capitalists in our building at UCSF are our own directors—though our connections in the finance community provide invaluable advice.

    Kaspar Mossman
    Communications director, QB3