by Dennis E. Powell
Some of the leading – and most lucrative – biotechnology in the world is being developed in a small Florida city with a population of less than 10,000, northwest of Gainesville. The city is Alachua, and it is home to the University of Florida Biotechnology Incubator, the current recipient of NBIA’s Dinah Adkins Incubator of the Year award in the Technology Focus category.
As you might imagine, it didn’t just happen. The incubator has stringent standards for acceptance of clients – and it makes them prove themselves all over again every year. But those who make the grade are handsomely rewarded, through the program’s extensive connections with venture capitalists and international biotech giants.
“We have been very good at selecting the most promising companies,” said Patti Breedlove, director of the incubator. After companies have been chosen, they are not home free, though. “When we review a company and license space to them, the company is given 12 months. At the end of that period, they go before a review committee. They go through the same process they did on entry.” If the company passes muster – as all but a handful have in the incubator’s 19 years of operation – it gets another 12 months, followed by another review.
This way, Breedlove said, “we have the strongest crop of companies in the program.”
Competition for incubator residency is fierce, which might be a surprise in the area, part of the greater Gainesville area whose entire population is only about a quarter million. “It’s only in the last 10 years that the community has learned how to make money from the research” conducted at the University of Florida. Initially, the program focused on companies founded by professors at the university, “but today we take a different approach,” Breedlove said. “Now the accent is on experienced business leadership. The best thing you can do is find experienced business leadership and bring it in, rather than train scientists to be business people.”
Once a great company is established, it has access to the considerable influence of the network of biotech companies and venture capitalists known to the Biotech Advisory Committee and to David L. Day, University of Florida’s assistant vice president and director of its office of technology licensing. Those introductions, as well as contacts made by the companies themselves, have led to a stunning string of successes. In 2012, for instance, a client company called Pasteuria Bioscience, which had developed a novel approach to parasitic nemotodes that harm agricultural crops, was bought out by Swiss-based Syngenta for $113 million. Two other companies were acquired earlier for $98 million and $34 million respectively. (Another Sid Martin graduate, Applied Genetic Technologies, which is developing treatments for “orphan” eye diseases, recently filed for a $50 million initial public offering; AxoGen, a resident client with products for patients with peripheral nerve damage, recently moved to the NASDAQ; and graduate Nanotherapeutics landed a U.S. Department of Defense contract of more than $200 million to build and operate a 165,000-square-foot advanced development and manufacturing facility for medical countermeasures).
The success stories are many and varied, but the rate of high-dollar acquisitions for a program that has graduated 28 companies is very high indeed. This is due in large measure to the Biotech Advisory Board’s – and Day’s – approach. “We’ve been able to attract the outstanding VCs to advise companies and to invest in them,” Breedlove explained. Part of the incubator’s service is to help the company grow into something that will attract investment – that is the kind of company that investors are seeking.
It’s a winning formula. Since it opened, the Sid Martin incubator has helped clients attract more than $1 billion in funding and brought on average $100 million economic impact to Alachua County each year.
The facility is purpose-built and includes features that are not easy for an early-stage company to provide on its own.
“We have the same physical plant we had at the beginning,” said Breedlove. “It was very well thought out and surprises us that they did such a good job of anticipating what would be needed, with few role models at the time in the field.”
The incubator offers private, secured laboratories of varying sizes that provide all the hookups a company might need; a freezer room with a backup generator (always important in sometimes-stormy Florida); hazardous waste management; climate controlled greenhouses; access to specialized equipment and facilities at the University of Florida if the equipment is not available at the incubator; and most especially animal facilities, because the regulations governing animal experimentation are complicated from both a scientific and a humane view.
“Some of our companies are here because the U.S. Food and Drug Administration requires animal studies prior to human clinical trials,” Breedlove explained. “The animal care facility cannot be operated by the incubator professionals themselves. Ours is operated by the university’s animal care unit. Companies doing animal research are required to have their animal protocols reviewed by a committee at the university.” Client companies make use of the university’s Institutional Animal Care and Use Committee and animal care facilities at the same rates they would pay were they university faculty.
“We have a lot of shared, common equipment,” adds Merrie Shaw, incubator manager. This, too, ranges from microscopes, ultra centrifuges and autoclaves to elaborate and expensive water purification systems and polymerase chain reaction equipment for DNA research, spectrum-analysis equipment of several varieties, and (something usually found only in programs near tectonic faults), a shaking incubator. This list is not at all comprehensive.
The program takes the long view as well, which involves building the biotech industry in the Sunshine State. To that end, the program developed the Florida BioDatabase, which is updated twice each year and which is the basis of their bi-annual state-of-the-industry report. The database contains every bioscience company in Florida, is fully searchable and available free online.
A city of entrepreneurs has grown around the Sid Martin incubator. Progress Corporate Park, where the incubator is located, is now a flourishing, 204-acre corporate-tech-biotech park that is home to numerous companies, some of them Sid Martin graduates. It borders a 7,000-acre state park.
“In these tough economic times,” says Shaw, “our facility has maintained a 95-percent occupancy rate.”
Adds Breedlove, “People have stopped laughing when Florida and biological science are mentioned in the same sentence.”
Dinah Adkins Incubator of the Year, Technology Focus
University of Florida
Sid Martin Biotechnology Incubator
12085 Research Drive
Alachua, Fla. 32615
Year established: 1995
Incubator size: 40,000 square feet, excluding greenhouses and animal facilities
Incubator clients: nine resident, 13 affiliate
Incubator graduates: 28 graduated or acquired
Organizational structure: Owned and operated by the University of Florida, the Sid Martin Biotechnology Incubator has a director and a Biotechnology Advisory Committee comprising venture capitalists, bio-tech entrepreneurs and others to provide guidance to incubator management and business advice to incubator clients.
Keywords: Biotechnology incubation, client services, best practices, Incubator management, NBIA programs
Phone: (740) 593-4331
Fax: (740) 593-1996
PO Box 959
Athens, OH 45701-1565