Loxo deal shows po­ten­tial of state biotech

New Haven Register (Sunday) (New Haven, CT) - - BUSINESS - By Paul Schott IN BRIEF [email protected]; 203-964-2236; twit­ter: @paulschott

STAM­FORD — Six years ago, a biotech firm plan­ning to de­velop ge­net­i­cally focused cancer treat­ments launched down­town.

That firm now is worth sev­eral bil­lion dol­lars and has put its first prod­uct on the mar­ket.

The rise of Loxo On­col­ogy — which has agreed to be ac­quired for about $8 bil­lion by phar­ma­ceu­ti­cal gi­ant Eli Lilly & Co., af­ter re­cently gaining U.S. Food and Drug Ad­min­is­tra­tion ap­proval for its Vi­trakvi drug — re­flects the grow­ing promi­nence of the biotech sec­tor in south­west­ern Con­necti­cut. The area’s cen­tral lo­ca­tion and pub­lic sub­si­dies have at­tracted other life-sci­ences star­tups, but long-term ex­pan­sion could hinge on sus­tained fis­cal and op­er­a­tional sup­port for the in­dus­try.

“Any suc­cess of a Con­necti­cut-based com­pany does a lot to pro­mote the state’s ro­bust biotech sec­tor,” said Paul Pescatello, ex­ec­u­tive di­rec­tor and se­nior coun­sel for the Con­necti­cut Busi­ness & In­dus­try As­so­ci­a­tion’s Con­necti­cut Bio­science Growth Coun­cil. “We have to make sure we take ad­van­tage of that mo­men­tum.”

Promis­ing in­dus­try

About half of Loxo’s ap­prox­i­mately 125 em­ploy­ees are based at its of­fices at 281 Tresser Blvd. It also main­tains of­fices in South San Fran­cisco, Calif., and a lab­o­ra­tory in Boul­der, Colo.

“We’re able to re­cruit and at­tract peo­ple on both coasts and in the mid­dle,” Loxo founder and CEO Josh Bilenker, a Stam­ford res­i­dent, said in a re­cent in­ter­view. “One of the hard­est things we en­counter is just hir­ing great peo­ple to take us to the next level. It’s nice to have a foot­print in these dif­fer­ent cities be­cause it lets us talk to more types of can­di­dates.”

Loxo op­er­ates within a cou­ple of blocks of Pur­due Pharma, the maker of OxyCon­tin, and Cara Ther­a­peu­tics, which is de­vel­op­ing treat­ments for chronic and acute pain and the itch con­di­tion pru­ri­tus.

One mile south, ge­nomic test­ing firm Sema4 opened its main of­fices at 333 Lud­low St., in fall 2017. It moved from its orig­i­nal home at the Mount Si­nai Health Sys­tem cam­pus in Man­hat­tan.

Sema4 set­tled on Stam­ford as its new home city be­cause it was look­ing for space for its grow­ing op­er­a­tions that it could lease for a frac­tion of Man­hat­tan rates, while still op­er­at­ing nearby.

The Stam­ford of­fices now house 126 em­ploy­ees.

“It’s gone bet­ter than ex­pected,” Sema4 founder and CEO Eric Schadt said in an in­ter­view last year. “It’s more re­laxed, with more space. It’s a bet­ter work­ing en­vi­ron­ment and a bet­ter qual­ity of life.”

Last April, Sema4 an­nounced it would move its Man­hat­tan lab work to Stam­ford and in­crease its head­count in the state by more than 400 within the next five years.

The ap­prox­i­mately 55,000-square-foot lab is sched­uled to open in the third quar­ter of this year. It would house DNA and RNA pro­cess­ing and se­quenc­ing and ge­netic-coun­sel­ing op­er­a­tions.

Sema4 of­fi­cials have not dis­closed the new test­ing cen­ter’s ad­dress, but they say it would be at a prop­erty that for­merly housed an­other lab.

In ad­di­tion, Sema4 has op­er­ated since 2014 a lab in Branford, where it em­ploys about 40 peo­ple.

Mean­while, the area con­tin­ues to make new re­cruits.

SpringWorks Ther­a­peu­tics, which is de­vel­op­ing drugs to treat can­cers and rare dis­eases, re­lo­cated last Novem­ber from mid­town Man­hat­tan to 100 Wash­ing­ton Blvd. in the Har­bor Point neigh­bor­hood of Stam­ford’s South End. Six­teen em­ploy­ees now are based there.

Sup­port­ing the growth

Sig­nif­i­cant state in­vest­ment un­der­pins the in­dus­try’s ex­pan­sion.

Re­lated to Sema4’s new lab, the state Depart­ment of Eco­nomic and Com­mu­nity De­vel­op­ment loaned the com­pany $6 mil­lion to pur­chase ma­chin­ery and equip­ment, make cap­i­tal im­prove­ments and move ahead with new hires. The com­pany would be el­i­gi­ble for up to $5 mil­lion of for­give­ness if cer­tain mile­stones were met.

In De­cem­ber 2015, DECD gave the com­pany a sep­a­rate $9.5 mil­lion loan to help cre­ate 145 po­si­tions.

Other ma­jor biotech in­vest­ments dur­ing for­mer Gov. Dan­nel P. Mal­loy’s eight-year ten­ure in­cluded the ren­o­va­tion of Univer­sity of Con­necti­cut health build­ings in Farm­ing­ton, the open­ing of the Jack­son Lab­o­ra­tory for Ge­nomic Medicine in Farm­ing­ton and the cre­ation of a bio­science in­no­va­tion fund.

Con­necti­cut In­no­va­tions, the agency that man­ages the bio­science in­vest­ment fund, so far has in­vested about $186 mil­lion in life-sci­ences com­pa­nies, help­ing to at­tract about $1.8 bil­lion in out­side in­vest­ment in those firms. Loxo is not CI-funded.

Biotech busi­nesses ac­count for about half of the com­pa­nies in CI’s port­fo­lio.

“Loxo is a great story,” said Dan Wag­ner, CI’s manag­ing di­rec­tor of in­vest­ments. “With our strat­egy of help­ing life-sci­ences com­pa­nies to grow, we hope some of them turn into the next Loxo and have a sub­stan­tial im­pact on our state for a num­ber of years.”

With its biotech-focused ex­pen­di­tures, Con­necti­cut ranks in the top 10 in sev­eral stand­ings. It placed No. 4 among the states for pri­vate­sec­tor R&D in­vest­ment, on a per-capita ba­sis, ac­cord­ing to a 2017 re­port by the non­profit Con­necti­cut Eco­nomic Re­source Cen­ter. Its to­tal of $2,227 was more than twice the na­tional av­er­age.

At the same time, it came in No. 7 for state-funded R&D in­vest­ments.

A num­ber of other pro­grams aim to en­cour­age the in­dus­try’s de­vel­op­ment.

Ac­cel­er­a­tor for Bio­sciences in Con­necti­cut, an ap­prox­i­mately six-month pro­gram for those launch­ing new bio­science ven­tures, last month an­nounced 12 projects for its sec­ond cy­cle, which is run­ning this year.

Branford-based De­sign Tech­nolo­gies is over­see­ing the pub­lic-pri­vate ini­tia­tive. The state busi­ness-de­vel­op­ment agency CTNext is back­ing the pro­gram, while cor­po­rate spon­sors in­clude three phar­ma­ceu­ti­cal com­pa­nies with head­quar­ters or ma­jor op­er­a­tions in Con­necti­cut: Pur­due Pharma, Pfizer and Boehringer In­gel­heim.

“We see in­creas­ing growth in early-stage ven­ture for­ma­tion in­clud­ing biotech, biotech re­search ser­vices, med­i­cal de­vices and dig­i­tal health,” De­sign Tech­nolo­gies Prin­ci­pal Mary Howard said. “We see more spin outs from more Con­necti­cut uni­ver­si­ties this year than last and more in­ter­est by cor­po­ra­tions and health providers out­side Con­necti­cut to en­gage with Con­necti­cut-based health­fo­cused ven­tures.”

Statewide, bio­science ac­counted for more than 35,000 jobs across more than 2,000 com­pa­nies, ac­cord­ing to the CERC re­port.

“We have a lot of good pro­grams and (tax) in­cen­tives in place,” the CBIA’s Pescatello said. “To the ex­tent we can im­prove our trans­porta­tion sys­tems and the state’s fis­cal health, that will help us in those en­deav­ors to cap­ture these grow­ing biotech com­pa­nies, es­pe­cially those com­ing out of New York City. They’re there for the tak­ing.”

Con­trib­uted Photo

GET COOK­ING: Han Tang Seafood & Grill Buf­fet, 61 Wash­ing­ton Ave. in North Haven, re­cently cel­e­brated its grand open­ing with a rib­bon-cut­ting cer­e­mony. From left are Dee Prior-Nesti, ex­ec­u­tive di­rec­tor Quin­nip­iac Cham­ber of Com­merce; Perry Dong, owner; and North Haven First Select­man Mike Freda. The restau­rant of­fers din­ing, take­out and de­liv­ery of Asian cui­sine, in­clud­ing fresh sushi. For in­for­ma­tion, call 203-889-2450 or visit www.han­tang­sushiseafood­buf­fet.com.

Michael Cummo / Hearst Con­necti­cut Me­dia

Loxo On­col­ogy founder and CEO Josh Bilenker, left, and Chief Busi­ness Of­fi­cer Ja­cob Van Naar­den in­side the com­pany’s head­quar­ters on Tresser Boule­vard.

Michael Cummo / Hearst Con­necti­cut Me­dia

Derek Chalmers is founder and CEO of Cara Ther­a­peu­tics, which is head­quar­tered at 107 Elm St., in down­town Stam­ford.

Michael Cummo / Hearst Con­necti­cut Me­dia

Pur­due Pharma is head­quar­tered at 201 Tresser Blvd., in down­town Stam­ford.

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