Monday, October 8, 2007

Pfizer hatches plan for startups

By Catherine Williams

If Pfizer officials give the green light to open a life sciences business incubator in Greater Boston, it would make the second corporate-funded life sciences incubator -- alongside one from Biogen Idec Inc.-- to open in the Bay State this year.

For burgeoning Massachusetts life sciences companies, the prospect of a new incubator may signify a rising interest by large life sciences companies to back the growth of new technologies, say industry experts.

"It's a shift in strategy for all pharmas coming to Massachusetts. Their old R&D model is going to be a dinosaur," said Kevin O'Sullivan, president and CEO of Worcester-based life sciences incubator Massachusetts Biomedical Initiatives.

Alex Polinsky, a senior Pfizer executive, said he is spending time in Boston seeking life sciences investment opportunities. If Polinsky finds enough startups to invest in, the company would create an East Coast incubator in or near Boston, he said. Polinsky is vice president and CEO of Pfizer's existing California incubator, known as The Pfizer Incubator.

"There is no commitment yet, but I am looking at several opportunities," said Polinsky, who has an office in Cambridge.

Polinsky is in charge of the La Jolla, Calif.-based incubator Pfizer launched earlier this year, after the intellectual property from a company he co-founded wound up in Pfizer's portfolio following a series of acquisitions. He also serves as a scientific adviser to Canada-based Supratek Pharma Inc.

Although the California incubator operates independently of New York-based Pfizer Inc., Pfizer has committed to investing $10 million annually over the next five years in the incubator, which is capable of housing five to eight companies. Pfizer incubator officials there look for companies that meet a list of nine research criteria ranging from the development of needle-free delivery of biotherapeutics or technology for predicting seizures. The California incubator's first resident is Fabrus LLC, which specializes in a technology to identify antibodies.

In return for the investment, Pfizer incubator companies agree to give Pfizer executives an opportunity to review any discoveries and, potentially, make an offer to license a particular piece of intellectual property. Otherwise, the companies would retain their intellectual property, said Polinsky. The strategy is designed to attract a broad range of startups by giving the fledgling companies more freedom, Polinsky said. A Massachusetts-based incubator would follow the same model.

Not the first

Biogen Idec opened a Massachusetts-based incubator at its Cambridge headquarters earlier this year. Biogen plans to invest between $3 million and $10 million per incubator company during each company's incubator stay, with the goal of folding any discoveries into existing products, said Jeff Behrens, head of business operations at the Biogen Idec incubator.

Behrens said the launch of a Pfizer incubator would be good news for the local life sciences industry.

"It is good for everybody the more we, as an industry, support innovation," said Behrens.

Biogen Idec has yet to fill its first berth in the incubator, said Behrens, but the company is in negotiations with two potential tenants. Behrens said he hopes to bring in the first one by the end of the year.

Still, Biogen's life sciences incubator isn't alone. Novartis AG launched an incubator in Cambridge in 2006 but its model is different because it's focused on folding in outside research projects rather than funding independent ventures. There are five other Massachusetts incubators that cater to life sciences companies but they are backed by universities and private investors, according to Mass High Tech's New England Technology Directory. For instance, the BioSquare Discovery and Innovation Center is based in Boston and manages 2,000 square feet of space, and Tufts University manages the 6,000-square-foot Tufts Biotechnology Transfer Center in Grafton.

Meanwhile, O'Sullivan's three Worcester incubators at the Massachusetts Biomedical Initiatives have pumped out 20 viable companies since 2000, he said. But it is unclear what obstacles exist for companies hitching their hopes on Biogen or Pfizer.

"It is one thing to get the funding, and another to know what kind of strings are attached," said O'Sullivan.