March/April 2014 – BizVoice/Indiana Chamber
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state and Lilly Endowment as well as industry
partners Eli Lilly, Dow AgroSciences, Roche
Diagnostics, Cook Medical and Biomet.
“We certainly want to acknowledge that
this is a big financial commitment in a time of
wanting to make sure we’re watching where
our dollars are spent as a state government.
It’s good to see that the state Legislature
recognizes that we’ve got a strong industry
and wants to continue to try to grow it.”
The intersection of life sciences and
technology will provide additional
opportunities for growth.
Headquartered in Indianapolis, BioStorage
Technologies organizes and manages scientific
assets for the research sector. It has additional
locations in Germany, China and Singapore.
Ball anticipates that the industry’s billion-
dollar investments and blockbuster drugs will be
replaced with a more targeted, personalized
medicine approach.
“In our world, managing patient consent
and being able to track that, being able to
prove that and being able to understand and
translate that is becoming a technology
discussion now,” she relates. “Indiana is well
positioned on the technology side to have a
horse in that race.”
Tripp seconds that.
“There are few industries that generate
bigger data than life sciences, whether it’s on
a basic life sciences investigation front or on
the health informatics (side). There are
tremendous opportunities there, not just in
the health care informatics space but across
agricultural biosciences where traditional
agricultural agronomy sciences are interfacing
quite directly now with information sciences.”
Focus on funding
Challenges that began during the Great
Recession remain in place.
Rossman says U.S. venture capital firms
raised more than $20 billion in life sciences
funds in 2006. That total began dropping
substantially by 2009 and plummeted to $4.9
billion during 2012.
Stemme points out that while the number
of investments made in Indiana in 2013 is
encouraging, the dollar amounts were modest.
“We had roughly $32 million invested in
20 companies, and that’s people who are
looking in the investment range of $250,000
to roughly $2 million or $3 million,” he says.
“We need to continue working on that.”
Start-up companies, whether able to
attract necessary funding or not, can receive
guidance by consulting with experienced
venture capital firms through the INext Fund.
It is one of two life sciences funds managed in
Indianapolis by AlpInvest Partners, which is
wholly owned by the Carlyle Group.
INext, backed by public and private
institutions, is a successor to the Indiana Future
Fund (IFF), which was launched in 2003. Both
are “fund of funds,” a strategy of investing in
other venture capital funds rather than directly
in stocks and other securities.
“The IFF and INext have invested
directly $45 million into Indiana-based
businesses,” Rossman explains. “If you take
into account the other members of their
investing syndicates, that number grows to
around a quarter of a billion dollars. And you
get a multiplier effect there.”
He’s optimistic about the future of funding.
“Because less firms are able to invest, less
companies are able to be backed,” he shares.
“I think we’ll see that pendulum swing back
the other way and will see more institutional
investors begin to put their capital back into
life sciences investing.”
Zooming in on diversity
Diversity – both in the types of companies
and their location – provides a competitive
advantage.
“You have companies that are in diagnostics
like Roche,” Tripp remarks. “You’ve got
companies like Lilly that are in therapeutics.
You have Dow AgroSciences, which is a
world-class leader in agricultural biosciences.
And (you have) Cook in medical devices.
You’re not at risk of being in only one life
sciences sector.”
Success stories aren’t limited to large
cities. Smaller communities like Columbia
City (home to orthopedic medical device
producer Micropulse) and Seymour (where
Kremers Urban Pharmaceuticals operates a
400,000-square-foot pharmaceutical
manufacturing plant) are holding their own.
Part of that success can be attributed to
Indiana’s manufacturing roots.
“A lot of the activity in Indiana is
manufacturing related,” Stemme observes. “I
think that’s one element of why we’re able to
be geographically dispersed. (Life sciences)
really is kind of crosscutting with other things
and other industries.
“Having that history of manufacturing –
there’s a friendliness to it. There’s a familiarity
with it.”
Ball notes that bringing company branches
to Indiana is crucial in expanding the state’s
life sciences base.
“Quintiles (a provider of biopharmaceutical
development and commercial outsourcing
services) is a good example of that,” she observes.
“It decided to open an office right here (in
Indianapolis) because there was a significant
amount of business locally, and they felt like
they needed to physically be here – not their
headquarters but clearly a branch.”
Panelists acknowledge, however, that
growth often comes from within.
“Part of that is because of the human
capital needs of the industry,” Tripp stresses.
“Once you’ve got a specialized base of
workers in one location and the network of
contacts in that industry, it’s very difficult to
pick up and move.”
Under the radar
Like many technology sectors, Silicon
Valley and the East Coast serve as hubs for
life sciences activity. But Tripp identifies
other states such as Iowa, Ohio, Minnesota
and Arizona as also making strides.
Life Sciences
“As the economy turns around,
people are going to have choices.
The question for us is: ‘How do we
continue with our way-above-average
retention rates of our employees?’ ”
Lori Ball
BioStorage Technologies
“Because less firms are able to invest,
less companies are able to be backed.
I think we’ll see that pendulum swing
back the other way and will see more
institutional investors begin to put their
capital back into life sciences investing.”
Curt Rossman
AlpInvest Partners
