Is this the next major biotech cluster in the US?
All states in the US would love to have a bubbling life science industry like Massachusetts and California. And why not? The industry attracts highly payed, skilled workers who create companies, attract investment, and create jobs.
But, as Garrett points out, it’s not as simple as building a biotech incubator and opening the doors.
In Part One of this series, Garrett describes some of the challenges faces by Wyoming specifically as it tries to grow its own life science industry. There are definitely lessons to be learned here by other states (and their consultants) wishing to do the exact same thing.
Parts Two and Three delve into some of the strengths which are specific to the State. He also includes a summary of just some of the life science companies that already reside in Wyoming.
We hope you enjoy reading these articles.
Life Science as an Industry for Wyoming
The Wyoming economic table has three legs: natural resource extraction, tourism, and agriculture. These legs are robust enough to enable Wyoming to have one of the most stable state economies in the United States.
As evidenced by the past, alignment and downturn of any two sectors produces a significant decline in the economic well-being of the state.
Therefore, a fourth leg of the economic table would provide additional stability and is the reason that the state, as a whole, should be eager to attract and establish life science companies.
Companies and sectors that comprise the life science industry have as their common link the application of biological and chemical knowledge to develop products.
The industry has four main sectors: Agricultural Feedstock & Chemicals, Drugs & Pharmaceuticals, Medical Devices & Equipment, and Research, Testing & Medical Laboratories.
Jobs produced and positions provided by life science companies will attract highly educated and skilled ex-pat Wyomingites, thus reuniting and rebuilding multi-generational families as well as retaining young Wyoming residents.
Life science companies provide high paying positions with full benefits and manufacture unique products yielding companies with high-value stocks and sustainable business cycles that are more environmentally friendly than the old heavy smoke stack industries.
Attraction, development and growth of life science companies within Wyoming municipalities will provide the additional benefits of a highly educated workforce interested in furthering education, art, history, diverse activities, community and culture.
Moreover, the establishment of a life science company in a community will provide the nucleation event to attract or develop additional pharmaceutical and biotechnology companies and soon, a cluster of life science companies will sprout and take root.
These life science companies provide fertile ground for the synergism of ideas, skills and expertize leading to the development of new generation of vibrant and robust companies statewide.
In Wyoming, professionals attracted by life science positions will enjoy the low personal tax liability, lower cost of living, the affordability of homes, and the short commutes as compared to the major life science regions of San Francisco, Los Angeles, San Diego, Seattle, Boston, Minneapolis, and Research Triangle Park (RTP).
Further, the public education system of Wyoming is safe and frequently highly ranked nationally. Having low student – to — teacher ratios as well as newer facilities, the Wyoming public school system is very effective at educating students for jobs and success in post-high school programs.
Coupled with easy access to a diversity of outdoor recreation sites and activities as well as historic and scenic spots; weekends, holidays and vacations in Wyoming are never dull.
As with all Wyoming based companies, life science companies will enjoy the business friendly environment, low tax burden, comparatively lower cost and expenses, as well as the hardy industrious nature of the residents.
Wyoming has many challenges for the formation and success of life science companies.
First, the existing workforce has a significant scarcity of life science talent in all areas: management, business, regulatory and research.
Secondly, lack of seasoned life science investors. Wyoming lacks active private, institutional and venture capital investors experienced and comfortable with funding life science companies.
Thirdly, intellectual property: The University of Wyoming has life science patents available for licensing but patents are limited.
Fourth, Wyoming lacks a large medical research center. Large medical centers such as The Mayo Clinic, Fred Hutchison and University of Colorado Medical Center perform medical research from which medical devices, pharmaceuticals and therapies are available for sale, licensing or used to form companies.
Fifth, The University of Wyoming is a fine school and making significant strides nationally and internationally in stature. Nonetheless, when mentioning “UW” at national or international life science meetings, the audience defaults to either the University of Washington or the University of Wisconsin.
Sixth, Wyoming lacks an advocacy group for the life science industry.
Developing Wyoming life science companies requires potential entrepreneurs, the populace and state as well as the municipal governments find niches within the industrial sector fitting the expertize, skills, assets, features and benefits existing in the state. Identification of these niches will focus efforts and resources in areas that are most likely to produce long-term life science successes, thus providing the state and the populace with the benefits of an additional industry providing employment and revenue to stabilize the economic table.
Therefore, Wyoming needs must implement the formation of a life science advocacy group (Wyoming BIO) to encourage and support the development of a statewide life science industry with the first goal of attracting and assembling major stakeholders from education, economic development, industry, government and capital.
The general mission of the Wyoming BIO organization will be to advocate the growth of the life science industry. Next, to elevate the profile of Wyoming within the life science industry by hosting an international meeting similar to the Keystone or Cold Spring Harbour Conferences.
For the meeting to be a success Wyoming may need a strategic partner to attract well-known international speakers and attendees. Ideally, the topics should leverage and display the uniqueness of Wyoming and life science opportunities in Wyoming. Thirdly, to foster growth and attract the establishment of life science companies in Wyoming.
The preference for Wyoming should be toward home-grow life science companies instead of attracting life science companies – if they can be lured in, they can be lured away.
Life Science Company formation requires technology, management and capital. Technology needs to be world class, novel, worldwide patent protected and without impinging patents.
The preferable patent position is for the company to hold patents that have Freedom-to-Operate in a broad area: a wide open blue ocean free of competition. The source of novel patents often is from academia with the most novel and best researched originating from world class educational institutions.
Corporate and science management are required to have deep experience and expertize. Ideally, management that has successfully developed products and produced companies that are growing and profitable as well as having returned to investors a significant sum through an exit such as an Initial Public Offering (IPO), Merger & Acquisition (M & A), or through a private equity purchase & sale.
Capital to propel the company can come from many sources; government grants, self-funded, angels, strategic partners, debt, investors and non- profits. The type of investor to pursue, the form of the investment and the amount of the investment as well as valuation of the company are complex issues, which should include the realization that an investor, especially a professional investor, will have many requirements attached to their investment capital.
Often requirements will include stock ownership, options and/or warrants, board representation, tag-along and drag-along rights, performance milestones and power to appoint management, just to name a few. The goal of all good investors and management is to squeeze risk of failure out of the company.
After formation and funding of a new life science company, management must execute the business plan balancing the use of capital and progress toward milestones. Risk to the company and product include the hurdles presented by research and development of the product(s), as well as regulatory risk, and business risk.
Research and development risk includes not achieving the market launch of a product or products due to the inability to convert the idea and prototypes into saleable and workable devices or products in a timely fashion. The definition of regulatory risk is not being capable of meeting the governmental requirements for a safe and effective product as required by the governing sections of the Federal Drug Administration (FDA), Environmental Protection Agency (EPA), United States Department of Agriculture (USDA), Federal Trade Commission (FTC) and Federal Communications Commission (FCC) as well as other agencies.
To research and develop a product the company must have in place — and follow — Good Lab Practices (GLP), Good Manufacturing Practices (GMP) and Good Clinical Practices (GCP) as well as implementation and certification of International Standard Organizations (ISO) and possibly other certifications.
Business risk would encompass the risk of not being able to raise additional capital if required, inability to penetrate the market and obtain sales, failure to manage the balance between new research and new products as well as effectively and efficiently protecting and developing the company’s intellectual capital and property.
An option for life science companies to preserve capital and management progress is through the outsourcing of research, development, manufacturing and regulatory approval of the product.
Any failure within any of the previously mentioned areas could be the death of the company. Fledgling and young life science companies have a precarious life cycle, having one or a very few products and limited capital, as well as a short record of accomplishment. The failure of one product or a large unexpected expense can cause the death of a new life science company.
Pioneers, the entrepreneurs of their day, settled Wyoming and turned a harsh wilderness into a land of prosperous horse and cattle ranches, as well as successfully leveraged the natural resources of the state ranging from minerals to tourism. Therefore, Wyoming offers fertile ground for the birth, growth and maturation of life science companies.