Hey investors, how does the Pacific Northwest stack up in life sciences?
It’s a loaded question, given that venture capitalists invested far less in the Pacific Northwest in 2018 than leading regions in terms of total investment, number of deals and deal size.
The average deal size in San Francisco and New England last year was around $60 million, double the roughly $30 million average that Northwest companies saw, according to data presented by Karen Bernstein, co-founder of BioCentury, at the 2019 Life Science Innovation Northwest conference in Seattle earlier this week.
Despite this, Seattle and the Pacific Northwest are seen as an emerging hotspot for the sector. At the conference, venture capital and angel investors offered their view on the region’s ability to compete with leading markets like the Bay Area and Cambridge, Mass. Here’s what they said.
Peter Thompson, Partner, OrbiMed Advisors
When asked how the Northwest competes in life sciences, OrbiMed’s Peter Thompson didn’t mince words. “Poorly, would be the snap judgment given the data.” But he also touted the Pacific Northwest’s growing talent pool.
“The success in this sector at generating an increasing cadre of skilled labor, in conjunction with a local university setting — that generates a self-fulfilling cycle, where you have more teams with more skills and more success,” he said.
Thompson said the area’s challenges are “not insurmountable. Look at the expansion of Juno [Therapeutics] and the talent that was brought into the area.”
“I’m hopeful that [if we look at the data] ten years from now, it will look much different,” he added.
Carol Gallagher, Partner, New Enterprise Associates
“I put a lot of stock in the fact that Seattle’s already an innovation economy, and therefore a very attractive place for people to want to live and work. And so I think that it is just a matter of time and upswing, and there’s been a lot of success recently,” said Carol Gallagher, a partner at New Enterprise Associates.
“There was tremendous talent here in the early days of Ekos, Immunex and ZymoGenetics. So it’s been here, it’s here. I think we’re expanding it with the recruitment to Seattle Genetics and other companies that are starting, NanoString — we’re getting more talent,” she said.
Andrew Schwab, Founder, 5AM Ventures
San Francisco’s 5AM Ventures has only invested in five Northwest companies, but four of those were in the past three years. Andrew Schwab, a managing partner at the VC firm, explained why:
“You look at what are the skill sets in the area that are the strongest in terms of people, companies and industries: very heavy biologics expertise and very heavy immunology expertise,” he said. “And what are the hottest places to invest in these days? It’s biologics, it’s immunology, it’s cell therapy.”
KT Moortgat, Director, AbbVie Ventures
A Seattle native, AbbVie Ventures director KT Moortgat touted her company’s connections to the region: “[AbbVie has] a longstanding partnership with Seattle Genetics, and we remain in close contact with the leading innovation centers that are here, the [Institute for Systems Biology], the Fred Hutch, the University of Washington.”
“If you ask what drives investors to go to any geography, it’s about discovery and innovation. And I think that we are driven to be here because of the depth of those elements that exist here today. I think that there’s a lot here, there’s a lot more for us to find,” she said.
Jim Reed, Managing Member, SWAN Venture Fund
In a separate panel for angel investors, Bellevue, Wash.-based Jim Reed of SWAN Venture Fund gave a local seed-stage investor’s view of the region.
“There’s a whole slew of money in this town. As you all know, we have lots of millionaires, and they don’t know where to put their money,” he said.
“I have Japanese MedTech companies, I’ve got Asian MedTech companies, and they all want to look at what’s happening this town. Everybody is talking about the Pacific Northwest … There’s so much interest in healthcare from Asia because they believe that we have the know-how more than they do.”