Hartford Business Journal

14 Hartford Business Journal • February 18, 2019 • www.HartfordBusiness.com By Matt Pilon mpilon@hartfordbusiness.com I n his first few years in office, Gov. Dannel P. Malloy sought to make a name for Connecticut in the world bioscience, committing more than $1 billion to recruit fac- ulty, back research, seed startups and build or expand major facilities, mainly at UConn Health's Farmington campus. Now, Gov. Ned Lamont, with input from industry, higher-ed and state offi- cials, is assessing what might come next. Budget-deficit pressures and Lamont's pledge to significantly reduce state borrowing likely means another legacy-defining investment may not be in the cards for the bioscience sector. But that doesn't mean industry stakeholders won't be lobbying for more support. In fact, they are. Their wish list includes investments and policies aimed at: developing and recruiting companies, C-suite talent and venture capital firms; building additional incubator and lab space; producing and retaining more STEM graduates; and en- hancing marketing and branding efforts. Those priorities came from a broad group of industry backers — UConn, Yale, Jackson Laboratory, the Depart- ment of Economic and Community Development, Connecticut Innovations (CI), several venture capital firms, and various companies, like Pfizer and Boeh- ringer Ingelheim — that completed a 50-page strategic plan in December, outlining how the state can help the bioscience sector ramp-up growth and better compete with nearby hotbeds in New York and Massachusetts. If the state and other stakeholders stick to the plan, the report claims the bioscience sector could add at least 6,000 jobs over the coming decade, an approximately 25 percent increase, depending on how you measure the data. "Think about that," said Dawn Hocevar, CEO of industry associa- tion BioCT. "If we were really able to grow that, this industry could give Connecticut the growth that it needs, the jobs that it needs, the revenue that it needs." With the report now complete, a bioscience working group led by Lamont advisor David Scheer, a serial bioscience entrepreneur whose port- folio includes founding New Haven's Achillion Pharmaceuticals, has started reviewing potential legislation to pitch to the governor. Needed: VC funding, lab space One company that helps illustrate Connecticut's bioscience strengths, and some of its shortcomings, is Farmington-based CaroGen Corp. The Yale spinout, which hopes to begin clinical trials next year for its chronic hepatitis B drug, works out of UConn's state-funded incubator facility and also received a $1 million equity investment from Connecticut Inno- vations, the state's quasi-public ven- ture capital arm. "We wouldn't exist if it were not for funding from the state, no way," CaroGen CEO Bi- jan Almassian said. But growing CaroGen to its next stage will be a challenge, he said. Almassian is trying to raise up to $25 million as part of the startup's first ma- jor fundraise, but he's learning about the state's venture-capital limitations. CI is important, but Almassian said the amounts the agency can invest only gets a company to a certain growth stage. Taking the next step requires private investment. While a couple of VC firms with Connecticut offices are active in the pharmaceuti- cal and life-sciences space, Almassian said there's not enough to go around. The funding gap for intermediate- level startups isn't a new challenge, said Dr. Bruce Liang, dean of UConn's School of Medicine, who uses a com- mon industry term for it. "Early capital investment in academic startups and biotechnology companies is critical to ensure success in navigating through the 'valley of death,' " Liang said. The new bioscience strategic plan keeps homegrown companies like Caro- Gen in mind. For example, it calls for tax incen- tives tailored to VCs, coupled with a global recruit- ing campaign to convince venture firms to open lo- cal offices. It also recom- mends that the state's $200 million Connecti- cut Bioscience Innovation Fund, which has doled out $55 million so far, focus its remaining invest- ments on job-creating companies rather than research. Phase 2 CT's bioscience sector has a new strategic plan that industry boosters say could add 6,000 new jobs over the next decade CaroGen CEO Bijan Almassian (right) in his UConn Health incubator lab. CaroGen has made plenty of progress, partly with the help of state investments. Its next hurdle will be raising millions of dollars, no easy feat, especially in a state with few venture capital firms, to advance its chronic hepatitis B drug to clinical trials. Dawn Hocevar, CEO, BioCT Dr. Bruce Liang, Dean, UConn School of Medicine LuAnn Ballesteros, Vice President of External and Government Affairs, Jackson Laboratory HBJ FILE PHOTO

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