NewHavenBIZ

6 n e w h a v e n B I Z | J u n e 2 0 2 2 | n e w h a v e n b i z . c o m Buyout trend reflects health of New Haven bioscience sector PHOTO | LIESE KLEIN Marian Nakada, vice president of venture investments at JJDC, Johnson & Johnson's corporate venture group, speaks at the Yale Innovation Summit on May 18. Our CT Cannabis Insider is delivered every Thursday at 10am to your inbox. SIGN UP NOW! NEWHAVENBIZ.COM/ENEWSLETTERS By Liese Klein O ne sign that New Haven's biosci- ence cluster is thriving is what's been happening when companies are bought out – their local facili- ties and workforce are staying put. When pharma giant Pfizer announced it would buy Biohaven for $11.6 billion in May, it said it would keep the drug company's New Haven operations running. AstraZeneca not only kept the Elm City research labs of Alexion open aer its $39 billion buyout, it is adding new staff at a steady pace and planning a major expansion into the new 101 College St. bioscience tower. "We're doing really well in having acquisitions happen and not having the companies be folded," said Dawn Hocevar, president and CEO of indus- try group BioCT. She also cited earlier examples of the trend in the region, with Sanofi continuing operations at Protein Sciences in Meriden and Lilly keeping Loxo Oncology open in Stamford. e active role played by major international pharma companies in the region and the ongoing growth of new startups reflects healthy expansion in the bioscience sector over the past five years, Hocevar told attendees at the Yale Innovation Summit last month. BioCT sponsored the first day of the summit's presentation, entitled "e State of the Life Sciences Industry." Hocevar stressed that the entire Northeast was benefiting from a biosci- ence boom, and cooperation with other clusters was vital to continued growth. BioCT has joined its Bay State counter- part MassBio in a vendor consortium that has saved member companies more than $200 million over the last 20 years, she added. Some storm clouds But even with all the good news about bioscience in New Haven, some dark clouds are looming thanks to the recent market downturn, speakers said. Valuations are shrinking and capital raises are getting more difficult, which may lead to cutbacks. BiomX, an Israeli biotech with a re- search facility in Branford, announced in late May that it would cut its work- force by 50% and delay some programs due to market conditions. "It's a little bit of a rude awakening," said Christine Brennan, managing director of Vertex Ventures, an ear- ly-stage venture capital firm with roots in Singapore. Midstage companies should think about becoming more realistic in their valuations and more efficient with their existing capital, Brennan said. "You're going to have to make some tough decisions," she said. "So you might not be able to do 10 programs, you might be able to do three." Companies that have gone public in recent years are seeing their valuations drop and are struggling to raise funds for ongoing growth, said Marian Na- kada, vice president of venture invest- ments at JJDC, Johnson & Johnson's corporate venture group. "We're going to see a number of com- panies shutting down," Nakada said. But smaller, seed-stage companies are ac- tually in a good position in the current market, Nakada added, because of the billions floating around in "dry powder," or funds seeking new investments. Citing the statistic that almost $30 billion has been raised for bioscience companies in recent years, Allyson Rinderle, a principal at New York City private equity firm KKR, emphasized that venture funding is out there for startups even as midstage companies "hunker down." Future innovation Annie Lamont, wife of Gov. Ned Lamont and a biotech investor, also spoke of large amounts of investor cap- ital looking for promising companies at a later panel, "Startup Journeys from Yale to Unicorn." "ere is a lot of venture capital money and private equity money on the sideline right now," Lamont said. "It's hard for investors to hold on too long before they get excited about the next company coming along. … By the end of the year, and certainly next year, it will be a more favorable environ- ment. Great companies will always get funded." As for the future of bioscience innovation, the panelists named fields including digital health, regenerative medicine and the scientific applications of computer modeling and artificial in- telligence. Innovations in neuroscience are also of interest to major funders, Nakada said. One ongoing strength of the area's bioscience firms is their location itself, said John Houston, CEO of Arvinas. In addition to employing people remotely in 19 other states since the start of the COVID-19 pandemic, the growing biotech is finding it increasingly easy to attract talent to New Haven, Houston said. "ey've bought into the idea of a growing company, an innovative com- pany, but also they buy into the idea of Connecticut as a place to live and work," Houston said. "ere's a great story to be told about Connecticut." n PHOTO | LIESE KLEIN The "Trends in BioTech Investing" panel at the Yale Innovation Summit at the Omni New Haven Hotel in New Haven.

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