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(Left
to right): BioGenerator’s President and CEO Ken Janoski
and Vice President Randy Weiss. |
BIOGENERATOR:
"Civic Midwife"
for the Local Life Science Industry
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By
Jim Baer
To find the cure for dreaded diseases, better feed our people,
and improve our environment, it can take literally millions
and millions of dollars to get there. Research and development
can be both a time consuming and an expensive process. So many
hands go into the process to move the work of a researcher to
the point where a little pill or a food product can extend a
life. However, it can be done, and it takes angels and investors
to turn theory into reality.
Interested parties exist in the St. Louis region that want to
see life science products develop and flourish. This kind of
research and work creates high-paying jobs and an educated workforce,
and boosts the local economy. St. Louis civic leaders are watching
this development keenly.
Further, a dynamic, vibrant environment where scientific ideas
and discoveries can be converted into useful applications, products
and services will provide for new medicines that cure dreaded
diseases along with improved diagnostics and healthcare. Also,
the quality of life will be improved through healthier foods
and a cleaner environment.
In a nutshell, the bioscience industry is good for the entire
region. Case in point is the Donald Danforth Life Science Plant
Center on the edge of the campus of Monsanto in West St. Louis
County. The CORTEX life science district in Mid-town St. Louis
will be another big winner for life science research, and the
business park at SIUE hopes to link entrepreneurs with the National
Corn-to-Ethanol Center on campus.
One of the partners in growing St. Louis’ life science industry
is BioGenerator. A recommendation in the original Battelle Plant
& Life Sciences strategy, the RCGA sponsored the development
of a feasibility plan for the so-called “virtual commercialization
center.” In turn, BioGenerator was formed in 2003 to facilitate
the formation of life science companies out of university-based
research in St. Louis. BioGenerator identifies promising life
science research projects that have commercialization potential.
They advise and counsel the research faculty and entrepreneurs
about the commercialization process. They provide seed money
and pre-seed capital. They manage support during initial company
formation and they assist in attracting side-by-side follow
up on funding. BioGenerator’s mission is to bridge the funding
gap between university-related research grants and venture capital.
Our mission, simply, is to be part of the effort to grow the
life science industry in St. Louis,” says a proud, recently-recruited
President and CEO, Ken Janoski.
This kind of activity has flourished for more than 50 years
in the Research Triangle (Raleigh-Durham-Chapel Hill area) of
North Carolina; in San Diego, the Silicon Valley near San Jose,
Calif. and in the Boston area. Now, biotech research and growth
is starting up in a big hurry in St. Louis.
BioGenerator is housed in the futuristic Nidus Center for Scientific
Enterprise.
BioGenerator was created as an independent, not-for-profit corporation
with $6 million seed money from the Danforth Foundation, the
James S. McDonnell Foundation, the Monsanto Fund and Bunge North
America.
Recruited from Atlanta, Janoski has the organization off and
running, ably assisted by right-hand man, Randy Weiss, PhD,
vice president of the firm. Weiss, a chemist by trade, conducted
a Life Sciences Company Funding Survey that was complete in
March 2006.
The findings were fascinating. BioGenerator surveyed 22 client
companies of Nidus Center, the Center for Emerging Technologies
and BioGenerator to learn from previous fundraising activities.
Facts found from the survey are:
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Early funding was secured mostly from founders, angels
and BioGenerator
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Non-equity funds were an important source of funding
annually with large contribution from contract revenue,
corporate partnership and sales
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St. Louis venture capital firms had less presence than
external venture capital firms as rounds of fundraising
progressed
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Critical factors positively affecting fundraising were
strong management, good—strong ideas; an incubator access
step, strong intellectual properties; connection with
investors and non-equity money relationships
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“You could call us the booster part of the equation. Out-of-town
money comes later in the process but we first deal with St.
Louis’ venture capitalists,” says Weiss.
“We found that medical device, therapeutic and agricultural
bio-technical companies have the ability to raise the most amount
of money,” says Weiss.
The goal, obviously, for any of these startup companies is to
go public or to sell to a larger concern.
Janoski, native St. Louisan, who spent the past 10 years in
Atlanta, returned recently to head up BioGenerator.
Janoski is quick to point out St. Louis’ many resources for
the development of a robust, sustainable life science industry.
He says the strength of this region includes strong civic leadership,
coupled with world-class research universities Washington University,
Saint Louis University and UM-St. Louis. “The presence and involvement
of research and development giants Monsanto and Pfizer Pharmaceuticals
are also tremendous assets,” he says. Also strengthening the
region as research institutions are the Danforth Plant Science
Center and the Missouri Botanical Garden.
Business incubators Center for Emerging Technology (CET), along
with Nidus, CORTEX—the St. Louis Life Science District and venture
capital companies RiverVest, Prolog, Triathlon and Oakwood plus
BioGenerator provide the key components of the success story.
“St. Louis has really grown its Life Science base the past six
years. We are still very, very early in our development as
an important region for the life science industry, but we have
the advantage to learn from what others have done successfully
in other regions,” reasoned Janoski.
BioGenerator is involved in three major activities. Those would
be sourcing, investing and client support. What the institution
continues to do is build relationships with universities and
researchers. Their goal is executing a business plan for as
many companies in this field as are possible.
Typically, the company works with Plant and Life Science startups
regionally. The typical investment will range from $50,000 to
$500,000 cash with a funding period of 18 to 24 months. Milestones
must be achieved and benchmarks must be met by these emerging
companies as the process goes along.
The deal structure can include equity (common shares with minority
shareholder rights); convertible debt (converts to preferred
shares at series A funding) and side-by-side investment as needed.
In essence, BioGenerator becomes a minority owner in the companies
in which they are investing. As the startup companies grow,
that ownership share diminishes in proportion.
In order to accomplish this mission, the company draws support
from an investor advisory board. The board is composed of notable
venture capitalists and angel investors who are experienced
life science investors and committed to supporting the St. Louis
region growth of its life science base.
Along the way, BioGenerator has worked with a number of professional
services providers who offer professional services at discounted
rates to their clients, ranging from legal and accounting services
to real estate expertise. In 2005, more than 20 local service
providers partnered with BioGenerator, providing timely professional
services yet also saving clients nearly $200,000 as a result
of reduced fees.
“That clearly demonstrates their commitment to supporting our
efforts in growing a successful life science industry in St.
Louis,” says Janoski.
BioGenerator is investing in St. Louis’ future,” says Janoski.
Their motto ‘Powering Ventures into Reality” strikes a harmonious
cord in this sophisticated high-tech medical-scientific industry.
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