Biopharma Incubators and Accelerators Play a Significant Role in Creating Regional Growth
Life science incubators and accelerators play a highly significant role in the industry and may be the key for regional growth, a new report shows.
Data from a report released this morning by PitchBook shows the significant impact that accelerators and incubators play in the life science industry. Citing a Silicon Valley bank analysis, Pitchbook said that 23 percent of life science startups that raised at least $4 million in 2017 and 2018 are currently involved with or have been involved with accelerators or incubators. The data shows that about 33 percent of all startups that successfully raise Series A funding go through an accelerator or incubator. What makes this significant, is that the analysts said involvement with incubators “play a significant role by providing early-stage support and sometimes a follow-on round.”
Additionally, Pitchbook said the support provided by accelerators and incubators is so significant in the life science sector that they “hold the promise” to help the ecosystem of a region grow. Additionally, accelerators and incubators benefit the sector and regions in which they operated by “extending the broader culture of innovation and promoting new sources of economic development.”
“Overall, life sciences and healthcare startups are remaining in accelerators longer to take advantage of community support, talent and resources and, as a result, may become more attractive investments. For example, LabCentral and JLABS (the Johnson & Johnson incubator) house several companies that have closed Series A rounds,” Pitchbook said in its report.
Last year, BioSpace pointed to four accelerators that were making a difference in the industry. Specifically, JLabs, Bayer’s Grants4Apps, the AstraZeneca Incubator and Illumina Accelerator were all playing a strong role across the sector. Not to be left out, last year Northwestern University also launched an accelerator called NewCures. That accelerator has a focus on helping the researchers lay the groundwork for winning venture capital funding.
Another finding in the Pitchbook report is a drop in venture capital investments in the life sciences sector during the first quarter of 2019 compared to the previous year. The Boston Business Journal, which was the first to dive into the report, noted that the drop in VC funding was somewhat predicted for the life sciences industry following a significant year of IPOs in the biopharma sector, including Moderna’s December IPO that broke records for the industry. Moderna secured more than $600 million in its IPO, which dwarfed the previous record for the sector set only months before by Allogene’s $324 million IPO, which was much higher than the company initially aimed.
In all, the Pitchbook report notes that the first quarter of this year saw $32.6 billion in VC investments across all sectors of industry.
BioSpace source:
