In 2001, when Phil Ferneau and his partners launched a venture capital firm focused on NH startups, they met with several academics from Dartmouth College. Ferneau had been an advocate for converting academic research into viable businesses in his role as founding executive director of the Center for Private Equity and Entrepreneurship at Dartmouth’s Tuck School of Business.
When he and his associates launched Borealis Ventures, one of their first tasks was to convince college management that new business development was an appropriate role for an esteemed higher education institution. Ferneau recalls, “This senior college executive said, ‘I understand you’re excited about the idea of starting new businesses. But I think we have all the companies here that we need. And that was the University Village’s parochial approach to innovation.
Over the next 20 years, Dartmouth lived up to its role in laying the foundations for a group of biomedical companies that are now gaining global attention for their effect on health sciences. The Hannover-Lebanon region, known as the Upper Valley, has become a center for research and entrepreneurship that far exceeds its weight class and rivals places like Cambridge and San Francisco.
While Dartmouth’s presence in the Upper Valley has everything to do with why the hub emerged there, other elements must have fallen into place over the past two decades. “First, there was the acceptance of entrepreneurship as a good thing, and that took years to build,” says Ferneau. “Then you need case studies and models.”
The 20-year history of the growth of biotechnology in the Upper Valley is largely the story of university researchers, venture capitalists from companies like Borealis, and inspired entrepreneurs, whom Ferneau calls the ” pillars of the ecosystem”. These “pillars” include Jake Reder, founder of Celdara, a company that turns academic medical research into FDA-approved therapies that can be marketed. But the most influential pillar is Dartmouth professor and bioengineering entrepreneur Tillman Gerngross.
Gerngross, along with former Dartmouth Dean Charles Hutchinson, started a company called GlycoFi in 2000. They wanted to create a better way to produce protein-based drugs, which were becoming mainstream at the time, but manufacturing was a challenge and expensive. They found a better way to do it; venture capital raised; and built a business in Lebanon which was acquired by Merck in 2006 for $400 million.
“It was a big wake-up call for a lot of people because it showed some things,” Ferneau says. “First, a biotechnology company could be created in the Upper Valley. It could attract venture capital to the Upper Valley. And it could attract the interest of big pharma.
GlycoFi is located in Hanover’s Centrerra business park, which Dartmouth developed in the late 1990s after Mary Hitchcock Memorial Hospital moved from Hanover to the Route 120 corridor in Lebanon.
The existence of adequate space and proper facilities to launch a life science operation also played a huge role in the emergence of the hub. “It’s a good thing Centrerra was there,” says Ferneau, “or you couldn’t have built a lab-based business. It now houses Adimab and other companies. »
GlycoFi is the acorn that took root in the business park. Nurtured by an increasingly supportive academic community, its success has led to other successful biotech launches.
After acquiring GlycoFi, Gerngross co-founded Adimab with MIT professor Dane Wittrup, with many of the same investors as GlycoFi. Twelve years after its creation, the company is still in the Haute Vallée and is the world leader in the development of antibodies for pharmaceutical and biotechnology companies.
Adimab continues to build other companies, such as Adagio Therapeutics, another company working on therapeutic antibodies now in high demand due to COVID. Adagio, now located in Waltham, Mass., went public last month and has been valued at more than $5 billion.
“The world has really changed in the Upper Valley from before GlycoFi to after GlycoFi,” says Ferneau, “and Adimab has taken it to the next level.”
Gerngross went on to launch successful biotech companies, including Avitide, which he co-founded with CEO Kevin Isett and Chief Scientific Officer Warren Kett in 2013. The company developed a better way to purify biologic drugs and was bought in September by a global bioprocess supplier. Repligen for $150 million.
“His fingerprints are on a lot of these businesses,” says Ferneau. “It’s not just what he does on his own, but also how he inspires others.”
Gerngross’s other major contribution to the growth of high tech and biotech companies in the Upper Valley is his role in developing an intellectual property transfer policy at Dartmouth that is generous to inventors. Under the policy promoted by Gerngross, Dartmouth only takes a 4% stake in companies started by Dartmouth faculty and students working in academic institutions. “The transfer function of intellectual property has often been controversial in universities in general,” says Ferneau. “Instead of treating it like a zero-sum game where the college negotiates with its own faculty for licenses on founder technology, why not flip it around and make it founder-friendly, with the goal of attracting faculty most innovative in Dartmouth?”
Another Dartmouth spin-off is Celdara Medical. Jake Reder, who had worked at the Geisel School of Medicine in Dartmouth, co-founded the company in 2008 with Professor Michael Fanger to convert the work of inventors into successful businesses.
The National Institutes of Health took note of Celdara’s work in the Upper Valley and asked the company to send a delegation to Washington, DC. The result was a three-year, $3.5 million Accelerator Hub Award from the NIH in 2018 to Celdara and the University of Vermont to promote medical innovation and entrepreneurship in the Northeast.
This work has helped advance 14 startups over the past three years, including six in the Upper Valley: Arctic AI, working to improve biopsy analysis; CairnSurgical, developing 3D printed surgical guides; Clairways, which improves clinical trials of new drugs for chronic respiratory diseases; Episteme Prognostics, a diagnostic test used in the treatment of cancer; Javelin Oncology, which advances precision oncology; and Lodestone Biomedical, which develops biosensors used in cancer treatment.
Tracey Hutchins, President and CEO of the Upper Valley Business Alliance, points out that the recently created Upper Valley MedTech Collaborative is the latest initiative designed to keep the hub running. Founded in 2020, the collaboration is a kind of chamber of commerce dedicated to the med-tech community, offering networking and training events.
The organization grew out of discussions at Simbex, a medical device company based in Lebanon and launched in 2000. necessarily know what each other is doing.
“When you have an educational institution like Dartmouth [College] and the Geisel School of Medicine, Tuck School of Business, Thayer School of Engineering and Dartmouth-Hitchcock, which is a leading teaching hospital, and everything is located here, which creates a really good environment,” she says. . “When you put all of those things together, you get this creative soup of an environment that fosters innovation, and that’s exactly what’s happening here with medical technology.”
A possible challenge, however, is a labor shortage, says Julie Demers, chief executive of the NH Tech Alliance.
“Jobs are in high demand, but the problem is the ratio of vacancies to qualified people available to fill them,” she says.
“We recently polled our members and asked them what they are most concerned about, and without exception, the number one issue was recruiting and retaining the workforce, and that across all sectors, including biotechnology.”
These articles are shared by partners of The Granite State News Collaborative. For more information, visit collaborativenh.org.