MI spin-off company one of 30 listed in North America and the United Kingdom
Luke Timmerman‘s article, published December 3, 2012, sited Xagenic as one of only 30 “exciting biotech startups” to raise significant venture capital (at least $5 million) in the life sciences sector.
Xagenic, founded by Drs. Shana Kelley and Ted Sargent at the University of Toronto, was also the only Canadian company named to the list.
Timmerman’s discussion of his methodology in creating the list highlights the extraordinary financial pressures life sciences founders face in trying to finance their companies, along with questions about the future health of innovation within the sector.
Here’s an excerpt of Timmerman’s article [emphasis added]:
So, here’s what I found about the biotech startup class of 2012. After three days of hounding human sources, digging into industry databases, and doing various online searches, I came up with a list of more than 65 biotech startups. But many of these companies look more like startup company candidates rather than true growing enterprises with a chance of becoming newsmakers. So for the purpose of this exercise, I defined an “exciting” biotech startup as one that has a big idea, credible founders, and pulled in at least $5 million in a first-time financing in 2012.
Even in a world full of super-lean “virtual” companies, it still takes tens of millions of dollars to accomplish anything big in life sciences, so $5 million is really a pretty modest start. While there are plenty of ideas and smart people to go around, I counted only 30 companies in North America and the United Kingdom who raised that modest amount of dough to get started this year.
Any way you choose to look at it, there is so little money now being put into biotech startups that any rational person has to wonder where the new drugs, medical devices, and diagnostics are going to come from in the 2020s and beyond.
The year isn’t over yet, of course, and I don’t really know how this number compares to other years, but I do know from experience that I wrote about more startups than that for Xconomy even during the dark financial years of 2008 and 2009. This trend worries me. Biotech needs to keep creating a steady stream of new companies, because a certain number of players disappear from the scene every year, via acquisition or failure. New startup investments matter, because if they pan out, they could have big implications for patients and the future of medicine.
The full article and a list of all the start-up companies is available on Xconomy’s website.
Posted by Elizabeth Monier-Williams, marketing & communications manager.