Kathleen Coviello on the New Jersey Economic Development Authority’s commitment to cultivating a vibrant biotechnology sector
Renee Morad: Why do you believe New Jersey is ripe for biotech innovation right now?
Kathleen Coviello: The landscape is so dynamic in New Jersey, with so many aspects coming together to make a perfect breeding ground for biotech companies. Today, we’re seeing biotech grow at an all-time pace, and more folks with long careers in pharma are embracing the ability to work in biotech. More individuals are understanding that they can take leaps and pursue ideas without that big pharma name behind them. The trade group BioNJ, in particular, has done a fabulous job of putting the various people and pieces together, through meet-ups, industry events and so on, to create a community lined with success stories.
R.M.: Can you please shed some light on the New Jersey Economic Development Authority’s role in funding biotech start-ups?
K.C.: We follow the mission that [Governor Christie’s] administration put forward to grow jobs in the state, and we work closely on the legislative programs that have been created to support that mission. There are two very powerful tools, from a finance perspective. First, with the net operating loss program—formally known as the [Technology Business] Tax Certificate Transfer Program—companies with fewer than 225 employees that are starved for cash can take the losses they experience when building their product pipeline and can sell those losses to profitable companies. If a technology company qualifies under the program’s legislative requirements, including modest job growth, they can get non-dilutive cash to grow their business. The second very impactful program is the Angel Investor Tax Credit Program, or ATC. A qualified New Jersey technology or life science business that meets specific legislative requirements can use this tax credit to attract new investors and encourage follow-on funding from their investors. The 10% refundable credit awards a credit to those that invest in New Jersey’s technology and life science sector, even if an out-of-state investor. The NJEDA has seen about half of the applications to date come from out-of-state investors. In several instances, companies have had the benefit of the investors taking their tax credit and/or refund and re-investing back into their business.
R.M.: The EDA’s Commercialization Center for Innovative Technologies is known as the state’s leading life sciences incubator. Can you share some insight on the value that the incubator program provides to start-ups?
K.C.: The Commercialization Center provides 46,000 square feet of lab space for up to 30 start-ups at any one time. Today, there are 21 companies, and we are at capacity. We really look for companies that have more than just an idea, but that have conducted a litmus test of efficacy, have some validation from, say, the U.S. National Institutes of Health or have conducted a successful Phase I trial and have some initial level of funding, usually from friends and family. We provide what we believe is nominal rent—class A space at class B price—and the start-ups can stay for up to five years. We have watched start-ups begin here with just a couple employees and over time grow to hundreds or thousands of employees internationally. Once you’re here, you’re always part of the family, and we often bring successful graduating CEOs back to mentor our newbies. We also have an executive-in-residence program that we launched in collaboration with BioNJ. This program brings primarily individuals who are in transition from pharma, but are best-in-breed in their domain expertise—such as marketing or strategic partnerships—to mentor our tenant companies.
R.M.: What’s your advice for biotech entrepreneurs looking to craft the perfect elevator pitch about their product?
K.C.: It’s a little bit harder on the biotech side because the science is so important, but it comes down to delivering an unmet medical need and addressing the human piece of it. I’ve seen a shift in the biotech industry where there’s finally a focus on patients and not just the science. BioNJ adopted the tagline “Because Patients Can’t Wait,” and that idea really hits home. It also hits home when talking to investors. Entrepreneurs should focus on: Here’s the big problem, and here’s how the technology will solve that problem. Don’t get too scientific. That’s for the next meeting.
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