St. Louis’s BioGenerator: An Interview With Donn Rubin
BioSTL is a regional organization in St. Louis whose goal is to champion the life sciences in St. Louis and the surrounding region. BioGenerator is the investment arm of BioSTL.
St. Louis is one of the fastest-growing and top-ranked emerging life sciences markets in the U.S. In a recent CBRE Research report, it ranked sixth in emerging life science markets. The city and environs have top academic research institutions and commercial organizations, including Washington University in St. Louis, St. Louis University, Bayer (formerly Monsanto), University of Missouri-St. Louis, and the Donald Danforth Plant Science Center.
Donn Rubin, president and chief executive officer of BioSTL and chairman of BioGenerator, spoke to BioSpace about BioGenerator and its role in St. Louis’s life sciences.
Rubin notes that BioSTL and BioGenerator define life sciences broadly, saying it’s “anything that touches healthcare and medicine, as well as anything that touches agriculture, food, nutrition and plant science. Our goal is to capitalize on the intellectual capital, research and innovation that’s going on in St. Louis and help turn many of those ideas into successful companies. We provide all of the infrastructure to help them grow and succeed here in the St. Louis region.”
BioSTL and BioGenerator’s inclusion of agriculture and food is not only the proximity of Bayer/Monsanto, but Nestle Purina, Post Holdings, growers and regulators, as well as the big grower organizations, like the National Corn Growers Association and the American Soybean Association. “Well before you get to Monsanto,” Rubin says, “the Danforth Plant Science Center is the largest research center in the world focused on plant science. You could argue that without Monsanto they wouldn’t be here either, because Monsanto donated the land and along with other philanthropists, helped get that started about two decades ago. It’s grown into a major research institute and has part of its mission to help support startups and makes its unique facilities, greenhouses and growth chambers and other equipment, available to startups, which is a pretty unique asset. These are things startups would never be able to afford or have access to without Danforth allowing access.”
One of BioGenerator’s close partners and funders is Washington University. As it turns out, the university owns the 90-year-old Crescent building in the heart of what is now called the Center of Research, Technology & Entrepreneurial Exchange (CORTEX). This 240-acre bioscience district was launched in 2002 by WU, Saint Louis University, the University of Missouri-St. Louis, BJC HealthCare and the Missouri Botanical Garden. That building, formerly a newspaper printing press building, has been empty for some time, but has since been gutted and renovated.
Rubin says, “BioSTL is the anchor tenant and our BioGenerator labs are the heart of the building, with an entire floor of shared labs and dozens of startups sharing that space. At our current space, we have more than 60 companies sharing the space, but that will grow when we move into the new building.”
BioSTL will consolidate its operations from three offices into the Crescent building. The building is 80,000 square feet.
There is an interesting connection between BioSTL, BioGenerator and their development of laboratory space. At one time, Pfizer had a major presence in St. Louis, but after a major downsizing, two of the Pfizer St. Louis executives formed a company, Confluence Discovery Technologies. Rubin notes, “It grew up in our labs. We started them originally partly to help them get started. Then they ended up hiring about 40 to 50 former colleagues as they’ve grown. It was acquired by Aclaris Therapeutics in August 2017, for about $100 million. As we move into our new building, they’re still in our space, but will move out and take an entire floor on their own.”
In terms of funding, BioGenerator started out with seed funding, but has since grown. “Now we have a continuum of programs,” Rubin says, “starting with grants, nondilutive funding to provide to companies, ideas really, to test ideas very early and kill them early and cheaply if necessary, by providing funds to do an experiment or an IP assessment. We have pre-seed investing that goes up to $100,000, and seed investing over $100,000. We also have a post-seed fund that has been necessitated by the drifting of venture capital further and further downstream. So more and more de-risking is needed, more and more milestones, before a Series A takes place.”
In some cases, BioGenerator has invested $1 million in an individual company in a combination of pre-seed, seed and post-seed.
To date, companies BioGenerator has invested in have raised somewhere between $800 and $900 million collectively, which is almost a 40:1 leveraging ratio of its investment dollars. BioGenerator has invested about $21 million overall.
BioSTL also has a global initiative, GlobalSTL, “where we are capitalizing on St. Louis’s research strengths,” Rubin says. “Our GlobalSTL capitalizes on our corporate buying power strengths instead of venture capital for funds.”
Rubin points out that the venture capital exposure in St. Louis isn’t anywhere as large as it is in Boston or San Francisco, but what it does have is corporate buying power. “We have the buying power of health systems and corporations that demand innovation and can be the first major source of revenue for an international company in North America. So, we’ve facilitated partnering with cutting-edge companies in Israel, Europe and other parts of the world with our healthcare institutions and companies here in St. Louis. We’re attracting these overseas companies, not to move here, but to place their U.S.-based offices here. We’ve done that a lot in digital health, a lot in ag-tech, food and nutrition.”
BioGenerator’s portfolio is extensive, including Accuronix Therapeutics, Arch Oncology, BacterioScan, Benson-Hill Biosystems, Elira Therapeutics, Edison Agrosciences, PM Diagnostics and many others.
Rubin says, “About half of all the companies we’ve invested in have come out of a university or research institution, and about half come from other places—individuals who left corporations or innovated on their own. There’s a wide range of sourcing. Several companies have even moved to St. Louis because of the portfolio of support the BioGenerator provides, the capital, the space, but also the venturing, the mentoring, the networking and the help in building relationships with investors.”
He also points out that Washington University and its medical school is one of its greatest innovation engines, which is why so many of their portfolio companies are drug developers or medical imaging. “But in addition to the hard science companies that come out of the med school we see the convergence of all the technology in IT spaces now converging with healthcare—from AI and machine learning, data analytics, virtual reality, augmented reality. All of those kinds of tech are being used now in healthcare and we’re seeing a lot of that emerging in the scope of BioSTL and BioGenerator.”
But what St. Louis, BioSTL and BioGenerator really leverage, Rubin says, is “a very trusted and collaborative environment. There’s not as much noise and stress and pretentiousness and other elements that can in some sense be a barrier to getting things done. You can have a pleasant life while getting things done within the very capital-efficient nature of our environment here.”