Doros Platika acknowledges that he misses practicing medicine. The tradeoff, he says, is the opportunity to multiply his efforts on behalf of many more people than he could ever hope to affect in an active medical practice.
That opportunity comes for Platika through the Pittsburgh Life Sciences Greenhouse, a public/private partnership that invests in early stage biotech ventures in the region. Platika took over as president and CEO of the organization last November.
Indeed, Platika is in a position to help leverage the biotechnological strengths of the region into its next fast-growth industry. He says he believes that Pittsburgh has the promise of becoming a biotech center on the scale of that of Boston, San Francisco or San Diego.
No doubt that there’s plenty of potential. Nationally, the life sciences attracted $4.9 billion in venture capital in 2003, or 27 percent of the total invested, according to PricewaterhouseCooper’s Moneytree Report. With research at the University of Pittsburgh and Carnegie Mellon University in play in the region, intellectual capital abounds.
The two institutions’ strengths, medical research and computer science, respectively, bring two critical ingredients to the mix.
“At the edges where those two fields merge, you have some of the biggest successes,” Platika says.
Strong foundation support locally has helped to get the Pittsburgh Life Sciences Greenhouse off the ground, he says. Now, however, the region needs to assemble a strong cadre of angel investors to grow small ventures to a stage where they will interest venture capital from outside the region. That will help to focus needed attention on Pittsburgh as a biotech center, says Platika.
“Right now, in all honesty, we’re a flyover city,” says Platika.
Ultimately, he says, successes — and failures — will allow the biotech sector to continue to revitalize itself. Successful companies will spin off other ventures, and the failed ones will allow talented and experienced scientists and entrepreneurs to be recycled back into the process of fueling and driving new start-ups.
Platika spoke with Smart Business about the future of biotech in the region and the role of the Pittsburgh Life Sciences Greenhouse.
What do you see as the key role of the Pittsburgh Life Sciences Greenhouse?
A key component of the greenhouse right now is to prime the pump and seed the opportunities in the life sciences. And that includes in the universities, making sure there are the facilities there for people to do their work and top-notch people who will generate commercial opportunities, to nurture and help them through our various programs, not just providing capital but providing entrepreneurial assistance in the form of management assistance, providing an incubator, providing assistance in gaining access to both federal and private money.
All of that is focused on early stage companies, as well as recruiting entrepreneurs to the area. One of the areas where there is a bit of a lack in Pittsburgh is institutional capital. That’s a gap that we need to fill.
What role do the University of Pittsburgh and Carnegie Mellon play?
Having those two come together and having an opportunity to develop bioinformatics and robotics that can lead to devices such as artificial limbs, that’s where we have the potential to create a real powerhouse for new technologies and company development. If I were an investor, I would be looking for opportunities that appear to be taking two areas of strength and putting them together.
Historically, it’s these hybrid opportunities that have yielded the home runs.
It seems like Pittsburgh has a lot going for it in this field. Are there any concerns?
What we have to be careful about is expectations. It’s a field that’s not going to happen in six months. It’s a field that’s not going to be as big as steel was in one or two years. So my biggest concern is, do we have the patience and stamina to stick with it?
I think if we stick with it and we believe in ourselves, there’s nothing stopping Pittsburgh from becoming one of the dominant centers in the life sciences in the world in its particular niches where we have strength. I think the other concern is, if we try to succeed from the get-go across the board, that’s the best way to use a lot of resources — and this is one man’s belief, and I could very well be wrong — that could be a way to spend a lot of resources and not be competitive with other groups that have many more resources.
But I think if we choose carefully and leverage our areas of strength, Pittsburgh will become one of the leading centers in the world in those areas.
What are those areas?
Areas that combine computational strengths with the life sciences. I think one of the other areas where we’re in the top 10 right now, if not in the top five, is tissue engineering, regenerative medicine.
People have not yet come up with a good business model in these areas, and that’s a challenge. I think there’s real potential in nanotechnology where it intersects with biology and life sciences. I think these are areas where we could become dominant.
Is there any piece of the puzzle that’s missing?
I think we have a gap in the area of angel investors. We’re blessed with very visionary foundations and more foundation capital per capita than most other regions, so there’s money in this region, but it’s more conservative money.
I think right now the best opportunities in Pittsburgh are if you are an angel investor or a small individual investor. In three to five years, I hope Pittsburgh will be as good an opportunity for the large funds. Right now, there are opportunities for the $100 million to $200 million mutual funds.
There are few opportunities that can adequately absorb the kind of capital that a $1 billion to $2 billion fund needs to put to work to make it worth their while.
Does the absence of a large pharmaceutical company in the region concern you?
That’s not a necessity. Boston isn’t and never was, and I’m not sure if it ever will be, a huge pharmaceutical stronghold. For the most part, many of the biotech companies have grown billion-dollar products without any pharmaceutical company research and development in the area.
The closest is in Connecticut, where Pfizer and Bristol-Myers Squibb have research centers. That’s also true for the largest center, the San Francisco Bay Area. San Diego has become a powerhouse in biotech without a pharmaceutical presence.
I would say having big pharmaceutical companies here would be a plus; not having them here isn’t a deal-killer. How to reach: Pittsburgh Life Sciences Greenhouse, www.pittsburghlifesciences.com