A new biopharma hub created to help expand Chicago's life-sciences ecosystem received a sizable donation this week from the National Institutes of Health (NIH).
Created as a new vehicle for Chicago's academic inventors to transform their research into commercial products, the Chicago Biomedical Consortium Hub for Innovative Technology and Entrepreneurship in the Sciences aims to help get innovative treatments from drug discovery to patients faster.
The hub will use federal resources provided by the NIH to bring in Food and Drug Administration and Centers for Medicare & Medicaid Services experts to move scientific discoveries at local universities toward commercialization.
Named as one of 13 hubs now part of the NIH Research Evaluation and Commercialization Hub program, the new hub will be funded through a $10.4 million investment, including $6 million from the Searle Funds at The Chicago Community Trust, $4 million from a grant from the NIH and $400,000 from the Walder Foundation.
While not a physical location, the hub is designed to connect Chicago medical scientists from nine of the city's most prominent institutions and provide them with the expertise and network they need to develop their ideas into real-world applications in biotech, said Michelle Hoffmann, executive director of the Chicago Biomedical Consortium (CBC).
Hoffmann said the new hub will be used to scale her work at the CBC — which has a mission to stimulate collaboration among scientists at Northwestern University, the University of Chicago and the University of Illinois Chicago, among other institutions — to nine area schools.
The funding will be used for more award money across those institutions and focus on "the valley of death" — the crucial early phase of new ventures where startups are still in early infancy and most vulnerable.
Early-stage funding in biopharma remains strong
While Chicagoland universities took in $5.8 billion in NIH funding between 2017 and 2022, according to the CBC, local biotech companies tend to fall behind their coastal counterparts when it comes to private venture capital funding. The new biopharma hub wants to change that.
Hoffmann said her goal will be to build biotech in Chicago by sitting at the interface of academic research and early science commercialization.
In the third quarter, U.S. biotechnology startups collectively raised $5.8 billion across 197 funding rounds, indicating that while the size of funding rounds is growing, fewer startups are bringing them in, according to the latest Venture Monitor report compiled by PitchBook and the National Venture Capital Association.
"Starting a company isn't really the issue. I could start a company on the internet this afternoon. The issue is garnering significant equity investment from a VC," Hoffmann told the Chicago Business Journal. "So in a world where capital is in fact mobile, what isn't mobile is networks of expertise, and the types of tools and specialized science that we develop in the university."
Hoffmann said the best way to attract capital is to build a story around each professor that comes to the CBC and figure out what it is that they have that nobody else in the country has and how they will able to solve a problem that nobody else can.
While she admits that overall the VC market continues to struggle — due to some backlash over companies that went public that probably shouldn't have — it's actually a great time for early-stage investing.
"If you are clinical or you're in phase two, you're raising Series C and that's a lot of money you need to get a program through the clinic. It can be somewhere between $40 million to $100 million. And so people are very gun-shy right now on funding those rounds, but they do have capital to deploy," she said. "Every pharma company needs stuff to fill their pipelines and are out there looking for early-stage deals, where the risk there is obviously lower."
