By Rich Soll, Senior Advisor, Strategic Initiatives at WuXi AppTec (@richsollwx)

Thong Le has a penchant for creating thriving ecosystems for biotech startups. Since joining Accelerator Life Science Partners in 2013 as president and CEO, the seasoned investor and business leader has helped the organization further catalyze the development and commercialization of breakthrough scientific innovations in the form of multiple promising startups. 

Accelerator – which has operations in New York, Seattle, and more recently, San Diego – has a unique model focused on finding promising science and forming companies around it. The organization has aligned itself with strategic partners, including major players in the life science industry, to build a robust portfolio. One of the reasons why Accelerator’s model is so successful is because the organization’s management team runs each startup in the very beginning, allowing the scientists to do what they do best – the science. 

Le – who has more than 20 years of experience in identifying, investing, managing, and successfully exiting numerous seed and early-stage investments – recently talked with me about his vision for growing and expanding Accelerator’s investment model, and how investing in and creating biotech startups is liking baking cookies. 

Rich Soll: Can you describe Accelerator’s purpose?

Thong Le: In a nutshell, what we do is we focus on catalyzing development and commercialization of biotech innovations. It’s something that we’ve pioneered now for over 16 years, and in fact, we are among the first to use the term accelerator when you talk about doing things to more rapidly advance the development of startup companies or science.  We search the world for promising early stage technologies and partner with entrepreneurs, scientific executives, and other folks that have these ideas and provide them with a complete business, scientific and financial toolkit that gives them the necessary inputs to help establish a successful early stage company with all the capabilities that it needs so that they can enhance their odds of success.

Rich Soll: Your portfolio of companies today is very impressive.  What makes them unique?

Thong Le: Over the course of some four-and-half-years of our investing activities, we have now funded about eight companies that are spread across the Seattle and New York City ecosystems. These are all companies that we have created from the ground up and are actively managing based on unmet market needs that we’ve identified alongside our syndicate of 12 investors.  Many of them represent opportunities that are very early stage.

If you look at the three projects, for example, that we now have in New York City, all three of those opportunities came from technologies that we found from New York-based research institutions, all of which were pretty early stage technologies that we then wrapped our capabilities and resources around to form very promising companies. One example is Petra Pharma, which we capitalized with $48 million in Series A. The company is focused on developing novel therapeutics for cancer.

Lodo Therapeutics is built around a metagenomics-based small molecule discovery platform.  The company was spun out of Rockefeller with the support of the Gates Foundation and orchestrated a $20 million Series A. The value of the Lodo platform was recently recognized by Genentech, which formed a multi-target strategic collaboration valued at $969 million in upfront fees and milestone payments.

In Seattle, we recently launched Proniras Corporation to develop Tezampanel in the treatment of seizure disorders.  Of significance is the fact The U.S. Department of Health and Human Service’s Biomedical Advanced Research and Development Authority (BARDA) awarded Proniras a contract worth up to $89.5 million to develop Tezampanel as a medical countermeasure for the treatment of nerve agent-induced seizures that are not stopped by current medications. We also have a collection of other companies that are being worked on that are here in Seattle, such as Rodeo Therapeutics, a preclinical-stage biotech company focused on first in class small molecule modulators of prostaglandin biology for enhancing tissue repair and regeneration, and ApoGen Biotechnologies, a company that is developing a new class of therapies that target drug resistance in cancer.

So, it’s a pretty interesting portfolio. In addition to that, we played some small de-risking bets around some early stage technologies that we’ve identified as a couple of our university partners where we find the technology interesting, but we want to do some additional proof-of-concept replication work to ensure ourselves that we have something that really has legs that we can build a startup company around. We have a few projects that we’ve already placed some bets on that we are monitoring with interest.

Rich Soll: How do you identify those assets and technologies?

Thong Le: We have a very talented team that I have the privilege of working with every day – many of them are card-carrying scientists, Ph.D.’s with advanced degrees, and between myself and the members of the Accelerator team and the members of our extended team, which include our clinical scientific advisory board and group of operating partners, we actually scour the world looking for technologies that potentially could be appropriate for us to take on.  We look hard and heavy obviously in Seattle and New York where we have our operational footprint, but then beyond that we actually have a lab and a network of relationships that extend well beyond those geographies in a number of interesting therapeutic areas.

We also have the benefit of having 12 strategic investors that we worked with who are invested in our projects, including Eli Lilly, J&J, Pfizer and AbbVie, as well as venture groups like ARCH  Venture Partners, Alexander Venture Investments, WuXi AppTec Corporate Ventures,  WRF Capital, 180 Degree Capital, and others who are constantly looking at opportunities themselves. Those groups also send opportunities to us that either may not be a fit for them, or better suited working in the model that we have that allows us to more rapidly and cost effectively catalyze these opportunities at an early stage.

Rich Soll: How many opportunities do you come across?

Thong Le: Over the course of some four-and-a-half years, we’ve looked at well over 3,000 discrete opportunities that have come from all over the world, and in that collection, we pick out maybe one or two of those opportunities that we might invest in in a given year so we can try to build a very deep well of interesting opportunities. We track and monitor those opportunities that may not be quite right for us just yet that may be still early and then we prosecute those that passed through the rigorous due diligence gauntlet that we’ve established internally that allows us to then rigorously pursue those opportunities that fit the specific criteria that we’re looking for.

Rich Soll: When do companies graduate from the Accelerator and how do they graduate?

Thong Le: It all depends. When we say graduate, that simply means a couple of things – the company is capable of raising additional capital, in which case we would then recruit an executive team to take over from the work that we’ve done, and that executive team would then go out and raise more money and continue to build and scale the company. We’ve done that already with Petra Pharma, where in a span of about 16 months, we started, ran the company, built out the technology, established the initial sets of collaboration, and have now brought in a seasoned executive team who is now taking over the operation of that company and is running with it. In other cases, graduation for us means that we get through the product development efforts.

Rich Soll: What happens to the technologies or science that don’t graduate?

Thong Le: In the event that the technologies don’t work out, we would then move quickly to shut the company down. We’ve already shut down one of the companies that we started in our clinical Accelerator fund. It was a seed investment that we made. A little more than halfway through the seed investment, we found that the results weren’t getting us to where we needed them to go. So, we discontinued that project, and obviously we wish the PI on that technology well. We’ll continue to monitor that area of science, but it just didn’t achieve what we hoped to achieve in that timeframe, and the milestones that we set up, and so we decided to stop our efforts there and move on.

Rich Soll: Let’s talk about the locations you’re in – New York City, Seattle and now San Diego. What led Accelerator to choose the particular regions?

Thong Le: Our choice in physical locations is in fact intentional. We are choosing to locate and operate ourselves in markets where we find that there is a very strong substrate. When we look at early stage technology development opportunities, we look for places that have a strong presence of research institutions and where there is a lot of early stage substrates where we could potentially build and start companies.

We also look for an entrepreneurial ecosystem that is supportive of company building, but doesn’t have an overabundance of those kinds of tools and capabilities so that we can maintain a competitive advantage. We were the ones who led what I call the early stage biotech renaissance in New York City because we were probably the first group that planted our flag and said that we were going to build early stage venture-backed biotech companies there. People thought we were crazy to do that. Contrary to that, we’ve actually built a number of companies now that have caused a flywheel effect for other venture firms and investors to now enter that market.

We just opened another Accelerator location in San Diego to serve the Southern California region.  San Diego and Los Angeles have very similar profiles to the Seattle and New York City markets, where we think are great places to do company building. And on top of that, we have a lot of intellectual capital and entrepreneurial capital that we’re hoping to leverage in Southern California.

Rich Soll: What are some of your short-term goals?

Thong Le: The current focus over the next couple of years is to ensure that the companies that we have funded are on their path to success. Each of the companies are actively developing their technologies, assets and product development portfolios, and we want to ensure that those companies are well positioned for developmental success in that regard. We want to continue to push those companies forward, advancing their product development efforts, finishing out the rest of the investments, and then take steps to continue the company building activity that we’re doing, and raising more substantial amounts of funding so that we can then continue the good work I think we’ve done.

Rich Soll: How do you see the Accelerator model impacting the ecosystem?

Thong Le: Through a business model and through company building activities, the Accelerator uniquely helps to foster an ecosystem for high quality, venture backed startup companies into the area, whether that’s Seattle or New York City. The collection of our strategic stakeholders, the proximity of putting our companies together under a single roof through the support of Alexander Real Estate equities, and the inherent value of externalized capabilities offered by WuXi AppTec and other CROs allows us to build a campus of innovation in a unique way that only Accelerator can do. We bring a new creative factor that then attracts other strategic players and other venture firms, and it brings other entrepreneurial talent around the type of things that we do in the ecosystems that we work in. We’ve certainly seen that in Seattle and in New York City.

Rich Soll: Would you consider the Accelerator a new benchmark in the industry? And is it a sustainable model?

Thong Le: I don’t know if I call it a new benchmark; it’s a different way of achieving early stage development in a capital efficient way. I don’t know if it’s something that can be done 100 or 1,000 times. I do think different groups of different pharmaceutical companies are experimenting with the use of CROs more frequently than they may have used in the past, and we certainly applaud and commend them for that. What we’ve done at Accelerator, this approach has worked out incredibly well, and because we have great and committed partners like WuXi working with us side by side, it has allowed us to do a lot of things more efficiently than we would have been able to do on our own or building from the ground up ourselves.

Rich Soll: What advice would you give to young people thinking about science careers?

Thong Le: We need more people to continue to pursue science, to observe and be creative. We need to partner alongside scientists and other entrepreneurs to make those observations a therapeutic reality. I would encourage as much as I can for people working with science to really push the envelope on the work that they’re doing because those discoveries, those observations are often the basis of the work that we do in building new companies and finding new medicines.