BOULDER - Obstacles to landing funding and difficulty in attracting business development talent are two major challenges for local bioscience companies despite a wealth of world-class science being conducted in the Boulder area.

That was a major focus of local executives gathered Tuesday for BizWest's CEO Roundtable discussion on bioscience held at the University of Colorado-Boulder's Jennie Smoly Caruthers Biotechnology Building. The event was sponsored by accounting firm EKS&H and the law firm of Berg Hill Greenleaf & Ruscitti.

Kate Tallman of the University of Colorado's technology transfer office said one encouraging sign is that her office is seeing an increase in licensing activity as companies look for new ideas to market. And counting CU's Anschutz Medical Campus, Tallman said bioscience accounts for about one-third of the startups spun out of CU-developed technologies.

"The question is whether we'll have the same record of survival of these companies," Tallman said. "Because they're getting started, but are they getting funded?"

Plenty of intricate factors are at play that make life tough for local bioscience companies to attract funding. For one thing, said David Traylor, senior managing director at Golden Eagle Partners, a Denver-based investment bank focused on the life science industry, a shrinking amount of venture capital in the country as a whole is going toward bioscience. That's largely due to the long payoff period for such investments when compared to software and information technology where development times can be much shorter with lower-risk.

Early-stage funding is particularly hard to come by, said Clovis Oncology Inc.'s chief executive Pat Mahaffy, because of the amount of money and time that does go into the development of many bioscience companies. Putting in the first $15 million in investment in a company is a tough decision when you know there is going to be possibly hundreds of millions more put in behind you before the payoff arrives.

"Being that Series A guy is a really dangerous game," Mahaffy said.

Kyle Lefkoff, founder and general partner of venture capital firm Boulder Ventures Ltd., said another wrinkle is that often early financing follows proven management teams more than it does promising science.

"When I think about a sustainable biotech industry in Colorado, the key is human capital, not the science," Lefkoff said. "The science from CU has always been world-class. The key is attracting and maintaining more Pat Mahaffys. That's really the challenge."

Mahaffy acknowledged the human capital aspect in attracting venture capitalists, but also noted that many public company investors are interested more in the competitive profile of one specific drug a company might have and not even the whole company.

The talent issue, several in Tuesday's group noted, isn't to be overlooked.

Ron Squarer, CEO of Boulder-based Array Biopharma Inc., said there is little challenge hiring talent in the sciences like chemistry and biology. But attracting the talent to develop and commercialize the technology and clear regulatory hurdles is tougher. Sometimes it's easier for those developing companies to be purchased or move elsewhere rather than build here.

Part of the reason for that, both Lefkoff and Mahaffy said, is the lack of bioscience companies in the area compared to, say, the East and West coasts. So it's harder for a talented exec to decide to come here when she knows there is less of a safety net of a broader industry locally to fall back on if things at her current job don't go well.

"Attracting people here, even if they want the lifestyle, you're going to pay up," Mahaffy said.

Still, CU professor and Nobel Prize winner Tom Cech said some of the "Silicon Valley envy" of places like San Francisco is overcooked. Funding for bioscience, he said, is tough everywhere. But he also noted that there are some advantages locally like CU's tech transfer office. Faculty at some schools, including the likes of Stanford, he said, don't get the same support in licensing and patenting their intellectual property.

The fact that Silicon Valley has a much larger bioscience ecosystem overall simply means that there are more success stories to talk about, though not necessarily disproportionately more. There are still plenty of struggles, and venture capital interest there is focused heavily on IT and apps and quick turnarounds much like it is elsewhere.

"I think we're in a much more similar situation than some of you think," Cech said.

Roundtable participants
Breanna Burkart, senior director, investor relations, Clovis Oncology Inc.; Marvin Caruthers, distinguished professor, University of Colorado-Boulder; Tom Cech, distinguished professor, University of Colorado-Boulder; Kyle Lefkoff, founder/ general partner, Boulder Ventures Ltd.; Pat Mahaffy, CEO, Clovis Oncology Inc.; William Marshall, president/CEO, MiRagen Therapeutics Inc.; Pete Neidecker, executive vice president, Mountainside Medical Colorado LLC; Len Pagliaro, CEO, Siva Therapeutics Inc.; Misha Plam, president/CEO, AmideBio LLC; Ron Squarer, CEO, Array Biopharma Inc.; Kate Tallman, senior director of technology transfer, University of Colorado-Boulder; David Traylor, senior managing director, Golden Eagle Partners.