One thousand people with plant science PhDs. A med school with the second highest federal research funding in the nation. Two innovation districts: an established one with a biotech presence and a new one for agtech. This is what St. Louis has going for it as a place to launch a life sciences business.
There are other advantages, too—although on the flip side, certain aspects could improve. We asked several executives and investors where they thought the local life-sciences startup ecosystem was solid and where it could be better. Here’s what they said.
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Strengths
One recurring theme was St. Louis’ pool of scientific talent—not only at large companies such as Bayer (formerly Monsanto) but also in the constellation of smaller, newer ones. “If a startup struggles and has to go through reductions or shut-downs, we’re now mature enough to where other startups can pick them up,” says Martha Schlicher, CEO of Impetus Ag and a general partner at the venture capital firm Cultivation Capital.
Top talent commonly arrives through WashU, whose school of medicine has updated its appointments and promotions guidelines to explicitly reward entrepreneurship. In addition, WashU’s tech transfer office has ramped up its startup licenses and license agreements over the past decade. Many of the licensees get their start through BioGenerator at Cortex. The infrastructure that BioGenerator provides is not on offer everywhere, says Andrew Young, who founded his company, Pairidex, while maintaining his clinical and research roles at WashU Medicine. “All my other friends who’ve done this have left academia,” says Young, who adds that he would’ve done the same if not for Biogenerator’s help with things like accounting, HR, contracts, and pitches to investors. “I’m not a business person,” Young says. “But BioGenerator is like, We can teach you how to speak the business language.”
Young also appreciates the local investment community, which may not have the resources of VC firms on the coasts but does seem to have more patience. “People in the St. Louis pool might be smaller but they’re people that want to see something successful come out of St. Louis,” Young says. “They want returns but that’s not 100 percent of the mission.”
Tom Cirrito, who has launched the company Varro with his brother John, a neurology professor at WashU Medicine, made a similar observation, referring to “the St. Louis way” of investing. “In New York, everybody’s a maverick,” says Cirrito, who spent 19 years in that city and took two companies public there. “St. Louis is very community-focused. Things here happen in groups, which sometimes take a little longer to get off the ground, but once they do, they have a much higher chance of success.”
Cirrito adds that when Varro recently began building out its team, he expected to need to bring in executives from the coast—and he was wrong. “I have been shocked at the quality of the pool of candidates in St. Louis,” he writes. Maybe Varro just lucked out, Cirrito says, concluding nevertheless: “At least in our experience over the last few months, the idea that it is hard to find talent here has been a myth.”
On the agtech side, the 39 North innovation district has recently emerged in St. Louis County, anchored by the Donald Danforth Plant Science Center, BRDG Park, the Helix Incubator, Bayer Crop Science, and the Yield Lab. “That’s a major, major shift in momentum,” says Larry Page, the managing director of the local VC firm Lewis & Clark Agrifood. “If you look at what Cortex did in medical sciences, I’m hopeful that 39 North will be the same for agtech.”
Challenges
For all of St. Louis’ scientific expertise, Page says, the region could use some strengthening in food science. “We have a great history of food packaging with Post and Ralston Purina,” he says. “But in food science, compare St. Louis to Research Triangle Park.” (Here Page is referring to the food technology emphasis at North Carolina’s innovation hub, which is filled with scientists from Duke University, the University of North Carolina at Chapel Hill, and North Carolina State University. )
Schlicher sees a different need, at least in agtech: graduation space, or buildings able to accommodate growing companies. “Where we struggle the most and continue to struggle is cost-effective space,” she says. The demand for greenhouse facilities, she says, is “way above and beyond what Danforth is able to offer.” Some companies have had to look as far afield as Columbia, Schlicher says.
Tania Seger, the CEO of Plastomics, says that while there is in fact plenty of commercial real estate in St. Louis County, much of it was designed for office use. To accommodate agtech companies, HVAC and water systems would need to be reconfigured—which isn’t cheap. And many suburban communities limit the building of greenhouses. “They’re not excited about the bright lights that greenhouses would bring.”
Capital, for some, is an area of concern. On the biotech side, Jim McCarter, who leads BioGenerator, has said he’s in the process of reaching out to the 250 venture-capital and private-equity entities that previously pumped in a combined $2.7 billion to the incubator’s companies. Some of these investors haven’t been involved in years, so McCarter plans to reengage them and get “additional dollars off the sidelines.” Meanwhile, in agtech, Seger of Plastomics says that attracting funding in the Midwest has grown easier, but there’s still room for improvement. “It’s gotten traction but we have to continue to feed it with successful companies and exits.”
Schlicher points out that certain investor groups have recently traveled to St. Louis to explore opportunities and ended up marveling at how various players across the ecosystem pulled together to make it worth their while. That collaborative ethos, in Schlicher’s mind, bodes well. “I’d say we’re still early in the journey,” she says, “with some promising signs.”
