When you think of life science and biotech hubs in the US, where do you go to mind? Boston? The Bay Area? Texas? Portal Innovations, a Chicago-based biotech VC firm, is trying to expand everyone’s awareness and provide opportunities for biotech startups emerging from labs in Chicago, Atlanta, and beyond.
“I founded Portal Innovations to support the life science community emerging from our research institutions for life science companies, especially in ecosystems like Chicago that don’t yet have the infrastructure and community,” explains Portal CEO John Flavin.
Over the past decade, universities such as Northwestern, the University of Chicago, and the University of Illinois have prioritized recruiting creative faculty into the life sciences ecosystem. As a result, there are a lot of investable ideas being developed in these labs, but not necessarily for them to expand without having to go elsewhere when they graduate from university.
Flavin, for his part, knows the importance of relocating. He spent his career as a biotech entrepreneur, during which time he built three biotechnology companies and took them public. The most recent startup, Pixis Oncology, came out of the University of Chicago. He was forced to move to Boston if the necessary laboratory space was not available in Chicago. It will continue to grow there, but Flavin sees the need to encourage growth and support elsewhere.
“Momentum and ecosystem are very important. A few years ago we had a lot of new people in the marketplace, but they really only had one option, which was to go to other markets to build their company,” Flavin explained. “By investing locally, developing the right ecosystem.” , we’re bringing Kendall Square to Main Street. That’s basically what Portal does.
The portal provides dedicated and fully funded lab space for startups struggling to get funding.
“The infrastructure is a very unique wet lab space, so you can do chemistry and biology,” says Flavin. This includes chemical fumes, tools to facilitate the work of cell and tissue culture. “It gives founders the ability to work in a variety of therapeutic approaches, from small molecules, polymers, and biomaterials in synthetic biology, but also cell therapy, gene therapy, mRNA. We support a variety of those approaches with the infrastructure we’re building and the equipment that goes into those labs.”
Science in action. Image Credits: Portal creations
If you’re wondering how much this type of lab space costs, you’re looking at more than $1,000 per square foot to build, according to Portal Group. It’s not just a building with lab chairs. It is a building that requires special ventilation systems, equipment on and behind those chairs, and lab technicians to support them.
“This is not a commercial office space,” Flavin said. “It comes with security and operating taxes, if you will. It’s not like we have three scientists in a lab running experiments on behalf of companies. We’re providing background support, hazardous waste permitting, lab maintenance and support.”
Portal labs are capital intensive places where a startup can’t get funding even with a seed round. The portal model is essentially part of the investment strategy.
“Our main focus is selecting companies based on the venture model. So we’re doing due diligence around the companies that we’re bringing into the space, and we’re doing a lot of due diligence to get to the final investment decision. And so, we’re giving space, and on that exchange, we have membership agreements with companies and typically private equity.” Chairs, and desk or office space are paying rent for what you can access in a month.Flavin on a monthly basis.
The investor, who has been in business for two years, says his labs are at full capacity, housing 35 companies in 50,000 square feet of space. He has invested capital in 12 companies. Portal Innovations is running a $25 million fund and typically issues $500,000 checks in seed rounds of $5 million to $7 million. For Series A funding, it will replenish its investments with $1 million to $2 million.
The Chan Zuckerberg Initiative recently selected Chicago as its next bio hub outside of San Francisco. Flavin reads this as a validation of Chicago, Northwestern and the University of Illinois’ life sciences investment and reaffirms the wisdom of Portal’s commitment to Chicago.
“[The selection] It means more talent will be attracted to the ecosystem, and it will benefit existing talent,” says Flavin. “And there’s going to be a lot of companies that come out of that and there’s going to be a lot of new products that help patients at the end of the day.”
The investor plans to expand beyond Illinois with a second lab in Atlanta, Georgia.
Flavin says of Georgia’s expansion, “the same characteristics.” “We believe there’s an underserved and underserved market, but all the features in Chicago — a large number of NIH grants to support researchers — are also there at Georgia Tech, Emory, Morehouse of Medicine, UGA. You have the CDC there, and there’s learning there. Or the growing talent population that’s moving there. You have this creative faculty movement because of the efforts at the top of those universities to prioritize innovation and hire those creative faculty.
And now that the researchers and the ecosystem are improving in Georgia, bet that there is an opportunity to further develop the portal infrastructure.
“They need wet labs. They need seed capital. And beyond doing the science right, they need the know-how to build biotech companies,” Flavin concluded.
For Portal, it’s not so much a matter of build it and they’ll come, but build it, and they’ll stay.
