If Mark Gurney can’t find the capital he needs in Michigan, his drug development firm is poised to look for it elsewhere.
Bringing aboard additional out-of-state investors could mean that Tetra Discovery Partners LLC has to move to follow the money, and that’s a decision Gurney is willing to make.
“Our challenge going forward is keeping our company in West Michigan,” Gurney said during a recent panel discussion at the annual MichBio Expo held in Kalamazoo.
His comments provide further voice to an issue facing Michigan-bred life sciences firms that formed years ago, progressed with early-stage venture capital, and now require larger rounds as they move into later stages of development.
While venture capital has made great strides in Michigan over the last decade, companies that need large amounts of capital generally have to go out of state for deep-pocketed investors that can fund later rounds.
That could result in a company having to relocate closer to a lead investor who may not view Michigan as the place to foster the next great innovation in the biotech industry or who still views the Midwest as a flyover region.
Gurney recalled running into that thinking once while sitting at a meeting with partners at a Boston-based venture capital fund.
“One of them turned to me and said, ‘Well, how do you get here?’ I told him I fly,” Gurney said during the MichBio panel discussion, drawing a few laughs from attendees. “There’s unfortunately a large vacuuming sound with the financing on the east or west coasts, and so it’s a challenge. I hope we can stay here. I hope we can find the investors and we can convince them Michigan is the place to be, because we’ll spend their money carefully and we have a high ROI being based here.”
Based in Grand Rapids with lab operations in Kalamazoo, Tetra Discovery Partners is developing a drug to treat Alzheimer’s disease. The company’s compound worked to improve memory loss in healthy subjects involved in an early-stage clinical trial.
Gurney founded Tetra in 2011 and raised $28 million, largely through federal grants from the National Institutes of Health and Small Business Innovation Research program, and $10 million in venture capital investment. Tetra Discovery Partners, which recently moved its Grand Rapids office out of the Smart Zone and into space on Fulton Street, now seeks to raise $30 million in funding to support further clinical trials on its drug compound “to find out if it will really benefit patients,” Gurney said.
“We’re raising money all of the time,” he said.
Part of bringing in more money to back Michigan-based life sciences firms could come from raising the industry’s profile.
Rob DeWit, CEO of MPI Research Inc. in Mattawan, said that even with the strong growth of the life sciences in Michigan over the years, the industry — particularly in West Michigan — still has a lot of work to do to raise its profile.
Michigan has “a lot of very good things” that go on here, and “we’re still horrible at telling people about them,” DeWit said.
“This is a great place to do business,” he said. “We need to continually do everything we can to let people know that there are a lot of good businesses here and (tell them about) the work ethic we’ve learned as we’ve worked more globally over the years. That is a very unusual thing here in West Michigan.
“We are masters at keeping that light hidden. I just don’t understand it. It’s just that general humble part of being in Michigan. We still need to do a much, much better job at drawing attention to what’s available here.”