Absci’s IPO reflects booming biotech market and growing PNW life sciences industry
Absci researchers at the company’s HQ in Vancouver, Wash. (Absci photo)
The upcoming public offering for Vancouver, Wash.-based biotech company Absci reflects a soaring IPO market and adds to the growing prosperity of Pacific Northwest biotech companies. The company’s success also highlights the still-tenuous links between the life sciences communities in Portland, Seattle, and Vancouver B.C.
Absci, which partners with other biopharma companies to identify and develop protein-based drug candidates, has its roots in Portland. In 2011, CEO and Oregon native Sean McClain spun out the company through the Oregon Bioscience Incubator, moving in 2016 to larger labs across the Columbia River in nearby Vancouver.
Erc Rosenfeld, founder of Oregon Venture Fund. (OVF Photo)
Absci occupies an unusual geographic niche, based in Washington state but part of the Portland area. The company pulls employees from both states, said Eric Rosenfeld, founder of the Oregon Venture Fund, an early investor in Absci.
“Some of us watch how Immunex in Seattle created a generation of investors and entrepreneurs,” said Rosenfeld, referencing Seattle’s flagship biotech company founded decades ago. “And we’re hopeful that this will have a similar catalytic effect here.”
Oregon Venture Fund is the company’s second-largest investor shareholder, highlighting how hyperlocal funding can spur game-changing regional biotech efforts. The company also received a grant of $200,000 from the Washington governor’s office to support its move to Vancouver.
Absci is the latest in a string of Washington state biotech startups to test the public markets — others including Impel Neuropharma, Sana Biotechnology, Athira Pharma, and Silverback Therapeutics have had IPOs in the past year. University of Washington spinout Icosovax just filed initial IPO paperwork this week.
Bolstering the workforce, increasing regional connections
As biotech companies thrive in Washington state, the need for life sciences talent is expanding, and the opportunities for regional integration are growing.
Life Science Washington CEO Leslie Alexandre. (Life Science Washington Photo)
Absci’s entry into the public market reflects the maturation of the Northwest biotech ecosystem, said Leslie Alexandre, president and CEO of Life Science Washington, the state’s life science industry group.
When Alexandre arrived in Seattle five years ago, the city was still recovering from the loss of California-based Amgen, which had acquired Immunex and then shuttered its Seattle operations beginning in 2014, shedding more 600 jobs.
Things are different now, said Alexandre, as companies such as Seagen and Adaptive Biotechnologies go public and grow in the region. “It’s gratifying to see more and more companies staying here for commercialization,” she said.
Rosenfeld echoed that point, noting that Portland-area companies have traditionally been acquired earlier in their lifespan. Now he’s seeing more local firms set to grow for decades to come.
There’s also a recent trend of successful Seattle software founders taking the startup plunge in life sciences. The group includes entrepreneurs such as Sujal Patel, who sold Isilon Systems to EMC for $2.5 billion and in 2016 co-founded Seattle-based Nautilus Biotechnology, or Terry Myerson, the former Microsoft executive who leads Seattle-area healthcare data startup Truveta.
But Alexandre said pulling in talent remains a challenge.
“This turbo-charged growth will be short-lived if we fail to create and invest in a comprehensive, ten-year plan to meet the diverse workforce needs of fast-growing biotech companies such as Absci,” said Alexandre. “As is true throughout the nation, talent is the rate-limiting ingredient in the growth of Washington life science companies.”
In response, Life Sciences Washington has launched an initiative to help recruit people into the state. Alexandre also points to initiatives to train and educate the next generation, such as Washington State Opportunity Scholarship and Washington STEM — but she’d like to see more.
“I’d like to see a more cohesive plan, integrating all of these programs, so that we are leaving no stone unturned in attracting the next generation of talent in our own backyard,” she said.
A 2019 report from Life Science Washington found that the state employed more than 35,000 people directly in life science jobs across 1,100 companies.
From 2010 to 2019, life sciences employment in the Seattle and nearby Bellevue region increased 21%, according to a recent report by JLL, a global provider of real estate and investment management services. In a 2019 report, commercial real estate firm CBRE pegged Seattle as the top emerging life sciences hub in the U.S.
Life sciences jobs are on the rise in the Seattle and Bellevue areas. (JLL)
Rosenfeld would like to see tighter connections between the Seattle and Portland metro areas.
“Investing is very much a local sport,” he said. “Investors want to invest locally, and be able to collaborate with startups, almost on a daily or weekly basis. Seattle and Portland right now are just a little too far apart.”
“If we had an express train that would be fabulous, of course,” said Rosenfeld. “I’d love for the regions to be more integrated.”
Local leaders also see similar untapped potential for integration between Vancouver, B.C. and Seattle, though some connections are emerging. For instance, Vancouver, B.C.-based biotech Zymeworks has numerous open positions at its Seattle location, and Seattle-based Gates Foundation has granted Vancouver-based AbCellera two projects in the past four years.
Absci is preparing to move to an even larger 78,000 square-foot campus just northeast of Vancouver in Battle Ground, said Rosenfeld. Absci also has employees throughout the U.S. and internationally, particularly after its recent acquisition of the synthetic biology company Totient and the deep learning startup Denovium. So far, it has had good luck recruiting in the Vancouver area, said Rosenfeld.
The low cost of living, proximity to Portland and other amenities are an attraction, he noted. “Vancouver, or Battle Ground, is beautiful. So hopefully that will be an inducement for people to want to live and work in the area here.”
Regional biotech growth also has its origins in strong research institutions, such as Fred Hutchinson Cancer Research Center and the University of Washington in Seattle and the Pacific Northwest National Laboratory in eastern Washington. In Portland, the Oregon Health Sciences Institute has spun out dozens of companies.
Absci and others are also buoyed by a rising biotech IPO market. It is seeking to raise $100 million, according to its recent SEC filings — though IPOs have recently been raising more than initial estimates. Seattle-based Sana Biotechnology, for instance, raised $587 million in its February IPO this year, after announcing it intended to raise up to $150 million when it first filed to go public a month earlier. And that’s just one sign of the times.
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In the last decade, biotech IPOs have been on the upswing, fueled in part by advances in genomics, gene editing, cell therapies and other areas. Biotech IPOs reached all-time high last year, according to Biopharma Dive, and accelerated in the first part of 2021. By the end of June, 49 biotechs had gone public, collectively raising $8.8 billion.
And that number does not include the spike in companies going public via the SPAC route — which reeled in more money combined than traditional IPOs this year internationally, according to Endpoints News.
“The amount of investment that is pouring into biotechnology and the life sciences is incredible,” said Alexandre. “Investors have really woken up and seen the opportunity.”
In addition to Sana, other recent Seattle-area biotech public offerings include Impel NeuroPharma, which raised $80 million through its IPO in April; Silverback Therapeutics, which raised $241 million in its IPO last December; and Athira Pharma, which raised $204 million in September. Nautilus Biotechnology, a proteomics startup, recently raised $345 million through its SPAC.
The growth in biotech also reflects a surging IPO market across the board. The IPO dollar volume for 2021 reached $171 billion by mid-June, surpassing the 2020 record of $168 billion.
Seattle-based startups Remitly and Rover (via a SPAC) are set to go public this year, while Paymentus had its IPO in May.
The Portland area, with its smaller startup ecosystem, ended a ten year IPO drought in 2018 when Vancouver, Wash.-based laser maker nLight went public. In June 2020, ZoomInfo, also from Vancouver, raised $887 million in its IPO.