This story is part of CNBC's quarterly Cities of Success series, which examines cities that have transformed into business hubs with an entrepreneurial spirit that has attracted capital, companies and employees.
The Denver-Boulder region is quickly becoming a major hub for the life sciences industry, attracting companies developing cutting-edge medical treatments and technologies.
Life science research aims to understand living things, from cells to our planet, to improve health, nutrition and the environment. Funding growth is being driven by a combination of factors: an increase in venture capital and government funding, a collaborative research environment, and a booming market for lab space.
Tim Schoen, CEO of BioMed Realty, walks CNBC through a construction site that will be converted into state-of-the-art laboratory space.
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San Diego-based real estate major BioMed Realty (acquired by Blackstone for $8 billion in 2016) made headlines in 2022 with its record-breaking purchase of Flatiron Park, a massive complex in Boulder, Colorado, for $625 million . The 1 million square meters in 23 buildings will be converted into laboratory and technical rooms to meet the region's increasing demand.
“This was a logical next step … to invest and expand in Boulder,” said Tim Schoen, president and CEO of BioMed Realty. “Boulder has all the elements you want in an innovation ecosystem – research universities, scientists, venture capital and then ourselves providing the mission-critical infrastructure.”
In addition to Boulder, the company operates in five other core life sciences and technology markets, including San Diego, San Francisco, Seattle, the Boston region and Cambridge in Massachusetts, and Cambridge, United Kingdom
Enveda Biosciences, a biotechnology company, occupies laboratory space in Boulder.
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According to commercial real estate group CBRE, in 2023, 14 companies were looking for a total of 506,000 square feet of laboratory space across the Denver-Boulder market, which includes the neighboring city of Aurora. Additionally, 370,000 square feet of laboratory space in the Denver-Boulder market has been completed and is ready for occupancy another 560,000 square meters are under construction or renovation.
“I would describe Boulder as unique and explosive. Unique in terms of its location at the foot of the Rocky Mountains,” Schoen said, “and then explosive in terms of how the ecosystem has really grown and expanded over the last decade.”
Financing on the rise
Investors are taking notice.
“Investors from Colorado and across the coast see opportunity here,” said Elyse Blazevich, president and CEO of the Colorado Bioscience Association. “Our ecosystem has raised more than $1 billion for the last seven years in a row – and early-stage funding in Colorado grew faster in 2023 than other life sciences markets nationwide.”
Founded in 2003, the Bioscience Association supports the growth of the life sciences with a focus on access to capital, education, networking and more.
According to Blazevich, funding for pre-seed projects, Series A and Series B rounds increased from 2022 to 2023. The largest increase was seen in Series A and Series B funding, which increased year-over-year $53 million or 28% increased. Pre-seed funding, the earliest stage of venture capital, grew by $18 million, or 163%, during this period.
According to a recent CBRE report, Denver-Boulder is the leading U.S. life sciences real estate market, driven by record investments from venture capitalists and the National Institutes of Health.
The report also found that the region's skilled life sciences labor pool is growing much faster than the national average, increasing 35% over the past five years, compared to 16% growth in the U.S. overall.
Entrepreneurial success
The recent surge in venture capital flowing into Denver-Boulder builds on the region's proven track record over the past few decades.
In 1998, entrepreneur Kevin Koch co-founded the biotech company Array BioPharma in Boulder. The company was acquired by Pfizer in 2019 for $10.64 billion, and now Koch is the co-founder and CEO of a clinical-stage startup Edgewise Therapeutics.
Edgewise, which develops treatments for rare muscle diseases, raised net proceeds of $186.1 million in its March 2021 initial public offering.
But the company started small.
“We were in an incubator within the University of Colorado. And we hired talented people from the University of Colorado,” Koch told CNBC. “We had interns who eventually became employees.”
A scientist at Edgewise Therapeutics in Boulder, Colorado, focused on developing treatments for rare muscle diseases.
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Today, Edgewise has a much larger footprint in Boulder: a total of 28,000 square feet, with half of its 93 employees working in the city office. The company plans to expand its footprint and hire more employees in the coming years.
Koch said the history of DNA and RNA research in the Boulder area in the 1980s was key to unlocking protein-based drugs to fight disease, which helped attract capital for the life sciences center.
“[That research] “It has led to investment in the Boulder area,” he said. “Now the companies that commercialized these products have invested back in Boulder.”
With the help of leading venture capitalists, Edgewise Therapeutics has raised more than half a billion dollars – $550 million in cash by 2027.
“We decided that Boulder was really the right place. And I think it turns out that was the case. We were able to attract a lot of fantastic talent,” said Koch.
Research powerhouse
Denver-Boulder's innovation ecosystem produces ideas quickly.
Aurora, Denver's largest suburb, is the epicenter of life sciences research: a 256-acre complex that houses the University of Colorado's Anschutz Medical Campus, which receives $700 million in annual grants.
Dan LaBarbera is a professor of pharmaceutical sciences and founding director of the medical campus's Center for Drug Discovery.
“Our goal here at the Center for Drug Discovery is to act as a bridge to bring innovation from academia to industry and then to the clinic,” LaBarbera told CNBC.
A look into the Center for Drug Research at the CU Anschutz Medical Campus under the direction of Dr. Dan LaBarbera (right) with the goal of speeding the process from drug discovery to delivery to patients.
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Founded in 2021, the center develops drugs for a variety of diseases from cancer to Alzheimer's – using cutting-edge technology, including robots and 3D bioprinters.
“I think people are generally familiar with 3D printers because they can print plastics or even metals,” LaBarbera said. “We use very similar technologies to print complex tissues that mimic aspects of human disease.”
Historically, it took approximately 10 to 15 years for a drug to move from the discovery phase to approval by the U.S. Food and Drug Administration.
“Now we can accelerate that with this technology, so that process takes about six to eight years,” LaBarbera said.
The center helps shorten the time from drug discovery to treatment and helps startups and existing companies bring breakthrough medicines to patients faster.
“Our goal is not to compete with the pharmaceutical industry,” LaBarbera said. “Our goal is actually to work with them to develop really innovative potential drug therapies.”
Tune in: The “Cities of Success” special with Denver & Boulder airs April 11 at 10:00 pm ET on CNBC.
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