ALBUQUERQUE, N.M. — Anyone who wants to see New Mexico’s economy thrive should pray that several dozen more firms like IntelliCyt come our way, and soon.
IntelliCyt sprang from University of New Mexico research into ways to improve flow cytometry, a technology used to study cells. The technology became a patent. The patent was licensed to IntelliCyt in 2006. Today, the company employs 55 people in Albuquerque and is expected to sell product worth $18 million this year.
The German pharmaceutical company Sartorius AG bought IntelliCyt last month for $90 million. Sartorius plans to leave IntelliCyt in Albuquerque. The hope is that it will continue to grow and employ more people. Even better, some IntelliCyt employees may one day leave the company to start their own biotech companies in New Mexico and start a cycle of life sciences business startups and expansions.
The question, as it has been for years, is how do you grow companies like IntelliCyt in a soil that has not been especially hospitable to private sector entrepreneurs? Ray Radosevich has been pondering that question for much of his career, first as a business professor at UNM, then as an angel investor and venture capitalist. Radosevich was one of the earliest investors in IntelliCyt and encouraged Albuquerque’s Verge Fund to back the firm.
To Radosevich, it comes down to human capital.
“We have smart people, but we have the wrong mix of people because we don’t have a private sector,” Radosevich said in an interview earlier this week. A more robust private sector, instead of an economy in which the best jobs are in government or in government contracting, would produce the talent we need to create and run companies.
Among the smart people is Larry Sklar. He led flow cytometry research at Los Alamos National Laboratory, joined UNM’s School of Medicine, and is a co-inventor of the intellectual property underpinning IntelliCyt. He continues to spearhead efforts to commercialize biotech research in New Mexico. Radosevich said Sartorius is inclined to leave IntelliCyt in Albuquerque because so much of the world’s flow cytometry expertise is in New Mexico.
We need more people who can take great ideas from researchers like Sklar and turn those ideas into commercial enterprises, people like Terry Dunlay, IntelliCyt’s founder and chief executive officer. Otherwise, the great ideas will be patented, then licensed to out-of-state companies. Local firms will never be created. Local people will never be hired.
Dunlay was trained as an electrical engineer. He has been an executive at a number of biotechnology companies. He knows the life sciences business, recognized the value of UNM’s technology and was able to recruit several experienced executives from out of state to help run IntelliCyt. Radosevich says this “surrogate entrepreneurship” is necessary because we grow so few of the business leaders we need locally.
New Mexico needs but does not have in sufficient numbers people who have taken companies public before, people who have created technology and marketing alliances with other companies, people who have raised a meaningful amount of capital and people who have built manufacturing and customer support operations.
Radosevich jokes that his walls are papered with worthless stock certificates from startup companies he has helped fund that eventually failed, so high is the risk in the venture capital world. Asked how New Mexico could produce more IntelliCyts, Radosevich replied, “If I could tell you that, I wouldn’t have all those certificates on the wall.”
There are probably a half-dozen more technologies at UNM’s Health Sciences Center that could become the foundation of new life science companies. “There is some world-class technology,” Radosevich said. But life science startups are expensive, and the capital they require is hard to locate in New Mexico. If the capital, at least a good piece of it, doesn’t come from New Mexico, the startup is far more likely to be uprooted to the state where the venture capital originated. The future economic growth and the jobs occur elsewhere.
The State Investment Council is authorized to invest some money in new high-risk ventures. Radosevich thinks more of the public’s capital is needed, but it must be deployed to the best deals, without regard to politics or other considerations.
Getting the right people is probably at least in part a matter of time. The more startups there are, the more surrogate entrepreneurs there will be. Eventually, the local people they hire get the experience they need to take top jobs in other startups and the surrogates will no longer be necessary.
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