BEVERLY — Early stage life sciences and “cleantech” companies that are part of the nonprofit business incubator North Shore InnoVentures are benefiting not only from reduced rates for lab and office space, but from the advice and networking it offers.
“To be successful, you can’t do it yourself,” said AdvaStim co-founder and Chief Technology Officer Barry Yomtov, whose medical device startup was one of the first to join North Shore InnoVentures.
“Networking is the biggest part,” said Martha Farmer, president and CEO of North Shore InnoVentures.
The high-tech incubator gives entrepreneurs the ability to rub elbows with CEOs from across disciplines who have dealt with similar problems in starting a company. It gives them advice on how to pitch to an investor, write a grant, protect intellectual property, get legal help or build an executive team.
“Working with mentors who are very strong, very experienced, ‘been there, done that,’ helps tremendously,” Farmer said.
Two years after North Shore InnoVentures settled into the Cummings Center, it has seen an explosion in the number of young companies it has incubated and graduated.
Seven are off doing business in the real world. In early December, it announced that four of its clients had “graduated and begun commercial operations,” allowing for three new cleantech and life sciences companies to move in, Farmer said.
All the companies that North Shore InnoVentures has worked with combined have attracted $26 million in equity investments, Farmer said. Another $22 million has come from grants from universities or governments to pay for such things as clinical trials.
One company, Atentiv of Cambridge, whose direct brain-to-computer interface is used to help provide a remedy for learning disorders, has raised approximately $12 million for clinical studies and development, Farmer said. The company doesn’t need office space in Beverly, but it takes advantage of the expertise that North Shore InnoVentures offers, she said.
Farmer said North Shore InnoVentures, which is supported by state and federal grants and corporate sponsors, is a success, given the amount of investments its companies have attracted.
“It took a lot longer to get started than we thought it would, and then when it took off, it went a lot faster than we thought it would,” Farmer said.
North Shore InnoVentures gives companies two to three years to get started and move on. Right now, it includes 23 companies that employ about 108 people. The incubator itself has two full-timers and three part-time employees. It started out as a cleantech incubator in Lynn in 2008. In October 2010, it settled in the Cummings Center, which itself has a cluster of more than 60 life sciences and cleantech companies.
“It’s a very congenial atmosphere,” Farmer said. “We have a network within the building of companies that have been helpful.”
One of those companies that is benefiting from the relationship is AdvaStim, which is developing a next-generation, implantable neurostimulator. AdvaStim is seeking to tap a $2 billion market for such devices used in a wide range of applications, mainly for controlling pain through spinal cord stimulation. The treatment is also being looked at for anxiety, post-traumatic stress and obesity.
“I learn a lot from Marty (Farmer), Don Freeman (a medical device mentor who sits on eight corporate boards and is a member of North Shore InnoVentures’ Advisory Board), the team that they have, the advisers. It gives me and eventually some engineers that I’ll hire, waiting to fill up those cubicles, the opportunity to be able to have the experience factor and getting another point of view,” said Yomtov, a Marblehead resident who co-founded the company with Larry Derose.
The company is in the process of raising its Series A round of financing within the next three to six months.
“What we saw was initially the opportunity to have space,” Yomtov said, “but what they brought to the table was the ability to have advisers.” Yomtov had been an engineer in medical device startups and is a pioneer in the field of neurostimulation, but in his new small company, he has to perform a range of activities.
“It has been a phenomenal experience, and it has allowed me to round out my entrepreneurial résumé,” Yomtov said.
The ability to offer lab space has been critical to North Shore InnoVentures’ growth in the past year. The incubator rents a lab full of high-tech equipment from New England PharmAssociates, which provides consulting and management services to life sciences companies. The lab is just down the hall from North Shore InnoVentures’ offices.
“That gave us the opportunity to really grow,” said Farmer, who is a scientist with a Ph.D. in pharmacology and physiology from Duke University. She has managed research labs and directed product development, marketing and communications for Baxter Healthcare’s Hemoglobin Therapeutics Division.
Four companies were part of the incubator in September 2011. By January 2012, five companies had come into the lab, and by June 2012, 18 companies were involved.
In the lab, Farmer shows the space used by Cell Assay Innovations, whose cell-based assay technologies are used in drug development, and HepatoChem, whose technology chemically produces metabolites of drugs used to speed up drug research and development. In April, HepatoChem was awarded a $330,000 loan from the Massachusetts Life Sciences Center, a quasi-public agency putting in place the state’s $1 billion life sciences initiative.
While it varies, companies pay about $2,000 a month to use the lab, far less than it would cost to set up a lab from scratch. Companies also get safety support, waste disposal, Internet access, utilities, heating, ventilation, air conditioning and other amenities.
“I think it has the package of services and facilities they are bringing to bear,” said Roger Frechette, co-founder and partner of New England PharmAssociates, of what North Shore InnoVentures provides for young companies. “It is absolutely unique.”
Staff writer Ethan Forman can be reached at 978-338-2673, by email at email@example.com or on Twitter at @DanverSalemNews.
Notable North Shore InnoVentures graduates Akrivis Technologies, a life sciences company whose technology is used in "early detection and diagnosis of cancer" and which has formed a strategic alliance with US Biological Corp. of Salem Arctic Sand Technologies Inc., an MIT spinoff commercializing a "breakthrough in power conversion chips" that cut energy losses CYTOO SA, a life sciences company kWhOURS Inc., which develops software for "commercial and industrial energy auditing industries" Magniture Systems Inc., whose technologies aim to make large facilities more energy-efficient Sharp Edge Labs, a life sciences company that is developing "next-generation biosensors" 7AC Technologies, which has developed ultra-high-efficiency air-conditioning systems