Splice and run

Part 3

Kristen Lombardi

Worcester has no problem attracting thirtysomething professionals bent on owning a home, raising a family, and growing old without the irritations of urban life. But, when it comes to young professionals (those forward-thinking scientists fresh from graduate school), Worcester simply lacks appeal. No doubt, with 30 or so educational institutions, metropolitan Boston is a mecca for young students-turned-professionals. Its culture of movie houses, theaters, museums, restaurants, and nightclubs draws the twentysomething crowd in a way Worcester can hardly rival.

"The critical scientists we want [to recruit] are in academic institutions like Harvard. They are not in Worcester," says Taunton-Rigby of Aquila. WPI has about 45 Master's and 12 PhD candidates -- an inadequate recruiting pool for a growing company, she says. (Neither Harvard nor MIT have biotech departments, but Harvard has roughly 250 graduate students in its chemical biology and molecular-biology departments; MIT has 656 graduate students in chemistry and biology.) "The people we want don't want to up and move out of Boston either," she adds.

Hogin of Hybridon is more blunt: "We're looking for the best nucleic-acid chemists in the world. They go to Harvard and MIT, and they don't want to leave Boston. I don't want to say Worcester isn't world class, but . . . "

Such opinions don't startle many Worcester insiders. They've heard this city's disadvantages -- and many don't buy them. As experts boast of a global village, insiders here find it hard to believe 40 miles make such a difference that investors -- in particular -- won't travel to Worcester.

Insiders say companies moving to Cambridge or Boston under the pretense of seeking better connections are really searching for more eminent addresses. Just as the Joneses keep up with their neighbors, so do maturing biotech companies want to move to a topnotch neighborhood.

"There is a perception factor at work here," says David Easson, chief operating officer for Alpha-Beta Technology. "Like anyone choosing where to live, companies like to have the prestigious address. It gives them some additional credibility because [Cambridge-Boston] is associated with Harvard and MIT."

Back in 1988, says Easson, Alpha-Beta came to Worcester to cash in on venture-capital assistance from MBRI -- through now-defunct Commonwealth Bioventures. The company could also rent cheap lab space at Biotech Park. Founders set up shop in a shoebox of an office measuring 2000 square feet. Now Alpha-Beta -- with its 103 employees -- has 60,000 square feet at Three Biotech.

Easson (a MIT graduate) says executives and investors outside of Massachusetts don't notice the 40-mile gap between the two cities.

"We have done well here," says Easson, alluding to the $200 million in investment money the company has raised -- some of it from Boston.

Morey Kraus's company also thrives in Worcester, albeit not at the rate outsiders might anticipate. Kraus came to the Innovation Center at Three Biotech nearly three years ago to launch t.Breeders (now developing a bioreactor to create rare cell types to combat cancer). Using MBRI financial and personnel resources, Kraus and his two-member staff have recently finished the second phase of development. He estimates t.Breeders could conclude its human-testing phase -- the stage preceding a product's introduction into the market -- within the next 18 months.

"It is hard to say what our business vision is at this point," says Kraus. He estimates he's raised about $1.5 million in private investment to propel t.Breeders to its next stage. "t.Breeders has potential to be a large, viable company."

No matter how good Worcester is to t.Breeders, Kraus admits, his company may have to leave the area once a product hits the market. Since it takes money to go commercial, many biotech firms end up going public to acquire needed capital. Once this happens, says Kraus, companies often become slaves to shareholders. Company presidents like Kraus don't always end up in control.

"As investor money comes in, my share in the company will decrease. It is inevitable that capital drives where a company will be," he explains.

Although t.Breeders has yet to reach the status of Hybridon and Aquila, Kraus doesn't anticipate problems finding the right personnel in Worcester or attracting them to the region. For a young entrepreneur like Kraus, Worcester offers everything he could ever desire -- except, and perhaps most important, the interest of investors.

"It's been very difficult to identify a strong source of funds," he says. He confirms the slump Goldberg alludes to with the dissolution of Commonwealth Bioventures. "Worcester needs to think of mechanisms to keep biotech here. It has space, but you cannot put a shovel in the ground and expect people to come. Worcester needs to think about ways to organize and generate capital to keep biotechnology going."

In the end, insiders are also willing to admit there's truth to the notion that Worcester doesn't offer enough to satisfy sophisticated professionals. The city has always been in the shadow of Boston, says Cheetham, and it may take more than existing theaters, museums, and cultural events to overcome the city's lackluster image.

"A lot of people in Cambridge and Boston feel there's nothing but wilderness on the other side of [Interstate] 495," says Alex DiIorio, WPI biotechnology professor and director of its bioprocessing lab. "This perception is a problem if you're trying to bring big money into the area."

Part 4

Kristen Lombardi can be reached at klombardi[a]phx.com.