The five-storey building is an expansion of the existing BioCity complex, which rents lab and office space to 48 companies that employ, collectively, 650 workers.
Director Toby Reid told Outsourcing-Pharma.com the complex boasts a 91% survival rate for the SMEs that moved in over the last twelve years, which have received a total of £50m ($78m) in venture funding.
Growth of these companies prompted BioCity to create more space and begin construction on a second, 50,000 sq ft building due for completion in 2017, he said. It is expected to provide workspace to 250 scientists, rising to 700 over the next 30 years.
The £30m facility is funded by Nottingham City Council and a D2N2 Local Enterprise Partnership grant of £6.5m ($10m).
Investing in tenants
The first companyto sign up is Sygnature Discovery, a preclinical drug discovery CRO which will rent 60% of the building’s floor space. Sygnature plans to hire an extra 70 staff after the move, bringing its headcount to 200 by 2018.
BioCity is presently seeking more tenants among small-to-medium contract research organisations and contract manufacturing organisations. It is also looking for financers for a venture fund it hopes to launch at the end of the year which will invest money in BioCity Nottingham companies.
BioCity’s Manchester hub runs a similar £5m fund which announced its first investment this week: £200,000 in Alderley Analytical, a bioanalytical services company.
Reid said BioCity has made small investments in its tenants in the past and received a 6.7 times return.
“We think as landlords we get an almost unfair advantage in terms of assessing early-stage investment opportunities. Because we see what time they get in in the morning, whether management sits together in the café at lunch, we know how they listen to advice and deal with adversity, and these are key things when it comes to assessing a team with previously no trading history.”
Reid told us pharmaceutical companies enjoy that the present BioCity set-up groups potential outsourcing providers in one place.
“They like coming to the site because they can interact with three or four CROs in one visit – there’s a suite of service providers you can pick and choose from.
“It works well for small biotechs that are more cash-strapped – you can meet them in the café and have a quick chat.
“It’s beginning to take shape as a new model of drug discovery – we house them and let them sort it out among themselves.
Many of BioCity Nottingham’s small companies have scooped up employees laid off after big pharma closures, like AstraZeneca’s Alderley Park, Sanofi in Dagenham and Pfizer in Sandwich.