Chalk up the saga of Envoy Therapeutics as a win-lose for Palm Beach County’s biotech hub.
Here’s one for the win column: Last year, Japanese firm Takeda Pharmaceutical paid $140 million for the start-up. Ka-ching.
But there’s also a loss: Next month, Takeda will move Envoy’s 13 scientists from Jupiter to San Diego. Ouch.
Envoy’s arrival in 2009 marked a coup for Palm Beach County’s biotech industry. One of the company’s four founders was a Nobel Prize winner from Rockefeller University in New York, and Envoy arrived here with an $8 million invesment from a Silicon Valley venture capital firm.
Envoy Chief Executive Brad Margus calls the $140 million deal an attention-grabber for investors considering backing biotechs based here.
“That’s a really good experience, and it should help make a case for other investors who are looking to start a company here,” Margus said. “Venture capitalists always want an exit strategy, and nothing speaks louder than what they call a good exit.”
The Takeda buyout proves that investors can find fat returns here.
“We demonstrated that we were able to execute quickly in South Florida instead of in a more traditional biotech hub like Boston, San Diego or San Francisco,” Margus said.
On the other hand, Margus can only wish Takeda had kept Envoy’s scientific operations in Jupiter. Envoy opened here to be close to Scripps Florida.
“It would have been a great beachhead,” Margus said. “I kind of feel like there was a little bit of a missed opportunity.”
That sort of churn is common in the biotech industry, said Scott Forrest, director of business and technology development at The Scripps Research Institute in La Jolla, Calif.
“That’s the nature of the beast,” Forrest said. “It’s a process that’s going to have some leakage. You’re going to have some companies that get bought and leave.”
In Jupiter’s other recent biotech deal, the scientists stayed in town after their company was bought. Opko Health Inc. of Miami in 2011 paid $10 million for Jupiter-based cuRNA, but that company’s lab remained here.
Envoy’s presence will live on even after its scientists leave. Envoy and Scripps Florida this week announced a collaboration that has Envoy paying for access to the Jupiter institute’s screening equipment and scientists. Envoy also has an arrangement with the Torrey Pines Institute for Molecular Studies in Port St. Lucie. The company won’t disclose how much it’s paying either institute.
Envoy is trying to develop drugs for schizophrenia, Parkinson’s, Alzheimer’s, drug addiction, epilepsy and other disorders. Its research focuses on identifying proteins in the brain that can be targeted by new drugs.
Envoy’s departure underscores the risks of Florida’s big bet on biotech. Florida taxpayers have spent $1.5 billion to create medical research institutes from Miami to St. Petersburg. The goal is to lure high-paying research jobs that have been concentrated in California and Massachusetts.