Colorado is well on its way to hosting a growing life-sciences industry, but the state must build up its small-but-growing venture capital haul, and create more tax incentives before it can develop into a top-tier biocluster, the state's lifesciences industry group concluded in a recent report.

The Colorado BioScience Association's new Colorado Bioscience Roadmap 2008, prepared for CBSA by Battelle Memorial Foundation, acknowledged that the state has enjoyed growth in its cluster of life-sciences businesses, in academic programs and their accomplishments, and in state government subsidies intended to support the industry.

"While Colorado has made great progress since 2003, gaps remain that hinder the growth and development of the state's bioscience sector and its positioning in the increasingly global economy," according to the report. "Chief among these are a continuing need for additional sources of early-stage risk capital and a more robust technology commercialization and entrepreneurial support network with sufficient financing."

The state's bioscience employment base grew 6 percent since 2001 from 16,874 employees in 663 establishments to 17,856 people in 920 establishments in 2006. Much of that gain appears to have taken place in 2001, judging by 2002 figures published the following year in the state's initial life-sci blueprint, Colorado's Place in the Sun: An Action Plan to Grow Colorado's Bioscience Cluster, that listed a state bioscience industry of 17,681 employees in 604 establishments.

According to the most recent report, to grow further over the next five years, Colorado will need to ratchet up its availability of capital, especially at early stages; step up support to bioentrepreneurs and their companies; develop, attract, and retain people with the skills and education needed to fill life-sci jobs; build more research facilities; and build up life-sci specialties that will allow Colorado to stand out from other states and countries.

"Our main objective is a 'grow your own' philosophy," John Collar, CBSA's executive director, told BioRegion News via e-mail. "With continued support for our research institutions, we will be able to grow our already talented workforce which will attract companies, and also maintain the entrepreneurs that call Colorado home."

Collar spoke a few days after his association released the Bioscience Roadmap, a 51-page report updating the state's progress toward fostering life sciences-industry growth in the five years since the 2003 report.

The new report, released late last month, also laid out a five-year plan that called for the state to focus future life-sciences growth on three strategic areas or "technology platforms:" bioenergy, electronic medical devices, and pharmaceutical biotechnology.

Colorado can enhance the presence of these specialties in the state's life-sci industry, according to the report, by adopting its recommended five strategies: Ensuring availability of capital for bioscience companies at all stages of development; creating a robust technology-commercialization infrastructure to rapidly move discoveries into the marketplace; ensuring that Colorado can attract, retain, and produce individuals with the skills to meet future bioscience-workforce needs; promoting Colorado's position as a leading bioscience center; and making a long-term commitment to bioscience industry development.

Colorado was one of the few states to record year-over-year increases in the amount of venture capital invested in state-based biotechnology and medical-device companies during the fourth quarter.

MoneyTree Report showed Colorado had more than quadrupled its biotechnology VC bets year-over-year during the fourth quarter, zooming from $5.5 million to $23.5 million, despite a drop in the number of deals from four to two; and more than doubling its medical device and equipment financing year-over-year during Q4 '08, to $12 million in three deals from $4.5 million in two during Q4 '07. MoneyTree is a quarterly VC study by PricewaterhouseCoopers and the National Venture Capital Association, with data from Thomson Reuters.

Dow Jones VentureSource showed an even more dramatic year-to-year fourth quarter increase, to $35 million in a single biopharmaceutical VC, from $1 million in a single deal a year earlier. DJVS recorded Colorado as receiving $18 million in med device funding in the final three months of 2008, compared with $9.4 million in the year-ago period; though in a mirror image of MoneyTree, DJVS recorded two med device deals in Q4 '08 and three in Q4 '07.