CEO and President
Nidus Center for Scientific Enterprise
Robert Calcaterra, the first CEO and president of the Nidus Center for Scientific Enterprise, has played a key role in the growth of the St. Louis region’s BioBelt.
At Nidus, which takes its name from the Latin word for “nest,” Calcaterra nurtured some 20 startup companies between 2000, when the center signed its first tenant, GenChemics, and 2007. He helped them raise a total $140 million and fill a 41,000-square-foot building within the Monsanto Company world headquarters campus in the St. Louis suburb of Creve Coeur, Mo.
From its beginning, Nidus has been fully subsidized by Monsanto; Calcaterra became an employee of the agricultural biotech giant after running two incubators that housed a broad mix of tech startups, as well as the Arizona Technology Incubator in Scottsdale and the Boulder [Colo.] Technology Incubator.
In October, Calcaterra disclosed Nidus’ plans to vacate its current building and co-anchor a new $45 million life-sciences building being developed across the street, on the campus of the Donald Danforth Plant Science Center by Wexford Science + Technology of Hanover, Md. [see BioRegion News, Oct. 29].
Calcaterra has announced plans to retire from the helm of Nidus on or about March 1. He is, however, assisting the center’s board — headed by Nicholas Reding, a retired vice chair of Monsanto’s board of directors — in its search for a successor.
BioRegion News recently interviewed Calcaterra about his tenure at Nidus, the center’s successes with biotech startups, and the challenges that the St. Louis region’s life sciences industry continues to face.
Why have you chosen to retire?
There was an opportunity because of a [buyout] package that Monsanto had available that was going to disappear — it was Aug. 31, but they gave me an extension, deferred it because we wanted to try to find someone to replace me.
That was one of the reasons. The other was [that] I’ve been very critical of us not being able to get a successful pre-seed fund going here. We have one, but it hasn’t been performing at the level I would have liked to have seen it perform. So I’m working with a partner to create a for-profit, pre-seed fund here. I’m driven by trying to make that happen.
What types of businesses would the fund finance?
It would be for plant life sciences businesses, so it could be medical devices, drug discovery, it could be food and nutrition, it could be agricultual biotech, it could actually be medical services businesses that have a strong technology underpinning — very early-stage, pre-seed or seed.
We are actually talking about St. Louis and adjacent states, so states like Iowa, Nebraska, Arkansas, possibly Oklahoma, and Tennessee. We’re staying away from Kentucky and at least the northern part of Illinois because of some partnering firms we’re working with that have funds in those areas.
When will the fund get up and running?
We’d like to be up and running by March 1, but the reality in raising money for venture funds the first time, probably it will be mid-year next year.
How did you come to join Nidus?
They did a search and hired me. I was the CEO of the Arizona Technology Incubator in Scottsdale. One of the attractions to this job was that I actually became a Monsanto employee and had all the benefits and stock options associated with Monsanto. So as a result of Monsanto funding the Nidus center 100 percent, I did not have to be a fundraiser, having to run around, go out and get sponsors. That was very attractive, because I could spend all my time helping client companies.
You were once quoted as saying you could count all the St. Louis region’s life science companies on two hands. Where did those early companies come from?
Many of them came from people who had left either Monsanto [or] Pfizer … and started their companies based on ideas they had wanted to pursue, that those companies weren’t interested in pursuing. They came out of industry.
We’ve had six companies come here from outside the region — from Canada, from New York, from Florida. We’ve had applicants from Israel, from France, from England, which we didn’t accept. It’s probably been steady through the whole time. It’s not an accident or through marketing. It’s primarily because of someone who has or wants to have a specific relationship with [a university or research institution or employer in the region] or somebody who grew up here and lived here for a while and wants to bring their company here.
How have the Nidus startups changed over your nine years that you have been at the center, in terms of specialties and staging?
When we first started, there was a pent-up demand, so our first few companies were larger when they came here. They already had a little bit of money, primarily from angels, and there may have been five or six people instead of one or two. Once we absorbed that initial pent-up demand, then most of the companies became very early stage, one- or two-person type of companies. Most recently, we see a lot we’re working on right now that are from the universities.
Also, the other change that I think I’m seeing, is that [Nidus] started during the very early stages of Washington University’s biomedical engineering department, and the department has since become world class, thanks to Frank Yin, who has headed it since the start. He’s brought in a lot of very young, very talented and very aggressive faculty that want to start companies. So we’re now starting to see a lot of device companies coming out of the biomedical engineering department, where we were seeing no medical device [startups] early on.
How reflective is that of the national trend toward greater investment in early-stage medical device companies?
I think it’s more regional, as a result of the people [Yin] recruited, and the quality of their work.
What’s the breakdown by specialty in terms of the types of companies at Nidus?
Throughout my time here, it has been heavily drug discovery, and that of course [stems from spin-offs from] Washington U and St. Louis University. We’ve had, here and there, a few device companies. We’ve always had a lot of opportunity for medical services businesses, so we’ve been extremely successful with that, because we didn’t want to load the incubator with just those types of companies. But we were attracted to having a few of those, because they tend to matriculate faster. And we’ve always had a steady stream of ag-biotech companies. But we’ve never had more than two or three ag-biotech companies at one time in Nidus.
Of the 20-plus companies accepted by Nidus, the center has graduated six companies. How long before additional companies graduate?
We’re going to graduate another three companies in January — [parasite-control product developer] Divergence, [drug discoverer] Apath, and [medical information system-developer] Graphic Surgery.
Going forward, what more does the region need to do to build its bioscience industry?
I think there are a couple of areas where we haven’t done as well as we should have. One is, we haven’t been really good at transferring technology out of the universities. We’ve done a better job with St. Louis University than we have with Washington University. I see that improving dramatically because of some changes at the university and the relationship between the community and a lot of [its leaders] with the university. I think this fund that I want to start up should make that happen faster.
During the early days, we lost a few companies because we didn’t have the funds at that time to get these companies started. But now we have the archangels who are investing, and we have the infrastructure of a lot of venture funds. But as you’ve heard me say, they’re matriculating to later-stage [companies] If we can get this fund up to do be really active at the very early stage with faculty taking technology out earlier, I think that will keep the pipeline going strong.
Another issue is that we have very few people who are serial entrepreneurs. We’ve done a great job of identifying people who have come out of industry, who have the right characteristics. About six of [Nidus’] 20 companies have been headed at least for a time by somebody that we’ve put in as an interim CEO, and they’ve done great jobs. Some of them are now recycling back, doing it a second or third time, so we’re building this entrepreneurial culture of CEOs, but we’ve got to keep doing that.
Also going forward, Nidus plans to move into the new Wexford building. How soon will construction start?
My understanding is it will start some time next month.
Nidus will occupy 17,000 square feet in the Wexford building, compared with its current 41,000 square feet. Why is the center cutting back on space?
One of the problems we’ve had here is that the three graduating companies occupy [a combined] 60 percent of our building right now. When you have the kind of building we’re going to have across the street, we can start moving companies out of the incubator much faster, and they will still be located at the same [building], so they will have access to our services. We can graduate them much earlier and really concentrate on companies at the earlier stage and moving them along, and then moving them out into the larger space. We never intended for companies to stay here that long, but because we didn’t have facilities for them to move to, it’s happened that way.
The other piece is, [the current Nidus center] is a gorgeous building, but it’s not an efficient building. It’s got an atrium, and an unusual design. As a result, its ratio of usable space to actual space is fairly low.
How much of the current space is usable?
About 22,000 to 25,000 square feet is usable, so we’re not decreasing that much.
What’s the plan for moving into the new facility?
I would say it probably will be the second quarter of 2009.
Looking back, what do you consider your greatest accomplishment and your biggest frustration over the past nine years?
I think the greatest accomplishment is that we have gotten so many companies started up … I’ve counted them and it’s approaching 50 companies between [the Center for Emerging Technologies, another St. Louis incubator] and Nidus, and that’s dramatic. I think we had a lot to do with that. I was a major factor in the BioGenerator [a nonprofit, seed-capital fund that invests in life sciences startups] getting started, as well as Bob Coy [former senior vice president for entrepreneurial development with the St. Louis Regional Chamber and Growth Association].
The most frustrating thing is we haven’t done as well in tech transfer as I thought we should. Secondly, Wexford is our third try at getting this building started, so [the new facility] has been delayed substantially.
Besides Nidus, what other occupants will take space at the first Wexford building?
Two companies likely to be there are Divergence and Apath. [Biofuel cell developer] Akermin probably will be by that time another graduate of Nidus, so the three of them should be there. Monsanto has been discussing taking some space in the new building as well. We’re working very hard to put [St. Louis] Community College there. The community college is talking about consolidating all of their bio classrooms and faculty in that building, which we think would be great. We’re working on some incentives for that from the state.
When is a decision expected on your successor?
We’re hoping we can do it in maybe January or February. We’ve had to go through the Thanksgiving holiday and we’re going to have to go through the Christmas holiday, which always slows things up. It could slip a little bit. We’re waiting for the search firm to talk to us about the initial round of candidates, which will occur within the next week or two.
What qualities should your successor have?
Some of it is very intangible; having people recognize that the individual can bring substantial benefit to their ability to succeed, and a lot of ability to convince people they can trust that individual. And helping people move their companies forward, and raise money and find talent to help them run their companies. But it also involves the ability to identify great opportunities, and say, ‘These are the ones that are going to succeed. These are the ones that will fail.’ So it’s the ability to select the right companies that will grow and prosper. It has to be an individual who understands the plant life science area, and build strong relationships with the investment community as well as the many people in the local community.