The life sciences market in Denver-Boulder is booming due to high levels of funding.

• The life sciences industry is thriving in the Denver-Boulder region due to increased venture capital and government funding, a cooperative research atmosphere, and a growing demand for lab space.
• In the Denver-Boulder area, the rate of growth in the pool of qualified workers in life sciences is significantly higher than the national average.
• BioMed Realty, which is expanding in Colorado, stated that Boulder has all the necessary components for an innovation ecosystem, including research universities, scientists, venture capital, and themselves, who offer mission-critical infrastructure, as said by Tim Schoen, president and CEO.

CNBC's quarterly Cities of Success series examines cities that have evolved into thriving business centers, drawing in capital, corporations, and talent due to their entrepreneurial mindset.

The life sciences industry is rapidly growing in the Denver-Boulder region, drawing companies that specialize in advanced medical treatments and technologies.

The growth in funding for life sciences research is being driven by a mix of factors, including increased venture capital and government support, a collaborative research environment, and a thriving demand for lab space.

In 2022, BioMed Realty, a major real estate player acquired by Blackstone in 2016 for $8 billion, made headlines with a record-breaking $625 million purchase of Flatiron Park, a massive complex in Boulder, Colorado. The 1 million square feet across 23 buildings is being converted into lab and tech space to meet the region's surging demand.

""Investing in Boulder and scaling was a logical next step for BioMed Realty, as it has all the necessary elements for an innovation ecosystem, including research universities, scientists, venture capital, and ourselves providing mission-critical infrastructure," said Tim Schoen, BioMed Realty's president and CEO."

The firm operates in six core life science and tech markets, including Boulder, San Diego, San Francisco, Seattle, the Boston and Cambridge area in Massachusetts, and Cambridge, U.K.

CBRE reports that 14 companies are looking for a combined 506,000 square feet of lab space in the Denver-Boulder market, including Aurora, in 2023. Additionally, the market has completed 370,000 square feet of lab space and has another 560,000 square feet under construction or renovation.

"Schoen described Boulder as both unique and explosive. Unique due to its location at the foot of the Rocky Mountains, and explosive due to the rapid growth and expansion of its ecosystem over the past decade."

Funding on the rise

Investors are taking notice.

"Elyse Blazevich, president and CEO of the Colorado Bioscience Association, stated that investors from Colorado and across the coasts are seeing opportunities in the state's ecosystem. The state has raised over a billion dollars for the past seven consecutive years, and early stage funding in Colorado in 2023 grew faster than other life sciences markets in the country."

The Bioscience Association, established in 2003, promotes the expansion of life sciences by concentrating on providing capital, education, networking opportunities, and more.

The funding for pre-seed ventures, series A and series B rounds increased by $53 million, or 28%, from 2022 to 2023. The biggest increase was seen in series A and series B funding, which grew by $18 million, surging 163%, year over year. Pre-seed funding, the earliest stage of venture capital, also experienced a significant increase of $18 million, or 163%, over the same time period.

The top U.S. life sciences real estate market is Denver-Boulder, according to a recent CBRE report, due to the surge in investment from venture capitalists and the National Institutes of Health.

In contrast to the national average, the pool of qualified workers in life sciences is expanding at a faster rate in the region, with a growth of 35% over the past five years compared to the U.S.'s 16% growth.

Entrepreneurial success

The proven track record of success in Denver-Boulder over the past several decades has attracted a recent surge in venture capital funding.

In 1998, entrepreneur Kevin Koch founded biotech company Array BioPharma in Boulder. The company was later acquired by Pfizer for $10.64 billion in 2019. Now, Koch is the co-founder and CEO of clinical-stage startup.

In March 2021, Edgewise raised $186.1 million through its initial public offering for therapies targeting rare muscle disorders.

But the company started small.

"Koch stated to CNBC that we were located in an incubator at the University of Colorado and recruited talented individuals from there. We also had interns who eventually became our employees."

In Boulder, Edgewise currently occupies a larger space measuring 28,000 square feet, with half of its 93 employees based in the city office. The company intends to increase its presence and recruit additional staff in the near future.

The Boulder region's history of research into DNA and RNA in the 1980s played a crucial role in the development of protein-based medicines to combat disease, which attracted capital to the life science hub.

""The research that sparked investment in the Boulder area has led to companies reinvesting in the area," he stated."

Edgewise Therapeutics has secured more than $550 million in cash runway through 2027 with the help of top venture firms.

Koch stated, "We concluded that Boulder was the ideal location. It seems that our decision was accurate as we have been able to attract exceptional talent."

Research powerhouse

Denver-Boulder's innovation ecosystem is churning out ideas, fast.

The University of Colorado's Anschutz Medical Campus, located in Aurora, Denver's largest suburb, is a 256-acre research complex that receives $700 million in annual grant funding.

Dan LaBarbera is a professor of pharmaceutical sciences and the founding director of the Center for Drug Discovery on the medical campus.

At the Center for Drug Discovery, our objective is to serve as a conduit for transferring innovation from academia to industry and eventually to the clinic, as stated by LaBarbera to CNBC.

The center, established in 2021, specializes in drug development for various diseases, including cancer and Alzheimer's, utilizing advanced technology such as robots and 3D bioprinters.

""People are generally aware of 3D printers' ability to print plastics or metals, and we use similar technologies to print complex tissues that mimic aspects of human disease," LaBarbera stated."

The process of getting a drug approved by the U.S. Food and Drug Administration typically takes between 10 and 15 years, starting from the discovery phase.

With this technology, we can speed up the process by approximately six to eight years, according to LaBarbera.

The center streamlines the drug discovery process, enabling startups and established companies to bring innovative treatments to market more quickly.

"LaBarbera stated that our objective is not to rival the pharmaceutical sector, but rather to collaborate with them to create groundbreaking drug therapies."

CNBC will air a special on "Cities of Success" featuring Denver & Boulder on April 11 at 10 p.m. ET.