How NEXT Molecular Analytics Explored the Science of Growth in the Biotech Industry
According to Ron Bouchard of North Star Leasing, the “thing” about biotechnology corporations is that, unlike most other businesses, biotechs don’t necessarily start out with the goal of making a profit. Of course, if they’re successful, the revenue will soon follow, but their true mission is to develop a product that provides value and contributes to the betterment of health for us all.
That’s a major reason why most equipment leasing companies abstain from adding biotech opportunities to their portfolio. Apparently, the risk is just too great to bet that these companies may or may not, someday, perhaps, fingers crossed, make a profit. And with that as a backdrop, Rob Harris of the Virginia-based biotech firm NEXT Molecular Analytics approached Bouchard and the North Star Leasing team in 2015.
Harris had been through the biotech start-up phase before, but for NEXT Molecular Analytics to stand a chance at being viable – and perhaps profitable, they needed to purchase sophisticated equipment.
“We had some seed money and had mined what we could from friends and family, but there was no venture capital waiting for us, and our funds were limited,” said Harris. “North Star Leasing was the only one who came to bat for us.”
It turns out, funding the equipment NEXT Molecular Analytics needed to get off the ground was a good decision – and the start of a mutually beneficial relationship that continues to this day. To date, Bouchard has helped finance eight equipment deals with NEXT Molecular Analytics. At North Star Leasing, we’re proud and thankful to have an ever-expanding relationship with a growing company like NEXT Molecular Analytics and recognize them as the latest North Star All-Star.
GETTING ON THEIR FEET FINANCIALLY
So how about profitability? NEXT Molecular Analytics also offers clinical testing services, and the COVID-19 pandemic has fueled a dramatic increase in its testing business. The State of Virginia Health Department contracted with NEXT Molecular Analytics to perform COVID testing on behalf of the state in 2020.
“Since the pandemic started, we’ve done more than a half-million tests,” said Harris. “We have the state of Virginia contract, and that’s included testing sanctioned through the health department.”
As a privately-owned company, NEXT Molecular Analytics prefers to hold financial information close to the vest, but Harris confirms that revenues have exceeded expectations and the company’s workforce has swelled to more than 60. In addition to COVID testing, NEXT Molecular Analytics also works with other biotech firms, offering integrated bio-molecular analysis services ranging from clinical testing to complete support for FDA validation of specific assays.
The key to being able to ramp up their services, said Harris, was having the right equipment. And the key to obtaining that equipment was to have North Star Leasing just a phone call away.
“The larger banks and lending institutions don’t want anything to do with this industry,” said Bouchard, who has emerged as North Star Leasing’s expert in the biotech industry. Bouchard works with some of the largest vendors in the space, including VWR International, and provides financing to the 1,200 members of the California Life Sciences Association. “The big banks tend to be leery of funding purchases of expensive, specialized equipment. I’ve been fortunate to get to understand some of the complexities of this industry, and that allows us to be much more agile and adaptable.”
NORTH STAR’S SPECIAL APPROACH
Harris said he’s ultra-appreciative of Bouchard’s fluency in the biotech industry.
“From the beginning, North Star Leasing had an appreciation for the potential,” Harris said. “They took a gamble, one that we only supported with some personal guarantees, and it worked out fine.”
Bouchard, said Harris, helps define the growth plans for the company.
“As the relationship has matured, he’s pushing us with forward-looking questions,” Harris said. “He’s asking what the potential is, how it will expand our business. North Star Leasing goes beyond what a normal leasing company would do. “
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