How Northern Kentucky became a hub for life sciences

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This story originally appeared in the Oct. 13 edition of the Weekly LINK Reader. To see these stories first, subscribe here.

To some, the decision to construct a life sciences lab in downtown Covington may seem like a random choice. It was one that Mayor Joe Meyer certainly hadn’t considered when he sat down  in 2021 to assess how to bring more economic value to the city.

According to Meyer, Covington is growing exponentially – in what he defines as a “symbiotic relationship” to Cincinnati’s development across the river – and he wanted to ensure that the city was doing its job to keep up.

Two years ago, he met with a group of leaders in the life sciences industry – including executives from Bexion Pharmaceuticals and CTI Clinical Trial and Consulting Services – who brought to the table an idea that would bring value to Covington while also supporting the growth of a hub of life sciences companies that had found their place in the city.

The life sciences sector was a gem of the Northern Kentucky region, they said, and Covington was the ideal location for the construction of a new lab. 

A conceptual floor plan of the lab that will be in the OneNKY Center. Photo provided | Corporex

According to an employment analysis by BE NKY Growth Partnership, the economic development company for the region, the life sciences sector is one of the top four target clusters for development in Northern Kentucky. The sector is growing rapidly alongside advanced manufacturing, information technology, and supply chain management and support services.

The industry deals specifically with living beings – conducting scientific research to develop and manufacture pharmaceuticals and biomedical technologies that will protect and improve human health. Northern Kentucky specifically specializes in medical device manufacturing, health informatics, gene therapy and biomedical research.

Employment growth in the life sciences increased more than 82% from 2014 to 2019, according to BE NKY. In a post-pandemic landscape, public interest in and funding for life sciences have swelled, notably spiking in 2020 and then steadily increasing even further.

“Employment (in the life sciences sector) is projected to grow by 30% by 2025,” said Cheryl Besl, director of marketing at BE NKY.

Such a significant projected increase in employment means that life sciences companies are increasing in size physically, as well. Covington is home to a number of companies, such as Bexion Pharmaceuticals, Gravity Diagnostics, and CTI Clinical Trial and Consulting Services, that in recent years have come to quickly outgrow the spaces that they currently occupy. It wasn’t long before they began vocalizing their need for new infrastructure that could house the size of their research and development.

“There really wasn’t any more room for new companies or scientists coming in (to the city) and wanting to incubate an idea,” said Chuck Scheper, chair of the board of Bexion. “And apparently there really aren’t any other kinds of facilities like (the Life Sciences Lab) available in the immediate area.”

Having seen the success of the city’s life sciences companies already, Meyer consulted the boards of existing companies such as Bexion and CTI about how to recruit more. 

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Scheper said he offered the idea of developing new infrastructure for a wet lab – so-called because it would need to be equipped with plumbing and ventilation – that could accommodate the growth of both new and existing companies. 

In such a facility, startup companies would be able to conduct research and development on early-stage projects, and eventually pursue manufacturing and commercialization if successful. 

“We think adding this discovery component of incubating early ideas will help build the overall life science ecosystem and attract even larger companies to want to locate here,” he said.

The group knew that Covington was the ideal location for such a lab. Surrounded by universities that turn out hundreds of graduates in the medical field each year and sitting just across the river from the Cincinnati Children’s Hospital Medical Center – a top pediatric hospital in the country – the city is rich in opportunities and resources for scientific advancement.

Many life sciences companies had already taken advantage of such assets, as well, and found success working in the city.

Bexion Pharmaceuticals is a biotech and pharmaceutical company that develops treatments for cancer and neuropathy. Its most recent project is on its drug BXQ-350, which aims to treat a variety of cancers in both children and adults. The drug, discovered at Cincinnati Children’s, was recently proved “very safe” in its Phase 1 safety trial.

Gravity Diagnostics provides diagnostic and innovative lab testing. It works with clients including universities, private practices and Fortune 500 companies. It had a notable presence during the pandemic, processing over 3 million COVID-19 samples and hiring over 450 employees since early 2020.

CTI Clinical Trial and Consulting Services is a global research service provider that specializes in supporting biotech and pharmaceutical companies. It is one of the largest companies of its kind in the world, and Covington became home to its global headquarters in 2017.

Their proximity to each other in Covington had already prompted collaboration. CTI supported Gravity in its early years of development and currently works with Bexion to run trials of its cancer drug, as well.

The success of life sciences companies has made Covington an ideal location where professionals want to work. And Meyer said the city’s urban core has progressed rapidly throughout the last decade, making it an ideal place where they want to live, as well.

“The educational retainment is growing exponentially,” Meyer said, adding that the city will only continue to grow in the opportunities it has to offer.

Additionally, Covington is positioned in a unique location for a life sciences lab. While a majority of such institutions are found nearer to the East Coast – think Boston, Philadelphia and Maryland – Covington sits at the center of a group of metropolitan cities, including Louisville, Lexington and Columbus. The development of a lab in Northern Kentucky would bring life sciences innovation to the Midwest.

Lastly, the state of Kentucky offers Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) awards. The SBIR/STTR Matching Funds Program offers grants of up to $150,000 for small businesses focused on performing research and development.

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“We’ve received a number of grants over the years at Bexion,” Scheper said. “If a scientist can get a Phase 1 grant with $150,000, the state matches with another $150,000. That’s pretty significant startup money for these companies. The state has been very supportive, and we’re excited about expanding that collaboration.”

With a considerable résumé under its belt, the city of Covington and its partners – Northern Kentucky University, BE NKY, the NKU Collaborative for Economic Engagement, the Kentucky Small Business Development Center and Covington Parking Authority – formally requested $10 million from the commonwealth of Kentucky to fund the construction of the new wet lab facility.

The request cited a need to create the infrastructure for startups to have access to shared laboratory space, and it specified that the funds would be used to support its construction. 

After it was submitted, Gov. Andy Beshear put the $10 million request in his proposed 2022-23 budget. 

The Kentucky Senate added an additional $5 million to the proposal to further assist in its development, showing that state leaders recognized the vision for the lab. The budget was passed by the Kentucky General Assembly on April 13, 2022, and Covington secured $15 million to help fund its lab.

According to Scheper, $12 million will be used to purchase a 99-year lease at the OneNKY Center, which is being constructed at the foot of the Roebling Bridge. The other $3 million will be used to build out and equip the 15,000-square-foot lab.

It was further determined that a nonprofit corporation would be established to oversee the lab’s construction and operations. In November 2022, the Covington Life Sciences Partners (CLSP) was founded “to advance science, education, entrepreneurism and job creation” in the region.

“That’s everything from coming up with the concept of the Life Sciences Lab, to developing the appropriate space and then, ultimately, to run it,” said Valerie Hardcastle, executive director at the Institute for Health Innovation and a board member of the CLSP.

The nonprofit’s makeup also includes a coalition of life sciences professionals and public sector partners. Scheper serves as co-chair alongside Garren Colvin, president and CEO of St. Elizabeth Healthcare.

The Life Sciences Lab will be located on the second floor of the OneNKY Center, which had its groundbreaking Aug. 30. The building will host several of Northern Kentucky’s growth organizations in addition to the lab, including the NKY Chamber of Commerce, OneNKY Alliance, meetNKY, the Catalytic Fund of Northern Kentucky, Horizon Community Funds of Northern Kentucky, the Northern Kentucky Bar Association and BE NKY Growth Partnership.

A rendering of the OneNKY Center. Photo provided | OneNKY Alliance

“We needed this new facility in Northern Kentucky, and we have acted quickly with this investment,” said Beshear at the groundbreaking. “We can support the many life sciences and biotech companies already in the region, and we can welcome new innovators, startup companies, and we can create more high-wage jobs and cutting-edge treatments right here in Kentucky.”

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Employees who work in the Life Sciences Lab will have access to common areas for employees of all different growth organizations to share as well, including conference areas and break rooms.

Construction on the facility is expected to be completed for an April 2025 opening.

Bexion, Gravity and CTI will use the Life Sciences Lab for additional lab space, but officials hope other startup companies move into the facility, too. It can take years for life sciences companies to become sustainable on their own. The lab would provide a place for startups to test their ideas while working in an incubator space where they can rent access to the resources they need at a reduced cost.

With so many growth organizations housed under one roof, the expectation is that companies can collaborate on projects, as well.

“We’re going to be co-located with all the economic development organizations in Northern Kentucky, which hopefully will lead to synergies,” said Scheper. “When we bring in scientists, hopefully we can recruit from all around the country, maybe internationally, to come here to try to develop their ideas.”

Lee Crume, president and CEO of BE NKY and a CLSP board member, said he hopes the lab will benefit startup companies enough that they will eventually be able to support themselves and move into their own spaces.

“The goal is to have a place where people who are innovating across the life science and health care (industries) can come develop their product, develop their technology, and then hopefully commercialize that,” he said. “Maybe five or 10 years from now, you’ll see those companies starting to branch out of this facility.”

Hardcastle agreed that there is long-term potential for startups to eventually grow out of the facility.

“This is really designed to help the early-stage entrepreneurs get their product off the ground, or learn that it’s not going to get off the ground and they should find something else,” she said. “They could go and finalize their product, refine it, test it and begin to market it. Once they get to that stage, they can start envisioning launching themselves … then they would move out of that space.”

In addition to building on Covington’s reputation as a hub for life sciences advancement, Crume anticipates that the Life Sciences Lab will bring more tangible benefits to the city.

“Covington recognizes that life science could be a good and growing part of their economy,” said Crume. “We often talk about good jobs. … These are jobs where you have professionals, and they pay very well. Companies invest in the community.”

Additionally, Meyer believes that recruiting more workers to live in Covington will enrich the city’s culture.

Perhaps most exciting, according to Scheper? “There’s a lot of momentum. I think you can feel that this life science incubator will be just another arrow in the quiver of why to come to Northern Kentucky.”

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