Bellwater's second-largest biotech employer has raised its own funding round, a smaller but pointed answer to Kestrel Biologics' much larger Series C as the two Foundry Row companies compete for the same graduating classes of scientists and technicians.
Ridgeline Therapeutics, the Foundry Row biotech firm that competes with Kestrel Biologics for lab talent and Kincaid graduates, has closed a $38 million funding round of its own, the company said this week. The Series B round values Ridgeline at roughly $140 million, well below Kestrel’s reported $310 million valuation, but executives said it gives the company room to compete for the same pool of scientists and technicians.
“We are not trying to be Kestrel,” said Ridgeline Chief Executive Nathan Pruitt. “But we are trying to hire from the same graduating classes, and that means we needed a number that made a candidate actually stop and compare offers.”
A smaller round, aimed at a familiar problem
Ridgeline plans to use the funding to hire an estimated 45 additional scientists, technicians and regulatory staff over the next two years, roughly a third of the headcount growth Kestrel announced after its own $64 million round. Pruitt said the company has watched several promising candidates take Kestrel offers over the past year, sometimes after Ridgeline had already extended one.
“Losing a candidate to a direct competitor down the street is a different kind of frustrating than losing one to a company in another state,” Pruitt said. “You know exactly why it happened, and you know it’s going to happen again next quarter unless something changes.”
Two biotech companies bidding up the same small pool of local talent is good for the people getting bid on and complicated for everyone trying to build a company on a budget.
Nathan Pruitt, Chief Executive, Ridgeline Therapeutics
The competition has a silver lining, economists say
Dr. Samuel Iyer, the Bellwater State University labor economist who tracks the region’s biotech and manufacturing employment, said the rivalry between Kestrel and Ridgeline is, on balance, a sign of a healthier local labor market than Bellwater has had in decades. “A bidding war for lab technicians would have been unthinkable here quite recently,” Iyer said. “The complaint used to be that there weren’t any jobs. Now the complaint is that there are two good ones competing for the same graduate.”
A recent industry report found the Foundry Row biotech cluster has doubled its jobs over the past five years, a trend Pruitt said has made hiring both easier, because more graduates now consider biotech a viable local career, and harder, because Ridgeline is no longer the only company making that pitch.
Ridgeline’s new funding also includes a smaller allocation for a clinical program targeting an autoimmune condition, which Pruitt said remains roughly 18 months from its own first trial milestone. He declined to detail the company’s cash runway beyond saying the round extends the company’s operations “comfortably” past that point.
Pruitt said Ridgeline has begun offering signing bonuses and relocation packages it did not previously provide, changes he attributed directly to the hiring competition with Kestrel. “Five years ago we could tell a candidate this was the only serious biotech job in Bellwater,” Pruitt said. “That pitch doesn’t work anymore, so we had to build a better one.”
He added that Ridgeline has also begun recruiting more aggressively from Bellwater State’s expanded lab-sciences programs rather than relying primarily on Kincaid graduates, a shift he said reflects both the tighter labor market and an effort to diversify where the company finds talent.
“We used to think of Kincaid as the only pipeline that mattered,” Pruitt said. “We can’t afford to think that way anymore, not with Kestrel hiring out of the same building.”
Theresa Nakamura, executive director of the Bellwater Chamber of Commerce, said she has heard versions of Ridgeline’s frustration from other Foundry Row employers, not just in biotech. “Once one company in a cluster starts paying up for talent, everybody else either matches it or loses their best people to the company that did,” Nakamura said. “That is a good problem for workers and a genuinely hard one for a smaller company’s budget.”
Pruitt said Ridgeline’s board debated whether to raise a larger round to match Kestrel’s spending power more directly, but ultimately decided against overextending the company for a hiring fight it might lose anyway on brand recognition alone. “We are not going to out-market a company that just cleared a clinical milestone,” he said. “We can out-culture them, and we can make sure our offers are competitive enough that culture gets to be the deciding factor.”
The company expects to close most of its new hiring within 18 months, Pruitt said, with an early focus on filling quality-control and regulatory-affairs roles he described as the hardest to recruit for locally. He said Ridgeline has also begun sponsoring a small number of tuition scholarships at Bellwater State in exchange for a hiring right of first refusal with graduating lab-sciences students, an arrangement Iyer said he expects other employers to copy if it works.