PROVIDENCE – The For Lease sign in the window was there for all to see: CBRE/New England was offering 10,255 square feet including office and lab space. Nabsys had closed up its shop on 60 Clifford St., and the more than 40 former employees of the firm were no longer using the parking lot across the street.

So, kudos to news editor Kate Nagle at GoLocal for traveling down from her office in person to investigate, and then traveling further down the street to Davol Square, making a beeline to the offices of Slater Technology Fund, one of the initial investors in Nabsys.

Nagle broke the story late Friday afternoon on Sept. 11 that Nabsys, once the poster child for the emerging biotech sector in Rhode Island, has closed its doors in Providence. [ConvergenceRI always believes in giving credit to the good work of other reporters.]

“Providence-based startup Nabsys – [that] had raised [more than] $40 million and was considered a rising rock star in the genome-mapping world – has closed its downtown office,” Nagle wrote.

The company headquarters, Nagle’s story continued, was shuttered, with a For Lease sign in the window. “A parking lot attendant across the street said that the 40-plus employees [that] had previously parked there were gone.”

Multiple sources, Nagle reported, said that the company has been “closed for a couple of weeks now.”

Nagle scooped everyone, including The Providence Business News, The Providence Journal,  Rhode Island Public Radio, and even WPRI’s Ted Nesi.

In his weekly roundup published on Saturday morning, Sept. 12, Nesi wrote about the Nabsys vanishing act, but didn’t cite the GoLocal story: “Barrett Bready’s biotech startup Nabsys has closed its doors, according to John Thompson, a former executive there. (I reached out to Bready for comment about the situation more than a week ago but never heard back.)"

Nesi continued: Nabsys had raised more than $40 million – including from Point Judith Capital, Gov. Gina Raimondo’s old venture firm (Nabsys is one of two investments named in her official bio) and was often cited as an example of Rhode Island’s growing innovation economy, linking to an op-ed written in 2011 in The Providence Business News by Richard Horan, senior managing director of the Slater Technology Fund.

Nesi also mentioned that Bready currently serves on the I-195 Redevelopment District Commission, and that his father, Richard Bready, was the former CEO of Nortek.

Close relationship to Raimondo
As Gov. Gina Raimondo once described Nabsys: “This is a company with world-class aspirations attracting world-class resources that serves as a terrific example of what might become of our efforts to build an innovation economy here in Rhode Island.”

There is little if anything that Gov. Gina Raimondo could/would/should have done to prevent the firm from shuttering its doors, according to sources. She no longer participates in investment management decisions made by her former venture capital investment firm, Point Judith Capital, where she had once served as general partner.

That said, Raimondo might now find herself in a vulnerable position, open to questions, given the close relationship she had with Nabsys and its founder, Dr. Barrett Bready.

Nabsys, a company in which Raimondo’s Point Judith Capital firm had invested, was featured in a campaign ad for Raimondo touting her job creation skills during her successful 2014 campaign, which included interior shots of Raimondo visiting the company.

In January of this year, one week after Raimondo’s inauguration, Bready, in turn, hosted a $1,000-a-person fundraiser for Raimondo at his East Side residence.

And Bready was the only member of the commission responsible for future development of the former Route 195 land who was reappointed by Raimondo.

Bready’s current role on the commission, particularly in deciding on potential future investments, such as the proposed Wexford life sciences development that abuts the Nabsys building, could raise issues regarding conflict of interest.

To date, Raimondo has not issued any statement regarding Nabsys.

What happened?
Nabsys had evolved from the 2007 merger of two Brown University spinouts, one from the departments of chemistry and computer science, the other from the department of physics. Both had received initial seed funding form the Slater Technology Fund. At that time, Dr. Barrett Bready had joined the firm as CEO.

The firm focused on the development of innovative technology for DNA sequencing – the merger of semi-conductor science with the field of DNA analysis in life sciences.

The core technology that Nabsys utilized was what’s known as nanopore arrays – determining the order in which nucleotides occur on a strand of DNA. This technology enables DNA sequencing through electrical detection instead of fluorescent space detection – a whole new paradigm of enabling technology for DNA analysis.

In 2014, Nabsys brought in Steve Lombardi as CEO, replacing Bready, to oversee the commercial launch of its DNA sequencing technology, what Slater’s Horan called “a critical inflexion point in any company development, particularly in the field of bio-analytical technology platforms,” in an interview with ConvergenceRI in September of 2014. [See link to ConvergenceRI story below.]

The plan moving forward to launching the Nabsys DNA sequencing technology commercially, according to Horan in the interview, had been to develop what he termed “early access” programs.

“[Nabsys enters] into alliances with major biomedical research institutions and gives them early access to the technology,” Horan explained in the September 2014 interview. “The companies develop applications with the technology. It’s the functional equivalent of beta testing in the world of genomics [technology], but it’s called early access. Nabsys has positioned [itself] right now for a broad-based, national and international roll out.”

For whatever reason, the planned strategy didn’t work; without comment from the management at Nabsys or from the equity investors that controlled the firm, which included Point Judith Capital, Stata Venture Partners, and most recently, Bay City Capital in San Francisco, what caused the unraveling amounts to speculation. Nabsys had captured some $50 million in capital investment, according to sources.

Horan, on behalf of the Slater Technology Fund, which had invested about $1 million in equity in the company, told ConvergenceRI that there had been no formal communication with shareholders on the matter of the wind down. Further, Horan declined to speculate about what had happened.

What the future holds

Horan was willing to talk about what he considered very capable leadership shown by Bready in raising the capital, recruiting the technical team, and advancing the development of the technology to the stage it had gotten. Further, he said that the capital raised had been efficiently deployed, citing comparable companies which had raised hundreds of millions to advance similar genomics technology platforms to the point of commercial launch. These included Pacific Biosciences, or Pac Bio, in Menlo Park, Calif., and Helicos Biosciences in Cambridge, Mass.

The credit for that, Horan continued, along with developing a high-caliber team at Nabsys, belongs to Bready. 

Now that the doors are shut, and the company has passed a threshold, with the building up for lease, what happens next is a matter of speculation, a place that Horan declined to go.

The more meaningful question to ask, Horan told ConvergenceRI, is: what does it mean for Rhode Island’s innovation economy?

In Horan’s view, Nabsys had demonstrated that the technology and talent could be assembled here in Rhode Island. Access to the kind of capital that would enable to the company to compete in the global market became the challenge. “While the investors have shown tremendous commitment thus far, they have apparently reached the limit on their ability to support the company to the point where new investors and/or strategic partners might be brought in to take the company to the next level," he said.

Further, from Slater’s perspective, and for Rhode Island more generally, Horan said that the economic return realized had been significant.

“Some $50 million followed our seed investment,” Horan said. “In excess of 50 jobs had been created, with plans to go up to 75 jobs.”

Horan continued: “These were high-value, high-wage jobs.”

According to metrics developed by Slater to measure the job creation from its investments, Horan said that in aggregate, more than “300 job years” of employment had been created by the investments in Nabsys.

The question moving forward, Horan said, was how to preserve the value that’s been created.