Mid-Atlantic Bio in the News

Here is a great article about Mid-Atlantic Bio from the Montgomery County Gazette:

Bio talks
Mid-Atlantic BIO backs regional cooperation, funding strategies
Friday, Oct. 13, 2006
by Steve Berberich

Staff Writer
Can’t we all just get along? If we can, it will be better for all of us.

That was the major theme of the Mid-Atlantic Bio conference in Washington, D.C., this week, which highlighted efforts by bioscience leaders in Maryland, Virginia and the District to collaborate as a regional entity rather than push divisive provincial interests.

The second annual conference drew more than 800 investors, businesspeople and academic leaders in biotechnology industries to teach and learn how to better fund development of therapeutics, diagnostics, medical devices and health care services.

‘‘This conference is about regionalism,” said Aris Melissaratos, secretary of the Maryland Department of Business and Economic Development.

Melissaratos and Patrick Gottschalk, secretary of Virginia’s Department of Commerce and Trade, announced a joint plan to maintain regional investment conferences, in Bethesda in 2007 and in Chantilly, Va., in 2008.

‘‘And we are going to continue this regional push,” Melissaratos said. ‘‘This showcases individual companies to each other, smaller companies to the larger companies especially. And it showcases science to the investors and brings together the community. I think it works.”

Meanwhile, for venture capitalists, the main interest was in mid-stage bioscience companies, rather than biotech startups or latter-stage companies.

‘‘I think investors here are interested in finding companies that can be successful ... companies that legitimize their science,” Melissaratos said.

‘‘I have always had this response for the biotech community: They say there is not enough money. I say there is more money around than you can shake a stick at.”

Regional strengths

Conference co-organizer Julia Spicer, executive director of the Mid-Atlantic Venture Association, said she enjoyed the regional comradeship.

‘‘It was so refreshing to hear the business development leaders from both states talk about the strengths of each other,” Spicer said. The leaders are ‘‘getting it,” that venture capitalists look at the region as a whole for biotechnology infrastructure and educated workforces. Regional collaborations will mean better markets through entire investor cycles in the region, she said.

‘‘Yes, the states in the region should coalesce,” said David C. U’Prichard, a partner with Red Abbey Venture Partners of Lutherville.

‘‘Look, this region, or the southern Jersey-Philadelphia region, are competing with the top guns, Massachusetts and California” and North Carolina’s Research Triangle Park, ‘‘although I think to some extent [Research Triangle Park] is a little overblown,” he said.

U’Prichard, who is also former chairman of the trade association PennsylvaniaBio, lauded the two-day conference.

‘‘The quality of the turnout and the quality of the speakers from the companies here, they are excellent,” he said.

The conference’s focus on a regional approach was also a boon for scientific service firms in attendance.

‘‘It is hard to distinguish Maryland from the mid-Atlantic region of potential clients” who add value to exhibiting at the conference, said Greg Mingo, director of new business development and marketing for Chesapeake Biological Laboratories Inc. of Baltimore.

The regional approach also appealed to Robert J. McLinden Jr., business representative for the 100-employee Advanced BioScience Laboratories Inc. in Kensington. ‘‘We are finding vendors and new clients and get our name out in public across several states,” he said.

Kristin Olson of VWR BioSciences Inc. of West Chester, Pa., said she collected ‘‘great leads” for 10 new clients from Baltimore all the way to Richmond, Va., in the first two hours of the exhibit hall opening Tuesday.

Funding priorities

Venture capitalists in attendance frequently commented that biotech startups and late-stage, clinical drug development companies are less attractive than companies in mid-stage product development who have smart alliances with larger pharma or biotechs.

‘‘We actually feel a little cornered right now,” U’Prichard said. Many VCs have been focused on clinical stage drug development for the past five years, but the process is so expensive now that ‘‘you are lucky to get your money back.”

‘‘Things are changing because the returns are a lot more favorable for development stage companies,” he said.

The conference offered dozens of young, eager biotechnologists the opportunity to pitch for venture capital in workshops.

Miles Grody, senior vice president of operations and general counsel of ACell Inc. in Jessup, pitched his company’s extra-cellular matrix system of wound healing without scars.

‘‘The body heals almost as if it had never been injured,” Grody said of ACell’s technology. Then he asked for $7.5 million to help the company pursue its strategy.

‘‘We are not looking to becoming a large manufacturing company,” Grody said. ‘‘Instead our strategy is focused on partnering with large, established companies in the life sciences industries.”

Doug Doerfler, president and CEO of MaxCyte Inc. of Gaithersburg, asked investors for $10 million help advance its patented cell-based therapeutics with up to 20 new commercial and academic clients.

‘‘We are in a position now to take off,” Doerfler said. There are ‘‘several hundred companies” now involved in cell therapies that are potential clients, ‘‘so it is starting to look like we have the right technology.”

Doerfler said his company is typical of what VCs are seeking.

‘‘We are not a discovery company but strictly a development company, the development of clinical assets with our partners,” he said.

After only 15 months in operation and 20 employees, Boro Dropulic, founder and CEO of Lentigen Corp. of Baltimore, offered investors a unique, established technology of virus-transported gene therapy techniques called ‘‘lenti-viral vectoring.‘‘ He, too, pitched the mid-stage theme, touting Lentigen’s collaboration with Johns Hopkins Medical Center, the National Cancer Institute and the Army, as well as a bevy of patented technologies.

Larger players make their pitch

The mid-stage theme for investors is not just for smaller biotechs, said Steven Mayer, CEO of CoGenesys and a speaker on a panel, ‘‘Building a Sustainable Company: Practical Advice for Bioentrepreneurs.”

CoGenesys, a spin-off of Human Genome Sciences Inc. of Rockville, completed a $55 million financing round in June and has at least seven drug candidates in late preclinical stages.

‘‘Our objective is to move them into the clinic, have proof of principle, and then seek partners or out-licensing of these products. We really do not intend to commercialize. We want to find large pharmas or large bioechs who want to partner with us to commercialize our products,” Mayer said.

He said he and former HGS colleague Craig Rosen, also now with CoGenesys, ‘‘took a long time” to study the venture environment and come up with their current formula.

‘‘We feel that it is a better way to build value into a company that does not require as much funding. So we can do more things with less capital,” Mayer said. ‘‘That is our thesis.”

He added that many companies are abandoning using an initial public stock offering as their ‘‘exit strategy,” because of the rising costs of government regulations.

Conference speaker Todd Brady of Domain Associates LLC of Princeton, N.J., and San Diego also said investors are influenced by rising costs of government regulations on biotech startups.

‘‘Because biotech companies take a very long time and have high expenses to market a drug, I think that is why the whole field has changed,” Brady said. ‘‘The closer to revenues you are, the more like a real company you are to investors.”

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