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Back biosciences, lawmakers urged at Grand Rapids hearing

SMIC — Fri, 26 Feb 2010 15:55:00 +0000

By Mark Sanchez for Business Review West Michigan

Biosciences leaders in West Michigan this morning urged lawmakers to commit to the industry in order to diversify the state’s economy.

Of highest importance is work force development, MichBio CEO Steve Rapundalo said.
The ability to nurture home-grown companies and attract biosciences businesses to Michigan hinges on developing the work force the industry needs, Rapundalo said.

“Michigan, regrettably, has largely ignored the work force needs of our biosciences industry,” Rapundalo told members of a state House subcommittee that’s examining the industry.

Michigan “lacks any road map for insuring a pipeline of skilled workers — from technicians, scientists and engineers, to many supporting professional positions,” he said in testimony to the Subcommittee on Biosciences of the House New Economy and Quality of Life Committee.

“We simply must realize that having a world-class biosciences work force, like that established through our legacy pharmaceutical companies, for instance, is the number-one reason that bioscience companies and research institutions grow or locate in the state,” Rapundalo said. “Michigan needs to build upon its work force strengths if it is once again to be viewed as a leader in discoveries, patient care and private-sector investment.”

Making needed changes requires a new training and education system for the industry that begins with assessing the existing talent pool, understanding its strengths and weaknesses, and determining the future skills needed, Rapundalo said.

To develop the biosciences talent pool, he cited efforts in others states, such as Massachusetts, which puts $25 million annually to support fellowships, internships and co-op programs, talent recruitment and work force subsidies. North Carolina in 2003 steered $60 million toward a foundation that created a training program in biomanufacturing that’s now recognized as a national model, Rapundalo said.

The biosciences industry now directly and indirectly supports more than 100,000 jobs in Michigan, according to the 235-member MichBio, the Ann Arbor-based biosciences trade association.

The need for talent goes beyond technical and scientific positions.

Management talent that can help scientists develop and bring their innovations to the marketplace — in both the pharmaceutical and medical device sectors — is a higher priority than capital, said Linda Chamberlain, executive director of the West Michigan Science & Technology Initiative in Grand Rapids.

“We sorely need trained and experienced entrepreneurs that know how to commercialize intellectual property grounded in the life sciences,” Chamberlain said.

Much of the state’s legacy and talent in biosciences stems from the former Pfizer Inc. research and development operations in Kalamazoo and Ann Arbor.

Out of its first downsizing in Kalamazoo in 2003, several Pfizer scientists formed their own contract research organizations that have grown as pharmaceutical companies increasingly outsource drug discovery and research.

One of those companies, Kalexsyn Inc., posted sales of $5.7 million in 2009, has a $2.4 million payroll and has grown annual revenues by an average of 44 percent since 2004, co-founder and CEO David Zimmermann said. The company, which specializes in medical chemistry, has hired 21 former Pfizer scientists in that time, some of whom returned to the state after leaving.

Zimmermann credits a $192,000 loan Kalexsyn received in 2004 with getting the company off the ground. He urged lawmakers to continue backing loan programs for bioscience startups, especially as the outsourcing of research and development by large pharmaceutical companies accelerates at double-digit rates over the next five years.

“Michigan is well-positioned to take advantage of this growth and leverage our success,” Zimmermann said. “The magnitude of our success will be directly dependent on Michigan’s commitment to providing financial support, which includes funding for new and existing companies, stable funding for organizations providing assistance to new and existing companies, and mentorship programs.”

The hearing this morning in Grand Rapids is the third held by the subcommittee this year. Previous hearings were held in Ann Arbor and Rochester.

State Rep. Ed Clemente, a Democrat from Lincoln Park who chairs the subcommittee, said the panel’s goal is to educate lawmakers about the biosciences industry.

Biosciences lacks the kind of awareness it needs in Lansing, said Clemente, who concedes that he “didn’t know much” about biosciences six months ago.

“It’s pretty much under the radar, how the industry has progressed,” Clemente said. “It’s pretty amazing the growth it’s had and the potential.”

Science-minded engineering firm to relocate in downtown Kalamazoo from Portage

SMIC — Thu, 25 Feb 2010 12:02:00 +0000

By Alex Nixon for the Kalamazoo Gazette

KALAMAZOO — A small Portage engineering company plans a move to downtown Kalamazoo to capitalize on the growing life-sciences industry here, an official said this week.

Arc Engineering LLC, which formed in 1999 and works with pharmaceutical, biotechnology and medical device companies on compliance with the U.S. Food and Drug Administration, is planning to move into new offices in the Main Street East building by the end of March, said Brian Brennan, Arc’s vice president for business development.

Brennan said many life-sciences companies in West Michigan are growing, which creates opportunity for Arc Engineering to win new business.

“We’re in expansion mode right now,” Brennan said. “We’re seeing a lot of firms in Southwest Michigan expanding … There’s a particular need in the life-sciences industry for the type of engineering we do.”

The company has six employees and is looking to hire an additional engineer, Brennan said.

“We’ve been very fortunate,” he said. “We’ve had to turn down business because we didn’t have enough people.”

Arc will move into 700 square feet in the Main Street East buildings in the 200 block of East Michigan Avenue. But it hopes to be able to expand that space in coming years.

“Kalamazoo is really trying to get the type of companies that we will do business with to come there,” he said. “So it makes sense for us to be there too.”

Contact Alex Nixon at (269) 388-2783 or anixon@kalamazoogazette.com.

A better bug killer? Vestaron Corp.'s spider-venom pesticides could be on market by 2012

SMIC — Sun, 21 Feb 2010 09:58:00 +0000

By John Perney special to the Kalamazoo Gazette

KALAMAZOO — Research lab. Scientists. Spiders. Cue Peter Parker, right?

Well, not quite. Actually, it’s not even close to a comic book storyline. While the work of startup company Vestaron Corp. may depend heavily on spider venom, there’s nary an arachnid to be found in the company’s workspace inside the Southwest Michigan Innovation Center.

“I think a lot of people have the vision that they’re gonna find a roomful of spiders,” says John McIntyre, president and chief executive officer of the nearly 5-year-old company. “But we’ve had only a very limited exposure to actual spiders. It’s all been a technology play.”

It’s technology that results in a different approach to an age-old problem: pest control. The approach, in essence, revolves around the food chain. Those spider webs with dead bugs in the corners of your home? Not a pretty picture, but a telling one.

“For 400 million years spiders have been very good at killing insects,” McIntyre says, “but their venom lacks activity against mammals, such as cats, birds and people.”

Vestaron’s insecticides would be more environmentally friendly than current products, because they come from nature. And they would be more effective because they kill bugs in four ways, making it more difficult for bugs to develop resistance.

Ordinary insecticides, McIntyre said, “tend to attack one of just four sites of action, so insects can very quickly develop resistance.”

Vestaron has researched the venom of the Blue Mountains funnel-web spider, native to Australia, and is developing agricultural insecticides it plans to have on the market in 2012.

Commercial and household pest-control products are also in the company’s plans down the road.

McIntyre’s team — currently 11 full-time employees — have isolated several components of spider venom, called peptides, that are responsible for killing a spider’s prey.

Vestaron is among 14 young life-science companies currently set up in the Innovation Center, located in Western Michigan University’s Business Technology and Research Park. In addition to getting lab space, business services, and access to venture capital and WMU resources, the startups share certain advanced equipment and another valuable resource: employees.

“A few companies are actually sharing their part-time employees,” says Innovation Center CEO Robert DeWit, who calls collaboration “the special sauce” of the Innovation Center.

“Some companies might have more work at one time than another, and it could result in full-time work for those part-time employees,” DeWit said. “There’s a broad base of laboratory skills that transfer quite nicely from task to task.”

Tapping into the emerging green way of life is another Vestaron perk.

“The people who are doing the development work for us think it’s an important benefit to their job-related success,” McIntyre says, adding that it’s also a calling card when it comes to going out to investors for funding.

To date, money hasn’t been a problem. Vestaron has spent more than $8 million, and is now pursuing Series B equity financing.

“We’d like to close that by the end of Q3 of 2010,” McIntyre said. “The key for those dollars would enable us to continue the scale-up process to bring us to that 2012 launch.”

As for testing, Vestaron has done greenhouse evaluations at Michigan State University, performed crop work at WMU, and conducted field trials in California, the upper Midwest, New York state and Florida. While field development and product sales teams would eventually be hired and located outside of Michigan, the company has no plans to leave Kalamazoo.

McIntyre says the company could have up to 30 employees in the area.

“Personally I’m fascinated. It’s a magnificent idea,” DeWit says of Vestaron’s work. “The idea of utilizing nature to accomplish an important task to lower the cost of goods for food production is really cool.”

And spider venom may only be the beginning. According to McIntyre, there is a lot more in nature for Vestaron to harness.

“We believe there will be a continual supply of new insecticidal material — we’re just looking at one spider,” he says. “There are also similar compounds present in other animals — snakes, scorpions, snails — and some plants. We plan to become the experts in this chemistry.”

Michigan biotech firm NephRx raises $6.2M for kidney, gastro disease therapies

SMIC — Fri, 12 Feb 2010 14:24:00 +0000

By Brandon Glenn

KALAMAZOO, Michigan — Biotechnology company NephRx Corp. has raised $6.2 million in equity for its kidney and gastrointestinal disease therapeutics, according to a Securities and Exchange Commission filing.

The preclinical stage company is working to develop drugs to treat kidney failure, plus diseases of the gastrointestinal tract, including mucositis, Crohn’s Disease and ulcerative colitis.

NephRx, founded in 2001, has no revenue and began the fundraise in November 2007, according to the regulatory filing.

It’s unclear from whom NephRx received the financing. However, its board members include employees of Michigan-based venture firms Seneca Partners and the Apjohn Group. NephRx executives didn’t immediately respond to requests for comment.

The company is developing two growth factors, which are proteins that stimulate cells to grow and divide. The first, called NX001, is designed to repair and regenerate kidney cells. The company’s other drug lead, NX002, would treat mucositis, an inflammation of the lining of the mouth, throat or gastrointestinal tract that occurs in cancer patients undergoing chemotherapy.

The company says it “would consider” establishing partnerships to help develop the drug candidates.

NephRx licensed its technology from the University of Chicago, where its founding scientist Dr. F Gary Toback is a professor of medicine and cell physiology. Chief Executive William McGiniss is a former Eli Lilly & Co. executive.

The company is located in the Southwest Michigan Innovation Center at Western Michigan University.

Southwest Michigan First Life Science Fund portfolio company, RealBio Technology, receives BRCC funding

SMIC — Fri, 12 Feb 2010 14:13:00 +0000

KALAMAZOO, Michigan – The Biosciences Research and Commercialization Center (BRCC) has completed a $250,000 investment in RealBio Technology, Inc. The BRCC, located in Western Michigan University’s Research and Technology Park, is charged with investing in and growing early stage companies in Michigan.

RealBio, based in Kalamazoo, Michigan recently established operations in the Southwest Michigan Innovation Center. The company is commercializing leading edge cell and tissue culture technology that facilitates the growth, expansion, differentiation and collection of human and non-human cells. The company is part of the Southwest Michigan First (SWMF) Life Science Fund portfolio managed by Southwest Michigan First, the economic development corporation committed to jobs and wealth creation in the Kalamazoo Region.

“We are extremely pleased to have the support of the BRCC, and to have the BRCC as an investor in RealBio,” said Paul Neeb, President and Chief Executive Officer. “This investment recognizes the business- and job creating potential of our revolutionary stem cell research technology.”

“We applaud the commitment that RealBio has shown to the Southwest Michigan life science community in such a short time. As a SWMF Life Science Fund company, we are pleased with their local efforts to secure funding from partner organizations, such as the BRCC, and their choice of the Southwest Michigan Innovation Center for its headquarters. We look for more exciting announcements to come from this young company,” said Ron Kitchens, General Partner of the SWMF Life Science Fund and Chief Executive Officer of Southwest Michigan First.

About RealBio Technology, Inc.
RealBio Technology, Inc. is developing a new generation of 3-dimensional cell culture technology. The company’s technology is based on ground-breaking research conducted at Aastrom Biosciences (Nasdaq: ASTM) through a $5 million DARPA grant. This patent pending technology is exclusively licensed to RealBio. The RealBio Culture System enables researchers to study the growth and development of human primary cells and tissues over a long period of time. The initial market for the technology will be to generate a consistent supply of stem cells for research purposes and the formation of tissues for in-vitro toxicology. More information about RealBio Technology, Inc can be found at www.realbiotechnology.com.

About the Southwest Michigan First Life Science Fund

The Southwest Michigan First Life Science Fund is a $50 million limited partnership venture fund interested in early stage life science opportunities in southwest Michigan that have demonstrably viable technologies and are committed to establishing a presence in the Region. The fund's primary goal is to spur economic development and retain intellectual capital within the area. More information about the Southwest Michigan First Life Science Fund can be found at www.southwestmichiganfirst.com/wmlifesciencecompanies.cfm.

About the Biosciences Research and Commercialization Center

The Biosciences Research and Commercialization Center (BRCC) of Western Michigan University is a commercially focused and science-driven translational research center. BRCC dedicates its pharmaceutical expertise and resources to the commercialization of promising life science discoveries and the growth of Michigan's life sciences business sector. To find out more, go to http://www.brcc.wmich.edu/.

About Southwest Michigan First

Southwest Michigan First is the catalyst stimulating growth across the Kalamazoo Region. Nationally recognized for its groundbreaking Community Capitalism approach to economic development, Southwest Michigan First is a private, nonprofit corporation fully committed to its mission of jobs and wealth creation. Whether you’re a site selector, an investor, an entrepreneur or part of an existing company looking to grow, Southwest Michigan First has the resources and expertise to assist you in identifying and surpassing your company’s goals. For more information, visit www.southwestmichiganfirst.com.

Contact:

Paul Neeb

President and Chief Executive Officer

RealBio Technology, Inc.

4717 Campus

Suite 1500

Kalamazoo, MI 49008

269.544.1088

paul@realbiotechnology.com

Ron Kitchens

Chief Executive Officer

Southwest Michigan First

241 E. Michigan Avenue
Kalamazoo, MI 49007

269.553.9588

rkitchens@swmfirst.com

Metabolic Solutions CEO: New 'trees' growing in Michigan life sciences

SMIC — Mon, 08 Feb 2010 11:15:00 +0000

By Mark Sanchez for Business Review West Michigan

February 4, 2010

Robert Beardsley likens it to the redwood forests of California.

New trees grow when the larger, older trees die and fall, generating “a circle of new trees growing up around it,” he said.

“That’s really what’s going on in the Midwest right now and Western Michigan. Pfizer has died and fallen down in the Midwest,” said Beardsley, the CEO of Kalamazoo-based Metabolic Solutions Development Co., which is developing a promising new drug to treat Type 2 diabetes.

“As you look around the Midwest and you look at the old Pfizer sites — Kalamazoo, Ann Arbor, St. Louis — and you’re starting to see lots of little trees springing up. The new redwoods are growing where Pfizer has fallen down,” said Beardsley, whose company is one of the proverbial redwoods sprouting in Michigan.

Formed by former Pfizer scientists, the company hopes to complete clinical trials and file an application with the U.S. Food & Drug Administration by 2015.

Metabolic Solutions is one of a number of young companies borne out of the downsizings at Pfizer over the last decade, as many researchers chose to stay in the area and pursue their own innovations.

“You have those people now forming those new trees because they know how to do what they were doing because they were trained by Upjohn, Pharmacia or Pfizer on how to develop drugs or how to support developing drugs,” he said.

Beardsley, who joined Metabolic Solutions six months ago, delivers the keynote address at Business Review’s life sciences forum on Feb. 25 in Kalamazoo. He spoke with Associate Editor Mark Sanchez on Michigan’s life sciences industry.

What’s your feeling on the status of the life sciences industry in Michigan?

It’s healthy, and it has a great deal of potential. In fact, probably more realized potential than appreciated.

What do you think Michigan has going for it?

It’s the people. You have the people in Kalamazoo and in Ann Arbor and to a certain extent also up in Grand Rapids.

The state has also done a decent job in providing resources to nurture these startups along in terms of venture capital investments and in terms of support for things like the Southwest Michigan Innovation Center, which has to be, for the size of the community, one of the best and most effective life sciences incubators probably in the country.

And in Kalamazoo in particular, and also in Grand Rapids, you have a sense of civic pride. For example, you have the Southwest Michigan Life Science Venture Fund, which is the folks who made a lot of money — sometimes in the life sciences industry, sometimes outside of it — who see this as an area to invest in growing companies and have put their money behind that.

What do you think we need to work on in Michigan to further build the industry?

There’s one major and one minor thing that come to mind.

The major thing is .... we have to do a better job of attracting the capital in from the coasts. At the same time, even in these tough economic times, the state can’t stop investing in these startups. This is where the jobs that we all want our kids to have will be coming from. So we have to keep investing and keep growing those opportunities.

(On the minor point), we Michiganders have great pride and great stubbornness in wanting to show that we can do it — that we can do it here. In this evermore-global era, the one thing that we have to be careful of is realizing that we shouldn’t just say, “OK, the people we want to work with are within a 50-mile radius of where we’re headquartered.”

A lot of people are, but we also have to go and partner with the best and brightest wherever they are in the Midwest or they are in the U.S., or wherever they are in the world. That’s one thing we just need to be conscious of — not to let the pride of what’s being accomplished here blind us to the fact that there’s good things going on other places.

I even see it sometimes between Western Michigan and the other side of the state. There’s almost a competitiveness between the Ann Arbor life sciences and the Western Michigan life sciences clusters.

If we broaden our horizons a little bit more and say, “Here we have these fellow trees that are sprouting up from where Pfizer has fallen down in the middle of the country. Let’s cooperate there and we can draw even bigger circles around that.”

We can take pride in our successes but realize that we can probably have even greater success if we ally ourselves with the best and the brightest in other places as well.

Getting more capital into the state has been a theme for a number of years. Any advice?

We’re seeing some successes. And I’ve looked at this problem from the Midwest’s viewpoint for close to a decade myself and keep coming back to the same answer — you can do lots of things to increase exposures to the coast VC funds, but at the end of the day, it’s really about generating successes.

Now you have Esperion generating nice returns for VCs, and I suspect that had more than a little bit to do with the ($36 million in 2009) investments in Lycera in Ann Arbor.

We hope to be part of that trend. We hope to attract that kind of coast participation in our current fund-raising round, and then out of that success, they’ll ask, “Well, what else is going on at the Southwest Michigan Innovation Center or what else is going on with the Upjohn folks that we should be investing in?” You have to generate success stories.

Opinion: One man's dream for life sciences

SMIC — Fri, 05 Feb 2010 11:23:00 +0000

By Rob DeWit for Business Review West Michigan

In a recent phone call with various parties about the upcoming Business Review life sciences forum at Western Michigan University, I stated that one potential topic for the future would be collaboration in the life science arena in Michigan.

I have been thinking a lot about the actions Michigan needs to undertake to return to an economy as vibrant as this state’s natural beauty. We all know there is hard work to be done to regain our status in the world’s economy. Through my life experiences I have come to believe collaboration is essential; let me reflect on only one of scores of examples I enjoyed in my career.

In the early 1990s, I was in a company working on a very important antibiotic for human medicine. As it was, the pre-clinical work was being done at a laboratory in Japan and the first clinical trials were to be conducted in the U.K. Separating those tasks was staff in Kalamazoo whose job it was to create a regulatory submission to support clinical trials in the U.K.

I am proud to report that the transition of the data from Japan, through a team in Kalamazoo to the U.K., was successful, that the antibiotic is now marketed successfully, and that it has saved the lives of many people who otherwise would have died. The willingness of people in three very different cultures to collaborate meant that the development of a life-saving drug occurred much faster than if everyone had staked their territory and maintained “it can’t be done.”

I know from experience that collaboration among experts with a common goal is not only very exciting, it can be phenomenally successful.

Many of us share a common goal to expand the more than 125-year-old life science story in Michigan. How will we get there? Not through intentional, thoughtful collaboration or through 1980’s-style silo building and information hiding.

In Michigan today we have those who are world-renowned for basic scientific research, those who have spent decades bringing scientific knowledge through non-clinical and clinical work to a submission for approval, as well as those who know how to market those products when approved. It is also true that these people are scattered in multiple organizations across various cities. Is it possible for them to collaborate?

I have witnessed successful collaboration in and across the following places: Kalamazoo, Ann Arbor, Connecticut, New Jersey, the U.K., Sweden, France, Italy, India, Singapore, China, Japan, La Jolla, San Francisco, St. Louis, Skokie and back to Kalamazoo. Yes, I believe collaboration can work within Michigan, because we share a common goal, the expert talent is at hand and the need for collaboration is urgent, perhaps desperate.

How can we best honor and grow the 125-plus years of life science history in Michigan? I suggest we lose the “competing-interests” mentality and replace it with healthy, active collaboration so we can all share in the inevitable success.

Rob DeWit is president and CEO of the Southwest Michigan Innovation Center. He will lead a roundtable on incubators at Business Review’s life sciences forum Feb. 25.

Getting down to your business in life sciences

SMIC — Wed, 03 Feb 2010 09:53:00 +0000

By Linda Chamerlain for Business Review West Michigan

As local leaders continue to discuss West Michigan’s economy, we inevitably hear about the promise of life science as a wellspring capable of revitalizing the region. While this recognition is all well and good, the conversation seems to be either very general or specifically focused on concrete projects.

This conversation can, at times, make it difficult to build a clear frame of reference and most certainly leads to challenges for community organizations and businesses looking to connect with the life sciences community.

As we approach a decade of earnest and focused entrepreneurial development in the life sciences, it’s a prime time to re-energize a more definite discussion about what “the life sciences” can mean to everyone in the community and what roles and responsibilities we all have to realize.

First, for life science professionals, community engagement means intentionally developing expanded channels for sharing the nature of your research or life science business, and how your work relates to the local economic ecosystem. What are your precise goals and objectives, and what are the precise capabilities and capacities you are going to need along the way?

You have a captive audience, eager and willing to understand your plans. They are equally interested in providing services to support your needs and help drive your growth. While there will naturally be times when the region cannot immediately address a specific technical requirement, local businesses and community organizations will learn, adapt and innovate over time to win your business and exceed expectations.

I’ve heard arguments from life science companies that it’s just too “high maintenance” to train and mentor inexperienced companies and organizations seeking life science involvement. I challenge that perspective with the shared regional need for high investment in our collective future. It is about all boats rising with the tide and taking both the short- and long-term view that we need to collectively develop our assets.

Next, government and community organizations and institutions must commit to effectively and thoroughly communicate your unique strategies, objectives, needs and constraints. Be prepared to define how and why alignment with you creates a true win-win for life science organizations. Be very willing to shed prescriptive solutions, and seek to play to your strengths in collaboration, shared infrastructure and community, and knowledge on how to get things done.

Whether it’s establishing a high-capacity commuter line linking Kalamazoo and Grand Rapids, new broadband capability for seamless communication or cultivating the next generation of research talent, it takes a mutual definition of success and the integrity and patience to create and work the plan. Together.

Finally, area businesses must also commit to a philosophy of high investment as a means to become engaged and educated in life science — and specifically on the research and companies most relevant and active in their community. The West Michigan Science & Technology Initiative dedicates two events a year to promotion and education of life sciences, both on a global and regional level. MichBio — as the state of Michigan trade organization — the Southwest Michigan Innovation Center and Business Review do likewise.

But these sorts of education and networking events, while informative and generally well attended, can only do so much to define specifically how to anticipate the needs of the life sciences. Do not assume your current portfolio of products and services will match the needs of the life sciences. It takes a deeper dive into the details, starting with interviewing potential customers and conducting market research so that you know how to differentiate yourself from your competition – regional or international.

You may need to make new investments to effectively serve the life science market — in people to add skills and knowledge necessary for life science clients, in capital to build specific capacity for life science products, in training to understand life science processes.

Attend trade shows and conferences, build connections meaningful to your life science customers, and read, read, read. Same as with the strongest business you already enjoy, you have to know your customer, their markets and challenges, and how your product and service is going to make them more successful.

The bottom line is that everyone involved has a role to play and responsibilities to assume in helping life science advance collective community success. And in most cases, it will require a stretch from traditional comfort zones and a commitment to, not just talking, but listening and leading the transformation we all want to see.

Linda Chamberlain is executive director of the West Michigan Science & Technology Initiative. She will lead a roundtable on collaborative partnerships at Business Review’s life sciences forum Feb. 25.

Vestaron scaling up ahead of regulatory evaluation

SMIC — Mon, 01 Feb 2010 11:53:00 +0000

By Nathan Peck | LabWork
npeck@mibiz.com

KALAMAZOO — Timing is everything.

The timing for growth could not be better, say officials with Vestaron Corporation, formerly Venomix Inc., as the company scales up for large scale production ahead of Food and Drug Administration approval of its first spider-venom based pesticide compound.

The technology, regulatory environment and market are ripe for the biologically derived pesticides produced by the Kalamazoo-based firm, John McIntyre, president and CEO of the agricultural biotech firm, told LabWork.

“The challenge has been to increase production and drop the cost of the product so it is competitive with current insecticides,” McIntyre said. “As of 2009, we have dropped the cost of producing a gram of the peptide within near proximity of the pricing for existing commercial insecticides.”

The 11-person firm has developed a pesticide based on peptides derived from spider venom that targets insects specifically and is harmless to humans and other animals. The problem with current chemical pesticides is insects have developed resistance to many insecticides because the chemicals target just four metabolic systems in the pests.

Unlike synthetic pesticides, which can be toxic to humans and other animals in the environment, the peptide pesticide quickly breaks down into harmless amino acids. Vestaron can avoid long-term field studies of toxicity and go through an expedited regulatory approval process with the FDA, which should take 12 to 15 months to complete. McIntyre expects to launch the product in 2012.

The company is working to develop the marketing and distribution channels within the agriculture industry. Vestaron is anticipating marketing to the high-end agriculture production, fruit trees, grapes, and nut trees. The spider venom peptide is particularly effective against chewing insects, such as caterpillars, and McIntyre believes they can take a sizable chunk of the $15 billion global insecticide market.

“We believe our product is unique and will stand clearly above the rest of the industry. Is that a tough sell, hell yes,” McIntyre said. “We are working to access markets in high-end food production. A lot of people will see our product as we go through further testing.”

Vestaron is working on closing out financing for its series B funding by the end of 2010, and McIntyre said the company is finding interest among agricultural based venture capital, but also has a committed group of current investors. Support from the Southwest Michigan First Life Sciences Fund and the state of Michigan have been key in driving series A investment in the startup since 2005.

“The thing that brings your life sciences companies to their knees is (access to) cash,” McIntyre said.

Researchers have been focused on increasing the yields of pesticides produced in the lab ahead of industrial scale production. The agricultural biotech company is working out the processes associated with producing batches of 2 liters in an incubator in their lab in the Southwest Michigan Innovation Center to batches of 750 liters for testing.

Vestaron has established a relationship with a production facility to produce the pesticide in industrial volumes of 10,000 liters or more, and hired Robert Venable as production manager to help scale up manufacture of the peptides. The company relies on the fermentation of yeast that has been genetically modified to produce and excrete the peptides, a technique developed in the pharmaceutical industry, said Robert Kennedy, VP for research.

“In order to do testing, we are ramping up our scale of production,” Kennedy said. “We are increasing the productivity of our fermentation, which has been pretty remarkable. The first hurdle was developing a novel mechanism for insecticides (and) we are now looking to other ways of using peptides.”

Vestaron is looking to new avenues to introduce the chemicals via genetically modified crops and a synthetic chemical mimic of the peptide insecticide. The company has had some success in introducing genes into plants to produce the peptide to fend off insects. A synthetic chemical pesticide would use the same target as the peptide, but because it is highly selective would be safe to humans and animals.

The approval process for synthetic insecticides is considerably longer, and McIntyre said Vestaron is looking to larger agricultural chemical companies to partner with the development of the GMO and synthetic insecticides.

Agriculture companies had looked at spider venoms 40 years ago, but spider venoms can contain several thousand peptides, some of which are toxic only to insects, others that are toxic to humans. The technology to separate out, identify and analyze the compounds was decades off, and the conventional wisdom was that the venom peptides could not be made into a viable pesticide, said Peter Carlson, Chief Scientific Officer.

“We are the beneficiaries of the tools of pharmaceutical research over the last 20 years,” Carlson said. “These have become off-the-shelf items for us. This sort of research could not be done two decades ago.” LW

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Column: Kalamazoo economy may benefit from international partnerships

SMIC — Sun, 31 Jan 2010 15:45:00 +0000

By Al Jones

KALAMAZOO
In October, eight Israelis gave Kalamazoo the once-over. They wanted to see if Kalamazoo was good enough for them.

They met with law firms and scientific contract-research firms here. They talked to area people. They talked hard business. They looked at the Kalamazoo area with a very critical eye.

Six were people who operate scientific-business incubators in Israel. Those are centers with clusters of up to eight businesses that are trying to develop medical products that will be used in Israel, but which will only find major success if they are introduced to the much-higher-volume U.S. market.

By visiting Kalamazoo and kicking its tires, so to speak, the incubator operators “want to make sure the community they’re passing them (their interior businesses) forward to has the capacity to help them grow and succeed,” said Ron Kitchens, chief executive officer of the private economic-development organization Southwest Michigan First.

Kitchens is trying to grow Kalamazoo as THE place such companies land when they head stateside.

“What we’re doing is nurturing those relationships so that we become the place of choice for medical-device companies, in particular,” Kitchens said.

He said the second quarter of 2010 has the potential to be big in terms of future job growth, if his economic-development organization can continue to develop its partnership with the Israeli government (which invests in and has an ownership stake in scientific research companies there) and with companies that want badly to market their products here.

The scientific research companies Southwest Michigan First has had in its sights (members of the Kalamazoo team have visited Israel three times in the past few years) are medical-device makers — typically those involved in producing such things as new implantable medical devices that help doctors treat cancer or obesity or heart disease.

“The first thing I love about medical devices is it’s manufacturing,” Kitchens said. “It plays to our strength of 50 years of medical history. We have the capacity to manufacture these devices in this region.”

And he said the medical-device industry provides jobs that are high paying and high quality.

“It’s an industrial sector that’s growing at about 8 percent annually,” he said. “By focusing and building partnerships around tech companies … we’re accelerating our ability to participate in the global economy.”

Southwest Michigan First has also been partnering with the Michigan/Israeli Business Bridge, a trade association of business and governmental people who want to foster trade between Israel and Michigan.

He said those new start-up business are part of Southwest Michigan First’s long-term business-growth strategy — to create wealth here by investing in companies that may start with just a handful of workers but that continue and become the great companies of the future.

Its short-term strategy is recruiting companies that create jobs today. Its mid-term strategy is working with existing companies to help them expand and grow.

“That is really where we’re going to see the bulk of the jobs created,” Kitchens said.

In addition to pursuing Israeli start-ups, Kitchens continues to recruit customer-service call centers to the region.

“We think we’re going to have a very good first quarter,” he said.

Kitchens said Southwest Michigan has the capacity to grow the call-center work done here by another 50 percent, with the focus on financial services and health care.

Michigan's future is on the line

SMIC — Sun, 31 Jan 2010 12:21:00 +0000

By Chris Knape

The Great Lakes State, its economy built on high-paying blue-collar jobs in the 20th century, is transforming.

Not quickly. Not easily. Not without pain.

So how can Michigan, with the nation’s highest jobless rate, get its people back to work earning middle-class wages?

The good news: The state is still an industrial powerhouse, damaged but functioning. In that fact lies the seed of salvation for the state’s work force.

Michigan people still design and engineer what the world needs every day — cars and trucks, office chairs, vacuum cleaners, washing machines and pain relievers, even boots and shoes.

But there are far fewer jobs actually making those products in the state than even a decade ago.

The solution to Michigan’s employment quandary ultimately will depend on the skills and imagination of today’s work force, one in which the manufacturing genius of previous generations is still deeply embedded.

But to get there, business leaders and workers are calling for Lansing to reinvent itself and for the entire state to get more serious about retraining and educating its workers.

The Michigan auto industry, at one time the envy of the world, employed 332,000 people in 2000. By September, that number had shrunk to 115,000.

Across all industries, the number of people employed in Michigan has plummeted by 17 percent in the past decade — 826,000 fewer workers.

A lot of Michigan’s future rides on the revival of Detroit’s crumpled auto industry. But experts say other industries hold promise for job growth and much needed diversification.

They are:

biomedical/life sciences;
alternative-energy technology;
design and engineering of durable goods such as autos, office furniture and appliances.

How Michigan lures these new businesses and grows existing industries is the most daunting challenge ahead, widely believed to require wholesale changes in the way Michigan operates.

“The reality is people (outside the state) think Michigan is not a place they can come and grow their companies,” said Ron Kitchens, chief executive officer of Southwest Michigan First, a private economic-development organization in Kalamazoo.

Michigan’s sluggish economy has reduced state revenue, but the state budget hasn’t shrunk by an equal measure, Kitchens said. That gives business owners the impression that the cost to run Michigan’s government is too high.

“To be competitive, we’re going to have to bring down those costs,” he said.
Mark Fields, president of Ford Motor Co.’s Americas division, said it will take a partnership between Lansing and the state’s employers to reduce government costs.

“When you get industry and government working together toward a common cause, particularly innovation, it’s not only good for job creation, it is also good for creating a buzz about the state,” Fields said.

But years of prosperity — 10 years ago Michigan’s unemployment rate was a record-low 3.2 percent — have left the state resistant to major change and stuck in a political stalemate, said

James Hackett, chief executive officer of Grand Rapids-based Steelcase Inc., the office furniture company that has slashed thousands of workers and closed plants.

As Hackett, who played football at the University of Michigan, put it: “I firmly believe that a system, like a business or sports team, college or educational environment can, over time, lose its fitness.”

A turnaround plan

Michigan must not sit by and simply hope for recovery.
“Hope is not a strategy,” Amway President Doug DeVos said. “We need to have a plan.”

He and other West Michigan executives have joined the new Detroit-based Business Leaders for Michigan, a who’s who of the state’s board rooms, to push for major reforms in the state.

The group includes four members of the board of directors of Southwest Michigan First: William U. Parfet, chief executive officer of MPI Research; David Boyle, local president for PNC Financial Services Group Inc.; Stephen MacMillan, chief executive officer of Stryker Corp.; and Michael Jandernoa, who was a prime mover behind Allegan drug-maker Perrigo Co. and now focuses on small firm investments.

Like it or not, the group’s Michigan Turnaround Plan is getting credit for at least kick-starting a conversation about a Michigan makeover.

“The new vision is focused on entrepreneurs and small business,” Jandernoa said.
Michigan needs to set the goal of being a Top 10 state in which to do business, said Doug Rothwell, chief executive officer of the Business Leaders group and former head of the state’s Michigan Economic Development Corp. from 1999 to 2002.

For now, it simply needs to rise from the bottom of the heap, he said. That means addressing real and perceived notions about Michigan’s high labor costs, unions and its convoluted tax system.

Businesses shouldn’t need to seek special incentives any time they want to make an investment here, he said. “The problem we face today is we have become a little too reliant on the MEDC to grow the Michigan economy,” Rothwell said.

“What our turnaround plan points out is Michigan’s lack of competitiveness for overall jobs.”
Key components of the plan call for:

A two-year state budget.
Reducing the Michigan Business Tax and making up for lost revenue by applying sales tax to some services.
Cutting up to 10 percent of state jobs and trimming state employee pay to be in line with private sector averages or averages of government workers in other states.
Forcing schools to share services and increasing charter schools.
Consolidating colleges and universities.

The plan hasn’t been universally embraced, but politicians from both sides of the aisle have latched on to it as a starting point for a difficult and politically charged debate.
Any reforms will need to be targeted at getting Michigan people into good-paying jobs.

The following four areas, with deep roots in Michigan, could yield results more quickly than others and are worth attention by the state’s leaders.

Biotech: Still filled with potential

The largest pharmaceutical and biotech manufacturers based in Michigan are growing, hiring for new positions and expanding operations.

Expectations are also high that the Southwest Michigan Innovation Center in Kalamazoo and the Van Andel Research Institute and the West Michigan Science and Technology Initiative in
Grand Rapids will spin off robust commercial ventures.

Kalamazoo-based medical-equipment-maker Stryker Corp. is on track to grow sales by 7 percent for the second consecutive year. MPI Research, based in Mattawan, is expected to open its downtown Kalamazoo laboratories this year, which will eventually total about 400 workers.

Perrigo, which makes store-brand drugs and generic prescription drugs, saw a strong end to its fiscal first quarter and raised its forecast for 2010. It is in the process of hiring 350 employees at its Allegan campus.

Kalamazoo area business and government officials also have taken the lead in finding new opportunities for some of the thousands of people laid off when Pfizer Inc. cut back research operations here and shuttered its huge campus in Ann Arbor.

Donald Parfet, whose great-grandfather founded The Upjohn Co. (now part of Pfizer Inc.), started the Apjohn Group as a venture capital firm geared toward helping new biotech firms get started.

“We’re fortunate in that there is a long legacy of pharmaceutical sciences and development in our region,” Parfet said. “As some of those jobs were displaced, not all of those individuals left the community. They are still willing to apply their talents and capabilities.”

Automotive: Still a driving force

“Like it or not, the auto industry is still going to be the dominant industry (in Michigan) going forward,” said Kim Korth, president of IRN Inc., an auto industry research firm in Grand Rapids.

“You’re not going to get any significant improvement (in the economy),” Korth said, “without any significant improvement in automotive.”

In the long run, the 2009 bankruptcies and downsizing of General Motors Corp. and Chrysler LLC should leave them more competitive with fewer brands, fewer plants and far fewer employees. GM Chief Executive Officer Ed Whitacre even held out the prospect GM could be profitable this year.

A J.D. Power and Associates forecast calls for a modest increase in U.S. car sales during 2010 — a forecast that could have the broadest impact on turning around the state’s economy.

The trickle down would be significant for the state’s battered supplier base.
One of those suppliers, Cascade Township-based ADAC Automotive, weathered the downturn by trimming hours and pay and, in a rare move, cutting jobs.

President Jim Teets hopes the company, which makes door handles, will emerge better prepared to grow from an industry rebound. “We’re going to have to be a different company because more and more of the platforms we supply are going to be global in nature,” he said.

Teets said the company was fortunate that Ford Motor Co., the only one of The Detroit Three not to file for bankruptcy, was its largest customer. But ADAC hopes to secure more business with “transplant” foreign car makers while also trying to build its nonautomotive business to 10 percent of sales.

The 800-employee company expects to add another dozen salaried employees — primarily engineers — this year as it cautiously ramps up. “The big thing is thank God 2009 is over,” Teets said. “We’re going to have a pick up in sales of almost 20 percent over 2009.”

Alternative energy: Making green with green

The biggest wild card may be the industry with the most unanswered questions about its future.

Efforts to produce solar panels, wind-turbine blades, alternative fuels and advanced batteries in Michigan have been greeted with millions of dollars in tax incentives.

Lithium ion battery plants are planned for Holland, Muskegon and Monroe and hold the promise the state might become a leader in powering a new generation of vehicles. Gov. Jennifer Granholm has said the emerging industry could create as many as 40,000 jobs in the state by 2020.

But no one really knows if those battery plants will ever ramp up to full employment.
George Erickcek, economist with the W.E. Upjohn Institute for Employment Research in Kalamazoo, said the projects are exciting. But he worries about providing incentives to specific industries, citing large tax breaks that went to now-closed corn ethanol and solar-panel plants, which had disappointing sales.

Office furniture: Beyond the cubicle

The outlook for the state’s “other Big Three” is less optimistic, but also tied to a global economic recovery.

Steelcase, Herman Miller Inc. and Haworth Inc. still employ thousands at their West Michigan plants where innovation and design are key to their futures.

Steelcase, which started the last decade with more than 9,000 employees in the Grand Rapids area, started the new decade with about 4,300 workers.

Hackett, the company’s chief executive officer, makes no apologies. Without the changes, Steelcase could be drowning in losses or simply out of business.

“I estimated we could have lost $500 million to $600 million a year under our old model,” Hackett said. Instead, the $3.2-billion company is breaking even as recession-battered sales have seen dramatic declines.

Building a better work force

Birgit Klohs, chief executive officer of The Right Place in Grand Rapids, doesn’t hold back about why she thinks so many people in the state are unemployed.

“We have way too many high school dropouts and not enough college graduates,” she said. “If you’re going to bring Michigan back to the forefront of success, education has to be a key component.”

One only needed to be among the 1,000 people who stood in line to get a shot at one of the 100 jobs at automotive electronics maker Gentex Inc. to see how much work is needed on that front.

Most of those interviewed as they waited in line earlier this month had only a high school education and had been let go from low-skill jobs at other factories that once paid more than Gentex’s $11.45-an-hour starting wage.

Those who don’t embrace education or retraining will need to get used to a new reality: lower paying, less-secure jobs with skimpier benefits — or maybe a new home in another state.

“Education doesn’t have to be a Ph.D. in molecular biology, but we’re talking about needing trained machinists,” Klohs said.

Teets, who leads ADAC Automotive, said he’d tell factory-floor workers to give their children simple advice about getting a good job: Go to college.

Bruce Los, Gentex vice president of human resources, said the company demands more education and aptitude than ever from its production workers.

“The reason we have not moved to Mexico or China is it’s darn hard to do what we do,” he said. “This is not your grandfather’s assembly plant anymore.”

After months with the highest unemployment rate in the nation, hope is rising in Michigan, a sense things have turned the corner or at least hit rock bottom.

This year’s job prospects may be better if only because it’s not 2009 or 2008.

But things will never be the same, and that doesn’t have to be a bad thing.

State funding will help Kalamazoo firm retain ex-Pfizer workers

SMIC — Fri, 29 Jan 2010 14:31:00 +0000

By Kalamazoo Gazette Staff

LANSING — A Kalamazoo-area life-sciences company will receive a $150,000 loan under a state program meant to retain former Pfizer Inc. employees.

Vestaron Corp., which is housed in the Southwest Michigan Innovation Center, will use the loan to hire three ex-Pfizer workers, according to a press release from the Michigan Economic Development Corp.

Vestaron, which is developing new types of insecticides using components of spider venom, currently has 11 employees.

The state created the $8 million Pfizer Retention Fund in 2007 to help companies hire Pfizer workers who were laid off when Pfizer began to close its human health research and development operations in Michigan.

“Vestaron's innovative technology continues to propel the company forward to soon make a significant agriscience market impact,” said Ron Kitchens, chief executive officer of Southwest Michigan First.

Vestaron previously received a loan of $50,000 from the fund to hire one former Pfizer worker.
The state also said it had loaned $120,000 to a Holland company working on technology that allows farmers to produce ethanol. eFarms LLC plans to lease space at a former Pfizer site in Holland and use their $120,000 loan to hire former Pfizer workers.

Success stories need to be told: Economic development chief urges business people to trumpet region's pluses

SMIC — Tue, 12 Jan 2010 12:45:00 +0000

By Al Jones

KALAMAZOO — Southwest Michigan has a good story to tell and needs optimists to tell it, says Ron Kitchens, chief executive officer of Southwest Michigan First.

The business people who live here, work here and know the community best are right for the role, the economic development leader says.

“Nothing good ever happened without an optimist speaking it to life,” Kitchens told Monday’s luncheon gathering of the Kalamazoo Rotary Club.

Kitchens amalgamated some of the growth and expansion reports of the past year to illustrate the idea that successful business people are thinking beyond the current economic recession and that many of them have been poised to move beyond it for quite some time.

Those include:

Kaiser Aluminum Fabricated Products LLC and Mann + Hummel Group USA Inc. — California-based Kaiser, a producer of recycled aluminum products, is in the throes of putting its first 50 employees to work at the Midlink Business Park in Comstock Township, and it intends to hire another 150 to 300 over time. Mann + Hummel Mann was transferring 52 jobs and adding 19 new jobs at its location in Portage to handle new programs for General Motors Co. or Ford Motor Co. The automotive supplier will produce and assemble components for GM’s electric car, the Chevy Volt.
The $50 million Southwest Michigan First Life Science Fund — Outsiders are investing their time and efforts in the area. “We are considered a fly-by state,” Kitchens said, referring to Michigan’s reputation for being a state that investors fly over en route to drop money in ventures on the east or west coasts.
But he said, “We are building the companies of the future in this community.”
The $50 million Southwest Michigan First Life Science Fund has invested in 13 companies that have great potential. Of those, only three are local firms. The balance are those relocating people and efforts here from Boston, San Francisco, Seattle and other cities.
Companies of tomorrow — The small companies that Southwest Michigan First is helping to grow now, such as Admetrx and a spate of other life-sciences companies, may start with a handful of workers, but are the wealth-builders of the future. Kitchens said they are the companies whose business dealings will attract more jobs and complementary companies here in the future.

Kitchens said the staff of his economic development organization made 900 visits to businesses last year, and most are saying they are ready to grow. But, he said, people have to remember that, “We lose jobs by the 100s and we are gaining them back by 10s.”

Kitchens said anyone involved in technology-driven manufacturing recognizes the talent of Michigan people. Having talented and passionate people — as well as business leaders willing to step up and help push the community — is how Kalamazoo will continue to find success, he said.

Contact Al Jones at ajones@kalamazoogazette.com or (269) 388-8556.

Catching up with... Jerry R. Colca

SMIC — Sun, 10 Jan 2010 12:49:00 +0000

By Kalamazoo Gazette staff

“We are developing novel therapeutics to treat diabetes and metabolic disease,” says Jerry R. Colca, co-founder, president and chief scientific officer of Metabolic Solutions Development Co.

The business is focused on developing drugs to treat and prevent Type 2 Diabetes. Started in 2006, it is located on the fourth floor of Haymarket building, at 161 E. Michigan Ave. in downtown Kalamazoo.

Colca is a Houston native who is among the many skilled scientific researchers to leave Pfizer Inc. after it acquired Pharmacia Corp. in 2003. Colca retired from Pfizer in 2006. He has a doctorate in biochemistry and physiology from the University of Houston.

Q: Who gave you the best piece of life advice?
A: Andre Robert, a scientist and mentor at The Upjohn Co. — “Never fall in love with your hypotheses!”

Q: What’s the biggest challenge your company faces?
A: “Raising sufficient capital to achieve initial cash flow.”

Q: What are the best and worst things about being in Southwest Michigan?
A: “Best: Many smart people who care. Worse: snow and ice in March.”

Q: Tell us something about your company that would surprise people?
A: “We could change the way pharmaceuticals are created and dramatically reduce health care costs.”

Q: What book is on your nightstand?
A: “The Stuff of Thought,” by Steven Pinker.

Q: What do you drive?
A: “A 1999 Chevrolet Cavalier (bought in Kalamazoo).”

Q: If you could have lunch with any person (living or dead), who would it be and why?
A: My dad, because I miss him.

Michigan: The right mix for hungry startups?

SMIC — Wed, 06 Jan 2010 15:06:00 +0000

BY DEBORAH L. COHEN

For decades the Big Three have cast a large shadow over the Michigan economic landscape, but with the automotive industry in turmoil, a new breed of startups is emerging from the darkness.

Ironically, some of the best talent appears to be coming out of the auto industry, where job losses have propelled Michigan to the highest level of unemployment in the U.S., tracking at 14.7 percent in November, well above the national average of 10 percent. There is likely a correlation between the high rates of joblessness and a push into entrepreneurial ventures.

"The influence you're seeing by new firms and smaller firms is apparent," said Mark Lange, executive director of the entrepreneur-focused Edward Lowe Foundation. "It's the influence of small business and the fact that people are leaving large companies to start their own businesses."

Between 1998 and 2007, Michigan lost 215,800 jobs, but the state also added 143,000 new establishments in the "stage one" category, or those with less than 10 employees, according to foundation data.

Consider Mandy and Pandy, an early-stage Ann Arbor, Michigan business that teaches children Chinese in a fun and easy way, by integrating books with CDs, DVDs, toys, fashion and television. It saw 2009 revenue of about $130,000 and forecasts a healthy increase for this year.

The company, which printed its first book in June 2007, was created by former Ford executive, Chris Lin. Lin, a 40-year-old American-born Chinese, is leveraging the skills he learned as a marketing director for the automaker in China and later as a consultant with Deloitte.

Even so, Lin credits much of the success of his new venture from the guidance he received from groups like Ann Arbor SPARK, an organization that supports local entrepreneurs involved in innovation, through funding and training programs such as a boot camp for startups. Mandy and Pandy received $244,500 in matching funds from the Michigan Pre-Seed Capital Fund, which is administered by SPARK.

The group's chairman "sat down with our business plan for half a day and just critiqued how we could make it better. He showed us how to improve the business plan and take it to an A level," said Lin, noting he sees a lot of laid off auto workers at these sessions.

For its part, SPARK, which receives funding from state and local governments, private investors, universities and corporations, said things have become very busy in recent months.

"We are getting more and more entrepreneurs raising their hand and saying ‘help,'" said Skip Simms, managing director of the business accelerator for the group. "For anyone to say entrepreneurialism isn't happening, they haven't visited Michigan, because it very much is. There's no indication that it's going to let up."

With fledgling ventures running the gamut from nanotech to alternative energy, activity seems robust. A sampling includes Axenic Dental, which has created a disposal high-speed dental drill; Algal Scientific, which offers advanced nutrient removal for municipal and industrial wastewater; and Accio Energy, a developer of new technology to harvest wind energy without moving parts, using electrically charged particles against a voltage gradient.

"We're hearing from all across the state that there's higher levels of activity in the past year, particularly in the last six or eight months," said Greg Main, president and CEO of the Michigan Economic Development Corporation, the state's foremost economic development agency. He added: "We still think there's a significant constraint in capital. We're trying to encourage more angel activity."

Paul Neeb, who helps run the Southwest Michigan First Life Science Fund, a $50-million venture fund targeting early-stage bio-tech companies, said a rise in entrepreneurial activity is crucial for the state to weather the current recession.

"I've seen a definite uptick and maybe it's by necessity," said Neeb, an entrepreneur himself and the CEO of RealBio Technology Inc., a startup that develops new technologies for the tissue cultures used in stem cell research and related applications. Neeb has helped RealBio raise a total of $2.5 million from investors, including the fund where he serves. "The state needs to move in that direction."

Kalamazoo celebrates growth

SMIC — Tue, 22 Dec 2009 13:20:00 +0000

By Candace Beeke

Business leaders gathered in downtown Kalamazoo last week to celebrate job growth in the Kalamazoo area over the past year.

Some 150 people joined Southwest Michigan First at its Catalyst Awards presentation to honor companies that have grown jobs and invested in the area.

“I think … symbolically we’ve stopped looking at our shoes. We’re looking into the future,” William Johnston, CEO of Greenleaf Companies and chairman of Southwest Michigan First, said at the event on Dec. 17. “It takes a village, and we know it, and every one of you are part of that important village.”

There were 12 Catalyst Awards presented to the following:

• HUMANeX Ventures, a Kalamazoo talent consulting and training organization that created 40 new jobs.

• Mann+Hummel USA Inc., a Portage automotive supplier that pledged to make a $20 million private investment and create 200 new jobs over the next five years to make battery frame assemblies for electric vehicles.

• East Jordan Plastics, one of the largest horticultural thermoformers in North America, which relocated into a vacant factory in South Haven and created 50 new jobs.

• Beckan Industries, a CNC machine company that bought a Goodwill Industries building on North Pitcher Street in Kalamazoo and will retain 18 jobs.

• ADMETRx, a Kalamazoo drug discovery support company that will use a $100,000 state loan to hire two ex-Pfizer scientists.

• Metabolic Solutions Development Co., which is developing new drugs to treat Type 2 diabetes and will use a $100,000 state loan to hire two ex-Pfizer scientists in Kalamazoo.

• J. Rettenmaier USA, a Schoolcraft agricultural company, which completed a $10 million expansion.

• Mossberg Precision Diagnostics LLC, the manufacturer of packaging equipment and materials for the life science industry, which will create 35 new jobs in Kalamazoo.

• RealBio Technology Inc., which is developing and commercializing cell- and tissue-culture technology, plans to create up to 40 new jobs over five years and to make a $2 million investment in Kalamazoo.

• Pfizer Animal Health, which will transfer 50 veterinary medicine researchers from its Overland Park, Kan. operation to downtown Kalamazoo in the next six months. Pfizer also invested $75 million in its downtown Kalamazoo facility.

• The city of Galesburg, for receiving a $614,609 state grant to fund a widespread downtown infrastructure reconstruction project.

Contact B. Candace Beeke at candaceb@mbusinessreview.com

Education Will Drive Life Science Success

SMIC — Mon, 21 Dec 2009 15:28:00 +0000

BY ROB DeWIT, PhD
President & CEO
Southwest Michigan Innovation Center

SPECIAL TO MIBIZ CRYSTAL BALL 2010

The life sciences play a key role in West Michigan's economy —past, present and future. Rob DeWit knows all about that. DeWit, president and CEO of the Southwest Michigan Innovation Center, a life sciences accelerator located in the Western Michigan University Business and Technology Research Park, has more than 25 years of experience in the industry, having worked in various roles at Upjohn/Pharmacia/Pfizer, as well as at Parke-Davis and Warner Lambert.

To get his take on what issues the industry could face in the upcoming year, MiBiz/LabWork Associate Editor Joe Boomgaard asked DeWit to participate in a Q&A.

What pending state or federal legislation could impact the industry in 2010?

DeWit: Obviously, the discussions at the federal level around healthcare could have a dramatic impact on how life science research is funded. A negative impact on the funding mechanisms for research, be it public funding through agencies such as the National Institutes of Health, or private funding from small start ups through the huge pharmaceutical companies, could cause the USA to lose its current leadership position. Losing our status in the life sciences would be unfortunate since most major medical advances in the last decades have come from North America.

How can the state continue to foster the life sciences given its budget situation? Can it afford not to?

DeWit: The most critical role of the state is to assure its educational system drives a new, knowledge-based economy, including the area of life sciences. We need to be serious about adjusting our economy to a base of smaller, innovative, responsive companies that can compete globally; the foundation for the new economy begins with excellence in our educational programs. We must be serious about celebrating, but dismissing, the old ways of crushing and expensive entitlements, frequent reliance on low-skill jobs and, instead, provide opportunity for new companies to create a bright future for Michigan. It would sadden me if we were to lose the life science legacy of companies like Upjohn, Parke-Davis, Stryker, Kellogg, Perrigo, Ash Stevens, and so many more. Whether the state needs to participate directly in protecting the life-science legacy is arguable and is dependent on one's views of government involvement in business endeavors. My suspicion is that most life science efforts will be funded by risk capital from those with a fundamentally different view of the future than the view of the past. Nevertheless, it would be great if the state is in a position to support the new economy as it unfolds, especially by achieving world class educational systems to feed a knowledge-based economy and allowing for the creation of an entrepreneurial business culture.

What major changes do you see in the West Michigan life sciences industry? What are the game changers?

DeWit: The primary game changers are four-fold:

1.There is a strong need for risk capital. Life science ventures are high risk, high reward ventures; while personalized medicine is a tangible dream based on available technology, safety and efficacy testing will still be required by the world's regulators. My experience is that they will demand more in these two areas which, unfortunately, increases the cost of medical advancement, increasing the need for private and public capital.

2.The most chilling thought for me is that with consolidation of the major pharmaceutical companies we are facing the possibility of 1000's of trained scientists being "right-sized" with nowhere to go. I believe this situation is unprecedented and we need to look for the opportunity for Michigan in the current upheaval.

3.The availability of information to the consumer will drive the demand for newer and better treatments and cures. As our educational systems improve, our citizens will understand that science drives medical advancement and they will be able to interpret the information they are given. Only cutting edge, responsive life science companies will survive the new era of informed consumers.

4.We need to think more regionally. It is common in life science that we need expertise that exists in only one spot in the world to solve a problem. This means that it is not economically sound strategy for each community to develop every bit of knowledge or skill or technology. We do need to constantly update our knowledge of innovations on the global scene so we can access them when needed.

What is the life science industry's role in Michigan's recovery?

DeWit: The life science industry should be one important piece of the region's recovery and new knowledge-based economy. To accomplish the recovery, those who are expert at life science should be encouraged to "do" life science as fast as they can. Similarly, those who have skills in modern manufacturing should expend their energy in that area; the same for alternative energy; the same for those who are experts in tourism, and so on. Based on my career I know that we participate in a global economy which means that low-skilled labor is now a commodity to be purchased as cheaply as possible. This means that we need to nurture our exceptional existing knowledge base to go as fast as we can and to focus concentrated efforts on the next success.

We have the talent to perform well today in the life science arena, but we need to educate the future leaders with the finest educational systems we can create. We need to execute our tasks with excellence, undeterred by the naysayers or those who would hinder our progress with excessive regulation. We need to work hard together, each playing to their strengths to create the diverse, flexible, responsive, powerful economic engine we all desire on this beautiful peninsula which surrounds us!

A bright future: Job leaders celebrate success

SMIC — Fri, 18 Dec 2009 12:11:00 +0000

By Alex Nixon

KALAMAZOO — Double-digit unemployment. Long-time businesses closing their doors. A lack of credit. Higher costs.

Seems there’s been little to celebrate this year when it comes to the region’s business community and economic development.

But Kalamazoo’s business leaders did just that Thursday, gathering for Southwest Michigan First’s annual Catalyst Awards, which recognize companies that expanded and added jobs in the previous 12 months.

“What makes (Kalamazoo) successful?” William D. Johnston said he is often asked when he travels outside the region.

“We’re not looking in the rearview mirror,” said Johnston, chairman of Southwest Michigan First’s board and owner of The Greenleaf Cos. “We keep looking ahead at what can be — not the problems of the past.”

So, despite the difficulties of the past year, he said, there is a bright future that includes many new and growing companies.

Ron Kitchens, chief executive officer of Southwest Michigan First, told the approximately 160 people in attendance at the Radisson Plaza Hotel & Suites that it’s easy to forget successes that happen throughout the year.

“We started this five years ago to talk about the good news,” Kitchens said. “It’s too easy to believe the sky is falling.”

There were 12 Catalyst Awards presented to the following:

HUMANeX Ventures, a Kalamazoo talent consulting and training organization that created 40 new jobs.
Mann+Hummel USA Inc., a Portage automotive supplier that pledged to make a $20 million private investment and create 200 new jobs over the next five years to make battery frame assemblies for electric vehicles.
Velesco Pharmaceuticals, an analytical and drug formulation laboratory that plans to open a manufacturing facility and office in Comstock Township where it will employ 35 people.
East Jordan Plastics, one of the largest horticultural thermoformers in North America, which relocated into a vacant factory in South Haven and created 50 new jobs.
Beckan Industries, a CNC machine company that bought a Goodwill Industries building on North Pitcher Street in Kalamazoo and will retain 18 jobs.
ADMETRx, a Kalamazoo drug discovery support company that will use a $100,000 state loan to hire two ex-Pfizer scientists.
Metabolic Solutions Development Co., which is developing new drugs to treat Type 2 diabetes and will use a $100,000 state loan to hire two ex-Pfizer scientists in Kalamazoo.
J. Rettenmaier USA, a Schoolcraft agricultural company, which completed a $10 million expansion.
Mossberg Precision Diagnostics LLC, the manufacturer of packaging equipment and materials for the life science industry, which will create 35 new jobs in Kalamazoo.
RealBio Technology Inc., which is developing and commercializing cell- and tissue-culture technology, plans to create up to 40 new jobs over five years and to make a $2 million investment in Kalamazoo.
Pfizer Animal Health, which will transfer 50 veterinary medicine researchers from its Overland Park, Kan. operation to downtown Kalamazoo in the next six months. Pfizer also invested $75 million in its downtown Kalamazoo facility.
The city of Galesburg, for receiving a $614,609 state grant to fund a widespread downtown infrastructure reconstruction project.

Kalamazoo companies land investments from capital fund

SMIC — Tue, 15 Dec 2009 14:43:00 +0000

By Mark Sanchez

The $250,000 two Kalamazoo biotech startups each received from a state capital fund that supports technology companies will help both move farther down the road to bringing their first products to market.

The funding that RealBio Technology got from the Michigan Pre-Seed Capital Fund “puts us in pretty good shape,” CEO Paul Neeb said.

RealBio Technology has now raised a little more than $2 million of the $2.5 million needed to launch its cell-culture tool for stem cell research in the first quarter of 2010, Neeb said.

Formed in June, the company is developing the Nth Degree System using technology licensed from Aastrom Biosciences in Ann Arbor. Grand Rapids-based MedBio will produce the culture tools for RealBio, Neeb said.

“From a commercialization track, we’re on target,” he said. “We’re in really good shape.”
RealBio previously received an investment from the Southwest Michigan Life Science Venture Fund that represents a large share of the $2 million raised to date, Neeb said.

WaldorfAxenic Dental Inc., part of the Apjohn Group in Kalamazoo, aims to bring its disposable dental drill to market in August 2010. The $250,000 from the Pre-Seed Capital Fund brings to $850,000 the amount the company has raised since September as it proceeds toward commercialization, CEO Mac Waldorf said.

Investors launched Axenic in late 2005 with $3.5 million in capital.

The company is presently seeking to raise another $3.5 million to continue toward commercialization and profitability in 2011, Waldorf said.

The Michigan Pre-Seed Capital Fund award is “a wonderful catapult to continuing the final product-development work,” he said.

“It was imperative funding that really allows us to leap out of the blocks in the development path,” Waldorf said.

Axenic Dental projects it can sell 300,000 to 400,000 units during the first launch year, or from August to December 2010, followed by 1 million units in the subsequent year and 2 million to 3 million in years three and four.

RealBio and Axenic were among four companies that last week received a combined $924,000 from the Pre-Seed Capital Fund, a collaborative effort of Michigan’s SmartZones, administered by Ann Arbor SPARK.

Contact Mark Sanchez at marks@mbusinessreview.com

Vestaron Named 'TiE Midwest 20' Winner

SMIC — Tue, 08 Dec 2009 11:10:00 +0000

KALAMAZOO, Mich., Dec. 8 /PRNewswire/ -- Vestaron Corporation has been named a "TiE Midwest 20" winner in the life sciences category, the company announced today. The award was presented at the TiECon Midwest annual conference in Dearborn, Mich. on October 23. The winners were selected by a combination of public opinion polls and experienced industry judges. Vestaron, based in Kalamazoo, Mich., is developing a new generation of insecticides based on the peptides spiders use to kill insects. TiE is a global, not-for-profit organization dedicated to fostering entrepreneurship.

John L. McIntyre, Ph.D., president and CEO of Vestaron said, "We are honored to be selected as a 'TiE Midwest 20' winner. TiE Detroit is a well known and respected promoter of entrepreneurship. Their recognition of our company is validation of the technology we are developing and the business plan we have in place to bring the next generation of pesticides to the marketplace."

TiE is a global, not-for-profit, non-political, and non-religious organization dedicated to fostering entrepreneurs across its international network. Since its founding in 1992, TiE has grown to become the world's largest organization for entrepreneurs and professionals, with membership spread across 53 chapters in 12 countries.

Vestaron is developing a new generation of insecticides using peptides from spiders. The company's technology is based on ground-breaking research conducted at the University of Connecticut. Over 50 unique, insecticidal spider peptides have been identified. This patented technology is exclusively licensed to Vestaron. Products under development have a unique mode of action, are highly effective against insects and related pests and are harmless to non-target species, including humans. Target markets include agriculture, animal health and specialty non-crop uses such as household insects. Vestaron products will be ideally suited for the environmentally conscious twenty-first century. www.vestaron.com

State wants to groom the next generation of venture capitalists

SMIC — Mon, 07 Dec 2009 11:08:00 +0000

LANSING -- Seeking to create a new generation of home-grown venture capitalists in Michigan, a state economic development panel is looking to start a pre-seed capital fund to mentor and support young investors.

Citing the pressing need for more early-stage capital in Michigan, and the inability to fully fund another business-plan competition next year, the Michigan Strategic Economic & Investment Committee is planing to create an ``accelerator fund'' that would foster new venture investors and entrepreneurial talent throughout the state.

The accelerator fund would work with existing venture capitalists in the state to groom new investors to form their own venture funds and invest in early-stage companies in Michigan. It would use money from the state's 21st Century Jobs Fund to support two new funds of $6 million each that would seed the creation of the new venture funds.

The panel aims to launch the accelerator fund in early 2010 and hopes to spur the creation of seven to 10 new investors and 12 to 24 new companies over a three-year window, according to a Michigan Economic Development Corp. staff memo this week to SEIC Board members.

``We're looking for young people who would like to get into that arena and would like to work with successful venture capital firms,'' said SEIC Board Chairman Mike Jandernoa, a principal at Bridge Street Capital Ventures in Grand Rapids. ``We've been undercapitalized for a long, long time.''

The SEIC Board reviewed a proposal this past week to create the accelerator fund and is working out the final details, Jandernoa said. Action to proceed with the initiative could come in February.

As proposed, the accelerator fund would accept applications from non-profit organizations associated with existing venture funds that have an affiliation with a university, such as Ann Arbor SPARK or Automation Alley in Oakland County and perhaps the Kalamazoo-based Southwest Michigan Life Science Venture Fund, Jandernoa said.

The board began focusing on starting an accelerator fund after the state's fiscal crisis limited funding for a traditional business plan competition.

``The state's in a real financial crisis and the money is just not there,'' Jandernoa said.

A report published last spring by the Michigan Venture Capital Association said efforts to transition Michigan's economy are at risk without an increase in venture capital in the state.

About $290 million was targeted at Michigan companies, far short of the current $1.6 billion ``entrepreneurial demand,'' states the MVCA's annual Michigan Venture Capital Report.

Four Michigan Companies Receive Support From Michigan Pre-Seed Capital Fund

SMIC — Mon, 07 Dec 2009 10:22:00 +0000

Contact: Elizabeth Parkinson

734.761.9317

ANN ARBOR - Four more Michigan companies recently received investments from the Michigan Pre-Seed Capital Fund. To date, 38 Michigan companies have received seed funding from the Michigan Pre-Seed Capital Fund, a collaborative effort of Michigan’s SmartZones. Combined, Mandy & Pandy, Algal Scientific, Axenic Dental, and RealBio Technology received $924,000 from the Michigan Pre-Seed Capital Fund.

“The Michigan Pre-Seed Capital Fund is a great resource for helping start-up businesses grow in our state,” said Skip Simms, Michigan Pre-Seed Capital Fund administrator. “The Michigan Pre-Seed Capital Fund is a resource that not only helps start-ups get launched in the state, but also keeps them here.”

Each of the Michigan Pre-Seed Capital Fund recipients will use the funding to support commercialization efforts. Specific innovations include:

o Mandy & Pandy teaches kids Chinese in a fun and easy way through books, CDs, DVDs, toys, fashion, and television. Similarly, Mandy & Pandy teaches English to Chinese-speaking children.

o Algal Scientific’s proprietary technology provides advanced nutrient removal for municipal and industrial wastewater allowing customers to meet stringent EPA standards, while producing algal biomass that can be used for biofuels and fertilizer production.

o Axenic Dental has created a disposable high-speed dental drill that can be used for any procedures in the dental market where re-useable metal handpieces are currently used.

o RealBio Technology will commercialize a 3D cell culture tool within the life science industry that will transform stem cell research. The Nth Degree System is a high-value, high-margin, single use tool that will have broad acceptance initially in stem cell 'farming' and research.

The Michigan Pre-Seed Capital Fund, a collaborative effort of Michigan’s SmartZones, is an equity fund that invests in technology-based companies to support business formation and acceleration. Ann Arbor SPARK serves as the Fund’s administrator.

To qualify for the Michigan Pre-Seed Capital Fund, start-up companies must be based on a technology in one of the state’s identified competitive technologies and have the sponsorship of a local SmartZone. In addition to SmartZone sponsorship, companies must have received grant, angel or venture capital funding as a match with the Michigan Pre-Seed Capital Fund investment.

The Michigan Pre-Seed Capital Fund is an equity investment fund that receives the same returns as the third party investor. The returns that the Michigan Pre-Seed Capital Fund receives from its investments will be redeployed by the Fund to continue its mission of helping start ups with their first round of capital.

Speakers at Future of Michigan event see opportunities in economic crisis

SMIC — Fri, 20 Nov 2009 15:54:00 +0000

By Tom Henderson, thenderson@crain.com

The mood was considerably upbeat Thursday afternoon at the annual Crain’s Future of Michigan event at the Somerset Inn in Troy.

A year ago, with the economy in free fall and credit markets frozen tighter than a schooner trapped in Arctic ice, speculation about the future meant wondering if it held a another Great Depression.

This year, the theme was: The glass is half full, and thank goodness.

While speakers didn’t sugarcoat the state’s business climate and where they think it’s heading, they had plenty of good news to talk about.

Ken Rogers, executive director at Troy-based Automation Alley, gave a rapid-fire bullet-point presentation of good news.

• Just in alternative energy, alone: Xtreme Power of Texas is spending $475 million on a facility at the former Ford Motor Co. Wixom site; Clairvoyant Energy of California is spending $857 million on a photovoltaic fabrication plant at the same site, which will make it the largest renewable energy tech park in the country; and A123 Systems Inc. out of Massachusetts is spending $600 million on advanced battery facilities in Livonia, Romulus and Brownstown Township.

• The state is becoming a recognized hub for life sciences, with former ex-Pfizer Inc. employees having spun off dozens of companies involved in drug discovery; the growing MichBio trade organization, the CMU Research Corp. in Mt. Pleasant to commercialize nanotech-related drug discovery and Western Michigan University’s Biosciences Research and Commercialization Center in Kalamazoo. In all, Rogers said, there are 540 life science companies in the state with 32,000 employees.

• TARDEC, TACOM and the National Automotive Center are bringing in billions of dollars for tens of thousands of contracts and tens of thousands of new jobs. The U.S. Army and the Marines are consolidating their national robotics research and manufacturing facilities in Macomb County. To support something called the Diminished Parts Program, which finds new suppliers to replenish military equipment made by suppliers no longer in business, Automation Alley is opening an office in Warren.

• Film production continues to pour into the state, with major studios to be built in Allen Park and Pontiac.

“Do we have a future in Michigan? If you ask Automation Alley, the answer is: Absolutely,” said Rogers.

Scott Graybeal vice president of sales with California-based Oerlikon Solar USA, which will build California-based Clairvoyant Energy’s photovoltaic plant, said Michigan was a natural for the new silicon-based fabrication facility.

He said the auto industry is good at aligning with technologies in the photovoltaic industry, and there is a ready pool of engineers available as hiring ramps up.

“The talent pool in Detroit is more than ready to handle PV manufacturing,” he said.

Jim Scapa, president and CEO of Troy-based Altair Engineering Inc.; Norma Wallis, CEO of Inkster-based Livernois Vehicle Development; and Joe Hoffman, sales manager for the defense contractor BAE Systems; spoke on a panel titled Why Michigan?

All praised the local talent pool.

Scapa and Wallis, though, as heads of longtime Michigan companies, said they wished the state put as much energy into supporting local companies as it does to lure out-of-state companies here.

Scapa said he has been lobbying the MEDC to support a new manufacturing facility for Ilumisys Inc., a growing maker of indoor LED lighting. He said Ontario has been far more receptive in offering support for a new plant.

“I’m very committed to Michigan,” said Scapa. “But sometimes there’s a sense of frustration. You feel like you’re fighting the fight alone.”

“It’s great to bring new companies into Michigan and give them tax breaks,” said Wallis, “but it’s disheartening for a company that’s been here to always face tax increases.”

Despite some disgruntlement, Scapa said: “I think we’re poised for a renaissance in Michigan. There is opportunity out of crisis.”

Steve Melnyk, a professor of operations and supply chain management at Michigan State University, gave a witty and well received presentation on opportunities that present themselves by understanding and managing the complex world of the supply chain.

It can, he said, be “the key to weathering the storm.”

Christopher Webb and David Skiven gave an update of the ongoing work by the Engineering Society of Detroit Institute to bring stakeholders together to solve energy, water and transportation issues.

The presenting sponsor for the event was Huntington Bank. Platinum sponsors were the MEDC and Wayne County.

Connecting People, Ideas and Opportunities

SMIC — Mon, 09 Nov 2009 21:49:00 +0000

By Stephen Rapundalo
President and CEO, MichBio

Michigan's biosciences industry represents a significant and growing component of the state's economy.

With well over 550 companies and almost 100,000 persons employed directly and indirectly, the industry represents $9.6 billion of Michigan's GRP and almost $500 million in state tax revenue.

Michigan's biosciences community spans multiple sub-sectors – like pharmaceuticals and therapeutics, medical devices and equipment, diagnostics, research products, bio-based technologies, informatics and clinical research – and is rich in assets, capabilities, technologies and talent. The state also boasts a vast array of resources and support programs available to the biosciences industry.

MichBio, the statewide biosciences trade association, acts as the complete source for connections and referrals, information, promotion, resources, and public policy aimed to help drive bioscience industry growth in Michigan. The organization works at the local, regional, state and national levels to connect and network industry people with others; help forge relationships that lead to new ideas, business opportunities and investments; and generally promote and raise awareness of what the industry offers in Michigan.

One of the best ways that MichBio provides connections is through our Preferred Provider Program. MichBio members can take advantage of bottom-line savings by connecting with various vendors and service providers. The association offers deals for lab supplies to liability insurance, liquid gases to business intelligence, scientific journals to office supplies.

A new and exciting provider is e-Zassi, an online community and innovation assessment platform dedicated to affording medical device industry users a streamlined way of enabling networking, collaboration and partnering of organizations and their technologies.

Numerous MichBio-hosted educational and networking programs provide the state's biosciences industry with many opportunities for learning and connections. The MichBio Expo & Conference is the state's premier gathering of life science professionals and providers. It includes business partnering meetings, an emerging business showcase spotlighting young start-ups for investors, and sessions with expert speakers geared to educating and adding operational value.

MichBio also partners with local organizations like the Southwest Michigan Innovation Center and Ann Arbor Spark to host the Kalamazoo BioInnovation Forum and BioArbor networking events, and along with these groups and others like the West Michigan Science & Technology Initiative, helps connect within and across regions in the state.

MichBio is an ardent promoter of its members and the whole industry by providing information about them to the marketplace and thus supporting their business growth collectively and individually.

That's why we started a publication focused exclusively on Michigan's biosciences industry – BioMatters. This bi-annual magazine showcases the diversity of our companies and the industry sub-sectors they operate in, the many assets and resources available in Michigan to support the industry, and the exciting technologies and discoveries emerging from our academic research institutions that fuel the birth of entrepreneurial ventures.

BioMatters has now gone digital and is made available nationwide, especially to the venture capital world so that we can raise awareness of potential investment opportunities.

In addition, MichBio has been working closely with the Michigan Economic Development Corporation (MEDC) to connect biotech companies and entrepreneurs to services, resources, incentives, networking opportunities and investment capital. This coming year, as we did in 2009, the MEDC and MichBio are collaborating to develop Michigan's trade pavilion for the 2010 BIO International Conference.

The BIO Conference is the largest gathering in the biotechnology space, and affords a significant opportunity to showcase Michigan's industry, its companies and their capabilities, and economic development resources.

Manufacturing diversification is the collective mantra here in Michigan as the state seeks to expand into a knowledge-based economy. For five years now, MichBio has been educating manufacturing suppliers who are looking to shore up business lost from the automotive industry about the opportunities and challenges in expanding their technologies and capabilities into the exploding biomedical technology sector.

We've co-presented day-long seminars on manufacturing diversification with groups like the Oakland County Office of Economic Development and continue to present manufacturing tracks as part of the annual MichBio Expo & Conference, where suppliers get a chance to meet and hear from medical technology OEMs.

Earlier this year, MichBio formed a collaborative partnership with the Automotive Industry Action Group (AIAG), a non-profit group comprised of OEMs, parts suppliers and service providers involved in the automotive supply chain with the goal of better connecting our respective memberships and creating more business expansion opportunities.

In spring 2010, MichBio hopes to grow its bioscience resource database by including listings of manufacturing suppliers with capabilities suitable for the medical device OEMs. This should create a robust tool for anyone to quickly identify bioscience companies, suppliers or service providers with the required qualifications and services of interest.

Connecting members and the biosciences community to public policy issues and decision makers that govern them has become an increasingly important role for MichBio over the last year. MichBio was critical in the formation of the Michigan Biotechnology Legislative Caucus and the more recently invoked State House and Senate subcommittees focused exclusively on the biosciences, all of which has given the organization a visible role in Lansing.

Similarly, in collaboration with national groups like BIO, PhRMA, AdvaMed, and MDMA, to name a few, MichBio interfaces with Michigan's congressional delegation on critical industry issues.

In short, MichBio is the single unifying voice and statewide representative for the life sciences industry in Michigan. It is committed to creating high-value opportunities for education, collaboration, networking, and advocacy, and by providing services and resources that foster a flourishing environment for bioscience businesses. LW

Rewriting the drug development model

SMIC — Mon, 09 Nov 2009 21:49:00 +0000

By Nathan Peck | LabWork
npeck@mibiz.com

KALAMAZOO - Inside laboratory space in the Southwest Michigan Innovation Center, Metabolic Solutions Development Co. may be changing the way future drugs will be brought to market.

The startup, founded by scientists Rolf Kletzien and Jerry Colca, former Pfizer Inc. scientists, have drugs in various stages of development that could tip the scales of the drugs to treat diabetes in their favor.

Two drugs dominate the market for the treatment of type-2 diabetes: Takeda Pharmaceutical's Actos and GlaxoSmithKline's Avandia, accounting for nearly $6 billion
in annual sales. Metabolic is betting that their compound will avoid the side-effects of the industry leaders, and will be delivered at a significantly lower price than their competitors.

The company has centered its focus on the development of a drug to treat the precursor to diabetes, metabolic syndrome, which scientists have linked to heart disease, strokes, and the onset of Alzheimer's disease.

The family of drugs under development by Metabolic Solutions, known as PPAR-sparing thiazolidinediones, target a specific protein in the mitochondria of human cells. The compounds that Colca and Kletzien had studied in the 1980s were discovered more than 25 years ago, but never were brought to market, due in part to mergers and acquisitions within the pharmaceutical industry. The duo hopes that the compound and second-generation analogs will avoid the current side effects of diabetes medication.

Colca said that they fought against institutional pressures to abandon the research into these compounds, because by 1993, Upjohn was moving out of the chronic disease market, instead targeting the development of drugs to treat acute diseases. Colca said that compounds he and Kletzien had in development were dropped, compounds that had been patented, and this has raised doubts with potential investors.

In 2003, Kletzien was transferred to St. Louis, where he moved to set up laboratory space for Pfizer, and later convinced Colca to join him. Two years later, the duo were laid off and looking at their options when they turned to the diabetes treatments that we mothballed more than a decade earlier.

"We thought we could develop this into viable treatments on our own," Colca told LabWork. "The question is always: If it was such a good idea, why did Pfizer pass on it? We knew then that this was the future of diabetes treatment."

Colca and Kletzien went all in on the drug's future, betting their severance from Pfizer, $125,000 apiece, to found Metabolic Solutions. Operating out of a spare bedroom in Colca's condominium, the two have built the company to a point where its main compound is entering Phase II clinical trials and they now employ 10 people. Metabolic Solutions now occupies lab space at the Southwest Michigan Innovation Center.

The duo considered starting the company in San Diego, Boston or St. Louis, but it was continued local connections that kept them coming back to Kalamazoo. Whether it was a lack of access to capital (St. Louis), lack of expertise in their field (Boston) or high operating costs (San Diego), Kalamazoo was at the top of the short list of startup locations.

"There is a lot of expertise that is concentrated in the area," Colca said. "No one has the concentration of pharmaceutical talent like Michigan. Everything we needed was in Kalamazoo."

Metabolic Solutions' partners prove Colca's point. The firm sends its compounds just down the road in the Business Technology and Research Park on Western Michigan University's Parkview Campus to Kalexsyn for production. Toxicology work is done by MPI Research in Mattawan, and Metabolic uses more than a dozen Michigan biotech firms for its work.

The potential of Metabolic's compound has been recognized by the Alzheimer's Drug Discovery Foundation (ADDF). It has supported the study of PPAR-sparing insulin sensitizers as a potential treatment for Alzheimer's disease, awarding a $100,000 grant to help fund a study in mice.

ADDF funding will support a collaboration between Dr. Douglas Feinstein at the Jesse Brown VA Medical Center and University of Illinois at Chicago and MSDC. Feinstein's research focuses on neurodegen-erative diseases while MSDC is developing novel treatments for type 2 diabetes and related metabolic diseases.

"Initial findings in our ongoing research suggest that some insulin sensitizers, including MSDC's lead compound MSDC-0160, currently in Phase II studies for the treatment of type 2 diabetes, might slow down the buildup of plaques in the brains of mice," said Feinstein in a statement.

Colca says the firm is looking to raise more than $30 million in capital to fund Phase II human trials, but Metabolic's sights are set on taking the drug to market. He hopes to draw other small pharmaceutical firms with drugs in development to Kalamazoo and rewrite the industry's business model, but realizes that the marketing, sales and production of a new drug will take considerable capital.

"Our company has a huge upside, but you have to be able to raise the money to carry this all the way through to the market," Colca said. "Big pharma still is waiting on the sidelines, waiting until you can't go any further with development or raising capital to pick up the pieces at a bargain." LW

Tolera Therapeutics Files IND Application for TOL101, Appoints O'Toole to Lead Clinical Operations

SMIC — Tue, 03 Nov 2009 14:10:00 +0000

KALAMAZOO, Mich., Nov. 3 /PRNewswire/ -- Tolera Therapeutics, Inc., announced it has filed an Investigational New Drug (IND) application with the United States Food and Drug Administration (FDA) for its lead candidate, TOL101, for prophylaxis of acute rejection of solid organ transplantation. TOL101 is a novel biologic protein that is designed to safely and specifically target T cells, components of the immune system that play a key role in the rejection, and ultimate failure, of transplanted organs. Organ transplantation is often the only viable treatment for many end-stage organ diseases.

"We are extremely pleased with our progress toward bringing TOL101 to the clinic," commented John J. Puisis, President and CEO of Tolera. "This action marks an important development milestone as the company continues its drive to address the patient's need for safer and more effective immune suppression therapy. Current industry practices and pipelines offer limited and incomplete solutions to advance patient care and meet this critical need. Pending acceptance by the FDA, we intend to conduct clinical studies starting in 2010."

Tolera also announced the appointment of Leslie O'Toole to lead its clinical operations as Director, Clinical Programs. O'Toole brings over 20 years of industry experience with 16 years focusing on clinical research management. Mr. Puisis added "We're excited about adding Leslie to our dynamic team. Her depth of clinical research experience adds an important operating aspect to the organization and positions us for continued success." Prior to joining the company, O'Toole was Director, Project Management at Clinimetrics, a full service contract research organization where she was involved in over 35 studies researching drugs in numerous indications with a primary focus in oncology and immunology.

About Tolera Therapeutics: Tolera Therapeutics is a Kalamazoo, Michigan based biotechnology company and a spin-off of the Cleveland Clinic Foundation. Primary investors in the company include Southwest Michigan First Life Sciences Fund, Triathlon Medical Venture Partners, Hopen Therapeutics and the Michigan Economic Development Corporation. Building upon research done at the University of Kentucky and the Cleveland Clinic, Tolera Therapeutics is developing and commercializing therapies for the immune modulation market with the goal of addressing unmet medical needs with safer, more targeted solutions to reduce the risk of serious and toxic side effects often associated with immunotherapy. The company is focusing on commercializing therapeutic monoclonal antibody technology for the transplantation and autoimmune markets. Additional information concerning the company and its technology can be found on its website www.tolera.com.

SOURCE Tolera Therapeutics, Inc.

James Herrmann, +1-269-585-2100, info@tolera.com

Biotech firms in Kalamazoo, Saline receive loans to hire seven former Pfizer scientists

SMIC — Wed, 28 Oct 2009 13:52:00 +0000

By Bridget Beckman, MEDC

LANSING - Governor Jennifer M. Granholm today announced two more Michigan companies have been selected to receive loans in the sixth round of funding under the state’s Company Formation and Growth (CFG) fund, an initiative aimed at retaining Pfizer talent and assets in the state.

“The action taken today will enable ex-Pfizer employees to lend their skills and expertise to helping Michigan companies grow and create high-technology jobs,” Granholm said. “Creating a diversified economy depends on our ability to retain highly-skilled talent in Michigan.”

The Michigan Strategic Fund (MSF) board today approved the funding that will be used by the companies to hire former Pfizer scientists. One was approved for a loan of $200,000 and the second for a loan in the amount of $150,000. Including today’s awards, the CFG to date has approved $7.25 million in loans to a total of 34 life-science companies in Ann Arbor, Chelsea, Jackson, Livonia, Kalamazoo, Portage and Saline.

The following companies were approved for CFG loans:

Kalamazoo-based Kalexsyn Inc. is a chemistry contract research organization whose customers include pharmaceutical and biotech companies. It is a graduate of Southwest Michigan First’s life-science incubator, the Southwest Michigan Innovation Center, and occupies its own building within the Western Michigan University Business Technology Research Park. Kalexsyn plans an addition in 2010 that will double its space and accommodate additional staff. The company will use its $150,000 loan to hire three ex-Pfizer scientists.

“Southwest Michigan First thanks the state of Michigan for their continued support of the Kalamazoo region’s life-science companies,” Southwest Michigan First CEO Ron Kitchens said. “The success and continued growth of Kalexsyn is evidence of what a company can achieve in Michigan when given an opportunity.”

Research Essential Services LLC, a Saline-based contract service company, will use its $200,000 loan to lease facilities in the state-of-the-art Michigan Life Science and Innovation Center located in a former Pfizer facility in Wayne County’s Plymouth Township, purchase ex-Pfizer assets and hire four ex-Pfizer scientists.

MSF created the $8 million Company Formation and Growth fund in June 2007 to accelerate company formation and growth and job creation based on employees, technologies and high-tech equipment left behind when Pfizer closed facilities in Ann Arbor, Holland, Kalamazoo, Plymouth Township and Portage.

“Our focus on entrepreneurship is part of a concerted effort to ensure Pfizer scientists will continue to start and grow innovative Michigan biotech companies,” MEDC President and CEO Greg Main said.

Kalamazoo, Portage said to be recovering faster than rest of state

SMIC — Sat, 17 Oct 2009 16:11:00 +0000

By Al Jones | Kalamazoo Gazette
October 17, 2009, 8:04AM
KALAMAZOO — Regional economic development organization Southwest Michigan First is trumpeting the listing of the Kalamazoo-Portage area as the only metropolitan area in Michigan considered to be among U.S. communities leading the way out of the economic recession.

It was among 79 metro areas in a Thursday report by MSNBC whose data indicate it is recovering from the recession.

“The Kalamazoo region has remained steadfast in its belief of facing the nation’s economic difficulties in an optimistic manner,” Kitchens said in a press release. “The current report released by MSNBC shows the results of our positive and focused approach, as well as our ability to adjust to change.”

Kitchens is chief executive officer of Southwest Michigan First.

The Kalamazoo-Portage area was the only one of 16 Michigan metro areas to score well on an index developed by msnbc.com and Moody’s Economy.com, which they call the Adversity Index. It uses data on employment, housing starts, home prices and industrial production to label each state and each of 384 metro areas in the nation as “expanding,” “at risk of recession,” “in recession” or “recovering.”

“At a time when our nation is craving hope, Southwest Michigan must stand proudly and enlighten others on the opportunities and advantages in our region,” Kitchens said.

Of the 384 metro areas studied, 79 were indicated to be in recovery according to August data on jobs, manufacturing and housing. Of the remaining metros, 270 have a “moderating recession.” The final 35 were considered to be in full recession.

The listing can be seen online at http://tinyurl.com/KalRecovery.

Original article

Metabolic Solutions Development Company To Test Potential Treatment for Alzheimer's

SMIC — Mon, 12 Oct 2009 15:22:00 +0000

Metabolic Solutions Development Company (MSDC) announced today that it has received a $100,000 grant from the Alzheimer's Drug Discovery Foundation (ADDF) to support the evaluation of PPAR-sparing insulin sensitizers as a potential treatment for Alzheimer's disease.

ADDF funding will support a collaboration between Dr. Douglas Feinstein (Jesse Brown VA Medical Center and University of Illinois at Chicago) and MSDC. Feinstein's research focuses on neurodegenerative diseases while MSDC is developing novel treatments for type 2 diabetes and related metabolic diseases.

"Initial findings in our ongoing research suggest that some insulin sensitizers, including MSDC's lead compound MSDC-0160, currently in Phase II studies for the treatment of type 2 diabetes, might slow down the buildup of plaques in the brains of mice," said Feinstein. "These mice are engineered to develop plaques similar to those found in the brains of patients with Alzheimer's. Positive results from these studies would encourage further investigation of SDC-0160 in the treatment of Alzheimer's."

Initial findings were presented at the 10th Annual International Conference on Alzheimer's Drug Discovery (www.alzdiscovery.org) in Jersey City, N.J. and demonstrated that a one-month treatment of MSDC-0160 can reduce both the number and size of the amyloid plaques in mice. Ongoing studies are evaluating whether the compound can improve the cognitive deficits in the Alzheimer's mouse model.

"We are very enthusiastic about the potential of MSDC's compound for Alzheimer's disease," said Howard Fillit, MD, ADDF's executive director. "Our relationship is another demonstration that venture philanthropy funds can provide a critical catalyst for innovative drug discovery research conducted by biotechnology companies such as MSDC."

Earlier this year, MSDC reported that a Phase IIa clinical trial in type 2 diabetic patients showed that MSDC-0160 can improve insulin response and lower glucose in individuals with type 2 diabetes without producing the weight gain seen with currently marketed PPAR-activating insulin sensitizers. MSDC-0160 and MSDC's other insulin sensitizers work through a novel target discovered by the company's founders while minimizing PPAR activation.

Numerous scientific studies have shown a link between type 2 diabetes, cognitive impairment and Alzheimer's disease. Some studies have implied that measures to prevent or control diabetes may lower the risk of dementia and suggested that certain diabetes drugs should be tested to find out whether they can help Alzheimer's patients.

"This funding from the ADDF is an important first step in what could be a key development in the treatment of Alzheimer's," said Jerry Colca, president and chief scientific officer of MSDC. "For MSDC, if our compounds can reverse cognitive impairments in animal models, this may have important implications for the treatment of type 2 diabetes as well."

About Metabolic Solutions Development Company:
Metabolic Solutions Development Company (www.msdrx.com), based in Kalamazoo, Mich., is developing innovative therapeutics using a different pharmacological path to treat type 2 diabetes. This new approach seeks to improve the efficacy of treatment by freeing patients from the adverse side effects of current treatments, including edema and weight gain.

The company's scientific strategy is built on a historical understanding of insulin-sensitizers and its unique insight into the mechanism of insulin-sensitizing pharmacology. The company believes that the result will be a new generation of superior, safer drug therapies.

About Alzheimer's Drug Discovery Foundation (ADDF): ADDF (www.alzdiscovery.org) is the only public charity whose sole mission is to accelerate the discovery and development of drugs to prevent, treat and cure Alzheimer's disease, related dementias and cognitive aging. We award grants to leading scientists conducting breakthrough drug discovery research. ADDF uses a venture philanthropy model to bridge the worldwide funding gap between basic research and later-stage development, using any return on investment to support new research. Since 1998, we have received over 2,000 requests to fund new ideas for Alzheimer's drugs. For all, we provided expert reviews and recommendations to advance their programs. We granted more than $36 million to fund more than 270 Alzheimer's drug discovery programs in academic centers and biotechnology companies in 15 countries. The ADDF website
explores headline news on Alzheimer's disease, updated weekly.

Vestaron Corporation hopes funding from the state will create 12-15 jobs

SMIC — Wed, 15 Jul 2009 12:08:00 +0000

KALAMAZOO -- A Kalamazoo company says some $1.8 million it received from the state Tuesday will help create jobs and develop the next generation of insecticides. John L. McIntyre, president and chief executive officer of Vestaron Corporation, said the investment should help the young company reach its goal of getting a line of insecticides on the market by 2012. Vestaron Corporation -- a bio-tech firm based at the Southwest Michigan Innovation Center -- has isolated compounds in spider venom that are being used to create a chemical that is harmful to pests and insects but safe for humans and animals. Vestaron Corporation expects to expand its operations by hiring 12 to 15 full-time employees over the next few years including two or three in 2009, McIntyre said. Vestaron Corporation currently employs eight full-time workers. New jobs will be in research and business operations. "We are a fairly rapidly growing company at this date in time," McIntyre said. Vestaron Corporation's products are targeted at agriculture and home-garden industries, but are designed for defense against household insects as well. "You might think, 'What do spiders do?'" McIntyre asked. "They kill insects." The venom compounds used by Vestaron Corporation are called the Omega Peptide, the Kappa Peptide and the Hybrid Peptide. They are three of 1,200 discovered and about 50 studied in spider venom by Vestaron Corporation researchers, McIntyre said. "One could arguably use any spider; we happen to use the Australian Blue Mountains Funnel-Web Spider," McIntyre said. Once isolated, the compound's identity is copied, concentrated and mass-produced. "We only have to squeeze the spider once," McIntyre said. "And if you saw him you'd know why, because he's kind of mean-looking."

The state award comes from the Michigan Strategic Fund, a board of the Michigan Economic Development Corp. "The second round of funding (the round Vestaron Corporation applied for) was made available only to for-profit companies that would create jobs in the near future," said Bridget Beckman, an MEDC spokeswoman. Including the state award, Vestaron Corporation hopes to raise between $8 million and $12 million for its second round of financing.

The company was born in 2005 out of research at the University of Connecticut Research and Development Corp.

Contact Blake Thorne at bthorne@kalamazoogazette.com or 388-2740.

State to invest $1.8M in Kalamazoo bio-tech firm, Venomix

SMIC — Tue, 14 Jul 2009 12:14:00 +0000

KALAMAZOO -- A Kalamazoo company working to develop a new generation of insecticides based on the venom of spiders was expected to receive an investment of $1.8 million from the state this morning.

The directors of the Michigan Strategic Fund were expected to announce this morning in Lansing that it has made that investment in convertible Series B shares in Vestaron Corporation Inc.

Vestaron Corporation is one of a cluster of bio-tech firms to find a home at the Southwest Michigan Innovation Center in Kalamazoo. It was a startup at the University of Connecticut Research and Development Corp. in 2005 before splitting away to develop products that can be commercialized.

It relocated to the Innovation Center, inside Western Michigan University's Business Technology and Research Park, in 2007.

Convertible shares are considered preferred stock that an investor can buy in a private company, then convert into common shares at a later time, and under prescribed circumstances. That is usually done to benefit from the growth in common-share prices, such as when the company is sold. "Series B" refers to the company's second round of share offerings to investors. "Series A" shares are sold in the first stock offering.

According to information provided by Vestaron Corporation, the Strategic Fund's investment was recommended by the state's development agency, the Michigan Economic Development Corp.

"We are extremely pleased to have the support of the MEDC and the state of Michigan, and have the MSF as an investor in Vestaron Corporation," John L. McIntyre, president and chief executive officer of Vestaron Corporation, said in a press release. "This investment recognizes the business- and job-creating potential of our insecticide technology."

In the press release, MEDC President and CEO Greg Main said, "Strong public-private partnerships are critical to helping high-tech companies commercialize their technology, gain market share and grow new jobs. Vestaron Corporation is on the cutting edge, and we are proud to partner with them to ensure their long-term growth and success in Michigan."

According to Vestaron Corporation, the products under development are intended to be effective against insects and pests, while being harmless to nontarget species, including humans. They are being targeted for use in the agriculture and animal-health industries, as well as for specialty noncrop uses such as household insects.

Contact Al Jones at ajones@kalamazoogazette.com or (269) 388-8556.

Kalamazoo company developing diabetes treatment secures $10 million

SMIC — Mon, 04 May 2009 15:04:00 +0000

KALAMAZOO -- Metabolic Solutions Development Co. raised $10 million in its most recent fundraising effort. The Kalamazoo-based drug-development startup is running clinical trials on a new treatment for Type 2 diabetes. Founded in 2006 by former Upjohn Co. scientists Rolf Kletzien and Jerry Colca, Metabolic Solutions secured $9.25 million from investors and a $1.36 million grant from the National Institutes of Health, according to a company statement. Metabolic Solutions officials have said they hope that their compound will be safer and more effective than current Type 2 diabetes treatments, Actos and Avandia. Those two drugs had 2007 sales of more than $5 billion.

Posted by Alex Nixon | Kalamazoo Gazette April 30, 2009 16:35PM

Southwest Michigan Innovation Center to celebrate: incubator has hatched more than two dozen businesses in five years

SMIC — Wed, 04 Mar 2009 19:24:00 +0000

The anniversary of the Southwest Michigan Innovation Center is to be marked Thursday afternoon with a ceremonial dedication of an 11,000-square-foot expansion of the facility.

Located at 4717 Campus Drive, in Western Michigan University's Business Technology and Research Park, the Innovation Center has become home to more than two dozen start-up companies focused on discovering and commercializing products, services and technologies that advance human health care.

Many of those started since the center was built in July 2003 are the brain-children of scientists-turned-entrepreneurs. And those scientists were among more than 1,200 workers to lose their jobs as New York-based Pfizer acquired Pharmacia Corp. and trimmed its local work force.

"The Kalamazoo region should be thankful to the leaders who had the foresight to create the life-science accelerator," Rob De Wit, president and chief executive officer of the Innovation Center said in a written statement.

Ron Kitchens, chief executive officer of Southwest Michigan First, said, "We've had two dozen companies that have been created, incubated and nurtured and are successful today."

Southwest Michigan First provides marketing and other administrative resources to the center.

"I think the companies will tell you they would not have existed and that (their success) would not have happened without it," Kitchens said of the center.

The center's roster of growing firms includes companies like:

• ProNAi Therapeutics, a biopharmaceutical company involved in developing anti-cancer drugs.

• Proteos, a contract research organization that produces purified proteins and peptides for research.

• Micromyx LLC, a contract research firm that provides scientific support services to companies testing and marketing anti-bacterial drugs.

The center's hatchlings include:

• Kalexsyn Inc., a company that provides chemical-research services to pharmaceutical and biotechnology companies.

• PharmOptima LLC, which provides drug discovery consulting and laboratory services.

• AureoGen Biosciences Inc., a biotech company focused on the development of new antibiotics to treat drug-resistant bacterial and fungal infections. It graduated from the Innovation Center in October 2006. Kalexsyn and PharmOptima graduated in late 2007.

The Innovation Center was built at a cost of $12.5 million. The building expansion is a $2 million project. But renovations that include heating and air-conditioning improvements, bring that project to about $3.5 million.

Story by Al Jones, Kalamazoo Gazette: ajones@kalamazoogazette.com or 388-8556.

Southwest Michigan Innovation Center announces leadership change

SMIC — Mon, 26 Jan 2009 10:35:53 +0000

The Southwest Michigan Innovation Center's Board of Managing Directors has announced Robert De Wit, Ph. D., as its President and Chief Executive Officer. As the leader of the Southwest Michigan Innovation Center, De Wit will be responsible for day-to-day operations of the 58,000-square-foot life science accelerator, the tenancy of its client companies and community relations.

De Wit joins the Southwest Michigan Innovation Center with over 25 years of experience in life science research and development. For the past twenty years, he served in various leadership roles at Upjohn/Pharmacia/Pfizer, the most recent being as Executive Director of Drug Safety Research & Development and Pfizer Global Research & Development Site Lead at Pfizer, Inc. His international experience includes assignments in both Japan and the United Kingdom. Previously, he worked at Parke-Davis and Warner Lambert. DeWit holds a Doctor of Philosophy (toxicology) degree from the University of Michigan at Ann Arbor and a Bachelor of Science Degree from Calvin College in Grand Rapids.

"The Southwest Michigan Innovation Center has been very successful in attracting, nurturing and graduating emerging life sciences companies. The Center's leadership has been instrumental in helping its tenant companies through their early growth phases. As our new CEO, Rob brings a long history of pharmaceutical development, collaboration and networking which will further develop the Center's capabilities. Rob is a proven leader in the industry and will work tirelessly to further advance the success of the Innovation Center and its companies," said Donald Parfet, Chairman of the Managing Directors of the Southwest Michigan Innovation Center and Managing Director of the Apjohn Group, LLC.

"To say that we are excited to have Robert De Wit take on the leadership role at the Southwest Michigan Innovation Center is an understatement," said Ron Kitchens, Chief Executive Officer of Southwest Michigan First. "The respect that the life science community holds for him bodes well for the Kalamazoo Region and brings tremendous opportunities for both current and future tenants at the accelerator. His skill set will undoubtedly invigorate the facility and bring heightened credibility to what has become one of the hallmarks of the Kalamazoo Region's life science community." The Southwest Michigan Innovation Center opened in 2003 under the guidance of Southwest Michigan First in order to provide wet lab space to entrepreneurs starting their own life science companies. The accelerator was one of the tools employed by the regional economic development group as a response to Pfizer's downsizing of its Kalamazoo operations. The Southwest Michigan Innovation Center's model is to provide subsidized lab space to a start-up company as it strengthens its scientific product, builds a viable market base and grows the financial capital allowing it to "graduate" to its own facility.

To date, the accelerator has contributed to the formation and growth of over twenty companies, which employ over 150 individuals and contribute over $13 million annually to the local community. Three companies originally housed in the facility have graduated to their own space - AureoGen Biosciences, PharmOptima, LLC and Kalexsyn, Inc.

About the Southwest Michigan Innovation Center
The Southwest Michigan Innovation Center is a 58,000 square-foot incubator/accelerator designed to provide wet-lab space, access to venture funding, proximity to Western Michigan University resources and business services to emerging companies in life science industries. The facility is located at the Western Michigan University Business Technology Research Park in Kalamazoo, a state-designated SmartZone. Tenants in this state-of-the-art and advanced facility share space, equipment, common areas, managerial and technical assistance. More information about the Southwest Michigan Innovation Center can be www.kazoosmic.com.

About Southwest Michigan First
Southwest Michigan First is the catalyst stimulating growth across the Kalamazoo Region. Whether you're a site selector, an investor, an entrepreneur or part of an existing company looking to grow, Southwest Michigan First has the resources and expertise to assist you in identifying and surpassing your goals. For more information, visit www.southwestmichiganfirst.com.

Newcomers Find Michigan Has Much to Offer

SMIC — Mon, 24 Nov 2008 13:05:00 +0000

Once a mainstay in the biosciences hotbed of northern California, Emiliem, Inc. is now headquartered in the west Michigan community of Kalamazoo. Created by Grand Rapids native and highly respected scientist Dale Johnson, Emiliem is a developmental stage biotechnology company, focusing on the discovery and development of molecularly targeted oncology drugs and other proliferate and inflammatory diseases. It recently signed an exclusive licensing agreement with the National Institutes of Health for the world-wide rights to develop and commercialize a series of compounds that modulate key biological pathways that are important in the progression of cancer and inflammatory diseases.

Emiliem was doing just fine in Emeryville, CA, says President and CEO, Johnson, who realized his company could do even better in Kalamazoo, after talking to David Zimmermann, CEO of Kalamazoo’s own start-up, Kalexsyn. Johnson also is president of ddplatform LLC, a biotechnology incubator and technology generator that played a major role in Emiliem’s formation. “David came out to California and showed us what (Kalamazoo) was doing,” says Johnson who then did his due diligence and moved Emiliem’s headquarters to Kalamazoo nearly three years ago.

“We were convinced that we could create a ‘virtual’ approach to discover and develop new molecular targeted therapeutics,” he says. “Other companies were using this approach for drug development, and we wanted to be the first group that combined both discovery and development in this mode.” Emiliem operates a business hub in San Francisco that provides it with business law, intellectual property and financial support. It also owns a commuter IT hub in Emeryville, across the Bay Bridge from San Francisco, that serves as the company’s direct link into Bay area universities, particularly offices of technology transfer, and other biotechnology companies with whom it discusses collaborative initiatives. Johnson says he was looking for an “on-the-ground” R&D hub, allowing Emiliem to expand as it approached clinical trials with its lead compounds. “We assessed all innovation centers that we felt were appropriate and in operation at that time,” he says, eliminating the San Francisco Bay area, India and China’s east coast. “Since a great deal of our collaborative and service work was being done in the Midwest (Michigan collaborators include Kalexsyn, MIR Preclinical Services and Van Andel Research Institute), we searched for a convenient location that also had experienced people in pharmaceutical R&D.

Southwest Michigan turned out to fit the requirements very nicely.” State money helped Emiliem, which received a Pfizer retention loan, as well as pre-seed investment money from Ann Arbor SPARK. The company hired two former Pfizer/Pharmacia/Upjohn employees, Diane Beuving and Donna Romero. “Finding two new members of this caliber for our management team says it all,” Johnson adds. Paul Neeb from Southwest Michigan First spearheaded the state loan and Sandra Cochrane, then the COO of the Southwest Michigan Innovation Center, and Skip Simms of Ann Arbor SPARK spearheaded the pre-seed investment. What “really had the most influence on our decision,” Johnson says, was the continuing contact he had with Cochrane. It didn’t hurt Michigan’s chances that Johnson is from Michigan and holds three degrees from U-M, including a PhD in toxicology where he was an AFPE Fellow. He received a Bachelor of Science degree and Pharm.D degree, completing a clinical pharmacy residency and receiving the Roche National Research Award and the Squibb National Resident of the Year Award.

Johnson has 30 years of experience in biotechnology and pharmaceutical research and development activities, all while working for a who’s who of American science companies. He has led and managed groups ranging from small units in start-up companies to multi-national units in large corporations. He’s participated in the research and development of more than 100 compounds, of which 15 have become marketed healthcare medicinal products and vaccines in the United States, Japan and Europe. Johnson was vice president of drug assessment and development at Chiron Corp., also in Emeryville, when he decided in 2005 to leave Chiron to start Emiliem. He was joined by colleagues Sucha Sudarsanam and Edwin Ching. They incubated Emiliem, using ddplatform, creating intellectual property and proprietary software. Despite being happily ensconced in Kalamazoo, Johnson clearly sees that money will determine the future of biomedical research in Michigan.

Start-up life science companies that discover and develop drugs do not fit the standard business model of the state, he says. That’s because unlike manufacturers, “life sciences companies are long-haul companies that generate no short term revenues, manufacturing or commercialization.” Factor in lengthy and costly clinical drug trials that could lead nowhere and it’s obvious why investors shy away from putting their money into start-up companies, he says. Johnson advises start-up companies to get sufficient capital to ensure a realistic exit strategy and make sure there’s an understanding of how to estimate company valuation at exit.

The perfect place for Midwest collaborations

SMIC — Wed, 22 Oct 2008 15:33:27 +0000

In this week's Business First segment, Dale Johnson, chief executive officer of Emiliem, Inc., talks about the ventures that his company is currently working on.

Emiliem an oncology research and development firm, designs drugs from a computer technology stand point. The company starts by selecting targets and biological pathways it considers to be relevant in a number of cancers, examines possible inhibitors to these targets and then designs or acquires efficacious compounds.

Exciting things are happening at Emiliem. Not only does the company have a drug candidate that will actually go into clinical trials within a year, Emiliem has also formed a joint venture with a technology platform company and will spin out a molecular diagnostics venture in the near future. In addition, Emiliem has formed an association with the National Institutes of Health to develop and commercialize a series of novel mTOR pathway inhibitors.

As Emiliem looked at where to put an on-the-ground facility that would satisfy future needs and promote their Midwest collaborations, Kalamazoo and the Southwest Michigan Innovation Center "turned out to be the perfect place."

Listen to Dale to learn more about Emiliem.

Business First, brought to you by Southwest Michigan First, airs every Sunday at 9:06 a.m. during "Sunday Morning" on NEWSCHANNEL3. Make a note to watch and learn more about the Kalamazoo Region through the words of local business and community leaders.

$4.4M for drug research comes to two local firms

SMIC — Wed, 22 Oct 2008 15:29:31 +0000

Kalamazoo - Two Kalamazoo drug-development firms have been awarded a combined $4.4 million by the state to support their research efforts.

Metabolic Solutions Development Co. and Tolera Therapeutics Inc. received the low-interest loans through Michigan's 21st Century Jobs Fund. They were among 17 companies to receive a total $29.6 million from the fund this week, according to the Michigan Economic Development Corp.

"These innovative Michigan companies are poised to turn their scientific and technological innovation into high-paying jobs," Gov. Jennifer Granholm said in a written statement. "We look forward to partnering with them as we work to diversify and grow our economy."

Metabolic Solutions, founded by two former Pfizer Inc. scientists, is developing a new drug that it hopes will be a more effective and safer treatment for people with Type 2 diabetes. It received $2.45 million to support Phase II clinical -- or human -- trials of the drug.

The company expects to hire "a small number" of scientific staff, Chief Executive Officer Mark Olesnavage said.

Tolera, a bioscience company developing new, protein-based drugs for cancer patients and organ-transplant recipients, received $2 million from the jobs fund to help it bring products to market.

The company was launched in 2007 through the commercialization division of the Cleveland Clinic and also will use the funding to expand its operations in Kalamazoo.

Tolera opened an office in the Southwest Michigan Innovation Center, a life-sciences business incubator in Western Michigan University's Business Technology and Research Park, earlier this year. It employs five people there and expects to hire a few more as a result of the state funding, Chief Executive Officer John Puisis said.

Puisis said the medical and pharmaceutical industries consider medicines developed from proteins -- a building block of the human body -- to be a $50 billion market. This week, drug-maker Eli Lilly and Co. paid $6.5 billion to acquire ImClone Systems Inc., which sells a protein-based treatment for cancer.

"We look at Michigan as an opportunity to draw experience and technology and capital to really grow a company," Puisis said. "We looked at a lot of different states, and we saw Michigan as a place that understood how a biotech could grow."

The 21st Century Jobs Fund supports a 10-year, $2 billion effort to fund research and new companies in life sciences, alternative energies, advanced manufacturing and homeland security. The funding, allocated in $75 million annual increments, comes from a multistate settlement with tobacco companies.

Contact Alex Nixon at anixon@kalamazoogazette.com or 388-2783.

Emilien Partners With NHLB

SMIC — Mon, 20 Oct 2008 19:17:44 +0000

Kalamazoo BioTuesday presents "Understanding the Other Side of the Table: Legal implications of Partnering." The free program is sponsored by Miller Canfield, the Southwest Michigan Innovation Center, and MichBio.

ADMETRx & Roche Collaborate on Multicriteria Decision-Making Application

SMIC — Fri, 17 Oct 2008 17:20:00 +0000

KALAMAZOO, October 15, 2008: ADMETRx, a Contract Research group committed to providing the best in vitro ADME discovery support possible, has initiated a collaboration with Roche to advance the development of ADMETRx proprietary multi-criteria decision-making models applied to drug discovery. ADMETRx and Roche both recognize how comprehensive data integration may offer significant advantages to discovery groups in selecting candidates for advancement.

ADMETRx CEO and Chief Scientific Officer Phil Burton, PhD, said, “Effectively using all the data available in a discovery program to prioritize or advance candidates with the best development potential is a significant challenge in the pharmaceutical industry. The multi-criteria decision-making methods developed by ADMETRx are intended to help Roche scientists to make these critical decisions, ultimately improving the success of candidates at each step in the development process.”

ADMETRx was founded by Dr. Burton and co-founder Jay T. Goodwin, PhD in 2003. Committed to redefining the drug discovery process, ADMETRx assists pharma and biotech clients in optimizing their lead selection decision-making. Focusing specifically on the ADME research needs of their customers, the company addresses a wide range of relevant issues, from managing capacity challenges to developing sophisticated multi-criteria optimization approaches. Its high quality data integration via advanced techniques and technologies leads to cost savings and improved drug discovery effectiveness. To learn more about how ADMETRx and how we can help you meet your drug discovery goals, please call us directly at 1.269.372.3272 or visit www.admetrx.com.

Life Sciences Fund Seeks $50 Million

SMIC — Thu, 16 Oct 2008 20:53:36 +0000

As work progresses to expand the area's biotech business incubator, the Southwest Michigan Life Science Venture Fund is seeking to raise another $50 million.

The second-round fund-raising effort by the venture fund began within the past month and reflects the continued success of work to nurture the life sciences industry in the wake of Pfizer Inc. cuts, Southwest Michigan First CEO Ron Kitchens said.

"We'd better get used to raising lots of money because of our success," Kitchens said.

The Southwest Michigan Life Sciencs Venture Fund will soon announce its 10th and largest investment since its formation three years ago. The new deal will involve a company that will relocate to Kalamazoo from the West Coast, Kitchens said.

Founded by local investors who pooled $50 million, the Southwest Michigan Life Science Venture Fund provides venture capital for life sciences companies based in southwest Michigan or willing to move to the region.

While the venture fund has yet to record an exit, Kitchens says it eventually will have to generate a return for investors in the years ahead as it seeks another $50 million.
Still, he added, investors behind the fund look at their role as "social investors" who are willing to wait for a return as they focus initially on building the industry in the Kalamazoo area.

"We're long term," Kitchens said. "We want to build companies."

The new round of fund raising for the venture fund began around the same time work started to expand the business incubator Southwest Michigan Innovation Center.

The $3.4 million expansion will add 11,000 square feet to the 58,000-square-foot facility, located in Western Michigan University's Business Technology and Research Park. The project will reconfigure another 6,000 square feet of existing space.
Since it opened in July 2003, the Innovation Center has provided a low-cost home to 21 start-up companies, nine of which have graduated to their own facilities.

The availability of incubator space, plus capital, talent and a support network around Kalamazoo, have combined to make the region an attractive life sciences destination for both entrepreneurs and investors, Kitchens said.

"We believe we have the right formula that works," he said. "By bringing all those together, we really have the magic elixir."

Emiliem, Inc. Acquires World-Wide Rights to Develop and Commercialize a Novel Treatment for Cancer and Other Proliferative and Inflammatory Diseases

SMIC — Wed, 15 Oct 2008 16:45:55 +0000

SAN FRANCISCO--(BUSINESS WIRE)--Emiliem, Inc. a privately-held biopharmaceutical company focused on discovering and developing novel molecular targeted therapeutics announced today that it has entered into an exclusive licensing agreement with the National Institutes of Health (NIH) for the world-wide rights to develop and commercialize a series of compounds that modulate key biological pathways known to be important in the progression of cancer and other proliferative and inflammatory diseases. The lead compound, which is positioned for clinical trials within a year, targets a key mechanism that determines whether cells, particularly those in tumors, grow and proliferate.

Dale E. Johnson, Pharm.D., Ph.D., President and CEO of Emiliem stated, “This is a seminal moment in the history of our company. Not only do we gain a well-researched molecule at an advanced preclinical stage, but this also enables us to focus our internal discovery efforts including medicinal chemistry and early stage development activities around the PI3K/Akt/mTOR pathway, a series of biological events that control protein synthesis, angiogenesis, and cell cycle progression. Our on-going research on the chemical-biological mechanisms of action within this pathway and on the identification of patient-selection biomarkers will benefit the development of this molecule as well as the rest of our entire pipeline.”

Safe Harbor Statement

This document is intended to provide specific information regarding initiatives of Emiliem, Inc. It is not intended as a general advertisement nor an offer to sell or a solicitation of an offer to buy any securities or an interest in Emiliem, Inc. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Except for historical information, matters described are forward-looking statements that involve risks and uncertainties, including: dependence on third parties for development, regulatory approval, and successful commercialization of products; the inherent risk of failure in developing product candidates based on new technologies; the risks associated with the cost of clinical development efforts, and other risks detailed in the company's private placement memorandum. Actual results may differ materially from those projected. These forward-looking statements represent the company's judgment as of the date of release. The company disclaims any intent or obligation to update these forward-looking statements.

Contact:

Emiliem, Inc.
Dale E. Johnson, 510-316-1197
dale@emiliem.com
www.emiliem.com

Emiliem and NIH Sign CRADA for Clinical Development of Novel mTOR Inhibitors

SMIC — Wed, 15 Oct 2008 16:24:25 +0000

SAN FRANCISCO-August 4, 2008 Emiliem, Inc. a privately-held biopharmaceutical company focused on discovering and developing novel molecular targeted therapeutics announced today that it has entered into a Cooperative Research and Development Agreement (CRADA) with the National Heart Lung and Blood Institute (NHLBI) of the National Institutes of Health (NIH) for the clinical development of LY303511 (LY3) and analogs for use in proliferative and inflammatory disorders. LY3, now called EM101, is an mTOR pathway inhibitor with a novel mechanism of action identified by Dr. Joel Moss, Deputy Chief of NHLBI’s Translational Medicine Branch, and colleagues at NHLBI. The project will set the stage for clinical trials starting in early 2009 in oncology and non-oncology indications, alone and in combination with other therapeutics. Emiliem acquired the world-wide rights to develop and commercialize this series of compounds in an exclusive licensing agreement with the NIH. Dr. Moss is the principal investigator on the CRADA.

Dale E. Johnson, PharmD, PhD, President and CEO of Emiliem, Inc. and Principal Investigator for Emiliem on the CRADA, stated, “We view the formation of this CRADA utilizing the strong science base at NIH as the ideal way to uncover novel approaches to develop compounds that inhibit the mTOR and related pathways. We expect to jointly establish methodology that will expedite the movement of these compounds to clinical proof-of-concept in multiple indications.”

About the mTOR pathway
Mammalian target of rapamycin (mTOR) is a central controller of cellular and organism growth that integrates nutrient and hormonal signals, and regulates diverse cellular processes. Studies have linked mTOR to several human diseases including cancer, inflammation, diabetes, obesity, cardiovascular diseases and neurological disorders. These findings demonstrate the importance of growth control in the pathology of major diseases and overall human health, and underscore the therapeutic potential of the mTOR pathway.

Safe Harbor Statement
This announcement is intended to provide information regarding initiatives of Emiliem, Inc. It is not intended as a general advertisement nor an offer to sell or a solicitation of an offer to buy any securities or an interest in the company. Forward-looking statements are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Except for historical information, matters described are forward- looking statements that involve risks and uncertainties, including: dependence on third parties for development, regulatory approval, and commercialization of products; risks developing drug product candidates; and risks and uncertainties inherent within the industry. Actual results may differ materially from those described.

Contact
Dale E. Johnson
510 316 1197
dale@emiliem.com
www.emiliem.com

ADMETRx & Roche Collaborate on Multicriteria Decision-Making Application

SMIC — Wed, 15 Oct 2008 15:32:00 +0000

California Company Joins SMIC

SMIC — Fri, 10 Oct 2008 15:50:02 +0000

Emiliem, Inc., an oncology drug development company, has relocated its R&D Center from Emeryville, California to the Southwest Michigan Innovation Center.

BioTuesday

SMIC — Fri, 10 Oct 2008 15:50:00 +0000