Sunday, March 04, 2001

New Economy


Baby steps for firms in incubator

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        It's something that makes Carol Frankenstein go hmmmmmmmm. Pick a winner, she's asked. She is president of 4-year-old Bio/Start, a biotech business incubator on the University of Cincinnati campus.

        Bio/Start now houses 15 companies. Which one does she think is the one that's closest to putting its product on the market?

        “That's hard to answer,” she said.

        The first name she gives is Protein Express. That company's been around for five years, and its product is in Phase III clinical trials, putting it a couple of years away from commercialization.

        “It's one of the major challenges for the companies in this area, the fact that time to market is so long,” Ms. Frankenstein said.

        Watching Bio/Start is like staring at your lawn. You have high hopes that one day it'll be thick and green, but compared to an an hour ago there's not much change.

        That's how it is keeping track of the high promise of Cincinnati's biotech business. And that's not a criticism. It's simply the nature of the business. Startups developing new drugs or medical devices need five to seven years to get their ideas developed, then run through regulators, then commercialized.

Signs of progress

        At Bio/Start, there is progress. Two companies — Cutanogen and VivoGen Biosciences — recently qualified for the Ohio Technology Investment Tax Credit program, which gives investors who put money into tech startups a 25 percent credit on state income taxes.

        Bio/Start recently landed its first nonstartup “anchor” resident: Nalco Chemicals, that will provide specialty services to Bio/Start companies.

        A development company, Emerging Concepts, is up and running within Bio/Start to help researchers at UC determine whether their ideas have any commercial potential.

        Bio/Start's former president, Pat Snider, is working to build a venture capital company called BioVentures, that will fund biotech startups. It's applied for federal approval as a small business investment company (SBIC), which can add federal money to theoretically triple the size of the fund.

        In December, BioVentures got its go-forth letter allowing it to begin raising money.

        Ms. Snider said the group aims to raise $15 million and get final SBIC approval by midsummer, then begin raising money.

        BioVentures' success could be critical to Bio/Start. Investing in biotech startups “is a lot different process than an Internet company,” said Ted Robinson, who is a Bio/Start board member and principal at the venture firm River Cities Capital Funds.

        “There's a whole lot more to the science of it.”

        One example is Bio/Start resident CardioEnergetics, a company working on device-based treatments for congestive heart failure.

        Chief executive officer Mark Byrne said the product is still several years away. Given the challenge of stretching funds until the product is ready, Bio/Start provides “lots of stuff you couldn't afford otherwise,” from labs to conference rooms, he said.

        Mr. Robinson said a year from now, the city's biotech scene may not look a whole lot different than it does today, but that won't mean it hasn't advanced.

        “People are just going to have to be more patient,” he said.

        E-mail johnb@enquirer.com. Find a list of local New Economy companies at Enquirer.com/neweconomy.

       



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