Kentucky biotech executives discuss their industry’s growth potential, challenges and successes.
by Melanie Wolkoff Wachsman
Biotechnology is one of the fastest growing industries in the United States, and Kentucky is to thank. It’s no secret that over the past decade Kentucky has invested heavily in biotechnology. The successful “Bucks for Brains” program, which matches public dollars with private donations to encourage academic research, has attracted top researchers from around the world to the bluegrass state. In fact, more than 75 percent of new biotech companies have spun out of either the University of Kentucky or The University of Louisville.
Medical News sat down with Kentucky biotech executives including Randall Riggs, president and CEO, Advanced Cancer Therapeutics (ACT) in Louisville, Ky., Ted Kalbfleisch, Ph.D., founder and CEO, Intrepid Bioinformatics; and Gina Lankswert, vice president, business operations and development, Intrepid BioInformatics Solutions, in Louisville, Ky., Eric Ostertag, president and CEO, Transposagen, in Lexington, Ky., and Bryce Johnson, CEO, Peptides International, in Louisville, Ky., and Keith Schneider, managing director, BioLOGIC, Covington, Ky., who shared their thoughts.
MN: What are some of the biggest challenges that face the pharmaceutical and biotechnology industries?
Randall Riggs: Enormous strength of payers (e.g., CMS) is having a draconian price control effect on novel therapeutic drug pricing, which then discourages innovation because of the unbalanced ratio of high risk/high reward now becoming high risk/low reward. In addition, since late 2007, sources of capital funding for innovative biotech companies have dried up and large pharma is becoming highly risk averse as well when risk taking and innovation is required of them now more than ever. Lastly, significant advances in human biology has been lackluster, leading to further failures among many drugs in development.
Eric Ostertag: Funding from most sources is significantly more difficult to obtain than a few years ago. Also, we sell to larger pharmaceutical and biotech companies, which have been making big budget and employee cuts.
Bryce Johnson: Large costs and long times to develop therapeutic drugs, and the availability of research funding from NIH and others to our customers.
Keith Schneider: I think the regulatory environment will always pose a challenge for the type of work we do. Especially in the start-up world where little pieces of funding need to carry an idea a great distance. That said funding is another key piece. More specifically for our region, we need to continue to strengthen the talent pool. By that I do not only mean people that can work for these companies, but also potential entrepreneurs form all stages of life that can contribute idea and intellect.
Ted Kalbfleisch: The challenge in the bioinformatics industries lies in developing systems that can handle big datasets and organize the information in a manner that enables scientists to quickly and easily realize the full potential of their data.
MN: What are some of the biggest misconceptions about biotechnology?
Gina Lankswert: In general, many people do not understand what bioinformatics is. Bioinformatics is a relatively young discipline (20 years) that has evolved through the melding of the fields of biology, computer science and information technology. The ultimate goal of bioinformatics is to use information science to drive the discovery of new biological insights that may result in better understanding of the causes and progression of illness, resistance to disease, and development of targeted drugs and cures.
Bioinformatics includes the development of tools and algorithms that allow for the analysis of various types of biological and genomic information as well as support for efficient access, and long-term management of those datasets.
K.S.: A misconception I often preach to is that life science companies are a riskier investment than other options. Although to call this a misconception is a bit of a stretch as there is a great deal of risk associated with life science start-ups, with anything the risk lessens when some key components are added to the mix. Things like a strong set of advisors, industry expertise, and like-minded people help lessen the risk. As long as you have a few people that understand the science and can translate it to the business end then I believe your chances to hit a home run with a company like Surgical Energetics are at least as good as hitting a homerun by seeking the next Facebook or Papa John’s. It may involve different nuts, but the bolts are the same—an addressable market, a strong team, IP, and executable business model. bioLOGIC’s goal is to bring the bolts to the table as we uncover great and launch opportunities.
R.R: Biotech companies have secretly discovered cures for many human diseases, but we hide them so we can sell our products each year to people. Another misconception is that drugs from biotech companies are a drain on our economy because of their costs, when in reality if we can improve the quality of someone’s life so that they can work and live a “normal life” and stay out of the hospital, then we have provided great value to our economy, the patient and their family.
E.O.: It’s not easy to make it big, especially if you are not willing to dedicate all of your time to your company.
B.J.: Biotech is not recession proof and can be very competitive.
M.N.: What accomplishments are you most proud of to date?
E.O.: I started with no money, no equipment, no lab space, no intellectual property and no employees and have built a biotech company that currently employs more than 15 full-time employees, has a very large IP portfolio, and generates revenue greater than $1 million per year. Most importantly, we are offering products and services that lead to new therapeutics to improve the quality of people’s lives.
R.R: We [ACT] started from scratch in late 2007, and we are about to start a Phase I human clinical trial with a novel, first-in-class anti-cancer drug that works by chocking off a key fuel source cancer consumes for its growth and metastasis. And, we did this with 1/5 to 1/10 of the resources that is commonly used within the pharmaceutical industry to accomplish this outstanding achievement.
B.J.: Development by our employees of a quality management system that has earned ISO certification and made it through some tough audits.
T.K.: I am most proud of the relationships that I have been able to build in Louisville, and across the nation to find the technological and business acumen necessary to start and sustain Intrepid. Equally important have been the scientific ties that I have been able to foster with government, academic and commercial scientists. These scientific, technological, and business relationships provide a solid foundation for Intrepid, and position us well to sustain our growth.
G.L.: I am most proud of the partnership I have been able to build with our founder and CEO. The blending of strong scientific and business expertise allows Intrepid to deliver superior returns to all its constituents.
M.N.: What advice can you give someone who would like to pursue a career within the pharmaceutical and biotechnology industries?
B.J.: A broad technical experience creates the best perspective for pursuing an MBA or other business degree in the biotech area.
R.R.: Have passion for breakthrough discoveries, but the persistence to face many daunting challenges and still move forward with confidence.
T.K.: The technology in the life sciences is improving at an incredible rate. Staying at the leading edge of technology is more difficult now than it has ever been. Keep your eyes and your mind as open as possible to identify and evaluate new opportunities. The people who are able to be creative in such a dynamic environment are the ones in the best position to lead us to the essential improvements in therapeutics and diagnostics for the benefit of our healthcare system.
E.O.: Being a biotech entrepreneur will require enormous personal sacrifices and dedication, so don’t try it unless you are passionate about it.
K.S.: Find a mentor. So many people I work with, whether at the CEO level or a lab rat, are so willing to share their time and insight. Set up a time to chat and bring them caffeine. You will gain a wealth of knowledge.
Sure, they may be executives. But they are not afraid to share. Below are some fun revelations our panelist said their colleagues would be surprised to learn about them.
“I have always wanted to be the President of the United States at some point in my life because I truly believe we need a non-politician running this country that has demonstrated integrity over his life and achieved success through hard work and passion.” — Randall Riggs, president and CEO, Advanced Cancer Therapeutics
“I can bench press significantly more than I weigh.”— Eric Ostertag, president and CEO, Transposagen
“I started out as a chemistry professor at the University of Louisville.” — Bryce Johnson, CEO, Peptides International
“Most people are surprised to learn I have no background in life science other than assisting a few companies with funding opportunities. To date, this has been an asset to me. It is so easy for a scientist or innovator to fall in love with their ideas and technologies, but if they can’t explain it to a guy like me it will be a long road to ruin.”—Keith Schneider, managing director, bioLOGIC
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