High-risk, high-return company analyzes Northeast Ohio business environment

Arnon Chait says Ohio State pretty much let him do what he wanted to do while he studied for his doctorate—so he decided (even though he’s from Israel) to stick around in Ohio. He says now that Northeast Ohio has everything he needs for his purposes.

And one of his main purposes is growing his company, Analiza, by breaking new ground in drug testing. His company works to answer questions such as:
• Which drugs in circulation will cross the blood-brain barrier?
• How do we quantify the role of diffusion in drug permeability experiments?
• Does this sample of protein-based drug still have therapeutic potency after one year in storage?
• What is the best composition of an aqueous-based purification method for a recombinant protein?
Read more about Analiza.

What got him started? He discovered a book written by Boris Zalaslaski, a fellow scientist who had emigrated from Russia in 1991. Chait says “only somebody who’s an expert in at least 2 scientific fields could command my full attention.” In the book Zalaslaski described techniques that fit perfectly for something Chait was interested in developing. So he went looking for the author and found him through his publisher in Illinois. Chait convinced him to start working together in 1997. They spent 3 years in the Lift incubator run by then-Enterprise Development Institute (EDI) and eventually got their own space.

Chait says they are growing their company in an unusual way—unlike most entrepreneurs who start with an idea, get money from VC and try to make a product out of it. He says that’s not the way things work in the market. “We don’t need good ideas,” says Chait. “It’s just impossible. You can spend as much management time in focus groups, etc. and you‘ll never actually understand whether the market wants [the product you come up with].”

Analiza operates unencumbered by investors. They develop technologies and do the initial commercialization for everything they do. And they also do some blue skies development—looking for something that will “turn into the next great medicine.”

Analiza has a basket of products, some already in the market, and some that need to be commercialized. They’re working on, says Chait, “some ideas that will change the face of medicine.” While they’re thinking of doing small round of funding, and they know good people, he hesitates.

“They ran an article in the PD on us, but it was amazing,” he says, that the only calls he got were not from people who would look at them as a potential investment opportunity. “Maybe we haven’t done our homework. Cleveland is run by people who know each other very well. It doesn’t have the spirit of the coast. If you’re plugged in, it’s great. But it’s not conducive to high-risk, high-return ventures.” Chait sees the investment atmosphere in Northeast Ohio as extremely conservative and still thinking in terms of old-style manufacturing—even banks and underwriters. They don’t seem to really understand “that somebody can do something other than make widgets.”

He feels that, to really move ahead, the area’s attitude must change fundamentally. There’s “tremendous positive stuff [in Cleveland]. It’s affordable, lots of smart people; it’s an easy Midwest-type town, which is especially good for early businesses.” Chait feels that if Cleveland and cities like it could capitalize on the Midwest flavor and put it together with providing ready access to resources, high-risk, high-return companies would consider it a winning formula. “We have half of the picture,” he says. “This is the Midwest. But we don’t have the rest.”

Analiza has good relationships with the organizations that recently received grant money (see “Northeast Ohio Determined”). And he says in the past, they actually received a lot of help from the old Bioenterprise. While he’s sure that there are good plans afoot, he’s taking a watch-and-see attitude. He says there were a lot of good plans before. ”A lot of organizations have tried to do similar things…so many studies, thousands of emails, but are we better off? I don’t know the answer.”

Chait feels that nonprofit is not necessarily the best platform to accomplish the goal of making Northeast Ohio a serious bioscience center. He says it takes a lot of work to get what you need out of them. And he says a business owner in the bioscience business world—at least he personally—doesn’t have enough time to pound on doors.

But he’s not saying it won’t work. “Maybe that’s the way it’s got to be done. Maybe this time around they have just the right combination of people and ideas.”

Chait points out that none of Analiza’s clients are in Northeast Ohio. “The region should know that companies like us exist.” He says they wouldn’t even mind mentoring others. He’s definitely hoping that the environment will improve in Cleveland, but right now he’s got to get back to work.