Not bio, but geez, what's up with the rocket scientists?

Okay, falling foam chunks. Seems like such a small thing...

I just made the mistake of getting the old movie "The Right Stuff," which I had always wanted to see, only to discover it was a very poorly made movie. Plot was rambling; acting was okay but when you have a crappy script, what can you do? Anyway, what I can't figure out is--since that was over 40 (yes, FORTY) years ago in the 60s--we could put guys in space on a regular basis back then and yet, with all the supposed advances in technology and science in those many decades, how come we can't even keep the foam on the rockets these days?

So much for the old debunker, "This ain't rocket science."

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.

Trek tests for antibiotic resistance--and stays in Northeast Ohio

An attractive young woman walked up to Mike Burke at a trade show a while ago. She handed him a slick magazine about RTP and invited him to come down—free of charge—to visit Research Triangle and see if he didn’t want to move his company down there. Burke, CEO of Trek Diagnostics Systems, Inc. wasn’t up for it, but they keep sending him this magazine.

Meanwhile Trek Diagnostics is busy making news, winning awards and developing new technologies, instrumentation and workflows for testing for antibiotic resistance. One of their latest is for testing blood culture—one of the most critical tests in the microbiology lab. The blood must be sterile, and morbidity (sickness) rates are high.

Many physicians put patients on drug therapy as a precaution, but with a culture you can identify that there is in fact a blood-borne pathogen. Then after you grow it in a culture bottle, you test further to see what drugs are most effective against it. The Trek test is about speed, getting positive results, and confirming the proper treatment as soon as possible to prevent using resistant antibiotic.

Trek invents and markets the software, the hardware and the background technology—users just want to know what’s available and to have tests that are easy to use

Trek has been wholly funded through equity and banking—never used any venture capital. “We were lucky that our volumes of existing products generated enough cash flow to warrant the financing,” says Burke. All product development is done in Trek labs and with an engineering firm they use. They collaborate with Hillcrest and the Clinic for workflow advice and design advice. “They’re very willing to support us by reviewing our ideas and the workflow designs we propose,” he says. “It’s a symbiotic relationship.”

Trek has undergone rather dramatic changes since it was founded as a small division of another company with 95 employees in 1999. From a fledgling organization fighting to maintain share, they’ve now achieved a very competitive position and employ 160 people. They recently won an award from an In Vitro Diagnostics organization that publishes a review, IVD Technology.

“Our products, people, and processes put us on a growth curve,” says Burke. “We’re very fortunate we have some real supporters here.” They hire med-techs from Cleveland Clinic Foundation as they added staff.

Molecular testing next

Technologies for traditional microbio testing haven’t changed significantly yet, but new testing is being developed at the molecular level that complements what’s been being done in the lab. “Molecular testing is generally faster and more accurate, but it’s not as broad, “says Burke. “For example, there’s no molecular test that can accurately read blood cultures like ours.”

Bacteria in the blood are not homogeneous, and when you draw blood, it’s easy to end up not capturing the blood going past the needle. For accurately capturing bacteria, you need larger samples 20 ml, but the test can only work with minute specimens. So you need to place it in a blood culture bottle (10 ml in aerobic and in anaerobic bottles), then grow it and detect it. Burke says molecular testing will not replace that part any time soon, but once you grow it, you can take a piece from the mass of bacteria and run a molecular test on it.

Molecular testing can tell you what the pathogen is, but it’s not good at determining resistance, according to Burke. Trek is looking at partnering with some molecular testing companies, molecular manufacturing companies, not doing it themselves. From Trek's point of view, this as an ideal type of company to attract--and would serve Northeast Ohio well for the long run.

“Molecular is the future in many areas of science,” says Burke. “I’ve heard it said that metals or building materials as we know them have been restricted by physics of the material. But at the molecular level we can get around physics by designing new materials molecularly—nanotech is an example.” New materials, not bound by physics, will be much stronger than steel or other known materials. Burke expects we will see an explosion of these materials in the next 50 years.

How’s Cleveland for resources? Burke says the work ethic is strong here. “We rely on UH and CCF and Metro to help us with certain positions, but for non-science areas, the educational level of the people here is good.”

To become a bioscience/tech hub, Burke says Northeast Ohio needs to start with dedicated organization. “Part of the Greater Cleveland Partnership or a separate funded organization like NEOBio.” Rather than trying to bring any and everything in, Burke says it make sense to build on existing areas of expertise: cardiology, orthopedics, etc. “Companies in those areas could use our institutions to leverage getting some of the R&D done here. They could develop divisions here. That’s how it’s being done in North Carolina. A lot of companies have located divisions there. Not startups or incubators; they’ve located large manufacturing divisions in these areas.”
Burke suggests the area should be specific about the types of companies it wants to attract.

Grassroots work turns into NEOBio

The attitude of the press is critical to the success of any community-building venture, says Steve Goldberg, executive director of NEOBio. At last, he says, economic development people are beginning to realize how important the bioscences are to their work.

“We need to say what we’re doing [at NEOBio],” says Goldberg. “After a year, it’s working. Companies, associations, hospitals, government are buzzing about us. And we have to stop being secretive about funding, and so on.”

“When the press doesn’t support those efforts, it’s tough.”

How it started

It all started when Goldberg was networking for his consulting business and ran into someone in the industry who had an IT problem. Then, in the same room, same event, same hour, he saw another guy in the industry and asked him if he knew the other guy. “I grabbed him and dragged him across the room—turned out they had the same problem. I said, why don’t you guys collaborate?”

Goldberg had a similar conversation with Bob Schmidt of Cleveland Medical Devices. And then, he says, it became an unstoppable force. CWRU got on board and then, after 5 weeks of meetings, the concept took shape.

NEOBio is not meant to be a real organization, according to Goldberg. “It’s meant to facilitate a healthy, organic, self-sufficient bioscience community.” Starting with 6 member companies and 4 others interested, the group now has 37 companies after one year. Recruitment efforts took place at community events Goldberg organized. The group built a database using the social networking model—names on the list have been gathered organically rather than by purchasing any SIC-code-constructed lists. The list so far includes 222 pure bioscience companies and 74 related (consultants, providers, contract manufacturers). “It’s real It’s up-to-the-minute,” he says.

Bioscience impact in Ohio

Impact means money and jobs—taxes, payroll, head counts for employees in the industry. A 2001 Battelle study claimed there were 7100 people employed in the biosciences in Ohio—that’s half of all the jobs in the state of Ohio. “A lot’s been going on since 2001, says Goldberg. “We estimate half a billion dollars in payroll now. And when you add researchers and health care workers in our large institutions, that number explodes.”

Grant money is essential, says Goldberg, but he notes that only a small percentage of it actually goes to the people doing the jobs. NEOBio will soon be applying to the Civic Innovation Lab for a second round of funding. The organization started with funding in early 2004. “Now there are a lot of well-respected people in this area interested,” he says, but he’s a little concerned at the push to formalize the organization even further. “I reject the idea that we know what we are doing—that we can predict where we’ll be at any given moment, let alone 5 years from now.”

“Fred Rothstein, CEO of University Hospitals, says we are already doing clinical trial work here for the big companies,” says Goldberg. He says it would be even better be if those companies would set up satellite offices here and hire people in Cleveland—say, engineers to tinker with their projects.

“We have to start paying attention to the real successes in our area—when a company like Cleveland Medical Devices owns a building and employs 35 people, it’s worth recognizing.” Goldberg talks about the need to fight  constrictive legislation such as the law that now gives companies only 5 years of patent protection—instead of 17—in which to sell their creations at free market prices. “Bioscience companies pay for all the development time, all the field efforts, then they only have protection for a short while. It makes no sense.”

Goldberg says NEOBio’s goal is to connect everyone in this industry and not have them rely on any institution. Businesses should be taking an active part in the connecting part. “If you’re too busy running your business,” he says, “you’re not doing all you can to keep the environment friendly for its continued success.”

Building relationships helps people make the connections that facilitate combining areas of interest…sometimes resulting in coming up with a new blockbuster idea. Goldberg mentions Pittsburgh and Ann Arbor. “They’re paying attention,” he say. “Pittsburgh Life Science has a networking event once a quarter that some of us plan to attend.”

The structure of NEOBio has to be flexible, according to Goldberg. It must be able to “respond to serendipity.” He believes in the possibilities that arise “when you don’t do everything the old way.” It’s about helping companies do for themselves. “We are grassroots,” says Goldberg. “We don’t rely on professionals [non-profit people].”

Besides being director of NEOBio, Goldberg is also part of a bioscience consulting startup called Synventus. Check out http://www.neobio.org/ and http://www.synventus.com/