Hartford Business Journal

16 Hartford Business Journal • May 11, 2015 www.HartfordBusiness.com proposals would have commercial applica- tions if we are able to do the research." PITCH would plug a major funding gap in the bioscience industry experienced by companies in Connecticut and across the country, Crews said. Government grants from the likes of the National Institutes of Health help fund scientific research but not advanced stage market applications, while private-sector financiers like venture capital- ists typically only invest in less risky, proven applications with businesses that are already started. Crews calls this gap between govern- ment grants and venture funding the Valley of Death, in which research never turns into real-world applications. "We would like to set up a collaboration statewide that would help us overcome this Valley of Death," Crews said. Crews made his comments at the StemConn industry confer- ence on April 27 in Hartford. Crews told the StemConn crowd the business of bioscience is often seen as the dark side of an industry focusing largely on research, but scientists need to be think- ing about real-world applications for their work, especially since interest in early-stage research and development at major biophar- maceutical companies is waning. Crews said big pharma increasingly prefers to acquire small drug development companies rather than do its own research, leaving the major- ity of the risk and cost for drug development to the investment community. Crews, a Yale chemistry, pharmacology and biology professor, famously co-found- ed a company called Proteolix thanks to a $100,000 grant he received from Yale for research into a bone marrow cancer drug. He later sold the company to Onyx Pharma- ceuticals for $851 million. Under the proposal pending before CI, Crews wants to develop a program at UConn and Yale where academic labs would pitch research ideas that would be vetted for their business viability by an external board of industry professionals. The research would then be developed at UConn or Yale with the focus on creating companies that can then go out and look for private capital. CI's Connecticut Bioscience Innova- tion Fund advisory committee heard the PITCH proposal on April 15 and was sup- portive of the idea, said Lauren Carmo- dy, spokeswoman for CI. The committee is negotiating the details -- including the total investment amount -- before it forwards the proposal to the CI board of directors for final approval. CT research Beyond Crews' proposal, the Stem- Conn conference showcased a signifi- cant amount of stem cell research happening around Connecticut. Frank McKeon, who along with his part- ner Wa Xian was the first to spin off a startup from Jackson Laboratory in Farmington into an UConn incubator startup, said their research into stem cell applications to treat lung and gastrointestinal problems yielded the company MultiClonal Therapeutics. Eventually the company could help with ail- ments like cystic and liver fibrosis. "These are the things we have to go after," McKeon said. Students and faculty researchers show- cased their various proposals on stem cell treatments, looking at ailments like cleft pal- ates, brain tumors, autism, nervous system disorders, missing limbs, and lung damage. Wesleyan University neuroscience and behavior professor Gloster Aaron discussed his research showing how stem cell injections could relieve epileptic seizures. His study is funded by the National Institute of Neurologi- cal Disorders and Stroke, Connecticut Stem Cell Research Grant, and Citizens United for Research in Epilepsy. Wesleyan researchers have been injecting stem cells in mice's brains and are seeing a reduction in seizures about 60 days after the treatment started, Aaron said. "We are going to keep going on this study to expand on this research," Aaron said. "We hope that seizure suppression will be very, very long term." Crews said the type of research being discussed at StemConn is a good example of work that can have real-world applications, but scientists should be thinking about how to bring those ideas to market. "This is the part of the science that people don't talk about," Crews said. UConn representatives were at StemConn to pitch the school's newly formed Accelerate UConn program, which is funded by a $300,000 National Science Foundation grant to foster entrepreneurship and create businesses. UConn is launching the program this month and becoming an official NSF I-Corps Site, promoting technology transfer. "We are trying to get scientists to think more about business," said Rita Zangari, UConn director of innovation programs at the Office of the Vice President of Research. n Craig Crews, Yale professor and entrepreneur, said state help is needed to shepherd basic research into startup companies with real-world applications. from page 1 Bioscience startup: From birth to acquisition By Brad Kane bkane@HartfordBusiness.com F ew ideas generated in research labs at colleges turn into million- or billion-dollar ideas. Here's a Connecticut example that broke the mold. Yale professor Craig Crews took a $100,000 grant from his university for research and turned it into a company that eventually sold for $851 million. In the early 1990s, Crews came across some public-domain research performed by Japanese scientists looking at anti- tumor applications. The research was originally funded by New York City pharmaceutical company Bristol-Myers Squibb, but the company pulled the plug because it wasn't sure the U.S. Food & Drug Administration would approve any commercial applications. In 1995, Yale gave Crews $100,000 to perform research to figure out how it could be turned into a drug. Two years later, the National Institutes of Health pitched in $1 million. In 2002, Crews discovered the Japa- nese research could be used to treat a certain type of blood tumor. The next year, Crews co-founded a company called Proteolix Inc. and raised $18 million from private investors to devel- op the anti-tumor drug. In 2008, Proteolix raised $143 mil- lion in private equity to start testing its drug, Kyprolis, for FDA approval. As the FDA was reviewing the drug, San Francisco drug maker Onyx Pharmaceuticals purchased Proteolix for $851 million. The FDA approved Kyprolis for patient use in 2012. Two years ago, California drug maker Amgen purchased Onyx for $10.4 billion, partially based on project- ed sales of Kyprolis, which could reach as high as $3.5 billion, Crews said. n CI finalizing PITCH investment The posterboard section of StemConn showcased Connecticut stem cell research efforts throughout the state, ranging from treatment of cancer and autism to regrowing lost limbs and lung tissue. P H O T O S | A L E X S Y P H E R S

• Cover