World Class Pharma feat. in GA Trend: Patience Pays Off
Wednesday, March 9, 2016
Posted by: Maria Thacker
Patience Pays Off
Since the ‘80s, Georgia has been focused on growing the pharmaceutical industry. Now we’re a big player in the field.
SOURCE: GEORGIA TREND
When you dive into the pharmaceutical industry in Georgia, it doesn’t take long to realize that the many moving parts in this successful sector – from elementary school education to university research into animal and human therapeutics to venture funding for startups to a major win like Baxalta – can all be traced back to decisions made by state leaders in the late 1980s to grow this industry here.
“I would say that among the top reasons that Georgia is doing better and better in [the pharmaceutical industry] is it’s something that Georgia has wanted to do for a long time,” says Mike Cassidy, president of the Georgia Research Alliance (GRA), an organization committed to expanding research and commercialization capacity in the state’s universities in order to launch new companies and create high-value jobs. “As a result of really wanting it to happen, [leaders have] been willing to make a lot of the right decisions and make a lot of the right investments.”
Greg Duncan, president and CEO of Celtaxsys, a small drug company developing treatments for serious inflammatory diseases, agrees that those decisions have made Georgia the place for companies such as his.
“For the earlier-stage companies, there’s a great scientific footprint here across universities,” Duncan says, citing Emory, UGA, Georgia Tech and Augusta University. “There are a number of enabling bodies like the Georgia Research Alliance, which are set up to bring investment and expand that footprint. That whole equation – great scientists in the area, government enablement through focused investment and partnerships – is complemented by a number of things. You’ve got fantastic transportation; you’ve got fantastic access to great schools for your people; you’ve got great access to talent [in] specialties like HR, IT, finance, and this is a world-class business community. You really have access to anything you need.”
The pharmaceutical industry in Georgia is a large part of the even larger life sciences/biomedical industry. According to the Georgia Department of Economic Development, as a state we exported more than $1.3 billion worth of medical devices, equipment and pharmaceuticals in 2014 – goods that are often not only manufactured here, but thanks to our top-notch research universities created here as well.
Another organization, Georgia Bio, with roots that go back even further than the ’80s, also has a hand in keeping the state at the forefront of the life sciences industry. And today, both Georgia Bio and the GRA are helping fill a need that’s been recognized for many years in the industry – lack of angel funding for early-stage research.
“Many of us involved in the industry recognize that we have this gap [in] early-stage funding – before companies are getting to the [venture capital] stage or the partnering stage, but maybe after they’ve raised grant funding or friends and family [money],” says Russell Allen, president and CEO of Georgia Bio.
To help fill that gap, Allen also manages the Biomed Investor Network, an angel (defined as very early-stage investors, often friends or family who invest in the person or an idea rather than a business) network for healthcare investment that just began investing last year.
“It has a national focus, early-stage investments in healthcare. We’ve closed five investments in our first year. We’re about to close on the sixth. I’m aggregating the amounts, but it’s over $1 million, probably close to a million and a half to companies that have presented to our network,” Allen says.
It takes a special group of people, which is why they’re called angels, to put their money behind early-stage medical research because the returns don’t come in quickly. Years of testing and regulatory compliance can try the patience of even the most well-informed investors. But the payoff can be tremendous if a company develops a drug or therapy that can ease the pain and improve the quality of life for people with cystic fibrosis, cancer, rheumatoid arthritis and more.
“Several of the investments have been in pre-clinical drug candidates,” Allen says. “You don’t see angel groups investing in therapeutics very often. And again, that goes back to the understanding of the regulatory process and the technology. But we’re fortunate to have people who do have that understanding and know the risks involved. But they also know the potential return.”
The GRA also has a venture fund, GRA Ventures, and Cassidy is quick to agree that these investments take patience. “Venture funding for the biotechs is a critical need, and it is very, very hard to come by, particularly in the Southeast,” he says. “Investors in a venture fund are looking for a return on their invested capital, and that does take time.”
Since 2002, GRA Ventures has advanced to market 300 technologies via $22 million in multi-phase commercialization grants and provided $10 million in low-interest loans to 42 of those deemed most promising.
KEEP READING AT GA TREND: http://www.georgiatrend.com/March-2016/Patience-Pays-Off/