Archive for the ‘Health & Medicine’ Category
Young biotech companies in North Carolina’s Research Triangle don’t have to read Ernst & Young’s 2011 industry report to know that early stage funding is down, that investors increasingly tranch their payments and make the tranches dependent on milestone accomplishments, that competition from other industries is growing fiercer for venture capital nationwide. (More on what isn’t being funded here.)
But sitting around and complaining doesn’t help, either. So, seven Research Triangle Park area biotech companies decided to do something. Last month, they traveled to the San Francisco Bay Area on their own dime to meet with potential investors.
The trip to Palo Alto, Calif., was the first of its kind the N.C. Biotechnology Center organized, said Peter Ginsberg, the biotech center’s new vice president of business and technology development.
“We wanted to change the way Bay Area venture capitalists think about North Carolina companies,” Ginsberg said. “And maybe, maybe, down the line, knock, knock, knock, get them to open an office here.”
A report that the biotech center submitted to state legislators in January offers clues where investors from outside the state see shortfalls in the North Carolina biotech industry, which is centered in the RTP area and along the Interstate 85 corridor to Charlotte.
Even though in 2010 North Carolina was home to about 500 biotech companies that employed more than 225,000, ranking the state third behind California and Massachusetts, very few of the North Carolina companies generated revenue. Also, among the companies located in the state only 10 were publicly traded, according to Ernst & Young. That’s about 3 percent of all publicly traded biotech companies nationwide.
Compared to other biotech hot spots, North Carolina lacks local life science entrepreneurs who successfully developed products and brought them to market and who financed multiple entrepreneurial ventures. (More on building entrepreneurial networks in the RTP area here and here.)
And the state’s many research institutions haven’t done a very good job translating their sponsored research into products.
As a former biotech analyst, institutional investor and company executive, Ginsberg has a good grasp of the fallout.
“We don’t have the breadth of life science venture capitalists as California or Massachusetts,” he said.
Add to that travel inconveniences.
The Bay Area is home to many venture capitalists, but without a non-stop flight to Raleigh-Durham International Airport most are reluctant to visit the RTP area, he added. “Venture capitalists travel a lot and it’s not easy for them to get here.”
So, traveling to Palo Alto for a day-long meet-and-greet with investors was similar to Muhammad going to the mountain to preach because the mountain wasn’t going to come to Muhammad.
The event was sponsored by Silicon Valley Bank, which has operations in the Triangle, and attracted more than a dozen venture capital firms, Ginsberg said. He declined to name them.
The seven biotech companies were traditional drug development companies, medical device and diagnostics companies and a company developing vaccines:
- Advanced Liquid Logic in Morrisville is working on a lab-on-a-chip based on nanotechnology developed at Duke University. Founded in 2004, the company has received $15 million in grants and $8.1 million in angel funding.
- CoLucid Pharmaceutical in Durham is testing a migraine drug in patients and working on therapies for chronic pain, Alzheimer’s disease and depression. Founded in 2005, the company has raised $42 million in venture capital.
- Heat Biologics, which relocated its headquarters from Miami to RTP this year, is working on therapeutic vaccines to combat a range of cancers and infectious diseases. Founded three years ago, the company has not released its funding.
- nContact in Morrisville develops and sells medical devices for minimally invasive treatment of heart arrhythmia. Founded in 2005, the company has raised more than $42 million.
- Scynexis in RTP is a drug discovery and development company that has delivered 11 drug candidates to customers in the past five years and is working on its own pipeline of experimental therapies. Founded in 2000, the company collaborates with Merck on a cancer drug and is part of a consortium working on the first pill to treat human African trypanosoniasis, also known as sleeping sickness.
- TearScience in Morrisville in July received regulatory approval to sell its first product, a medical device to treat dry eye patients in an outpatient procedure. Founded in 2005, the company has raised more than $60 million in venture capital. To bring the dry eye device to market, TearScience recently received $15 million in debt financing.
Regardless of how many birthday cards, T-shirts and magazines declare that 50 is the new 30, the organs in our bodies start showing their age after 40. One of the first organs to do so is the eye, said Joan Roberts, a visiting scientist at the National Institute of Environmental Health Sciences in Research Triangle Park.
Presbyopia is what we notice – the eye’s lens loses elasticity, which makes it harder to focus on nearby objects and requires us to wear reading glasses. The chemical changes we don’t notice – at least not right away.
Between 40 and 50, the amount of protective antioxidants in our bodies decreases. That makes the eyes particularly vulnerable to damage from light, because it compounds a chemical change in the production of protective pigments that starts at about the same time.
The result, nearly 40 percent of Americans develop cataracts by the time they are 65 or older, according to data of the Centers for Disease Control and Prevention.
Cataracts, or clouding of the lens, can be treated with surgery. But when this increased vulnerability to light damages the retina, cells die and macular degeneration develops. This age-related disorder, which causes tunnel vision around a blurred spot in the center, affects about 5.6 percent of Americans 65 or older, according to CDC data.
Cataracts and macular degeneration aren’t avoidable, Roberts said, but their onset can be delayed.
Roberts, a chemistry professor at Fordham University in New York City who for 15 years has done part of her research at NIEHS, has more than 25 years experience tracking the good and bad effects of light on the eye.
Ultraviolet radiation is largely responsible for the bad effects, as Roberts described in a 2009 research paper.
The cornea absorbs UV light with the most potential for damage. In adults, the lens absorbs the remainder of the UV light and only visible light reaches the retina. But the eye’s natural defenses start to break down after 40. The chemical changes in the pigments and the loss of antioxidants cause damage to the lens that adds up over time. Clear lenses get cloudy. Cataracts develop.
Drugs, such as the antibiotics Cipro and tetracycline, and medicinal herbs such as St. John’s Wort, can accelerate the lens damage. So can light reflecting off of sand and snow.
Roberts, who said, “It’s my job to turn that 70 into 100,” had several suggestions how to delay the onset of cataracts: Antioxidant boosts through nutrition. Fruit and vegetables high in vitamin E and lutein and green tea were high on her list. Wraparound sunglasses protect on the beach and in the mountains.
Macular degeneration can develop following UV damage to the retina at a very young age or following prolonged damage by visible light called short blue visible light. Age-related changes in the eye’s pigments after the age of about 50 can promote such prolonged damage.
Roberts’ suggestion to delay age-related macular degeneration are Eagle Eye sunglasses, which were developed by NASA and designed for astronauts to block short blue visible light.
The N.C. Biotechnology Center in Research Triangle Park announced today that it will spend $2.5 million to help generate marine biotech jobs in the eastern part of the state.
The four-year grant will establish a center of innovation – the fourth in the state – to develop commercial products from North Carolina’s marine life with the help of biotech tools.
Coastal marine labs are doing research that could be applied in several areas, such as health, energy, aquatic foods and diagnostics, according to John Chaffee, director of the biotech center’s eastern office, which is the fiscal agent for the marine biotech consortium.
The biotech center already spent $100,000 to plan for the marine biotech center of innovation or MBCI. This first grant was used to develop a business plan. With the new award, the MBCI must meet business milestones and ultimately establish itself as an independent, self-sustaining entity. The first milestone will be the hiring of an executive director, who will lead the center in identifying and prioritizing key market sectors, said Chaffee.
The University of North Carolina at Wilmington, the UNC-CH Institute for Marine Science, N.C. State University’s Center for Marine Science and Technology and the Duke Marine Lab helped during the planning phase. East Carolina University technology transfer staff assisted with new innovation center’s business plan.
Two years after the Hamner Institutes for Health Sciences set up a gateway to China, the Research Triangle Park research institute is adding a Chinese company to its collaborators.
Ascletis will establish its U.S. research and development operations on the Hamner campus. Other operations of the company will be in the National High Tech Industry Development Zone in Hangzhou, a city about two hours southwest of Shanghai.
Founded this year by Jinzi Wu, former head of global HIV drug discovery at GlaxoSmithKline in RTP, and Jinxing Qi, a Chinese real estate investor and chairman of the Hangzhou Binjiang Real Estate Group, Ascletis has $100 million in commitments from U.S. and Chinese angel investors. The company plans to establish a global therapeutics business that targets cancer and infectious diseases.
Allan Baxter, former global head of medicines development at GSK, will lead Ascletis’ discovery and development strategy as chief strategy officer.
According to its Web site, the company aims to buy the rights to new treatments, develop them and introduce them to the growing Chinese pharmaceutical market.
Projected to generate about $60 billion in sales this year, the Chinese pharmaceutical market is increasing at an annual rate of more than 20 percent, according to a report by strategic consulting firm The Monitor Group. By 2015, Monitor advisors expect China to rank second in market size to the U.S. and ahead of Japan, Germany, France and the United Kingdom.
Incidence and mortality rates for lung, stomach, liver and breast cancers are comparable or higher in China than in the U.S., the Monitor report pointed out. But competition among pharmaceutical companies is high in China. Nearly all multinationals and numerous local firms are jostling for market shares.
Also, health insurance coverage in China is improving rapidly. In the past two years, the Chinese government invested more than $160 billion in healthcare reform.
Bill Greenlee, the Hamner’s chief executive, and Wu, chief executive of Ascletis, signed the joint venture July 16 at the U.S.-China Governors Forum in Salt Lake City. At the same forum, N.C. Gov. Beverly Perdue and Zhao Hongzhu, the party secretary of the province to which Hangzhou belongs, signed an agreement to foster business and economic development between North Carolina and Zhejiang Province through commercial interactions.
Editor’s note: North Carolina’s Research Triangle is home to hundreds of young companies. Scientists and entrepreneurs started them to develop technologies and medicines for better detection and treatment of diseases. Some of the companies work on innovations that are the result of research done at one of the area’s universities. Others are outgrowths of established companies. Galaxy Diagnostics, which chases a stealth bacteria that infects pets and their owners, is one of those young companies.
Galaxy Diagnostics is going where few have gone before, to borrow a phrase from the American science fiction franchise Star Trek.
The startup is an outgrowth of work researchers at the N.C. State University College of Veterinary Medicine have done on Bartonella bacteria, pathogens that live in the digestive guts of lice, fleas, biting flies and ticks and are transmitted through the insects’ poop. Cats are particularly prone to harboring Bartonella; about 40 percent of them carry a strain called Bartonella henselae at some time of their lives. That’s why Bartonella infections in humans are best known as cat scratch fever.
Scientists have found signs of Bartonella infection in a 4,000-year-old human tooth from southeastern France. At the time, the pharaohs were building the pyramids in Egypt. But today’s physicians aren’t much better at diagnosing a Bartonella infection than their colleagues were in ancient Egypt.
To track down the elusive bacteria, the NCSU researchers combined lab skills common in the 1950s with 21st century genetic sequencing technology.
In 2009, with little hope of attracting outside investors while the U.S. economy was reeling, the researchers teamed up with a sociologist to launch Galaxy Diagnostics.
Amanda Elam, the sociologist, runs the company. Her title is president, but she calls herself “chief cook and bottle washer.”
To earn her doctorate in sociology at the University of North Carolina at Chapel Hill, Elam studied entrepreneurship. She taught at the NCSU College of Management last year and she continues to publish papers in her academic specialty. The company has received a state loan and a federal grant totaling about $230,000, but unlike the three lab technicians Galaxy Diagnostics employs, Elam doesn’t get paid for the more than 40 hours she puts in as the company’s president.
“It’s field work,” she said.
As Elam’s assessment of her job suggests, Galaxy Diagnostics is an experiment in more ways than one.
The test that the company has developed promises to detect a Bartonella infection earlier than other tests, before symptoms progress from a low-grade fever and muscle and joint aches to brain seizures, loss of sight, poor coordination and muscle weakness. But Galaxy Diagnostics also straddles human medicine and veterinary medicine, two health care disciplines that have more in common than most people think.
Animal pathogens can adapt and cause new diseases in humans. Severe acute respiratory syndrome, or SARS, bird flu and swine flu are among the most recent examples. All three diseases emerged in the past decade after viruses jumped from animals to humans.
The quicker viruses and bacteria multiply, the faster the infection develops. Two E.coli can form a colony of hundreds of bacteria in just a few hours. Bartonella bacteria double in numbers just once every 24 hours and infections can take years to develop.
Left to multiply, Bartonella bacteria infect red blood cells and the cells lining blood vessels and they manage to hide where the body’s immune defenses cannot detect them. That’s why tests looking for immune system antibodies to Bartonella bacteria often produce false negative results.
Galaxy Diagnostics goes after the bacteria themselves. The company uses a patented enrichment media in which even small numbers of Bartonella grow in a bottle. Genetic fingerprinting follows to positively identify the bacteria. A multi-drug antibiotic treatment usually gets rid of the bacteria.
More than 250 veterinarians in the U.S., Canada, the United Kingdom and Brazil have already sent Galaxy Diagnostics blood, tissue or fluid samples from pets that the company has tested for Bartonella bacteria.
In the past three to four years, a research lab at the NCSU vet school has run more than 800 human blood samples through Galaxy Diagnostics’ testing process. The samples came from patients suffering from symptoms their physicians couldn’t allocate to a disease. About 28 percent of the samples were positive for a Bartonella infection, Elam said.
By the end of the summer, Galaxy Diagnostics expects to be able to test human samples at its new lab in the Alexandria Innovation Center at a cost of about $600 to $800 per patient.
Editor’s note: North Carolina’s Research Triangle is home to hundreds of young companies. Scientists and entrepreneurs started them to develop technologies and medicines for better detection and treatment of diseases. Some of the companies work on innovations that are the result of research done at one of the area’s universities. Others are outgrowths of established companies. Vijaya Pharmaceuticals, a drug discovery company founded in 2009 by a husband-and-wife team, is one of those young companies.
Former GlaxoSmithKline researcher Subba Katamreddy did what came natural to a medicinal chemist who in 2008 got caught at the beginning of U.S. drug research and development cutbacks that have rocked large pharmaceutical companies since then.
Katamreddy started his own drug discovery company, Vijaya Pharmaceuticals, and established a lab in the Park Research Center incubator in Research Triangle Park to explore some ideas he had for next-generation antibacterial and anti-inflammatory treatments.
So far, Katamreddy and his wife, Vijaya, have financed the startup on their own. Katamreddy is about to start making molecules to develop technology that he can patent and use to attract more investors. But funding early stage startups has gotten more difficult this year despite more money being raised.
So, Katamreddy has begun to take in contract work to generate revenue. He’s determined to keep going and hopes to hire a couple of employees in the next three to five years. “Vijaya,” is Telugu, a language that is spoken in the southern Indian region where the Katamreddies are from, and stands for “victory.”
“Whether you’re in a small lab or a big lab,” Katamreddy said, “an idea is an idea.”
He’s had good ideas before. During his seven years at GSK in RTP, Katamreddy was involved in discovering two experimental drugs. His area of research was metabolic diseases such as adult-onset diabetes. Large pharmaceuticals are investing heavily in finding treatments for diabetes and other chronic diseases, because these diseases are on the rise and require ongoing treatment.
Vijaya Pharma is treading were large pharma hasn’t.
The number of antibacterial drugs the Food and Drug Administration approved for sale declined 56 percent from 1983 to 2002, according to an analysis published 2004. Demand for new drugs is rising with the spread of multi-drug resistant bacteria. (More on the problems superbugs are causing here.)
Katamreddy is particularly interested in a group of antibacterials called macrolides. This group includes erythromycin, an antibiotic that is used to treat pneumonia, venereal disease and urinary tract infections.
Cempra Pharmaceuticals, another young drug development company in the Research Triangle, is testing a macrolide in patients. (More on Cempra Pharmaceuticals here.) There’s also some interest in macrolides outside of the U.S. European researchers are studying a macrolide to treat inflammatory bowel disease and rheumatoid arthritis. But large pharmaceutical companies hesitate to invest in antibacterial research, because successful drugs are used once and for a short time only.
Katamreddy’s other idea is related to a known anti-inflammatory called curcumin, which is the biologically active ingredient in the Indian spice turmeric. Researchers have tested curcumin’s effect on Alzheimer’s patients and cancer cells. Dennis Liotta, a researcher at Emory University, is also studying curcumin as a cancer treatment.
Large pharmaceutical companies have not shown much interest in curcumin, because it can’t be patented and it doesn’t stay in the body long enough. Katamreddy wants to tinker with naturally occurring curcumin, but he’s not ready yet to say how.
Software programmers who build Web sites that map incidents reported by mobile phone. A branchless banking system that allows customers to send cash by mobile phone text message. Medical specialists who diagnose patients hundreds of miles away with the help of images uploaded through a mobile phone app and stored as electronic medical records.
These are just three innovative uses for mobile phones, crowdsourcing and open-source technology. But this type of innovation isn’t happening in rich, developed countries like the U.S. or in Europe.
The Ushahidi mapping tool has collected crowdsourced incidents reports in Afghanistan, the Democratic Republic of Congo and Mexico. Kenyans mail small amounts of cash through M-Pesa‘s branchless banking system. SANA‘s open-source technology brings healthcare screening to rural areas in India and the Philippines.
Presented at a TED talk independently organized by IntraHealth June 2 at the Varsity Theatre in Chapel Hill, these innovative technological applications provided a glimpse of what’s possible in places without functioning transportation, healthcare and banking infrastructures.
As Diali Cissokho & Kairaba, a band of Senegalese and North Carolina musicians, played between presentations, the crowd of more than 250 in the filled-to-capacity movie theater just across from the University of North Carolina’s Chapel Hill campus was left to re-examine perceptions of developed versus developing countries.
“It’s the new era of global technology,” said Heather LaGarde, special projects advisor to IntraHealth OPEN, an initiative that encourages the use of the latest technological advancements to improve healthcare in poor countries.
TED talks are an outgrowth of a conference that brought together technology geeks, entertainers and design mavens. The concept is owned by a private foundation a magazine publishing entrepreneur started in 1996.
TED talks follow in the footsteps of storytellers who spread knowledge and wisdom. Their purpose is to disseminate ideas.
TEDxChapel Hill was the fourth independently organized TED talk in the Research Triangle. Three previous talks took place in the past 18 months, one at the Research Triangle Park headquarters, one at N.C. State University and one in Raleigh. (More about the TEDxTriangle event at RTP here.)
The Chapel Hill talk was organized by IntraHealth, a UNC spinoff focused on global health. Among the speakers featured was Holden Thorp, UNC-CH’s chancellor, who as a UNC chemistry professor developed technology for electronic DNA chips and founded companies.
Thorp encouraged scientists to bring their research to bear upon problems people around the world are dealing with, such as drought, poverty and climate change.
“We have a leg up addressing these problems,” he said.
Thorp could draw some inspiration from the venue. In the mid 1980s, while he was an undergraduate at UNC, Thorp said, he watched the “Adventures of Buckaroo Banzai Across the 8th Dimension” 16 times at the Variety Theatre. The science fiction movie was about an adventurer, surgeon and rock musician who took on evil alien invaders with his band of men.
UNC and other universities as well as nonprofit research institutes and global health organizations in the Triangle are trying to do just what Thorp suggested.
At UNC, the Carolina Global Water Partnership developed a microfinancing program for Cambodians to buy biosand and ceramic filters and gain access to clean drinking water.
At Duke University, Robert Malkin, director of Engineering World Health, is encouraging engineers to develop medical equipment that works in hospitals in Sudan, Nigeria, Nicaragua, El Salvador, Haiti, Liberia and Sierra Leone.
The World Health Organization estimated that 70 percent of the medical equipment developed in the U.S. or Europe doesn’t work in poor countries in Asia, Africa and Latin America, including used and new surplus equipment donated by U.S. hospitals.
Indeed, much of this equipment is stacked in large warehouses, collecting dust, Malkin said. (More on barriers for medical devices in the developing world here.)
During his presentation at TEDxChapel Hill, Malkin said he observed this first-hand when he attended a heart surgery in a Nicaraguan hospital many years ago and the overhead surgery lights caught on fire. The nurses responded calmly, protecting the patients from the billowing smoke with a blanket, Malkin said. He found out later, that the special light bulbs for which the donated surgery lights were designed weren’t available in Nicaragua. The 100 Watt light bulbs the hospital used instead caught on fire routinely.
IntraHealth, which mostly deals with community health workers in developing countries, is also looking for hands-on solutions. IntraHealth’s OPEN Council brings together some of the most innovative thinkers, such as Jon Gosier, the founder of Appfrica, a company that invests in East African software startups; and Josh Nesbit, the chief executive of Medic Mobile, a nonprofit that uses mobile technology to create health systems in developing countries.
Gosier and Nesbit also participated in TEDxChapel Hill, and so did Dr. Radhika Chigurupati, a surgeon at the University of California San Francisco Children’s Hospital, who talked about her work with SANA.
Mobile device technology developed by a team of students, volunteers and faculty at the Massachusetts Institute of Technology in Boston allows SANA to bring health screening to remote rural area.
More than half of the population in developing countries are mobile phone subscribers, according to a 2010 United Nations report.
In India, Chigurupati said, community health workers use their mobile phones to take high-resolution pictures of potentially cancerous lesions in patients’ mouths or on feet. The images are uploaded to a server to which physicians in faraway urban areas have access.
Trips from the countryside to see a doctor are prohibitively expensive for the patients. But mobile telemedicine enables community health workers to screen for cancerous lesions and connects them with experts who can help treat the lesions and save lives.
In 2010 alone, more than 4,000 patients in rural India were screened for oral cancer, a disease that is prevalent because of widespread tobacco and beetle nut chewing.
“I think the tide is high,” Chigurupati said. “If you’re shrewd enough and committed enough, you can make a difference in the lives of millions.”
A researcher at the Hamner Institutes for Health Sciences in Research Triangle Park has received a $750,000 grant from the Environmental Protection Agency to study the health risks that various toxins pose for the liver.
Sudin Bhattacharya, a research investigator in the Hamner’s Center for Dose Response Modeling and the Institute for Chemical Safety Sciences, will use a virtual liver for the research. The virtual liver is a computational model of the human liver that can predict liver cell response to varying doses of environmental chemicals.
The research is funded through the EPA’s National Center for Environmental Research to better understand the possible consequences of global change on human health, ecosystems and social well-being. Bhattacharya focuses on computational modeling of cell signaling and key gene regulatory networks and the disruption of these networks by toxic compounds and drugs.
The virtual liver, which was developed by a team headed by Dr. Paul Watkins, a UNC professor of medicine, is also used as a computer-based simulation of prescription drug-induced liver injuries. (More about the Hamner’s efforts here.)
A good idea has shelf life. We all know that.
Ideas pop into our heads every day. Only the good ones linger. They survive challenges and reassessment. That’s also true for business ideas, which hold the promise of starting a company, generating income and creating jobs.
But it’s hard to test how good a business idea really is, because honest feedback is difficult to get, said Ron Harman, owner of CTO Outsourcing, a Durham company that provides software expertise to startups.
“Getting people to tell you how great you are is easy,” Harman said. But few friends, relatives or paid consultants aren’t usually willing to probe an idea for flaws that could kill it.
“Nobody wants to tell you bad news,” Harman said.
To fill that gap, he and six other entrepreneurs in North Carolina’s Research Triangle eight months ago founded the RTP Idea Lab. So far, they’ve held three idea vetting sessions at RTP headquarters.
The sessions attract crowds of a few dozen and combine idea pitches, question-and-answer follow-up and critiques. It’s a concept that’s also being tried in other areas where lots of people work in research and development, including Boston, Pasadena, Calif., Austin, Texas, and at universities, but the efforts aren’t mirror images of each other.
Pasadena-based Idealab has created and operated pioneering technology companies since 1996. Bostinnovation is a digital community hub for ideas that have matured into startups. The Business Innovation Factory in Austin, Texas, is a nonprofit that was founded in 2004 to help innovators test ideas before they turn them into startups. The University of North Carolina at Chapel Hill has an IDEA Group to develop novel biomedical imaging and analysis tools.
The RTP Idea Lab mainly aims to provide a forum where innovators pitch their business ideas to a group of people who are neither experts nor potential investors. Ideas bandied about have ranged from mining company e-mails to prevent theft of intellectual property to matching up retired executives with startups and nonprofits in need of short-term mentoring.
“Getting into a group and talking about ideas was very attractive,” said Jim Ingram, a technical writer and a RTP Idea Lab board member. At the most recent session in May, Ingram pitched his idea to reconfigure the hierarchy with which computers file information.
“An idea without an interaction with others is just a thought,” Ingram said. ” It dies in the brain if it isn’t talked about.”
The founders of the RTP Idea Lab, most of them local technology entrepreneurs, also want to stimulate the birth of new companies and the creation of jobs in the Triangle. The area’s unemployment rate has come down slightly in the past year, but it remains above 7 percent, according to April state unemployment figures. That compares to 9.5 percent unemployment statewide.
With federal and state budget cuts looming, it’s not likely that the government and public universities, important contributors to the Triangle’s economy, will be of much help. But technology startups are on a roll. Another Internet gold rush is on, stocks are up, investors are eager and startups are sprouting from New York to Durham.
The Triangle offers plenty of services to form a startup and find a home for it. What the area lacked was a place where people with ideas could ask other people, “What do you think?,” and get a honest answer. That’s where the RTP Idea Lab fits in, said Anthony Edwards, board chairman of the RTP Idea Lab.
Edwards is an IT consultant and a founder of Morrisville-based Tavve Software. He’s also involved in RedOak Logic, a Chapel Hill startup that targets the drug development industry but has yet to be funded.
Having RTP Idea Lab sessions “is good for the community, for RTP,” he said. “It encourages people to form companies.”
He wants to add to the feedback sessions and form partnerships with serial entrepreneurs, venture capitalists and angel investors to also provide seed funding.
For 25 years, Liz Cermak worked for Johnson & Johnson, one the biggest names in the pharmaceutical business. Now, she works for one of the smallest. And she says in terms of marketing, it’s giving the Goliaths a run for their money.
Cermak is the executive vice president of POZEN, Inc., a Chapel Hill-based pharma developer/manufacturer with no more than 30 employees. Since coming onboard in 2009, she has overseen the company attain FDA approval on two authentic combination drugs: Treximet and VIMOVO—for migraines and osteoarthritis, respectively. No small feat, even by J&J standards.
But what Cermak is most excited about is POZEN’s fresh and unique approach to pharmaceutical marketing.
Instead of sending sales representatives to hospitals and doctors’ offices to promote their products, Cermak and her team pitch most their medicines online.
“The reality is that the current sales rep model of traditional pharma is obsolete,” Cermak said to a packed house at the Marketing Mondays series held at The Research Triangle Park HQ earlier this week. “Eighty-six percent of US doctors go online for product info now, and 82 percent are on smart phones.”
In-person sales pitching can be inefficient, she said, because all health care workers are overbooked and overbusy, and representatives must endure a costly wait just to get two minutes in with the doctor.
Two minutes. That’s the average rep-doc face time. But online, the average time spent by a physician on a single ePromotion activity is eighteen minutes.
Cermak has three rules for digital pharma marketing:
1. Develop products that deliver real value to customers.
Be relevant and learn from your customers. Understand their needs and study their e-behavior. Most pharmaceutical companies need to broaden their apertures here, she said.
2. Make them affordable and accessible.
POZEN recognizes the strains today’s pharmaceutical pricing puts on doctors and patients today alike. As should go without saying, costs must be kept low to compete and to demonstrate a respect for your consumers.
3. Engage with customers in a meaningful but highly efficient way.
This means using social media and online public networks like Facebook and LinkedIn, but also more exclusive, MD-only communities like Sermo or CogNet. Use push and pull marketing tactics; see what works and what doesn’t.
Cermak calls this “Pharma 3.0”.
“The change isn’t coming,” she said. “It’s here.”
We’ve seen this before with other industries, as well. Amazon now sells more books for the Kindle than it does in print, and Netflix’s superior, customer-based business model has Blockbusters closing up shop around the country. The global economy is now decidedly digitalized and will only continue to shift that way.
Now, as POZEN enters the final testing and approval phase for its latest development, an ulcer-reducing aspirin compound dubbed PA32540, a viral campaign is already underway to spread the word.
Cermak stressed there is still utility in face-to-face interaction, though. Sending sales reps is important to explaining drug principles to doctors, learning about clinic demographics, and building a personal rapport with primary care physicians. However, there are not enough reps to go around as it is now, and focusing sales online will drastically cut down their jampacked schedules.
The biggest advice Cermak has for pharma companies looking to try this new approach is to not be afraid to experiment. To take risks. And to lose.
“Be ready to try and fail,” she said. “Absolute ROI of a given digital initiative cannot be accomplished with a high degree of certainty.”
No one expected it to work out for POZEN. But no one expected 30 people from Chapel Hill to get two drugs FDA-approved in two years, either.