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Critical
Mass
The
Virginia Biosciences Commercialization
Center is taking life sciences in the
Richmond region to a new level,
assembling venture funding and a support
network to help foreign companies
commercialize their products in the
United States.
by
James A. Bacon
Virtual
Ports Ltd., a start-up company in
Misgav, Israel, is developing
technology that promoters hope
will revolutionize the practice of
endoscopic surgery. Following the
lead of orthopedic surgeons who use
minimally invasive tools to
reconstruct knee and shoulder
joints, Virtual Ports is adding to
the toolkit that surgeons can employ
when operating inside a patient's
chest or abdomen.
Dr.
Ken Zaslav knows a thing or two
about orthopedic surgery: He founded
the Sports Medicine Center at the
Advanced Orthopedic Centers in
Richmond. He believes that
endoscopic surgery is following the
same path toward less invasive
techniques that orthroscopy began a
decade ago, and
Virtual Ports has created two
surgical tools that will propel the
process forward, he told a gathering
of the Richmond Venture Forum
earlier this month.
When
surgeons insert endoscopic blades inside the body, they can get
fogged up, Zaslav explained.
Surgeons have to pull the scope out
of the body, clean it and reinsert
it 16 times on average during an
operation -- a process that
increases the length of the surgery
and raises the risk of infection.
Virtual Ports has invented a tool
anchored in the cavity, EndoClear,
that allows the surgeon to wipe the
lens clean without retracting the
scope. Another device, EndoGrab,
makes it easier to move pesky
intestines and other organs out of
the surgeon's way, saving the
expense of an assistant and the
trauma of a second incision for a
second scope.
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Zaslav |
"Virtual
Ports has a pipeline of tools that
will revolutionize surgery,"
says Zaslav, who is helping the
Israelis commercialize their
technology in the United States. The
new tools will make many surgeries
less expensive, speed patient
recovery times and improve medical
outcomes.
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That's
great news by any measure. For
the Richmond life sciences community,
the story gets even better. Virtual
Ports is one of eight Israeli companies
that has agreed to launch its United
States operations from the Virginia
Biotech Research Park in downtown
Richmond. The hope is that, in time, the
company's nominal presence could grow
into a full-fledged U.S. headquarters
that oversees clinical trials,
regulatory approvals and the set-up of
distribution channels.
The
Israeli companies are the first fruits
of a path-breaking economic development
initiative, the Virginia Biosciences
Commercialization Center. In
contrast to the biotech park's
successful incubation center for start-up
companies, the Commercialization Center
provides support for the next phase of
growth. Under the leadership of
Donna Edmonds, the Commercialization Center
has built a support infrastructure -- a
venture capital fund, academic support
and a world-class scientific advisory
board -- for companies that have reached
the stage where they're ready to
commercialize a product in the
U.S.
Created in 1993, the park now
encompasses nine buildings with 1.1
million square feet, says President Robert
Skunda. Within the park reside 44
private companies, four Virginia
Commonwealth University research
institutes, four state labs and five
life sciences-oriented not-for-profits.
More than 63 companies got their start
in the park. Thirty-one have graduated
from the incubator,
and three are now publicly traded.
For
life science companies moving beyond the
incubator stage, the Commercialization Center
provides a support structure that, outside the established biotech centers
of California, Boston and perhaps the Washington
area, no region can match.
Donna
Edmonds is the driving force behind the
new center. As she tells the story, she
was sailing with her husband through the
Chesapeake Bay when she discovered
Virginia. "I was thinking
that I was going to stay a year."
That was in 1981.
Edmonds
still lives in Lancaster County today, but she
drives to Richmond with some regularity.
She'd spent her early career
funding and managing technology
start-ups and when she settled in
Virginia, she gravitated to the biotech
park. Appointed to the park board during
the Gilmore administration, she got
progressively more involved, Skunda
recalls. In 2006, she
licensed technology from a German
company, Vital Sensors, that invented a
device for monitoring intra-cardiac
pressure, brought it to Richmond and
raised seed financing for it.
Skunda
describes Edmonds as a dynamo, bringing
tremendous energy and knowledge to the
park. "She's got contacts from
coast to coast. There is hardly a
subject where I can't bring her into the
room" to talk about intelligently,
he says.
"She has been enthused, excited and
committed -- and able to dedicate the
time."
While
Skunda has long aimed to recruit foreign
life sciences companies to the park as
an entry point into the United States
market, Edmonds is the person who
assembled the elements that would put
Richmond on the map.
|
Skunda |
The
U.S. accounts for 52 percent of
world market share for biotech and
biomedical products. "You
cannot succeed without a global
presence," Skunda says.
Richmond has pitched its
relatively inexpensive cost of
doing business, its proximity to
regulatory authorities in
Washington, D.C., and adjacency to
a significant medical research
university. But |
Richmond
was a hard sell. Most foreign companies head to a handful of world-class biotech
centers where they can access venture
capital and the management talent needed
to
commercialize their products.
Edmonds
identified two assets of the Richmond
region that economic developers had not
fully appreciated before: the existence
of several world-class private medical
practices that conducted clinical
trials, and the presence of Owens &
Minor and McKesson Medical-Surgical, two
of the largest distributors of medical
supplies in the nation.
Not
only do the VCU medical school and the
Massey Cancer Center provide access to scientific expertise but the
Richmond area has a number of
"unusually strong clinical
practices," Edmonds says.
"Richmond has a unique mix. We
have the perfect clinical community to
launch new products in. ... The medical
community here is academically oriented
and practices good medicine."
One
of the Israeli companies setting up shop
here is BioProtect, inventor of the
SpaceGuard Balloon, a device that is
inserted into
a patient during prostate surgery and
inflated to separate the prostate from
healthy surrounding tissue. Says
Edmonds: "We're doing an FDA
clinical trial at three sites around the
country: one in New York and two in
Richmond."
Another
incomparable asset is the participation
of senior executives at Owens &
Minor and McKesson on the
Commercialization Center's board. The
two companies have an unmatched
knowledge of U.S. markets and
distribution channels for medical
equipment and surgical supplies. They
provide market and strategic advisory
capabilities that small firms would have
to pay tens of thousands of dollars in
consulting fees to acquire, Edmonds
says. Of course, the two distribution companies are
delighted to have a window into
cutting-edge technology. "They're
seeing technology they'd have to go to
Israel to see otherwise."
Edmonds
also has assembled a "world-class
scientific advisory board" that
includes scientists at VCU, local
physicians like Zaslav, and prominent
professors from the likes of Johns
Hopkins University and the University of
Pennsylvania. "We have a scientific
advisory board with national reach,"
she says. Foreign companies can come
to Richmond and access a national
network of relationships.
Richmond
has been a tough place to find venture
capital for technology companies at the
commercialization stage. But Edmonds is
working on a solution for that problem,
too. She and Zaslav are approaching
Richmond's Jewish community to raise an
"Israeli Opportunity Fund" of
$3 million to $4 million to fund 10 or
so of these companies.
Here's
the pitch: The nine Israeli companies
have been heavily vetted, reducing the
risk to investors. First, the companies
had to be selected by the best incubator in Israel, and then
they survived a
development process that shakes out the companies
with weaker ideas. Of roughly 900
life sciences companies in Israel, some
300 believe they have a market-ready
product, Edmonds says. "We screened
those companies. We met with the best
27, then cut them down even further. We
have domain experts and a clinical
community that looks at
all of these
companies. Then we have created a
structure to surround them with folks, a
circle of clinical, scientific and
business support. We're committed to
their success."
Virginia
is comparable in population to Israel,
and Richmond is comparable to size in
Tel Aviv. Israelis feel comfortable
here, Edmonds says. "These folks
have been running to New York and Boston
and Silicon Valley for years, and they
get lost in the hub-bub for being just
another set of folks. They come here,
and they get a very good reception.
We've made this feel like home for them.
... The local Jewish community has been
very supportive."
So
far, a number of Israeli companies have
committed to locate in Richmond,
including not only Virtual Ports and
BioProtect but Cupron Inc., which has
invented a way to bind copper oxide to
textile fibers and other materials as an
anti-microbial agent, and EnzySurge,
developer of a treatment for
hard-to-heal chronic wounds.
"To
participate in the program, they have to
commit to put their U.S. headquarters
here," Edmonds says. And that means
jobs, swelling the life sciences talent
pool in the region. One Israeli company
expects to grow its Richmond
staff to 60 to 70 employees over the
next two or three years, she says.
Skunda
is so optimistic about the prospects for
the Israeli companies, he's thinking
ahead to replicating the template for other
countries. VCU has relationships with
sister universities around the world
that it may be possible to build upon, and
the Greater Richmond Partnership has
built ties to the biotech sector in
Erlangen, Germany. (See "Boosting
Biotech in Bavaria.")
It's an incredibly
exciting time for the biotech park, says
Skunda, who has nursed the institution
from its infancy more than a decade ago. For all
the growth that Richmond has seen in
its life sciences to date, he says, the best
has yet to come. The research magnet, the
venture capital, the labor pool and the
entrepreneurial culture -- all the
pieces are coming
together. Says Skunda: "We've reached critical
mass."
--
June 4, 2008
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