Accelerate LI Seeds First Batch of Biotech, Cleantech Startups
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it lost its anchor, OSI Pharmaceuticals, the creator of lung drug erlotinib (Tarceva) last year. Astellas Pharma—which acquired the company for $4 billion in 2010—announced plans to shut it down in May 2013. OSI employed 100 at its facility, was the anchor tenant in the Broad Hollow Bioscience Park, a complex on the Farmingdale State College campus that gives prospective startup biotechs a place to conduct experiments, and was a draw for local biotech entrepreneurs.
Still, Lesko views that as a positive for the startup community. OSI occupied the entired Broad Hollow space. Now, startups “scrunched” into tight incubator space at, say, Cold Spring Harbor can move into the facilities OSI scientists were using.
“OSI psychologically had an impact on the region,” Lesko says, “[but it shutting down] actually loosens the logjam.”
With the first five companies now funded, and the other five potentially on the way, Lesko is today starting the process of raising a “larger, proof of concept fund.” He’s hoping to amass a new fund by the end of the year, with the help of the state, that could theoretically provide anywhere from $250,000 to $500,000 to each Accelerate LI startup, rather than just $100,000 apiece—something of a $2.5 million to $5 million fund in total.
“As an ecosystem we need to do it in steps,” Lesko says. “This region is just capital starved when it comes to early-stage capital for life sciences companies in particular, so I’m kind of making that case to everybody that’ll listen to me.”
In all, 35 companies have gotten to the point of pitching the Accelerate LI and LIETF seed funds hoping for cash. Here are some details on the first five that have made it through and gotten seed dollars:
Goddard Labs—Housed at one of Stony Brook’s incubators, and developing a technology that tests for bacteria in fresh produce, according to CEO Noel Goddard. The technology “literally harvests the bacteria from the produce samples” and prepares them for further testing. Goddard says that molecular diagnostic testing is being increasingly used in the healthcare industry, but the sample preparation isn’t efficient, and its pricey. Goddard wants to create a quick, low-cost alternative that enables farmers and distributors to routinely do molecular testing. Goddard will buy a Dupont BAX instrument to help optimize its sample prep technology with the seed money.
Green Sulfcrete—licensed a patented technology from Brookhaven National Laboratory that turns sulfur from oil and gas refineries and fly ash from waste plants to what co-founder Bill Biamonte calls a “superior strength, low carbon, waterless cement”—an alternative to Portland Cement (the most common type of cement), which Biamonte says is responsible for 5 percent of worldwide greenhouse gas emissions. Biamonte says that while the technology for making sulphur polymer cement has existed for decades, the production costs were too high to go beyond “niche” applications. Green Sulfcrete’s process can do so at a “commercially competitive price,” he says. The company has already won a $150,000 Phase 1 grant from the National Science Foundation.
PolyNova—Making heart valves for catheter implantation out of polymer-based biomaterials, rather than preserved animal tissue (the current standard). The technology comes from funded research at Stony Brook. Co-founder Ted Claiborne says that PolyNova’s heart values can be molded into a unique shape to aid blood flow, and should be more durable than those made from animal tissue. With the cash, PolyNova is securing and diversifying its intellectual property, preparing a grant application, setting up operations, and trying to lock down more angel and VC investments.
SynchroPET—developing a positron emission tomography (PET) scanner technology licensed out of Brookhaven National Laboratory that Alessi says is “smaller and cheaper” than the competition—researchers and pharmaceutical companies could use it to perform a PET scan on an awake animal. The tech is also MRI-compatible, meaning it can be inserted into an MRI machine to do simultaneous MRI and PET scanning. With the cash, SynchroPET is now close to closing out its seed round, and is using the cash to attract additional investments. It’s hired an engineering team and is building its first commercial products, according to Alessi.
Traverse Biosciences—holds an exclusive option to license a library of drug candidates from Stony Brook to treat chronic inflammatory diseases in humans and companion animals, like dogs. Scaduto says the company has chosen to initially focus its lead drug candidate on the prevention of canine periodontal disease. “We envision our product to be the first FDA-approved, once-daily chewable prescription medication to address this condition,” he says. Traverse hopes to hit certain technical milestones like scaling up manufacturing of its drug prospect, and seeing early safety and efficacy signals in a dog model of periodontal disease. It also hopes to add to its management team.