Start-up Serves Needs of Bio-tech Industry
By Kyle Schliesman, Inside Tucson Business, September 16, 2002
Finding the right human tissue for drug testing isn't as easy as it might sound. As more bio-tech firms perform gene research, the need grows for healthy and specifically diseased human cells from various parts of the body. But a steady, high-quality supply is not always available.
Thus, a two-year-old Tucson startup intends to step in and fill that gap for the bio-tech industry. CellzDirect, founded by Marc Griesenbrock and Louis Breton, bases its business in identifying, procuring and packaging specific human and animal cells for the type of bio-tech research being performed in more than 150,000 laboratories around the world. The company's research indicates a billion dollar market with potential growth of more than 25 percent annually.
"The market opportunity for moving cells and proprietary cell lines into the research community for drug and diagnostic discovery is huge," said Scott Edelman, chief executive officer of CellzDirect.
At the very least, the company's prospects impressed local investors. Over the past year, the principals of the company worked to secure additional financing for the first launch of the product. The company closed on its second round of funding at the beginning of the month, receiving about $3.4 million from local investors, including Solstice Capital, Tucson Ventures and Desert Angels, as well as from Technology Funding and Village Ventures.
"The amount of research being done at the cell level is increasing rapidly and that means cells become a bit of a bottleneck. So we like the market, and the company has assembled a first-rate management team," said Harry George, president of Solstice Capital, the primary investor.
The funding will be used to support the company's fledgling marketing effort. CellzDirect plans to launch its first line of products in October. Those product lines will include: liver hepatocytes, used to test the safety of pharmaceuticals; pancreatic islets, used in diabetes research; and umbilical stem cells, used for a myriad of clinical applications.
The need for the CellzDirect product comes from the rise of custom medicines, as the biotech industry takes off worldwide. With more known about genes and increased demand for new drugs, researchers perform many more drug discovery projects.
During Breton's research into the market, many drug researchers told him they were having a difficult time finding the right cell lines to perform their research. In some cases, companies had to put off submitting their findings to the FDA because they couldn't perform the necessary tests without the right cells.
"We started to notice in 1997 that pharmaceutical companies started to take an interest in more normal human cells for their studies," Griesenbrock said. "What they found was that they couldn't get the cells and, when they did get them, they were of poor quality."
In order to address this problem, the CellzDirect principals plan to establish a company brand name and product associated with more rigorous quality control measures. Already CellzDirect is working with another company to develop packaging that would help make the cells more viable after shipping. Another problem the company hopes to address is the provision of technically knowledgeable customer service.
The company's initial marketing efforts will be domestic, mainly targeting major markets on the East and West Coasts. The company also plans a strong local presence, as organizations such as the International Genomics Consortium and the University of Arizona Institute for Biomedical Science and Biotechnology prompt the growth of the local biotech industry.
"We are going to be working very closely with the University of Arizona and we already have a strong number of contacts there," Breton said. "We look forward to working with the IGC and actually helping to build the biotech community here in Arizona." The company also is working with local scientists in the establishment of its science advisory board.
Currently, the company has six full-time employees and expects to move up to 20 by the end of the year. By the end of next year, the company could have as many as 35 employees, with about half operating in Tucson and the others operating as national sales representatives.
