Lexington, KY - Audra Stinchcomb didn't think she'd start her own company when she moved from Albany, N.Y. to Lexington in 2001. But the faculty researcher at the University of Kentucky's College of Pharmacy had an idea that fit her clinical interests and got the encouragement, seed money and business advice needed to take the plunge.
"President Todd encourages faculty members to start companies at the university. Entrepreneurialism is highly encouraged," said the founder and chief scientific officer of AllTranz, whose focus is developing safe and effective pain management drugs in the form of a gel or patches. AllTranz plans to hire 30 more employees by 2013. The company is one of 88 local entrepreneurial companies around Lexington being honored by the Venture Club, a partnership between UK's Von Allmen Center for Entrepreneurship, the Lexington Innovation and Commercialization Center and Commerce Lexington's economic development team.
The Club meets every two months "to connect entrepreneurs with venture capital attorneys and banks to help them find funding to capitalize on their ideas," said Gina Greathouse, senior vice president for economic development for Commerce Lexington. This is the club's eighth year, and the number of start-up businesses it has worked with has steadily increased.
"The venture capital has grown from $14 million in 2002 to $47 million today," said Greathouse. A survey of the companies showed that total employment was 804, up 51 percent over 2008. There were 386 new hires in 2009. The average full-time salary was $69,800, up from $65,000 in 2008. Total revenues for the companies were down about 15 percent in 2009, but Greathouse is encouraged, considering the state of the economy.
"Companies are still starting up, people are investing and believe in them," she concluded.
You might think that early-stage companies are in a rat race to quickly develop their products, get them to market and to compete. The rat part is certainly true for one new Lexington company.
"We genetically modify rats for use in drug discovery research. This is of interest to pharmaceutical companies because often the genes play an important role in disease," said Richard Stump, vice president of operations for Transposagen.
Stump, a Lexington native and graduate of UK's MBA program, said Transposagen was founded at the University of Pennsylvania but relocated to Lexington because of the state's funding program that matches federal funding.
"Federal dollars come with a lot of strings attached but the state's matching fund allowed us to build our company and research much more quickly and efficiently," he said.
Getting back to those rats, Stump said the best way to test the safety of drugs is in small animals like rats. Rats are better suited to model human diseases because they are more similar genetically to humans than mice.
"Rats have a heart rate similar to humans, whereas mice have a heart rate five times as fast. So when you're studying cardiovascular disease, rats give you results much closer to what they would be in a human," said Stump.
Another member of the Venture Club and a spin-off from UK is Brainchem.
"We're taking advantage of research by UK's Greg Gerhardt, Ph.D., one of the top ten Parkinson's researchers in the country," explained Larry Prinssen, vice president of operations and marketing at Brainchem. "Dr. Gerhardt developed a probe (an intra-operative neuro-monitoring device) that fits into the brain to measure dopamine absorption and other chemical absorptions to make sure a particular part of the brain is still active. One of the biggest markets is for people with epilepsy. Another is brain trauma."
"Most war injuries coming out of Iraq and Afghanistan deal with brain trauma. Also, many accidents in coal mines result in brain trauma," he said.
The UK College of Pharmacy has spun off several promising companies. Three-year-old Coldstream Laboratories has found a market niche in small-volume sterile manufacturing of drugs, primarily for oncology.
"The University had the wisdom to spin it out into a private company and allowed it to grow," said Joe Wyse, president and CEO of Coldstream Labs. "It made the investment in building a sterile manufacturing facility for us where we make injectable drugs for patients."
Coldstream's business model calls for working with high-value products but in small numbers of units. The facility is deliberately sized for those numbers so units can be priced competitively. Many larger facilities can't handle small volume because of high overhead. Wyse said the company spun out with 30 employees and now has 70. The average salary is $60,000.
"It's pretty exciting and a lot of fun. We added jobs and are proud of that," Wyse said.
He also said Coldstream Laboratories is the largest sterile drug manufacturing facility in Kentucky and the second largest drug manufacturer in the state.
Stump said you never know where one of these little start-ups will go.
"Think of Microsoft beginning with a couple of founders in a garage and, over a ten-year period, growing to 30,000 to 50,000 employees," Stump said. "If you want employment to rise in Kentucky, you need as many entrepreneurial, high-growth companies as possible."