Delaware Innovation Space embraces smaller startups

Susan Tam and Di Zhang are the minds behind Eivogen Biopharma, one of several small startups operating out of the former DuPont Experimental Station.

By Dan Linehan 
Special to Delaware Business Times

Like the emerging companies it cultivates, the Delaware Innovation Space has a growth timeline of its own. It started in March 2017 as an incubator guiding fledgling companies through their earliest stages. Like an egg incubator that controls heat and humidity to create an optimal environment to hatch, a business incubator provides the space, advice and connections to start a business.

This year, it is becoming a business accelerator, which helps companies grow through mentorship, a connection to funders and access to services such as accounting, marketing and law.

By 2020, it plans to become a research institute in its own right.

Meanwhile, the Innovation Space plans to change the mix of companies it hosts. When it started, the Innovation Space had three well established “anchor” tenants — DuPont, Chemours and Incyte — that took up about two-thirds of its space.

Within the next few years, it aims to flip that ratio, with anchor tenants taking a third and newer companies occupying two-thirds.

Here’s a look at how four of those smaller companies have used the Innovation Space to punch above their weight.

Eivogen Biopharma — Pharmaceutical R&D

Seven current and former colleagues, each with at least 20 years of experience at a major pharmaceutical company, co-founded Eivogen Biopharma in January 2018 and moved into the Innovation Space in May.

The team shared ideas that had been percolating in their minds for years but that they hadn’t been able to pursue in the corporate world, said one of Eivogen’s three research scientists, Susan Tam. She spent more than 30 years in cancer drug discovery, most recently as a lead scientist.

Named after the Greek word for “egg,” and its connotations of growth and potentiality, Eivogen is developing drugs in three main areas: cancer, lung disease and autoimmune disease, in which the immune system mistakenly attacks healthy cells. They’re exploring other opportunities as well.

To do that, they have adapted three proprietary “platforms” — methods and technologies used in the creation of new drugs — by adding their own ideas and innovations to existing technology.

One of them puts a twist on a promising new therapy called CAR T-cell therapy, which uses the body’s own immune system to fight cancer. Tumors can hide from the immune system, but genetic engineering can modify immune cells to help them more efficiently find and eliminate cancer cells.

Eivogen is developing a variant of this therapy called “cell-free” because, unlike typical techniques in which cells are engineered and multiplied outside of a body, its technique acts directly on immune cells while they’re in the body.

Until now, most of Eivogen’s funding has come from its founders. These early fundraising rounds, sometimes called “friends and family” rounds, are common among startups. Typically, equity investors, who contribute money in exchange for an ownership stake in the company, join in later on.

For now, Tam is focused on the earliest stages of drug development: designing and developing molecules at the genetic level. Modern tools allow Tam and her collaborators to combine DNA sequences from genetic databases to synthesize potential drugs.

The DNA itself is synthesized by an outside lab, and the proteins created by the DNA — the hoped-for medication, that is — is sent to Eivogen and tested for effectiveness at killing cancer cells or other functions.

“I don’t think we could have done this anywhere else,” she said.

They hope to progress to Phase 1 studies, which are limited trials in humans to establish safety and an effective dose, in about a year. They expect to hire a few more people in the coming year.

Tam said life at big pharmaceutical companies means working on someone else’s priorities. At Eivogen, she’s able to investigate her own ideas.

“There’s a joy in designing a molecule and seeing it work,” she said.

Adesis — Specialty chemical ingredients

Andrew Cottone joined Adesis as a research chemist in 2001, and by 2005 he was helping guide the company through a shift in strategy.

At the time, Adesis was facing stiff competition from Asian companies, which could supply standard chemical components to major pharmaceutical companies at a lower price.

So the company pivoted to a different market, one that valued speed and confidentiality as well as price. It now focuses on working for smaller and medium-sized companies on projects that require specialized products.

Cottone later became president of the company, which remained a contract research organization, or CRO, meaning it provides products and services to clients in the pharma or biotech fields.

Adesis is one of only a few CROs to be located entirely in the United States, Cottone said. It gives the company another selling point, as American companies worry about losing the intellectual property they send overseas.

Often, Adesis is manufacturing chemicals — typically oils and powders measured by the gram or, sometimes, the kilogram — used as part of another process.

Some of the company’s major products are key chemicals used in the creation of organic light-emitting diodes, or OLEDs. These are thin layers of film that give off light when exposed to an electric current and can be used in digital displays in televisions and phones, including Apple’s new iPhone X. The thinness and flexibility of the screens opens up numerous possibilities for their use in clothes, walls and elsewhere.

Universal Display Corp., a company that licenses intellectual property and sells proprietary materials to OLED manufacturers, had long been a buyer of Adesis’ OLED precursor chemicals. In 2016, Adesis was purchased by Universal Display Corp.

Part of Adesis develops these chemicals for UDC, but the company maintains its independence as a CRO, Cottone said.

Though most of Adesis’ manufacturing occurs in its roughly 50,000-square-foot laboratory space in New Castle, it has a lab in the Innovation Space as well. Its role is to conduct small-scale research; once the lab hits on a success, it can be scaled up at the company’s larger labs.

Cottone said Adesis is not simply following a recipe. Instead, it works with clients to solve their problems, and it needs labs to do that.

The company plans to maintain its Innovation Space labs even after its new labs open later this month at its New Castle site.

The company has about 100 employees and plans to reach 120 by the end of 2020 to qualify for all of a $450,000 grant through the Delaware Strategic Fund.

Science, Technology and Research Institute of Delaware (STRIDE) — Research and  science consulting

A few years ago, Debora Massouda was a former DuPont researcher and engineer who still wanted to explore new ideas in the lab. She believed many of her former colleagues still had skills to contribute, too.

Massouda also believed there would be a business demand for their expertise, especially because businesses could hire them for individual jobs without taking on the long-term expense of a full-time employee.

But renting lab space would require a loan and a long-term commitment, perhaps making the venture too risky. The Delaware Innovation Space, though, allowed them to organize a consulting group without turning
to the private market.

In October 2017, the Science, Technology and Research Institute of Delaware, or STRIDE, was among the Innovation Space’s first smaller tenants.

A year later, Massouda said, her initial hypothesis about the demand for expertise like hers has been borne out. STRIDE employs 10 to 20 people part- or full-time and is finding its own niche by zeroing
in on in-demand specialties.

In particular, that’s meant working with materials called polymers, substances composed of molecules made up of repeating units, such as plastic, rubber and Teflon.

Though the researchers at STRIDE are working on clients’ projects, they’re still involved in discovery. For example, the company earlier this year began working for a California-based company called Zymergen.

Mixing chemistry and biology, Zymergen uses artificial intelligence to identify microbes that could, through digestion, fermentation and other processes, be engineered to create chemicals with useful properties, such as strength and flexibility. That’s where STRIDE’s expertise with polymers comes in. Its researchers can modify the chemicals identified by Zymergen until they meet the standards of Zymergen’s customers.

STRIDE started as a nonprofit but has since created a for-profit entity as well, which Massouda explains via a daycare analogy: a church can remain a nonprofit while running a for-profit day care.

Even as its for-profit side outgrows its nonprofit arm, the latter has maintained its educational and entrepreneurial efforts. It’s worked with the Route 9 Library & Innovation Center to hold summer classes for children and has rented its lab space to three entrepreneurs so far.

ACROBiosystems — Biotools to support pharmaceutical industry

Just as a new technology can open up possibilities for the companies using it, it can also create opportunities for those that can help spread it.

One of the most promising fronts in the campaign against cancer involves the use of an ancient but potent weapon: the immune system.

Research into new drugs to boost the immune system has created a market for companies that can supply drug makers with the proteins to develop and support these drugs. That’s the niche occupied by ACROBiosystems, which was started by Mike Chen in Beijing in 2010.

By 2013, the company had created a location in the United States and it was one of the first non-anchor tenants to join the Delaware Innovation Space in fall 2017. The lab space helps the company collaborate with customers and develop more products.

The company has about 160 employees; about 150 are based in China and 10 in the United States, said Jae Sly, head of corporate development and innovation lab operations.

Its products help researchers engineer immune system cells to recognize and defeat specific cancer cells. ACROBiosystems has sold its products to more than 2,500 clients, Sly said.

One popular offering supports researchers developing drugs that are helping the immune system reacquire its targets. A healthy immune system uses so-called “checkpoint proteins” to stop an immune response and avoid damaging its own body. But tumors can hijack this system, inhibiting the immune system and essentially giving the all-clear while the tumor can grow unchecked.

Blocking these checkpoints can re-engage the immune system to fight cancer. ACROBiosystems’ portfolio includes hundreds of immune system checkpoint proteins to help researchers develop new immunotherapies.

Editor’s note: ACROBiosystems has announced since the publication of this issue that it plans to move its operation to the STAR Campus in Newark, starting December 1. 

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