Categories: News
Date: Jul 17, 2003
Title: New biotech company sports familiar faces
Cytovance Biologics Inc. is a new name on the biotechnology scene, but it is stepping in to solve an old problem...
2003-07-17
By Jim Stafford
The Oklahoman
Cytovance Biologics Inc. is a new name on the biotechnology scene, but it is stepping in to solve an old problem, said John Crowley, its founder and chairman.
Demand for manufacturing of newly developed protein-based medicines for clinical trials that can bring them closer to market far exceeds capacity. That's where Cytovance Biologics plans to stake a claim.
As the latest addition to Oklahoma City's growing biotechnology industry, Cytovance will fill the void by manufacturing new protein-based drugs -- known as biologics -- on a contract basis. It will operate from a state-of-the-art, 26,000-square-foot plant to be built in the Presbyterian Health Foundation's Research Park complex in Northeast Oklahoma City. Construction is expected to begin this fall.
"In the not-too-distant future, a lot of small and midsized biotechnology companies are going to realize that there is the definitive contract manufacturer in Oklahoma City," Crowley said.
The investment banking firm J.P. Morgan Securities recently published an assessment of the industry that estimated manufacturing demand will exceed supply levels by two to four times by 2005, the year Cytovance's Oklahoma City plant is expected to open.
The Oklahoma City Redevelopment Authority announced Wednesday that it is providing $7 million in bond financing to build the facility for Cytovance, with the Presbyterian Foundation providing up to $2 million in loans to complete specialized interior construction.
Although Cytovance Biologics is a new name, Crowley is well known to the Oklahoma City business and medical community. He helped grow Oklahoma City-based Novazyme Pharmaceuticals into a biotechnology success that was sold for $225 million to Genzyme Corp. in 2001.
It was the Novazyme experience that led the New Jersey businessman to start Cytovance, and eventually back to Oklahoma City.
Novazyme was founded by University of Oklahoma researcher Dr. William Canfield to develop the ground-breaking technology he created to treat gene-based afflictions such as Pompe disease.
Crowley had a personal stake in developing the technology. His two children were afflicted with the rare, fatal disease.
But when Novazyme was ready to make its product for clinical trials, manufacturing space was difficult to locate. Crowley and his team surveyed the manufacturing landscape and didn't like what they saw.
"What we found was that there were very few companies to do that on a contract basis," Crowley said. "We also found there were very long waits to get into those companies, it was extremely expensive and the companies that were available to work with were of very variable quality.
"You go to some of these facilities around the country and they look just awful. Some of them are renovated warehouses."
Novazyme eventually built its own small manufacturing facility.
Crowley said startup costs for Cytovance Biologics will be about $3 million, excluding the facility deal announced Wednesday.
"We've already raised over $1.5 million in seed money through private investors and the founders," Crowley said. "I myself have put in a fair amount of money into the startup."
Several Oklahomans have invested in the company, Crowley said, including individuals he did not name, and the Presbyterian Health Foundation.
The management team includes William Fallon, who will serve as president and chief executive; Kevin Ruddy, vice president of business operations and facilities; and Spencer Reynolds, vice president for marketing and strategy. All are Novazyme veterans.
And Crowley said he expects to draw heavily on the pool of talent produced by the OU Health Science Center.
Ironically, Oklahoma City was far down on Crowley's wish list when he began considering a location for Cytovance Biologics. He considered nearly a dozen other cities, many that offered incentives and had a bigger biotech industry already in place.
Oklahoma City was a long-shot winner, he said. A casual conversation with officials from the Presbyterian Health Foundation quickly led to more serious negotiations. Crowley met with Carl Edwards, chairman of the foundation, and chairman emeritus Stanton Young, and that launched the process that resulted in Wednesday's announcement.
"There are a lot of people who are going to be real heroes in bringing this to Oklahoma City because there was not an established infrastructure for the establishment of companies like Cytovance," Crowley said. "I cannot say enough about the folks at the Presbyterian Foundation and the folks at the Redevelopment Authority, particularly Stanton Young and Carl Edwards, who from day one have been huge champions. They just saw a vision."
Edwards said the foundation helped bring Cytovance to Oklahoma City in part because of Crowley's past involvement with Novazyme.
"We felt he was a known quantity, and when we heard he wanted to move into a new endeavor, we did everything we could to make it clear to him we would do everything we could to help him come to Oklahoma City," Edwards said. "We think it is an outstanding group of people that he has put together. We would like very much to see them be a great success here in our community."
In addition to the manufacturing facility, Crowley said Cytovance expects to open an office in the Research Park in the next six months in 10,000 square feet of space leased in one of the existing buildings. That will give Cytovance an opportunity to market itself while waiting for the manufacturing plant to open in 2005.
"I really think that in the future Oklahoma City will be recognized as one of the key biotechnology manufacturing centers in the world," Crowley said. "Today there are only three or four of those places in the world, and I think this will be a huge step forward too putting Oklahoma City in that category."