Indianapolis bio sector hopeful as venture firms cash out
Profits flowing from earlier investments could mean more available capital, but firms continue to be selective in placing their bets.
Profits flowing from earlier investments could mean more available capital, but firms continue to be selective in placing their bets.
The Indiana University School of Medicine has licensed a pediatric psychiatrist’s patent on
an alcohol-dependency drug that the doctor discovered improves the language and social skills of autism patients. IU has licensed the patent to Indianapolis-based Confluence Pharmaceuticals Inc.
In this installment of IBJ's Who's Who series, meet key members of the city’s banking and finance sector. They include bankers, fund managers, venture capitalists, lawyers, financial planners and others who influence the movement and availability of money in the local economy.
With economic growth in the United States sluggish, Indiana companies are joining the race to capitalize on the fast-growing Chinese economy—even as hundreds of millions of Chinese move into the middle class and adopt a Western-style thirst for goods and services.
Zimmer Holdings Inc. and Biomet Inc., both based in Warsaw, are among the bidders for AstraZeneca Plc’s Astra Tech, a Swedish unit that makes dental implants and medical devices, reported Bloomberg, citing two people with direct knowledge of the matter. Astra Tech may sell for $1.8 billion to $2.1 billion, according to a research note by analysts at Sanford C. Bernstein. Astra Tech, which also makes medical devices for urology and surgery, had sales last year of $535 million. It employs 2,200 and operates in 16 markets. Separately, Zimmer won a $13.5 million contract to sell orthopedic implants to the U.S. Department of Defense. The new contract is guaranteed for one year, with the possibility of four one-year renewals.
Elanco, the animal health unit of Indianapolis-based Eli Lilly and Co., which this month agreed to acquire Johnson & Johnson’s European animal health unit, also had its eyes on another target, according to a Reuters report. A now-abandoned joint venture between the animal health businesses of New Jersey-based Merck & Co. Inc. and France-based Sanofi-Aventis SA anticipated selling off some assets for roughly $1 billion, according to unnamed sources cited by Reuters. The news agency reported that Elanco paid roughly $300 million to Johnson & Johnson, in order to acquire 50 animal health medicines sold under the name Janssen Animal Health. Elanco is the world’s fourth-largest animal health company, with $1.4 billion in annual revenue.
How’s this for financing drug development? Even though it hadn’t brought a single product even close to the market, Carmel-based Marcadia Biotech Inc. was sitting on $37 million in cash when it agreed to sell itself in December to Switzerland-based Roche. The money piled up not from venture capitalists but through Marcadia’s research partnerships with large pharmaceutical companies, primarily with New Jersey-based Merck & Co. Inc. “Our venture-capital firms were going crazy. They never had a company that had to pay taxes,” said Fritz French, former CEO of the 11-person firm, which had attracted $15 million from investors early in its existence. French and his management team sold Marcadia for $287 million, with the possibility of reaping $250 million more if one of Marcadia’s experimental diabetes drugs makes it to market.
Elkhart General Healthcare System and Memorial Hospital and Health System of South Bend have agreed to merge. The two hospitals signed a memorandum of understanding to develop a parent organization that will operate both systems. Memorial CEO Phil Newbold will lead the combined organization. According to Newbold, the affiliation will attract more physicians to engage with the new system and help direct its future. “Together, Elkhart General and Memorial will have more than 700 highly skilled, well-trained physicians on staff. This shared medical expertise will enable us to attract even more specialized professionals to the area and produce the region’s highest quality of care,” Newbold said. Memorial Hospital boasts 526 beds. Elkhart General has 325 beds.
Marcadia execs French, Hawryluk reflect on massive growth of Carmel firm after sale to Roche.
Purdue University officials and others connected with the life sciences in Indiana say the planned $164 million Life and Health Sciences Quadrangle at the West Lafayette campus will mean high-paying jobs, retention of highly skilled scientists, and researchers who might well have left the state for either coast.
Major tours once again bypassing Indianapolis. ‘Million Dollar Quartet’ only first-time visitor.
A complicated legal case about trade secrets points up a down side to the success Indiana’s research universities have had turning their research into revenue: Large legal bills can eat much of the money.
Growing cargo and logistics business overshadows such titillating concepts as solar farm, recreation campus.
Even as some of its investments bear fruit in grand fashion, the state’s principal fund for investing in high-tech companies may get even less in the next budget than it did two years ago when its funding was cut in half.
Shares of biotechnology company Endocyte Inc. rose in afternoon trading Friday, after the company slashed pricing expectations for its initial public offering.
On Feb. 4, 34-year-old Jeremy Stephenson saw 4-1/2 years of work conclude successfully when the JW Marriott complex—1,005 guest rooms in 34 stories and 104,000 square feet of meeting, banquet and exhibit space—opened downtown.
John Merriweather went from the Army at 18—he earned a Commendation Medal in Desert Storm—to a small company in Carmel where he learned all facets of the business, from warehousing to quality control to sales. Now 38, he runs his own firm.
Sanofi-Aventis’s experimental diabetes drug lixisenatide, given to volunteer patients once a day, was at least as effective as Eli Lilly and Co. and Amylin Pharmaceuticals Inc.’s twice-daily medicine Byetta, a study found.
The December sale of Carmel-based Marcadia Biotech to Roche garnered at least $287 million—and as much as $537 million—for the company’s owners and could lead the Marcadia management team to launch a firm using one of Marcadia’s experimental diabetes medicines.
WellPoint Inc. CEO Angela Braly has been working with her counterparts at insurers UnitedHealth Group Inc., Aetna Inc., Cigna Corp. and Humana Inc. in an informal lobbying alliance aimed at blunting parts of the health-care law, according to Bloomberg News, citing unnamed sources. The unofficial alliance might try to formalize in the next two months and may even try to pull in large employers to rally around mutual health-care interests, they said. The five for-profit companies control 39 percent of the commercial, Medicare and Medicaid health-insurance market, according to data compiled by Bloomberg. Indianapolis-based WellPoint is the largest health insurer by enrollment, with more than 33 million members in its health plans. The arrangement began about six months ago, growing out of a desire to improve the companies’ image and out of unrest over decisions by America’s Health Insurance Plans, or AHIP, the Washington-based lobbyist that also serves hundreds of small plans and nonprofit insurers. Spokesmen at all five companies declined to comment on the sessions or didn’t return e-mail and telephone inquiries. Karen Ignani, AHIP’s CEO, declined to answer questions about the split, calling it “palace intrigue.”
Community Health Network will provide an employee health and wellness center for Metropolitan School District of Lawrence Township employees and their covered dependents. The center, to be housed in remodeled space at Community Health Pavilion-Fort Ben (8501 East 56th Street), is scheduled to open in mid-April. The center will focus strongly on engaging school district staff in wellness and disease prevention. Medical personnel will include a “health coach,” who can help patients make changes in their daily health habits to improve health. The coach can assist with anything from smoking cessation to stress reduction techniques, diet and exercise planning. The health and wellness center is an addition to the district-sponsored medical benefit plan. Employees covered under the township plan will be able to continue using their participating provider of choice; however, if they utilize the new employee health and wellness center, they will not pay an office visit co-pay for their visits.
Executives at Endocyte Inc. are now on an investor road show, making presentations in advance of the company’s $78 million initial public offering this month. The West Lafayette drug-development firm plans to offer nearly 5.4 million shares at a price between $13 and $15 apiece, according to a filing Jan. 21 with the Securities and Exchange Commission. Underwriters of its IPO will have the option to buy up to an additional 802,500 shares to cover excess demand. Endocyte's key focus is on developing treatments for cancer and inflammatory diseases. The lead product candidate, EC145, is a potential cancer treatment. The company hopes to move it into late-stage development as a potential ovarian cancer treatment. Endocyte said it will trade under the "ECYT" symbol on the Nasdaq exchange.
Noblesville-based King Systems Corp. is without its two top executives after both abruptly left the company on Jan. 26. CEO Don Dumoulin and Chief Financial Officer Yun Kim exited King Systems in a “mutual agreement” with Great Britain-based parent company Consort Medical PLC, said its CEO, Jonathan Glenn. King Systems manufactures anesthesia and respiratory-care products. With 475 local employees, it’s the third-largest medical device developer in the Indianapolis area, according to IBJ statistics. Glenn, who arrived in Noblesville last week to announce the departures, declined to provide specifics on why the two were let go. “The business is fine,” he said. “There’s nothing sinister behind this.” A search is under way for a new chief executive and CFO, said Glenn, noting that a couple of executives from Consort will be overseeing King Systems' operations until permanent replacements are named. King Systems hired Dumoulin, a former Roche Diagnostics Corp. executive, as its CEO in October 2008. Dumoulin, a vice president at Roche, was let go from that company after shipping $11.7 million worth of diabetes-testing equipment in September 2006 to alleged grifter Dina Wein Reis after she convinced him she was running a not-for-profit. Demoulin could not be reached for comment.
Event-planning powerhouse VMS Inc. plans to invest more than $1.5 million to expand its Indianapolis operation and create as many as 102 jobs over the next four years, state officials said Friday morning. The locally based company now employs more than 135 and plans to begin hiring additional workers during the first quarter. Founded in 1995 by Mandy Moore and Neal Rothermel as a meeting-planning firm, VMS found a niche in the highly regulated pharmaceutical and biotech industries and grew from there. It now helps clients manage health care meetings and also assists with strategic marketing, medical-education and patient-adherence initiatives. In 2007, it reported annual revenue of $30 million and a staff of about 70. More recent financial results were not immediately available.
The West Lafayette company does not yet market a product and has not yet reported a profit.
An executive at the Noblesville firm’s parent company said the departures of CEO Don Dumoulin and Chief Financial Officer Yun Kim were the result of a “mutual agreement.” A search is under way for replacements to lead one of the area’s largest medical device manufacturers.
The Indiana 21st Century Research and Technology Fund received $2.6 million from the December sale of Marcadia Biotech to Roche Diagnostics Corp. That represented a 30-percent total return on the state’s $2 million investment in the company. It is the first time the 21st Century Fund has reaped a return on one of the grants it gives to startup companies since the fund rewrote its investment rules five years ago. Before that, it simply made grants that did not have to be repaid if a company hit it big.
Hoosier Village Retirement Center in Zionsville announced plans Monday for a $32 million project that will expand its campus near Interstate 465 and Michigan Road. Hoosier Village plans a 90-unit apartment complex to replace its original residence hall, which was constructed in the 1960s, renovated in the 1990s and expanded in 2001. Hoosier Village currently has 197 independent-living units on its 150-acre campus. Plans also call for a “Memory Support Center,” licensed for residential care of residents with Alzheimer’s and other dementia-related conditions. It will have 36 private rooms and 7,500 square feet of common areas. In addition, the expansion will add a 23,700-square-foot dining center with a 250-person seating capacity, and a community center with exercise rooms, a fitness center, indoor swimming pool and locker rooms. Hoosier Village is a not-for-profit community operated by Baptist Homes of Indiana Inc. The expansion, which should begin this spring and conclude in 2013, will allow the center to add 50 full-time workers. The project is awaiting approval from the Zionsville Planning Department.
Indianapolis-based Arcadia Resources Inc. signed a three-month pilot agreement with the Cleveland Clinic under which the hospital system will use Arcadia’s DailyMed program to help chronically ill patients take their medications after being released from a hospital, thereby reducing readmissions. DailyMed dispenses a monthly cycle of a patient’s prescriptions, over-the-counter medications and vitamins, and organizes them into pre-sorted packets marked with the date and time they should be taken. Also, DailyMed pharmacists call patients, as well as their primary-care doctors and caregivers to encourage medication compliance and avoid drug interactions.
Nearly 300 physicians from Indianapolis-based Community Physicians of Indiana and Evansville-based Deaconess Clinic have joined a research network run by HealthCore Inc., a subsidiary of Indianapolis-based WellPoint Inc. The Integrated Research Network uses physicians to study drugs, devices, diagnostics and medical methods to see if real-world applications differ from results produced in clinical trials. HealthCore combines its study results with WellPoint’s records on the 33 million Americans it insures. The Deaconess Clinic has about 90 physicians in its multi-specialty physician group. Community Physicians of Indiana employs about 200 general practice physicians for the Community Health Network hospital system. The HealthCore network is currently exploring several opportunities in the areas of heart failure, pain syndromes, antibiotic resistance, Type 2 diabetes and breast cancer.