More Growth: Zen-Bio Adds Additional Space, Beefs Up Its Staff

Company expects to launch new product lines in coming months. Also: Charlotte biotech event draws four times more people than in 2002.

Editor’s note: BioWatch is a regular feature on Fridays.Zen-Bio Chief Operating Officer Richard Giersch says the company is expanding its offices and laboratory from 3,000 square feet to 3,800 square feet this week in its same RTP location.

“We managed to do it for a very reasonable price,” says Giersch. “We’re growing slowly but surely and profitably,” he adds.

Giersch says the 11-person company will soon add four more employees it has already hired, one in sales and three in research. Zen-Bio received a $100,000 Phase I Small Business Innovative Research Grant this month. It expects to submit a Phase II application to further study the link between obesity and Type II Diabetes in the spring of 2004.

Giersch joined the company in April 2002 and notes that it has been profitable from the time it started shipping products in 1996, the year after it launched. Zen-Bio sells human fat tissue and human fat cell related tests and assays to biotech, medical and pharmaceutical clients.

Human fat cells cost more than the research alternative, mouse cells. But Amgen made a $20 million mistake buying rights to a potential weight loss product tested on mouse fat cells in 1994. The product did not have the same effect in human clinical trials. That gives Zen-Bio a good sales pitch.

Giersch describes the company as “focused on improving pharmaceutical research effectiveness.”

Zen-Bio has niche products, but it’s not hard to understand why it’s a successful business. The hunt for drugs is costly on the order of hundred million plus Hollywood blockbusters with even richer rewards for those that succeed. But finding out you made a mistake at clinical trial time can be disastrous.

Giersch says Zen-Bio is increasing its revenue, which was cited at $1 million annually in 2001, and expects to move into new, advanced research areas. The company also received a cash-influx when its spinout company, Artecel, which worked on tissue engineering from fat cells, was sold to another company.

Giersch says Zen-Bio plans to launch new product lines in the next couple of months.

Charlotte Biotech conference a hit

Giersch spoke to the second annual Charlotte Biotech conference held at UNC-Charlotte Tuesday.

More than 200 people attended says Terry Thorson, president of co-sponsor, the Metrolina Entrepreneurial Council (MEC). That’s four times the size of last year’s group. They heard presentations from two early medical device companies that are spin-outs from Charlotte’s Carolina’s Medical Center (CMC) plus a number of high-profile speakers.

Giersch discussed how Charlotte could carve its own biotech niche in the state.

He talked about why the city would be a good place for a biotech hub of its own flavor, citing its advantages, such as CMC and the University, its strength as a banking center, and its culture of business and entrepreneurship. “It’s a young industry,” he told the conference. Giersch points out the oldest firm among the top 10 biotech companies is only 27 and the youngest is only 10 years old.

Giersch adds that he talked to Thorson about something the MEC, CED and NC Biotech Center might do: establish a biotech business clearing house to list products various regional biotechs and pharmaceutical and medical companies buy. He also suggested that they facilitate interactions by making introductions.

“You’re always looking to identify companies to purchase your products and small companies don’t always have the resources to identify who needs what.” Giersch says. He thinks those organizations are in the good positions create such a clearinghouse.

Giersch also cautioned the Charlotte group: “Big companies come from small companies. So, don’t forget to support your small companies. Ultimately, that’s where you base has to come from.”