Kalexsyn, Inc: your science deserves the best scientists

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Local Pfizer spin-offs get seed money

Tuesday, July 15, 2003
BY AL JONES
KALAMAZOO GAZETTE

Bob Gadwood and David Zimmermannn started talking about forming their own company as soon as Pfizer Inc. said it would relocate research-and-development work out of Kalamazoo County. " We thought 'contract chemistry,' " said Zimmermannn, a 45-year-old pharmaceutical-research manager who has been with Pharmacia Corp., now Pfizer, since June 1980. "We felt that if we had strong feelings about staying in the community, we would not be unique -- there would be other medicinal chemists who would want to stay in Kalamazoo, and we wanted to take advantage of that unique talent pool." That was in late April of this year. Today, exactly one year after New York-based Pfizer announced its intentions to buy Pharmacia, the men have become part of the first wave of local scientists-turned-entrepreneurs. They are ready to start their own company, with $192,200 from the state of Michigan. Gadwood and Zimmermannn's company, called Kalexsyn (short for Kalamazoo Experts in Synthesis) was one of seven Pfizer spin-offs that now at least have road maps for their future and money for gas. Three other firms will look to keep workers who are being laid off by the drug maker employed here in Kalamazoo. Another is looking to put them to work in Ann Arbor. After a spokesman for the American Association for the Advancement of Science, a New York-based analytical firm, said his organization was impressed by the caliber of life-sciences business proposals it reviewed for the state during the last six weeks, members of a Michigan Life Sciences Corridor Steering Committee doled out shares of a special $2 million set-aside earmarked for life-sciences start-ups that would put displaced Pfizer employees to work. As announced on May 28, the quickly established set-aside was especially geared to help Pfizer employees start their own companies. The $192,200 for Kalexsyn was a share of that money. Shares ranged from $56,000 to $200,000. Todd Zahn, program manager for the Life Sciences Corridor Program, said the projects approved Monday for funding would employ up to 189 people, primarily displaced Pfizer workers. The projects are a long way from being done deals, however. Kalexsyn is a contract research organization specializing in doing medicinal chemistry for large pharmaceutical companies and biotech companies, "and we'd also like to collaborate with Michigan universities," Gadwood said. Like some other companies that are getting funding, Gadwood said, "we'd like to have contracts with Pfizer. That would help us enormously." But there has been no word yet from Pfizer. Phil Carra, Kalamazoo site leader for Pfizer and a member of the Life Sciences Corridor Steering Committee, said a number of such proposals are being reviewed at Pfizer for support. The state funding also gets the companies through their start-ups. Some will need to become self-sustaining within a year or two. Others may need additional investment capital. Seven of the companies approved for funding are to be run by displaced Pfizer employees. One plans to use the cancer-research expertise of former Pfizer employees to build an offshoot of a 2-year-old Ann Arbor research firm, Molecular Therapeutics, and operate totally in Ann Arbor. It is the sole project that won't be Kalamazoo-based, said Paul Krepps of the Michigan Economic Development Corp. The business was incorporated last month and is called Molecular Imaging Research Inc. Two other companies are being started by Steve Sensoli, an Ann Arbor man who has been involved with three other successful start-ups. Sensoli said he plans to base his two new firms, Trilithon Pharma LLC, a developer of cardiovascular products, and AmphiBiotics LLC, a developer of antibiotics, in Kalamazoo and employ former Pfizer workers. Another project approved for funding is to be a Kalamazoo branch of Statprobe, the large Ann Arbor-based contract research firm. John Freshley, director of marketing and corporate development for Statprobe, said Statprobe first needs to improve the long-term prospects for the business by securing state support for its marketing and development efforts. It has managed a similar branch office since 1998 in Columbus, Ohio. "Our goal is to have them self-sufficient within 24 months," Freshley said. Zahn said project developers must still negotiate terms for receiving their allocations. That is to be done with the Michigan Economic Development Corp. Gadwood, 51, relocated to Kalamazoo from Chicago 17 years ago and persuaded his wife, a physician, to join him. He said it would be difficult for her to give up a practice she has been building for 17 years if he opted to relocate again. With his tenure at Pharmacia, now Pfizer, he said he plans to take early retirement as well as the severance package the company is offering. He and his wife have two children who are planning soon to attend the University of Michigan. Zimmermann, who has no family in the area, is a transplant from Washington state who came here to work for the former Upjohn Co. in June 1980 and said he simply enjoys the quality of life here. Both men say they have season tickets to the Kalamazoo Symphony Orchestra and are upbeat about staying here and about the prospects for their new company. Both expected to leave Pfizer in late August or early September. They said they hope to have Pfizer as a customer and say they see the shake-up at Pfizer as an opportunity neither of them would have envisioned otherwise. Their business plan involves them starting with Gadwood as company CEO and Zimmermann as chief operating officer, along with three other researchers. They said they hope to grow to 20 workers in the following months and say they have identified those workers, who are other Pfizer workers who don't plan to leave the area. Pfizer officials have refused to say how many workers the community will lose as it shifts work to its sites in Connecticut, Missouri, California and Ann Arbor, but local officials have estimated anywhere from 1,400 to 2,000 employees could lose their jobs. Workers have said the exodus has started, with dozens, if not hundreds, of scientists sucked away to work at Indianapolis-based Eli Lilly and Co. and groups of workers scheduled to leave in waves of perhaps 150 workers every two weeks over the next several months.