CELLECTAR, STATE IN NEW TERRITORY
Milwaukee Journal Sentinel
By Kathleen Gallagher
WISCONSIN SPROUTING COMPANIES AT LEADING EDGE OF DRUG INDUSTRY
From the outside, there’s nothing special about Cellectar Inc.’s new 16,000-square-foot building in a strip mall off the Beltline highway on the city’s southeast side.
Inside is a manufacturing plant that is one of only four in the country with the ability to make pharmaceuticals using radioactive ingredients.
Cellectar’s $3.3 million custom-designed building has 1-foot thick concrete walls and a sophisticated control system for monitoring pressure and air flow that sends e-mails, then phone calls, if so much as one fan goes awry. It’s the first completely new, radiopharmaceutical drug manufacturing facility built in the United States in 20 years, said Bill Clarke, Cellectar’s president and chief executive officer.
It isn’t by any means as large as radiopharmaceutical manufacturing facilities owned by GE Healthcare, Covidien or Bristol-Myers Squibb, but it represents a giant step forward into an important area for Wisconsin’s biotech industry: drug development.
“The ante is bigger, the risk is bigger, but if you have a success story, the markets are enormous – in some cases, in the billions of dollars,” said John Neis, senior partner at Venture Investors, a Madison venture capital firm that helped raise $13 million for Cellectar in January.
Led by veteran companies such as Promega Corp. and Gilson Inc., Madison is home to a research tools industry that sells everything from test tubes to genetic testing technologies to researchers around the world.
A breeding ground
Driven by the pharmaceutical industry’s hunger for new drug candidates and aversion to the risk of developing them in the early stages, new companies have formed around the country to get promising compounds through the first two phases of the four-phase clinical trials required by the Food and Drug Administration.
In Wisconsin, the availability of larger pools of private equity money and experienced executives have combined with the wealth of life sciences research at the University of Wisconsin-Madison to create a breeding ground for drug development companies.
“We’ve long had the technology to have therapeutic companies here, but it’s only recently that the combination of leadership and financing has come into play as well,” said Tom Still, president of the Wisconsin Technology Council.
Take Cellectar. The company has raised $22 million from investors and is being run by Clarke, who was previously GE Healthcare’s chief technology officer and chief medical officer.
Clarke said Cellectar is almost ready to start clinical trials for a drug based on its technology, which uses fat-like molecules to deliver radioisotopes that can either destroy malignant cells or help imaging equipment locate them.
“When you start looking at therapeutics, the cost to get regulatory approval is enormous,” Neis said. “Two decades ago it just wasn’t finance-able in this state.”
You don’t have to tell that to Hector DeLuca.
The UW biochemistry professor and top executive at Madison-based Deltanoid Pharmaceuticals LLC was one of the first drug inventors in the country to wrangle the patent rights to his federally funded drug discoveries out of the government’s hands in the late 1960s so they could be commercialized.
DeLuca says his lab has produced eight pharmaceuticals, including Zemplar for Abbott Labs, that are marketed around the world. DeLuca and his wife, who is also a scientist, started Deltanoid in 2001 to get drugs from their labs and others on the Madison campus through Phase II trials so they’ll be more attractive to big drug companies.
“Eighty percent of drugs that make it through Phase II trials end up as pharmaceuticals,” DeLuca said.
Creating jobs in state
Getting a compound through Phase II is a complex, highly regulated process, said Trevor Twose, CEO of Madison’s Mithridion Inc. and head of Biopons Inc., a Fitchburg biotech consulting firm.
The Madison area has good technology and funding, along with a base of skilled research employees and several contract research organizations that can sponsor clinical trials, Twose said. But companies still have to go out of state for advisers with drug development experience.
It’s important to breed drug development companies here to “exploit the real value” of technologies developed at Wisconsin research institutions, Twose said.
“That’s what creates the jobs and the thriving economy,” he said.
Cellectar is capturing even more value by doing its own manufacturing.
Much of Cellectar’s world-class manufacturing facility and equipment was built and designed by people and firms in Wisconsin, like Ruedebusch Development and Construction in Madison and Vulcan Global Manufacturing Solutions in Milwaukee, Clarke said.
And the state’s congressional delegation has been instrumental in helping Cellectar ensure that patients will get Medicare reimbursement for its drugs, he said.
That developing infrastructure should help to create even more drug development companies for the state.
“I want to get other small pharmaceutical companies around here,” Clarke said. “The more synergistic people and infrastructure you get, the better for all of us.”