Economic officials are hoping to lure a different breed of biotechnology company to Rhode Island, even as they set about reclaiming the state’s $26.8-million investment in a failed pharmaceutical factory.
Their efforts are aimed at QIK Technology – a Brighton, Mass., company in the process of raising up to $3.5 million in equity capital to finance relocation and expansion here. The year-old operation views the state not as a potential venue for initial research and development, but rather a launch pad for proven technology, according to Samuel Driver, QIK’s president and founder.
Typically, biotechnology companies “raise a couple hundred thousand dollars” toward developing a product, “put it through clinical trials and bank on success,” Driver said. “That’s very much not what we’re about.”
“We’re skipping the seed money,” he said. “We have a commercially viable service now.”
QIK is involved in functional genomics, a new scientific field that seeks to find the function of genes. The company claims to have developed techniques for determining gene function in living organisms (as opposed to cells) that are faster, cheaper and provide more useful information than existing technologies. Tapping into the estimated $1 billion a year genomics market, QIK plans to sell its services to biotechnology and pharmaceutical researchers involved in developing new drugs and therapies, Driver said.
“We provide information to test other people’s efforts,” Driver said.
QIK’s interest in Rhode Island is practical.
“We’re operating out of Boston right now and, as you can imagine, the costs here are astronomical,” Driver said. More affordable laboratory space and housing for employees, and easy access to universities, hospitals and T.F. Green Airport all put Rhode Island on “the top of the list,” Driver said.
Dr. Joseph Hammang, director of technology transfer for the Rhode Island Economic Development Corporation, said he’s put QIK in touch with local companies and groups of venture capitalists. The company was also the subject of the Jan. 28 Brown Venture Forum, at which entrepreneurs, investors and business executives meet to discuss early-stage companies.
Driver said he’s been scouting laboratory space, including the former CytoTherapeutics plant in Providence’s Richmond Square, and would like to begin operations here by early summer. CytoTherapeutics has relocated all its operations in Lincoln.
The state, too, would like that, Hammang said.
“These kind of service-related businesses that don’t need FDA (Federal Drug Administration) approval are exactly the kind of company that Rhode Islanders, I hope, would want to see here and certainly that we’d like to see here,” he said.
Still Hammang cautioned that QIK is in no way a sure bet.
“They still need to prove that (the technology) is marketable to large pharmaceutical and biotech companies,” he said.
To date, QIK has contracted with one academic research laboratory and is in “the final stages of negotiations” with another, according to Driver. The company is also in discussions with three biotechnology companies, including two in Rhode Island, he said. Driver declined to give names.
QIK’s founders and managers have financed the company exclusively through its first year. That six-person team includes Frederic A. Eustis, III, a former executive vice president and legal counsel to Lincoln’s CytoTherapeutics, Inc. For long-term funding, the company hopes to form partnerships with pharmaceutical companies, groups of venture capitalists and private investors who together would own about 45 percent of the company. The $3 million to $3.5 million raised would go toward equipment and supplies, and the hiring of up to 15 additional scientists and technicians, Driver said.
William M. Jackson, chairman of the Brown Venture Forum and president of the university’s Research Foundation, said QIK could have an easier time finding investors than some other biotechnology start-ups.
“I think the service business is always less risky,” Jackson said. QIK is “more like a regular company in that you have a product but it’s on the supply end.”
That’s not to say that the state or individual investors should shy away from companies developing products that require clinical trials, Jackson said.
“I think you want a mix,” he said. “Certainly the bet-your-company kind of company can pay off big. It’s the same with the big pharmaceutical companies. It’s all a matter of what’s in your pipeline.”
