Companies on the Verge of Making it Big
Seven new ventures drawing a bead on a market bull’s eye—from senior care to nanotechnology.
Researchers at Kailos Genetics hope to have a test kit available to physician offices this year.
Photos by Dennis Keim
As the United States moves toward a more entrepreneurial form of capitalism, there’s no need to look beyond Alabama for evidence of this economic trend. From Huntsville to Mobile, here are seven new businesses poised for growth, thanks to inventiveness and old-fashioned fortitude. These young companies are finding ways to improve lives with breakthrough technologies, products and services in the areas of medical research, computer systems design, radio frequency technology and elder care.
Without question, the U.S. economy is becoming more entrepreneurial based, and most people don’t realize that Alabama is a leader in this movement, notes David Ketchen, professor of management and executive director of the Lowder Center for Family Business and Entrepreneurship at Auburn University. Ketchen says Alabama is a leader in the shift to an entrepreneurial economy because of its first-rate business incubators, alliances with its universities and economic developers, and a strong entrepreneurial emphasis at several of its universities.
“Alabama consistently ranks at the top of surveys about the best states to start a business,” Ketchen observes. “Venture capitalists and angel investors are catching on to these trends, and they are very interested in high tech startups based in Alabama. Overall, there is a lot for entrepreneurs to get excited about in Alabama today.”
Dane Stangler, research director at the Kansas City-based Kauffman Foundation, which works to advance entrepreneurship nationwide, agrees that Alabama has a strong track record of producing new high-growth firms. “In particular, Huntsville and Birmingham have each produced, on average, at least one company per year on the annual Inc. magazine list of the fastest growing firms in the U.S. over the past 30 years.”
Atlas RFID Solutions
Helping big guys keep track of things
Applications for radio frequency identification (RFID), the technology that allows manufacturers, distributors and retailers to identify their products at any time, are rapidly expanding—from manufacturing, supply chain management and asset tracking to retailing, payment systems and security and access control.
Atlas RFID Solutions was recently founded to bridge the gap between the firms that are developing RFID technology and the firms that can benefit most from implementing RFID.
Birmingham-based Atlas develops, integrates and maintains customized RFID-based systems for clients worldwide, operating in Birmingham at Innovation Depot—a business incubation facility partnering with the University of Alabama at Birmingham. Atlas provides all-inclusive RFID systems by collaborating with top companies who supply RFID components. Clients include Honda, Toyota, Northrop-Grumman, Southern Co. and Bechtel. Companies that are building large industrial facilities use Atlas products to put their hands on critical components and activities.
President and CEO Robert Fuqua believes Jovix, the company’s proprietary solution for tracking assets on large industrial construction projects, is its catalyst for growth. “We have developed solutions that provide exceptional value on current nuclear construction projects. Given the forecasted increase in nuclear energy over the coming years, we view our experience in this area as a significant competitive advantage.”
In 2003, Walmart and the U.S. Department of Defense began mandating that their suppliers use RFID technology to improve supply chain productivity. These mammoth mandates created an industry as a flux of new companies formed to develop and manufacture their own RFID products. “In 2006, I observed dissatisfaction in the marketplace that grew from firms who were very interested in leveraging the benefits of RFID technology, but were unable to connect with the RFID hardware providers who could supply the appropriate technology for a customer’s specific needs,” Fuqua says.
Traditional RFID companies struggled to deliver comprehensive solutions that packaged the data collected from RFID into actionable information presented through a software interface. Fuqua founded Atlas to bridge these gaps, and acquired the RFID expertise to serve as an unbiased ally to customers for selecting the appropriate applications.
“Presently, we control a very large share of our designated target market; however, the issue from my perspective is expanding the size of our addressable, potential market,” Fuqua explains. “I would much rather have 10 percent of a watermelon than 90 percent of a grape. My hope is that we can achieve the watermelon scenario within our market.” Concerning the future of Atlas, Fuqua believes it could move in one of two directions—acquired by a global business software firm interested in its Jovix construction solution and client portfolio, or growing to become a “source of pride and leadership for Birmingham.”
Big business viewing tiny particles
An Auburn-based company has quickly become a leading provider of optical imaging solutions that are advancing research in the area of nanotechnology—the engineering of functional systems at the molecular level. CytoViva imaging systems create a high contrast, dark field-based image that enables fast, easy observation of nano-materials, live cells and pathogens.
A tenant in the Auburn Research Park, CytoViva was launched in 2006 by Aetos Technologies, a privately-held technology development company and equity partner with Auburn University. The company’s award-winning nano-scale microscopes have been adopted by research hospitals, including Johns Hopkins School of Medicine and M.D. Anderson Center, along with government laboratories within the FDA, NASA and the National Institutes of Health.
CytoViva’s technology is unique in the market for two reasons, explains CEO Samuel Lawrence.
First, the illumination system allows for real-time optical images of nano-scale particles and materials not available using other common optical microscopy systems. Secondly, it allows the user to identify nano-scale particles and structures in the image without requiring any other sample preparation.
CytoViva produces, markets and sells its High Resolution Illuminator (HRI) system, which is based on technology developed by an Auburn University professor. It is licensed exclusively to CytoViva through Auburn University’s Office of Technology Transfer, which serves as the link between the commercial marketplace and AU faculty.
Hyperspectral imaging technology (HSI) has been integrated into the company’s nano-scale microscopes, which enables further research on the tiny particles. Hyperspectral imaging involves subdividing the electromagnetic spectrum into very narrow bandwidths, for increased optical capabilities, and was developed by the U.S. Department of Defense for reconnaissance in identifying camouflaged materials.
In the marketplace since January 2005, the company has installed its HRI system in more than 240 facilities worldwide. The company has been selling its HSI system since August 2008 and has installed about 35 worldwide. Work is underway to make the optical illumination system capable of producing 3-D images and to expand the HSI system into the near-infrared range.
“These expanded capabilities will allow us to more fully serve the more than 15,000 estimated laboratories worldwide that are doing nano-based research,” Lawrence says. “Given our unique capabilities, established brand name and growing international distribution, we feel we are well positioned to grab a large portion of this market for years to come.”
Quick-response genetic testing puts DNA into physician practice
Molecular-based genetic testing may soon be as routine as checking weight, blood pressure and temperature. Kailos Genetics is bringing “genetics into the clinic” with technology that can identify and track a person’s DNA, and delivers the results in one week instead of today’s standard of four or more.
A patient’s response to drug therapy varies widely, and much of this variability is linked to an individual’s genetics. With genetic results delivered in a timely manner, physicians can quickly learn what drugs may be able to pinpoint a personalized therapy, avoiding drugs that may cause adverse reactions or be less effective.
Kailos licensed a technology in 2010 that overcomes key barriers in genetic testing—time, cost and information management, explains CEO Brian Pollock.
Founded in 2010, Kailos is based at Huntsville’s HudsonAlpha Institute for Biotechnology. Kailos currently provides cancer researchers with testing they can use in their laboratory. This year, Kailos plans to apply this technology to the clinical market. Trials will be conducted on its new genetic test designed to provide oncologists with quicker results in determining the right cancer medications to prescribe based on their patients’ DNA.
Chief Commercial Officer Michael Walters says the company is positioned to make a difference in human health and now is the time to move from an R&D company to a commercial entity.
Pollock expects Kailos to impact three markets—research, diagnostic and pharmaceutical services. The company plans to launch its first research kits in late first quarter 2012, followed by a larger panel in the second quarter. These kits will allow researchers worldwide to effectively and affordably get from biological sample to results.
The ability to sequence the human genome for genetic variation has generated both excitement and promise, adds Pollock. But it also has brought about limitations—cost, time and a burdensome amount of data—due to the size of the human genome. Kailos technology targets the genome’s relevant areas only.
Sequencing unnecessary genetic material, he says, is like “having to buy tickets for the entire season to see the one game you want.”
There is a race to lower genome sequencing costs, Pollock says, and what many researchers need is a system that provides information targeted at those genes most critical to the diseases they are studying.
“Our ultimate mission is to provide patients and physicians with information that provides a better outcome for patients by putting genetics into practice,” Pollock says. “This will be accomplished through broad availability of our technology in the research markets, as well as physician-accessible testing through laboratory services.”
A new leader in porting software
Companies wanting to improve their application software to run on new computing platforms traditionally had to manually re-write the software, commonly known as porting. Companies can now save time and money by eliminating the porting task with automated software reuse tools offered by MapuSoft Technologies, based at the Business Innovative Center in Mobile.
President and CEO Raj Johnson, seeing what he calls “a great market opportunity,” established MapuSoft in 2001. “We are now seen as a leader in the porting products and services market,” Johnson explains, “and we came to this point by establishing strong and neutral vendor relationships, and also offering an extensive combination of solutions.”
MapuSoft’s software interoperability and reuse tools help protect a company’s software investment from platform changes. The tools also offer a way to optimize the performance of the computing platform specifically for the application. MapuSoft also offers porting, integration, and support and training services to help developers migrate code from legacy platforms to the next generation.
Boeing, IBM, General Electric, Lockheed Martin, Fuji-Xerox and Northrop Grumman are some of MapuSoft’s largest customers. The company serves the aerospace and defense, medical, telecom, automotive and consumer electronics industries.
Johnson says there are no competing products in the market, so his main objective is making potential customers aware of MapuSoft’s offerings. His strategy is to expand sales by using distributors and partnering with operating systems vendors. The company sells through 11 distributors in Asia, Europe and the Middle East. The company also has a secondary development and sales center in India.
When Johnson was in the early stages of developing his company, he was confident that he had a product that would be in demand, but he lacked the resources for advertising, marketing and other promotions, recalls Mary Ellen Keller, a director of the Business Innovation Center. BIC directors convinced Johnson’s board to invest in sending the MapuSoft team to trade shows in their industry as their primary marketing initiative. The exposure led to a major U.S. company purchasing their products, which led to wider recognition.
“We want to be the No. 1 solution provider when it comes to re-hosting software across a wide variety of computing platforms, with a focus in embedded and mission-critical applications,” Johnson explains. Plans also include increasing market awareness with direct marketing and continuing to expand product offerings with a greater emphasis on increasing revenue in the services market. Global expansion, he adds, will happen by establishing successful distribution channels in various countries.
Touching Hearts Senior Care
Nevada born, Alabama incubated, growth-targeted eldercare
Aging in place—the ability to grow older without having to move—is gaining in popularity as the aging population increases. According to the AARP, nearly 90 percent of people over age 65 say they want to stay in their home as long as possible, and four of five in that age bracket believe their current home is where they will always live.
As the aging population that desires to stay at home increases, so does the need for services to make aging in place possible. Touching Hearts Senior Care in Mobile was started in 2007 to help improve the quality of life for people wanting to do so. Co-owners Gina Germany and Richard Perry provide caregivers who assist with meals, transportation, errands, bill paying, light housekeeping, bathing and other basic activities.
“The impact of this booming industry is huge,” says President and CEO Gina Germany, who currently employs about 70 full and part-time staff. “Every day until 2030, there will be 11,000 baby boomers turning 65. The numbers are phenomenal.”
Touching Hearts also provides a program called Welcome Home, which assists patients being discharged from a hospital or institution by providing transportation back home. The caregiver also provides the in-home services that are needed, such as grocery shopping and meal preparation, to ensure that the client is able to readjust to at-home living.
Elder care case management is another service offered by Touching Hearts. A certified senior advisor assesses a client’s needs and helps the client navigate the complexities of the Social Security Administration, Medicare, Medicaid, the Veterans Administration and other bureaucracies that provide elder services.
Germany spent many years working for nonprofit agencies and later became a certified senior advisor. While living in Nevada, Germany made plans to relocate to the Mobile area, where she wanted to start her senior care business in an incubator. The Business Innovation Center in Mobile advised her over the phone for about six months, and Germany was ready “to hit the ground running” when she arrived in Mobile, explains Mary Ellen Keller, a director of the Business Innovation Center, where Touching Hearts Senior Care is based.
Germany believes the next three years will be a period of major growth for Touching Hearts Senior Care. Along with expansion in Mobile, plans call for expanding services in Baldwin, Escambia, Washington and Jackson counties. Within three years, Germany believes Touching Hearts Senior Care will grow into a multi-million dollar business, employing more than 6,000 caregivers.
Value added: A human factor in drug development
Human cell research should be used routinely in drug advancement and development, but that’s not always the case, notes Erik Schwiebert, director of DiscoveryBioMed, a Birmingham-based company that specializes in human cell engineering and human cell-based drug discovery.
The company is currently offering its human cell platform-driven drug validation and profiling capabilities to the commercial marketplace, to seize a majority market share in the drug discovery and development enterprise, Schwiebert explains.
“It has taken the better part of two years to find this fit within this marketplace. Both in the services sector as a contract research organization and as a therapeutics discovery company, our human cell-centric drug discovery operation is the novel value added to the marketplace.”
The company began in 2007 in the business incubator program at Innovation Depot in Birmingham—the entrepreneurial center that partners with the University of Alabama at Birmingham—and graduated from the program in September 2011. DiscoveryBioMed now has office and lab space at Riverhills Office Park, in Birmingham.
“Life sciences and biotechnologies companies are notorious for being late to revenue. This historical fact carries significant risk, which is adverse in general and particularly now, with a still uncertain economic climate,” Schwiebert says. Despite DiscoveryBioMed spending its formative years in a weak economy, the company’s success is due in large part to its ability to serve both the commercial and academic sectors with its human cell-driven programs and experiments.
According to Schwiebert, this dual approach has increased DiscoveryBioMed’s revenues since the first year of operation. It moved to seven-figure revenue in 2011 and Schwiebert foresees another seven-figure year in 2012 and a projection of additional profitability. “We have done this through multiple revenue generators staggered out over time, including revenue from service contracts and sale and license of human cell lines and platforms, and from Small Business Innovative Research grants and other types of grants.”
Schwiebert points to significant precedence for specialty drug discovery companies being acquired by larger biopharmaceuticals. In the meantime, DiscoveryBioMed is focused on developing drugs for chronic respiratory diseases, renal diseases, cancers and metabolic diseases, such as diabetes and obesity.
Supporting Alabama entrepreneurship also is important to Schwiebert. Each fall, he and Joe Ritchie, head of business development and staff scientist at DiscoveryBioMed, teach an MBA course called “Idea to IPO” at the UAB School of Business. “DBM and I feel strongly about identifying and helping new aspiring entrepreneurs to found and launch new companies here in Birmingham and across Alabama.”
Targeting a better chemotherapy
A new drug delivery system in the battle to beat cancer is being developed by Serina Therapeutics, a small, privately-held pharmaceutical research and development company on the campus of Huntsville’s HudsonAlpha Institute for Biotechnology. Serina Therapeutics was incorporated in the fall of 2006 and is one of HudsonAlpha’s original associate companies.
Serina’s technology is based on the polymer polyoxazoline (POZ), a water-based polymer that can be made using a relatively simple chemical process. Cancer-fighting drugs can be attached to the polymer, allowing the drug to be released into the cancer patient’s system at a slower and more controlled rate than today’s chemotherapy treatments, allowing for greater recovery and fewer side effects.
The company has designed and manufactured a new generation of biopolymers that can be used in a range of pharmaceutical products. It’s believed that these “POZ systems” have improved chemical properties, are safer and have wide applicability.
CEO Randall Moreadith says Serina has developed these polymers with anti-cancer drugs attached to them that show remarkable effect in animals, which suggests that the drug might be successful in treating human cancers. Serina researchers have discovered that these polymers impart a long “half-life” to the attached drugs, in some cases longer than the parent drug that is attached to the polymer.
Other companies have tried to attach cancer drugs to polymers to promote a potent anti-cancer effect. Most of these attempts have shown good results in experimental animals, Moreadith explains, but have failed in the clinic. He believes that failure is caused by drug delivery systems that don’t give the tumor enough sustained exposure to the cancer drug.
“Our POZ does, and to date it promotes a half-life extension of the drug from hours to weeks,” he notes.
Serina will initiate a Phase I program in humans later this year at the Clearview Cancer Institute in Huntsville. Although Moreadith believes their drug delivery system will succeed where others have failed, he says it is too soon to speculate on the impact it will have in the marketplace.
“I believe we are at the forefront of introducing a novel new polymer that will allow companies to attach any number of drugs to our POZ,” Moreadith explains, “and then target them specifically to cancer cells. Our patent estate continues to issue, and we will accelerate that process in 2012 and 2013. I do believe we have a powerful new technology in the battle to fight cancer.”
Jessica Armstrong is a freelance writer for Business Alabama. She lives in Auburn.