GREENVILLE, SC – The story of how Greenville, SC–based life sciences startup Selah Technologies was acquired by UK-based Lab21 may seem complicated at first. Indeed, bringing the two companies together involved a veritable army of company executives, economic developers, and community leaders. In another sense, however, the story, like most great ideas, couldn’t be more simple. Michael Bolick, who founded Selah and is now President of Lab21 Americas, is a veritable poster child for how global pipelines – defined simply as one company closely cooperating with another company from abroad – can help small to midsize companies make huge advances in innovation, realize rapid growth, and ride the wave of industry sea-change to become true thought leaders. Bolick sat down with the Global Carolina Business Journal to talk about his key role as chairman of SCBIO, the history of Selah and Lab21, and the changing, fast-growing life sciences industry in the Carolinas.
Global Carolina: What is your vision for life sciences in South Carolina?
Michael Bolick: At the national level, the term life sciences, or biosciences, is typically used as an umbrella term that includes medical devices, diagnostics, and pharmaceuticals. This umbrella normally extends over ag-bio [agricultural biotech] and biofuels. In most states, companies under this umbrella work together to form a life sciences industry affiliate of the national BIO organization. By working together in this way, companies enjoy a more vibrant business climate than if each company or subsector goes it alone. The closest successful case examples in our region are NCBIO and GeorgiaBio.
Each year, the national BIO organization hires Battelle to survey the health of our nation’s life sciences industry with a state-by-state focus. This report told us two years ago that South Carolina is home to more than 500 life sciences companies. Last year’s report told us we are now growing towards 600. So we’ve had all these companies here, but we’ve historically had difficulty coordinating an industry organization. Several of us decided it was time to work together to move to the next level. We considered the situation and realized we needed more particular information than what was readily available from the Battelle report.
We approached Hildy Teegan, Doug Woodward, and others affiliated with USC’s Darla Moore School of Business for help. With support from New Carolina [SC’s Council on Competitiveness], Dr. Woodward was able to identify the specific number and subtype of all life sciences companies in each of the three zones in our state [Upstate, Midlands, and Lowcountry]. When we got the results back, we were startled to find that the companies are evenly distributed in all three zones. This was outstanding news because the general impression had historically been that our companies were clustered in the Upstate and the Lowcountry. This report enabled us to demonstrate to the South Carolina Department of Commerce and the regional economic development entities that the life sciences industry was something that we could all rally around together!
Our next effort was focused on working with other folks to eliminate a historical messaging problem. On this front, we were blessed to be at the right place at the right time. SCRA [the South Carolina Research Authority], had already been helping coordinate activities for the state’s transition to a knowledge-based economy. These efforts naturally encouraged the formation and growth of life sciences companies. During their normal course of business, SCRA acquired an entity in Greenwood that was called SCBIO but was not the state life sciences industry affiliate. In a gracious and timely manner, SCRA agreed to transfer the name SCBIO to our group so we would be named in a manner consistent with the other state BIO affiliates. So now when a landing party calls our Department of Commerce looking for the industry folks at SCBIO, they find that we are open for business. This is a critical step forward because business executives want to check the facts on the ground with local industry leaders as part of any landing party due diligence.
The next challenge was to make sure that all of South Carolina’s life sciences companies could come together in under the umbrella, or “big tent” model – a model very successfully implemented by GeorgiaBIO. So since our companies are evenly spread throughout the state, it just made sense to bring medical devices, diagnostics, pharma, ag-bio, and biofuels under the organizational umbrella of life sciences in the form of SCBIO. Thanks to an array of industry leaders, we reached critical mass and officially achieved this model in October 2011.
GC: At the first SCBIO conference, titled “Creating WOW!” [and held Nov. 9–10 in Charleston], it was pointed out that while South Carolina is no longer a “fly-over” state between RTP and Georgia Tech, our competition is not limited to those two powerhouses but is now global. In short, companies need to maintain “global pipelines” to enhance innovation and remain competitive. How do you see your former company, Selah Technologies, and its recent acquisition by UK-based Lab21 as an example of this concept?
MB: Let me start with a brief history of Selah and our cancer imaging technologies and how those caught the interest of Lab21. I founded Selah Technologies in 2006 after licensing from Clemson University a carbon-based platform nanotechnology – now trademarked as Selah Dots®. In late 2007 we narrowed the Selah Dots® development to a focus on molecular imaging of cancer. By February 2009 we had a working prototype: we could make cancerous breast cells light up and non-cancerous ones stay dark in a Petri dish; positive and negative controls. So we applied and were selected to present at the Life Sciences Venture Capital Summit in the Financial District in New York City – just in time for the Dow to fall from 14,000 to 6,300 points! So we achieved our plan and normally would have been entering the Financial District with a very confident posture, but we matured into a market that had everything but people jumping out of windows. We were hearing frequent stories of limited partners in venture funds who were no longer answering capital calls. People were shell-shocked, and risk capital was scarce.
While we attracted some interest from the venture capitalists in New York City, I was concerned that we did not have enough runway for that type of market. I came home and started the rounds – updating our investors and evaluating possible paths forward. Around that same time, Ed Snape, founder and partner at Nexus Medical Partners, contacted me and mentioned that Graham Mullis, CEO of Lab21, was searching broadly for a home for his U.S. headquarters. Ed saw a wide-open field of opportunity in South Carolina and suggested that I speak to Graham to describe the playing field for life sciences companies in South Carolina. In May 2009, at Ed’s insistence, I met with Graham and Berwyn Clarke, Lab21’s Founder and CSO. And the more we talked, the more I saw opportunity in Lab21's business model. At some point I realized that Selah’s molecular imaging agent might be a perfect fit in a fast-growing molecular diagnostics company. I told Graham and Berwyn that I didn’t know if there was going to be a way to put Selah and Lab21 together, but I was going to make it my mission to bring Lab21 to South Carolina. Because we need companies like this in our state. And so a 30-minute discussion turned into about four and a half hours on how to make this connection between South Carolina–based Selah and UK-based Lab21. And so, yes, I think this is precisely what you’re talking about around “global pipelines” and how beneficial they can be.
GC: These “global pipelines” are simply defined as one company communicating openly with another from overseas. That seems to be the case for Selah and Lab21. But it turned into quite a bit more in the long run.
MB: Yes it did. When I was thinking about what Lab21 offered, I was also thinking about all the people and groups who had helped Selah get to where it was, all the people who had been such a blessing to us. And I thought if I could take the innovative capacity of Lab21 from the other side of the ocean, which is constrained somewhat because of government-controlled healthcare, and unleash that capability set – that proven set of best practices around molecular medicine and personalized healthcare – in a U.S. market that is still globally competitive . . . I knew it could be huge.
The next step for me was to set the hook, so to speak. So I reached out to the City [of Greenville] leaders, the [Greenville] County leaders, the Upstate SC Alliance, the Greenville Area Development Corporation, the South Carolina Research Authority, SC Launch, the developer of the Next Center [where we are now located], to everyone I could think of to help me build the case that this was the place to come to. There is a great pro-business environment among our governmental agencies, the innovative capacities of the major universities [Clemson, USC, and MUSC], and a history and tradition of global business in the Upstate and throughout the Carolinas. In short, we all worked together to prove that South Carolina was the right home for Lab21 in America.
GC: And now you have the opportunity to carry on that tradition of building, growing, and utilizing the global network through SCBIO.
MB: That’s exactly what we’re doing. Part of the value in terms of landing a life sciences based company here in South Carolina is in leveraging a network of existing sector companies and enlightened industry executives who will help you be successful. SCBIO is determined to help you come here and be effective in launching and growing your business. That’s what SCBIO is all about! When you call in, we make it our mission to connect you to someone, a company that is doing something similar to what your company is planning to do. Someone who can help you learn the ropes and show you how the neighborhood is laid out, so to speak. And SCBIO becomes stronger with each new life science–focused company that launches or relocates here. One recent example of this strengthening is Nephron Pharmaceuticals Corp.’s announcement of new pharmaceutical operations in Lexington County, SC. The planned US$313 million investment is expected to generate 707 new jobs.
GC: What is the current state of Lab21?
MB: We just finished construction of our headquarters and molecular-diagnostics-focused clinical reference laboratory here in Greenville, South Carolina. Our lab is focused on helping regional clinicians realize the potential of personalized medicine, starting with oncology and infectious diseases such as HIV and hepatitis. Our products division, based in Cambridge, UK, just received 510k approval from the FDA for our first in-vitro diagnostics kit here in the U.S. We are in a number of exciting negotiations with firms who either want to distribute our products or are interested in our providing content to their diagnostic testing platforms. I can’t go into much detail at present, but I can say that our products and intellectual property offerings are proving to be very innovative and differentiating. In short, Lab21 in America will soon have a bevy of products to distribute throughout the U.S. market. Eventually, as the scale of U.S. distribution grows, we will need to start manufacturing here as well.
GC: Global pipelines often yield innovation dividends. Can you give us examples of this at Lab21?
MB: The type of innovation you’re talking about resulting from global pipelines is readily apparent here at Lab21. We’re doing a lot of cross-fertilization of ideas between South Carolina and the UK. For example, we recruited the lab director from Lab21 in the UK to come over here to Greenville. He is working over here for a year as Lab21’s director of laboratory services. So you talk about transfer of knowledge and best practices; we actually transferred the guy who wrote the best practices! On the flipside, [Lab21 VP of Operations and former COO at Selah] Ken Morgan and I have a robust track record of manufacturing in a FDA/GMP-compliant manner. Ken just returned to Greenville after a six month assignment in the UK. During this assignment, Ken helped our very impressive British partners to restructure our manufacturing operations to allow a substantial scale-up in manufacturing capacity. Ken performed a comprehensive review of our UK practices and performances to ensure we’re ready for FDA-compliant, high-quantity manufacturing capabilities in the Cambridge operation. So we’ve got expertise and excellence on both sides, and we have enjoyed capitally efficient cross-fertilization as a result.
GC: What are your next activities, some of the things happening now at Lab21?
MB: We are working to leverage Lab21’s track record of diagnostic service excellence with major multinational pharmaceutical companies from all over the globe, including the largest of the companies here in the United States. We’ve now transferred the undergirding best practices for molecular-diagnostics-focused clinical reference laboratory operations to our U.S. operations. We also have some exciting news coming soon related to a major initiative to demonstrate the clinical utility of next-generation sequencing. Our target customer base is responding very favorably! While the senior leadership at Lab21 always planned to position our company to thrive in the U.S. market, the decision to begin operations in South Carolina allowed an outstanding opportunity to realize greater potential with less risk out of the blocks. So the future looks very bright.
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