The Business of Research
Among their discussions after Mumper's return to UK was the idea that they should think about forming a company together sometime down the line, an enterprise that would get them into the drug-delivery business.
"We started submitting invention disclosures related to our work with microemulsions and nanoparticles, and thought we might form a company in four or five years to license these intellectual properties," Mumper says. "But then after about a year and a half we decided, why wait."
"Our work was coming along well, and we'd been watching new developments, reading the literature closely. So we decided that if we waited, we could get scooped," Jay says. The result of this forging ahead was the birth in 2000 of NanoMed Pharmaceuticals Inc. Co-founders Jay and Mumper were joined in 2001 by Stephen Benoit as the company's CEO.
"Russ and I went to a venture fair in Kalamazoo, Michigan, and made our presentation about the nanoparticle work we were doing," Jay explains. "Afterwards, Stephen came up to us and said he liked what he'd heard. He told us about his background, which is very impressive, and then he said, 'How would you guys like a CEO?' It was a very serendipitous meeting." Benoit, who holds an MBA in finance, brings to this venture over 20 years' experience in biotechnology, disease-management, pharmaceuticals, and finance services industries.
Jay explains that NanoMed is focusing on translating their research into the marketplace, and despite the economic downturn in the United States in the last couple of years, market opportunity is good, he says. "The global market for advanced drug-delivery systems was more than $16 billion in 2000 and is estimated to grow to more than $27 billion in the next five years."
"Resources are NanoMed's biggest challenge, no doubt," says Mumper. "Our labs continue to do well, and we'd like to commercialize this technology for biomedical applications, but you need money to perform the safety-toxicity studies in animals and do early clinical trials."
The general rule for product development, Jay adds, is that each product costs about a million dollars to get into clinical trials. "Then the weeding process starts," he says. "Of every 250 drugs that enter clinical trials, only one will get approved by the FDA. So drug companies and investors sink a lot of money into the process in hopes of the big score. People should understand that this is why drugs are so expensive. It's not because the companies are overpaying the scientists," he laughs.
But Mumper is undaunted by these challenging stats.
"A primary reason I came to UK," Mumper says, "is because I was ready to make a long-term investment in this research and translate it to market. It's also an investment in our state. Kentucky-based businesses like NanoMed can help keep some of our top graduates from leaving Kentucky."
"My greatest hope," says Jay, "is that some of our technology will make it to commercial products. In 15 years I'd like to be able to look back and say, 'Not only was it a great ride, but what we discovered and developed is being used to help people in measurable ways.'"
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