The busy life of a stem cell (biotech) startup founder

If you ever thought of launching a biotech startup… the following blogterview is for you. Jim Hardy is a long time insighful commenter of Pimm and he shared with me his brand new experience as the founder of a biotech startup in the much hyped field of regenerative medicine. The transparency of the interview makes it really valuable besides its information richness thanks to Jim. I found especially useful the used equipment network by necessity, which could be the base of a worldwide biotech startup network and could serve a biodiy movement. Make no mistake: biotech is the next IT.

ACs: Would you be kind enough to introduce your background?

JH: My name is Jim Hardy and I have a BA in Biology and Chemistry from Wittenberg University, a small Liberal Arts school in Ohio. I sold Xerox office equipment for a couple years after school before getting back into science. I was large-scale chemical mixer making laundry detergents, a lab tech at the University of Rochester for 3 years and dabbled in graduate classes before moving to Maryland in 1988 to work in R&D at Life Technologies, which is now Invitrogen (a subject for a separate post). I have always found R&D rather boring and would rather finish one project and move on to the next, so the rest of my career has been in Manufacturing.

ACs: What is the story of Gahaga BioSciences?

JH: Gahaga is an acronym for the three founders: Garner-Hardy-Gage. That’s always the first question. We started the company to commercialize a proprietary method for extracting 3-5 times the number of implantable HSC from afterbirth than is achievable from traditional Cord Blood recovery procedures. Our current business has drifted away from the initial goal. I found your blog, because I was googling amniotic stem cells, or something of that nature. The initial process I am using for producing MSC’s is almost precisely as you describe in the “Make Stem Cells at Home” post and in your poster. Dissect amnion, digest, plate or freeze. So, by classification, my cells would be Amniotic Membrane-human Mesenchymal Stromal Cells (AM-hMSCs).

I just learned our cells stain intensely positive for Nestin (a neural stem cell marker), by Cellomics Array scan and CD 44+ (hematopoietic stem cell marker) by FACS. Right now I am just looking to get these cells into as many places as possible to learn what exactly they are.

Gahaga Biosciences is a client company of the Frederick Innovative Technology Center (FITCI), a business incubator program in Frederick, Maryland. Anyway, I’ve just started a local blog called Frederick County Biotech Community.

ACs: What are your working on at this very moment?

JH: I have three separate groups working with me now:

Last week, I dropped some cells off at Dr. Bressler’s lab at Johns Hopkins. They will use them for toxicity work and also to teach a class at the NIH on how to use stem cells (in exchange for free publicity).

I am also working with Dr. Farrar in the Cancer Stem Cell group at NCI here in Frederick. They’re phenotyping the cell line as well as looking at gene expression during differentiation. They have specific of targets they’re most interested in, of course , so I still have some phenotyping to do.

Then I have Dr. Kelleher-Anderson at Neuronascent running Cellomics Array scans . She’s a neuronal stem cell junkie and wanted to look for precursors and hopefully take some pretty pictures for me.

And this week I was talking with an old colleague from Life Tech days. This person invented Lipofectin and commercialized the cationic lipids for the first time back in the late 80’s early 90’s. He has started another new company, tinkering around with novel transfection reagents and wants to use stem cells. Maybe that’ll be the fourth collaboration, although that collaboration would be entirely commercial.

I will know in a few weeks time whether or not I have “stemness” factually instead of just looking like they are supposed to. That would give me something saleable that I could market to researchers. The business model for Gahaga is to make the research tools for the researchers so they don’t have to spend all of their time making things they need to accomplish their research. Kind of like like the hardware store in a gold mining town.

ACs: Where does the funding come from?

JH: I am self funded. I have enough to sustain myself for 20-30 months, in terms of paying the bills, sending kids to college and buying materials. I am funding my “research” by sourcing and processing tissue for a couple of small start ups. Making foreskin feeder layers, cord blood serum for culturing, HUVEC (Human Umbilical Vein Endothelial Cells, soon to be MSC from Wharton’s jelly, too) and just working up a human placental BME (basement membrane extract) for culturing ES cells. I am also sell a lot of used equipment and we’re also distributors of just about any lab supply you’d need.

Oh, and our latest project is to now become the Biodiesel Testing Center for the State of Maryland! That was a weird twist that just fell into our lap. We have just installed 2 GC’s (gas chromatography system, on free loan from PerkinElmer if we help write their SOPs, standard operating procedure), free lab space from the State and have already started testing last week.

Kind of busy. Maybe some day there’ll be some money in it for me . I applied for Md Stem Cell Commission funding but was not funded. I have also submitted a grant through the NIH/SBIR programs, but no external funding has come trough. At some point in time, I will be trying to raise money through investors, if I am not able to make ends meet on my own and after establishing a few sustainable products.

ACs: Foreskin feeder layers are the replacements of the animal (mouse) feeder layers for hES cells but another big culture problem is the “black box” fetal bovine or calf serum used for human stem cells that eventually should be prepared to clinical trials. How much FBS are you using in your medium and how would you like to eliminate them?

JH: I don’t use FCS in my medium. Although I am using medium from other commercial sources which are known to contain FCS, I use cord blood serum and placental plasma in my own media, which I produce myself. I use a proprietary formulation that I have developed based on my years of work with primary cells.

ACs: What type of used equipment network do you have? This sounds like a terrific recycling idea and one that is perfect for capital-low rookie biotech entrepreneurs.

JH: We have a pretty extensive used equipment network, actually. I am working with a number of the “big guys” in the area (Lonza/Cambrex, Human Genome Sciences, Digene/Qiagen, Invitrogen, Medimmune) because I just happen to know a lot of people in those companies (thanks to Invitrogen eliminating for 2,000 jobs in Maryland in 2000) . They are constantly turning over equipment. I do all of this through BridgePath Scientific although we’re not advertising the used equipment through the web site, yet. We just brought a mechanic on board last week and he’s going to be posting it soon. Just bought 11 biosafety cabinets, 6-8 analytical balances and a bunch of other lab ware from a wholesale group, so we will be busy. Through BridgePath, we’re also able to pool our purchasing power and get pricing on lab supplies that normally are only available to big companies. We are also starting to sell and market products produced by other FITCI companies, so we have closed the supply chain loop.