Two brothers who own a rapidly expanding biotech company in Mount Laurel, Medical Diagnostic Laboratories (MDL), are building their own 50,000 square-foot facility on Yardville-Hamilton Square Road. Jerry Moradi and Eli Mordechai have broken ground on a five-acre lot that is behind Yardville National Bank and next to Selective Insurance.

To be closer to the delivery systems for their DNA testing services and to their potential pharmaceutical clients, they needed a more central location, one that was nearer to the turnpike. They have applied to the state for various incentive grants. "When we opened in Mount Laurel, we were extremely small, and we didn’t think about such a rapid development of specific testing for infectious diseases," says Mordechai.

Mordechai founded the company in 1998 with four people. Now it has 100 employees, and by the time MDL moves it could have up to 120 people, possibly growing to 300 or 500 workers in five years.

Using Mordechai’s method of DNA testing, MDL can test for 90 illnesses, including sexually transmitted diseases and the West Nile virus. It has a new blood test for babessia, a pathogen transmitted by ticks that also carry Lyme’s disease, and it has a new way to use one gynecological swab to test for 17 different pathogens.

Moradi (the elder brother) and Mordechai (who has kept the traditional name) were born in Israel, where their father was a plumber and their mother a kindergarten teacher. Moradi, a builder and developer, is the CEO of MDL, and Mordechai, the scientist, is the vice president.

Moradi started out in the merchant marine and the Israeli navy before moving to the United States in 1981. Among his development projects have been the Newman Building on Quakerbridge Road, University Office Plaza, and the residential development behind it. He is married to the daughter of the late Stanley Newman and they have two children. Moradi Enterprises will do the construction of the MDL facility, with financing from Yardville National Bank.

Mordechai says he has been fascinated by infectious diseases since he was six years old, and that his mother encouraged his interests. He emigrated when he was 16 years old, graduated from Rider University in 1990, and has a PhD from Temple.

MDL has tests for chronic fatigue syndrome, atherosclerotic risk, infectious arthritis, and it works in the areas of virology, bacteriology, and mycology. One of MDL’s significant products is its "one swab, 17 pathogens" test for gynecological disease.

MDL’s tests use a real time polymerase chain reaction, a molecular technique called amplification or cloning, to make multiple copies of specific gene. "With billions of copies it is easier to detect the infectious DNA sequence," says Mordechai. "This technique is not new but our unique idea is to do multiple pathogens with one swab. After we make multiple copies we add a probe, a specific DNA sequence that recognizes the infectious sequence and binds to it and emits light. This light can be caught by a machine and quantified."

Among MDL’s R&D projects are newer and better tests for vaginitis. Some chronic vaginal infections are resistant to over-the-counter medications, but women keep on self-medicating anyway. MDL’s test would identify the mutations that cause chronic disease and so that physicians would know which medication to recommend and how much should be used. This test could be ready in a year and half, says Mordechai.

Medical Diagnostic Laboratories (MDL) 877-269-0090; fax, 856-608-1667. E-mail: sales@mdlab.com Home page: www.mdlab.com

#h#NJ Support For Biotechs#/h#

As part of a big push to support New Jersey’s cluster of pharmaceutical and biotech companies, the state wants to create a $10 million venture capital fund to support new life-sciences companies. The fund would be financed by residual funds from the Business Employment Incentive Program (BEIP), part of an overall $50 million to be invested in job creation.

"The state has a rich history as a leader in the biotech and pharmaceutical industries," said State Treasurer John E. McCormac in an announcement earlier this fall. "The venture fund will help assure that New Jersey continues this role for the next generation of biotech advances."

"We’re thrilled," says Debbie Hart, president of the Biotechnology Council of New Jersey. "We need early-stage life-sciences company funding in New Jersey. The administration had been looking for ideas on how to help life science companies in New Jersey, and we responded with this suggestion. I keep pinching myself hourly to make sure I’m not dreaming."

McCormac says he expects that private investments will at least triple the fund, which will make equity investments in early-stage biotech and life-sciences companies in New Jersey. It will be administered by the New Jersey Economic Development Authority. The Biotechnology Council of New Jersey is supposed to have input on the criteria to be used in making the investments. A private fund manager is going to be hired.

Medarex is the poster child for this push for seed capital. Its first spinoff, GenMab, was established in Denmark because of that country’s potential for investment. Raising $183 million in 2000 it broke the record for the largest biotech IPO in Europe and has 200 employees, only 17 in Princeton. Now Medarex is producing another spinoff, KeyCell Therapeutics, and it hopes to keep that company at home.

While the Medarex mouse can work in many areas, such as its recent anthrax discoveries, KeyCell will focus on developing cancer vaccines. Right now KeyCell has a half dozen people, but if more money comes through, it could be another GenMab.

"Our people live in the area and we would like very much to keep KeyCell close at hand," says Don Drakeman, Medarex CEO and former president of the BCNJ. "The venture fund is a great idea, and it should help build the biotech industry in the state and contribute to the economy."

Drakeman also supports the concept of setting aside part of the state pension funds to professionally managed venture capital firms. "This is commonly done by almost every other state, and it should not only enhance the pension fund’s investment returns but also contribute to the growth of the biotech industry in New Jersey."

Neighboring states are competing for biotech start-ups. According to an Ernst & Young report, New Jersey is fifth on the list of biotechs, with California first, Massachusetts second, and Pennsylvania seventh. Pennsylvania established three biotech greenhouses with $100 million from its tobacco settlement money, but it has yet to follow New Jersey’s lead in letting young companies sell its unused tax credits for cash.

New Jersey’s Business Employment Incentive Program awards tax credits to companies that move to the state or create a certain number of new jobs here. Under the BEIP the state promises give back up to 80 percent of their gross income tax payments. The six-year-old program has awarded a total of $754 million to 311 companies.

McGreevey’s initial budget was going to eliminate those payments on these grants, but a recent compromise would let the state borrow $70 million to cover the payments this year. The EDA plans to issue $231 million in bonds as a way to cover grant payments through 2007 if the monies are not made available by the legislature.

If the state pays 80 percent of the gross income tax, it keeps 20 percent and considers that "found money," tax money that would have been collected were it not for the BEIP. "We use that 20 percent to spur further job growth," says Matt Golden, spokesperson for the treasury department.

From that 20 percent would come the $10 million for life sciences. It would be part of the bond issue to be floated by the NJEDA. More job creation initiatives, for a total of $50 million, will be announced in the coming months, says Golden.

What would this new venture fund mean to Princeton? The U.S. 1 database of Princeton/Central New Jersey companies shows 58 biotech companies. This compares with the Biotechnology Council of New Jersey’s figures for the whole state: 120 biotech companies that employ more than 8,000 people.

To put $10 million in perspective, the New Jersey Technology Council (NJTC) Venture Fund now has $80 million, thanks partly to its limited partners (NJ Economic Development Authority, Commerce Bank, Merrill Lynch, and Kemper Insurance) but mostly to the federal government. The Small Business Development Center’s SBIC program contributed $50 million. Now the NJTC fund is the largest early stage fund focusing on New Jersey. The fund has chosen eight companies so far, including Epigenesis (see story below) but ultimately will have 25 portfolio companies, and about one-third will be biotechs. Each of its companies will get an initial $1 to $2 million and about an equal amount later, for a total of $3 to $4 million.

Both funds pale in comparison to the just-established Battelle Venture Fund, headed by Mort Collins, which will invest nationwide; it starts with $150 million and could grow as high as $900 million (U.S. 1, October 15).

#h#From Epigenesis To Polymerix#/h#

Karen Giroux, former president of Epigenesis at Cedar Brook Corporate Center, is now chair and chief executive officer of a company that is based on the polymer research developed by Rutgers scientist Kathryn Uhrich. Located at 10 Knightsbridge Road in Piscataway, Polymerix exemplifies the biotech companies that New Jersey hopes to attract with its new venture fund. It is New Jersey Technology Council’s Life Science Company of the Year and also the recipient of the Thomas Alva Edison Patent Award from the Research & Development Council of New Jersey.

Uhrich (pronounced your-ick) is an associate professor in chemistry and chemical biology at Rutgers. She is working with pharmacologically active biodegradable polymers that can be used as coatings, formed into microspheres, or used as carriers for other drugs. One of her patents is for a medical device coating that is good for coronary stents because it prevents scarring of the arteries. Sometimes called "plastic aspirin," this technology incorporates the active ingredient in aspirin into the polymer structure.

Giroux, who labels herself a serial entrepreneur, went to Massachusetts Institute of Technology and did graduate and postgraduate work there and at North Carolina State. She worked for the department of agriculture in North Carolina, with Harry Brener at Technology Management and Funding, and with George Muzinich of Manhattan-based Muzinich & Company, which did private placements for Epigenesis.

Giroux organized the first significant investment in Epigenesis and was the first non-scientist president. "I prepared the first stage of documentation for the FDA for our first product and then we hired my replacement, somebody with more experience working with the FDA," she says. "There was some evidence that the first drug could be effective, but a business decision was made by the new investors not to pursue it," she says. Epigenesis has reorganized, significantly downsized, and has different leadership (www.epigene.com and U.S. 1, September 27).

Giroux and Uhrich founded Polymerix, with Rutgers University and Robert Butz, in 2000. Giroux has landed a $4.5 million strategic partnership with a medical device company and $3.9 million in investment from prior investors and Sherbrooke Capital Partners LLC (www.polymerixcorp.com).

#h#Rutgers’ Biotech#/h#

With $3.5 million figuratively in his pocket, Ilya Raskin is going hunting for pharmaceutical gold in Kyrgyzstan and Uzbekistan. The National Institutes of Health hopes Raskin will find plants, fungi, and microbes with the potential to make miracle drugs.

Raskin teaches plant biology and pathology at Rutgers Cook College’s Biotechnology Center for Agriculture and the Environment. He also works with Bertold Friedlander at an R&D company, Phytomedics, on Stults Road in Dayton (www.phytomedics.com). With colleagues from Rutgers and the University of Illinois, he will lead the biodiversity team.

"The extent of the goodwill, hospitality, and friendship we encounter in these countries is truly unprecedented," says Raskin. "We are pleased that the world’s geopolitical situation favors the development of strong and lasting ties with these two U.S.-friendly Muslim nations."

Discovering raw materials for pharmaceutical products can help develop new business and industries in developing countries, says a Rutgers press release. Raskin has left on his travels and was unavailable for comment. A search like this one also offers a training ground for a new generation of scientists and helps conserve native biodiversity.

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