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This article by Barbara Fox was prepared for the June 9, 2004
issue of U.S. 1 Newspaper. All rights reserved.
Keys to Success – Slow, Steady, and Small
Kirti H. Valia has been around the block several times, each time learning a little something more that could help him with his start-up pharmaceutical company. In between jobs in northern New Jersey and Indianapolis, he had worked in Central New Jersey for four different companies before starting his own, Core-Tech Solutions Inc., now on Lake Drive in the Twin Rivers section of East Windsor.
Founded in 1998, Core-Tech has had an R&D lab at the Burlington County College incubator in Mount Laurel, and by next year expects to hire 10 employees, followed by 15 more workers over the next several years. Valia has bought a 10,000 square-foot building that has been renovated to comply with Food and Drug Administration manufacturing standards. Core-Tech will manufacture drugs, such as transdermal patches, that deliver drugs through the skin, and one of its R&D projects is to develop vaginal creams as delivery devices for progestins, spermicides, and microcides.
As interesting as Valia’s science are the methods he uses to build his business. He says that, as a scientist, he tries to observe everything and tries to learn from everything. "There are so many things in your newspaper," he says, referring to U.S. 1, "that even if you take one sentence or one paragraph out of it, you can go a long way. A lot of people get a lot of good hints and directions. All my credit goes to your newspaper."
Some examples: Having read about the Trenton, New Brunswick, and Burlington County College incubators, he set up his business at BCC in Mount Laurel. Having read about a professional resume consultant, he contracted for a resume and cover letter and used it to gain good exposure at a drug delivery conference. Having read about the offerings of the New Jersey Economic Development Authority, he investigated getting an EDA loan to buy the Lake Drive property – 10,000 square feet on three acres for $1.17 million, plus $1 million for converting it into a Food and Drug Administration-approved manufacturing facility with a sophisticated security system. As it turns out, he opted instead for a loan from Sun National Bank, because it was four times as large ($800,000) and came with fewer restrictions. The EDA loan, he says, required him to use union labor for the rehab.
"We got a home equity loan, and during the last 25 years, we saved money and invested in stocks wherever I worked," says Valia. "And because of that, the bank gave us a mortgage and an $800,000 line of credit." The bank insisted that he buy the building for two reasons. "If we don’t survive, at least we have the building. And by the time our drug is on the market in 2006, and if the building owner didn’t extend the lease, we would have to start over."
Valia also observed the struggles of other young firms and gleaned useful tips from their travails. Some failed because they hired too many people too soon, he decided. So as of now he has just two employees: himself as CEO and his wife, Manjari, as vice president of operations. Everyone else is employed as a consultant. Valia turned away the enticement of the state tax incentives that would depend on creating steady full-time jobs.
Core Tech’s work will be too cyclical to hire full-timers, he says, and it is more a question of timing than of cash. "I have enough money to hire 10 people, but I don’t have time to hire them, train them, write SOPs for them, and supervise them," says Valia. Hiring will come later. "When the machines start to run, in the second quarter of next year, then we have to have 10 people." Meanwhile he is engaging almost two dozen consultants on a per-diem basis, at rates of $500 or $1,000 per day, for services that range from regulatory affairs to security.
"One day we will have 10 people, and 25 people, but we will make sure we do it the right way," he says.
The founder’s name, pronounced Keerti, means "fame." At age 15 his father borrowed 15 rupees, left his village, and came to Bombay, later bringing his brothers and sisters to Bombay, and the family grew to 100 people in size, most of them working in the family business, manufacturing saris.
Valia earned his BS in pharmaceutical chemistry from the University of Bombay in 1973, emigrated to Pittsburgh to earn his master’s degree at Duquesne University, and went to work for Arthur D. Little in Boston to work on synthesizing anti-cancer agents. He returned to India to marry his wife, Manjari, a 1973 graduate of the University of Bombay. When she came to this country she earned an associate’s degree in computer science from Mercer County Community College. For 16 years, in the time period from 1979 to 2002, she worked at AT&T’s Bell Labs. She and her husband have two grown children.
Valia was a bioanalytical chemist at Carter Wallace from 1977 to 1982, meanwhile working on his PhD at Rutgers. His research was on transdermal drug delivery, getting the drug through the skin, which can improve patient compliance.
Moving his family to Indianapolis in 1984, he worked for Eli Lilly & Company, developing liquid formulations and pediatric suspensions for Prozac. In 1992 he joined Piscataway-based TBS Laboratories with his former professor, Yie Chien. The company struggled. "Since then, I learned that when you have a company, you need to make sure you have a product, even if is only a five-cent product," says Valia. From 1994 to 1996, at Warner Lambert, he worked on over-the-counter products such as Zantac and Rolaids.
In 1996 he helped to set up the United States division of Lavipharm, a pharmaceutical formulation and particle design company, in Piscataway. Lavipharm, in fact, was the first company that he brought to East Windsor. Valia says he helped to select the Lavipharm site at 69 Princeton Hightstown Road. "They are my competition now," says Valia.
He left Lavipharm in 1998 to start his own firm. "I read your newspaper, got 500 square feet at BCC and started doing consulting, getting contract research projects from small, medium, and large companies, contract research," he says. "I had 12 clients in the first for years. Then in 2000 I got a major National Institutes of Health grant, and that turned it around. I had three major projects in 2000 and 2001, and I made so much money that I used 50 percent for salary, the rest to buy equipment.
By the end of this month Valia expects to get his equipment qualified by the FDA to make clinical batches of a product that he licensed to a pharmaceutical company. He cannot name either the licenser or the product, a patch that delivers drugs through the skin. For the next three months he will make the clinical batch of this transdermal patch, and from October to December he will run clinical studies. The product won’t be ready for release until at least 2006, but the FDA requires the same machines to be used for the clinical batch as for the commercial batch. That’s why he needs the machinery in place now.
The equipment came from a San Francisco company that had been bought out by Johnson & Johnson, and because Valia was his own boss, he was able to get a cut-rate price. "I bought the whole thing, and they were surprised that I didn’t have to get approval from anyone. No, I said, the approval is done."
Core-Tech’s neighbors in Twin Rivers Business Park include four other pharmaceutical companies: Neil Laboratories, Esoterix, NexMed, and Hovione. Core-Tech’s one-story brick veneer building was erected in the mid 1970s and used by United Piece & Dye until 1988 when it was purchased by MAS Laboratories, which ceased operations in 1995. Then it was purchased by VolMar Services, a construction firm that used the space to warehouse supplies. (VolMar Services now lists its address as Box 839, Wrightstown 08562-0839.)
Charles Segal of Segal Commercial represented VolMar, and though a real estate agent had been helping Valia to find space, Valia came across the Lake Drive address on a drive-by and negotiated the lease by himself.
"We bought this facility in September, 2002, for $1.17 million," says Valia, explaining how he changed his business model when he acquired property. "At that time I had three chemists plus myself. I helped them look for a job somewhere else, and now we have two people, the vice president of operations and me."
"During the last two years, many companies came asking to buy me out for $2 million, and I declined. I came with $8 in my hand in 1973, and I don’t want to look for a job again. I learned I don’t want to prove myself to anybody."
"This is what my father told me, on a different continent, that as long as you work hard and have a degree, people will respect you. I tell my son the same thing. I called him an hour ago, and I told him, "Make sure you work hard.’"
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