Corrections or additions?
This article by Barbara Fox was prepared for the
October 31, 2001 edition of U.S. 1 Newspaper. All rights
Life in the Fast Lane
Biotech companies aren’t supposed to go out of business
in the blink of an eye, but ValiGen did. On the day that U.S. 1
was completing a write-up of ValiGen for an October 17 cover story
for Space: Pharmaceutical and biotech companies find their niche in
central New Jersey), Monday, October 15, almost all of the 60
employees in Princeton were told to go home and expect no severance
Not three weeks before, ValiGen had moved its entire operation from
Newtown, Pennsylvania, into 50,000 square feet at the former AT&T
conference center on Carter Road. Its landlord, Maryland-based
Capital, had invested $8.8 million to fit-up the long-empty building
into up-to-date laboratory space for its genomics research. ValiGen
was so sure it would close
its next funding, ($12 million now, $12 to $15 million later), that
each of 10 board members put up $100,000 to carry the company through
the next pay period.
On Monday, October 15, all but six ValiGen workers found themselves
without jobs, and CEO Doug Watson resigned. On Wednesday, October
18, U.S. 1 published information reported the previous week. But the
roots of this trouble had begun on the all-too-recognizable date,
September 11, when the trauma of a nation triggered a significant
drop in ValiGen’s investors’ confidence and sounded the knell for
the promising biotech.
"The investors were meeting in midtown Manhattan," relates
Michael Blaese, former chief medical officer of ValiGen (U.S.),
they watched out the window as the towers fell. The papers were
but the due diligence had not been finished." Some of the
were clearly nervous. First one investor pulled out $2 million.
Friday, October 12, they learned that one of the two lead investors
had pulled out $4 million. Over the weekend, the management team
they would close the Princeton lab on Monday. They paid everyone and
said there was no money left."
ValiGen, the U.S. operation of a multinational firm, did pioneering
work in target validation: controlling genes to prevent disease and
find new treatments. ValiGen is expected to declare bankruptcy, but
not before it spins off a sister company, based in San Diego, that
works on agricultural genomics. Board chairman Stephen Evans-Freke
did not return phone calls by press time.
The property owner, Townsend Capital, will probably emerge from this
unusual situation relatively unscathed. Finished lab space is at a
premium, and the Townsends have hired Maryland-based McDevitt Real
Estate Services to market the property; there are already a handful of
The real estate broker who signed ValiGen into the space, Doug
of Grubb & Ellis, will likely lose his commission. He was also
to sublease one-third of ValiGen’s 77,000 square feet. "As late
as October 2, we were talking about getting the space ready for the
sublease market," says Petrozzini, "and there was no hint
that anything was wrong." He heard about the funding loss on
"The amount of chaos in this closing shows a complete lack of
preparedness," says Rick Metz, ValiGen’s executive director of
product development. Scientist-employees at ValiGen in Princeton have
learned that their health insurance will continue through November
and that they can roll over their 401ks, but they are getting no
pay. A handful of employees (the facilities manager, an accountant,
the network manager, a legal assistant, and a human resources person)
remain on the payroll.
The ownership of ValiGen’s target validation technology is in dispute.
The original work was done at the laboratories of Thomas Jefferson
University, and TJU is not giving up its patent rights easily. If
anyone can extract some of the technology and keep it viable, that
person is Blaese, who came to ValiGen from a stellar career at the
National Institutes of Health (NIH). He is hoping to transfer some
of ValiGen’s technology to a university like Princeton or Penn.
A 1961 graduate of Gustavus Adolphus College in Minnesota, Blaese
went to medical school at the University of Minnesota and spent 33
years at the National Institutes of Health doing research on rare
conditions, such as the "bubble boy" disease. He pioneered
gene therapy research and held the prestigious job of chief of
gene therapy of the NIH’s human genome project, leaving that in 1999
to be chief scientific officer at ValiGen’s predecessor, Kimaragen.
"The problem with a biotech with a human therapeutics agenda is
that it takes 10 to 12 years to make a profit," says Blaese. Money
for this type of company was difficult to find in the dot com era.
So Kimaragen merged with companies in Berlin and Paris. "It made
a fairly reasonable story on paper," says Blaese. The French firm
could identify genes working in various cells in various
The German company had 150,000 patients with cardiovascular disease,
and it had the family histories and DNA samples that would help it
screen to find particular genes.
Kimaragen could change the "spelling" of these genes in living
cells. "Kimaragen would take the genes, modify them, and develop
cells or animals to present to the big pharmas as validated targets.
It was a target validation business," says Blaese. "But the
burn rate was higher than anticipated."
Then a fourth company, working on agricultural genomic applications,
was added in San Diego, and the plan was to move the San Diego
scientists to Princeton. The Californians balked at moving. Their star
Bernard E. Bihain, became chief scientific officer of the entire firm.
The money stream to Princeton dwindled, and Bihain threatened to
in a major way. Thus, one small company had four sites spread over
time zones, which meant considerable administrative duplication.
"I think there were foolish decisions made on the allocation of
resources," says Blaese.
Blaese is volunteering his services ("as a stockholder, I am a
happy volunteer") to demonstrate the laboratory and its equipment
to prospective tenants. Most recently, he showed the property to the
State of New Jersey, which is reportedly looking for additional space
labs. What emptied this property can be traced to the terror at the
World Trade Center, and what might fill this space could be a massive
effort to combat bioterror.
Marie Gallagher and her daughters Corinne Gallagher
and Tina Stanton have taken over where Liza Price left off —
amateur golfers the opportunity to play out their Walter Mitty dreams.
They bought the National Senior Golf Association and the NSGA tour
from Price, the co-founder of American List Counsel, who is now based
in Flemington and staging one-day golf tournaments
"It’s no secret that the travel business is at an all-time low,
but the golf business is helping us through the slump," says Marie
Gallagher bought the golf tournament business in April 2001, and the
eventual price is based on client retention, she says. About 1,800
members pay $35 per year or $75 for three years to cover the cost
of the bimonthly newsletter, eight pages in black and white. This
newsletter tantalizes golfers with the legendary names — Pebble
Beach, Sawgrass, Pinehurst, and Coueur d’Alene — and puts them
on these courses as if they were playing in a professional tournament,
complete with first night cocktail party and last night awards dinner,
plus activities for spouses.
Gallagher went to Monmouth University in Long Branch and taught
for a few years before opening her travel business, IT Travel of
Princeton. As director of
golf operations, daughter Corinne is in charge of the database,
a new webpage, and membership, while Tina works on corporate
and tournament sales.
Corinne majored in psychology at the College of New Jersey, graduating
in 2000 and spending her first full-time year in the workforce as
a hotline counselor of Womanspace. An experienced travel counselor,
she had also been working at her mother’s business, IT Travel at 1
Airport Place in Research Park. Stanton majored in political science
at Ithaca College, Class of 1990. She is trained as a police officer
and hostage negotiator and worked for a police department in upstate
New York; she rejoined her mother’s firm four months ago.
Costs can be as low as $1,900 for the three-day, four-night
with a spouse’s "social" price at $1,300 or $1,500, plus air
travel. Players are grouped by skill level and pairings change daily.
Members must be 50 years old or over, but no particular handicap is
required. "Some have a 30 handicap, many shoot in the 80s, and
we have one member who is a five — but we don’t have any scratch
golfers," says Gallagher. "In our last tournament, a gentleman
with a 26 handicap won the tournament. He had never won a tournament.
He was so happy."
"I am now doing the air travel for a lot of people," says
Marie Gallagher. "The travel agency connection worked out very
well. My goal is to get more attendance at some of the
Just finished: a $4,200, fully-escorted tour of Spain’s golf spots.
Next up: Las Vegas in November, Sawgrass (Jacksonville, Florida) in
December, and a fully-booked cruise in January.
Airport Place, Princeton 08540. Marie S. Gallagher, president.
fax, 609-921-2707. Home page: www.amgolftour.com
After years at the head of the "Smooth Jazz"
Frank Cody has left Broadcast Architecture on Hulfish Street and
out to California to start a new venture. The moving van arrived this
Monday, October 29. Stepping into the post of executive vice
manager at Broadcast Architecture is Allen Kepler.
"I am age 53," says Cody, "and I have time for at least
one more change. The nice thing about being 53 in 2001 is that you
can invent yourself. It used to be you had to stay with something.
Especially for babyboomers, anybody over the edge of 40 has had a
couple of careers and will have four, five, or six careers in their
Owen Leach founded the predecessor to Broadcast Architecture in 1973,
and Frank Cody joined him in 1988. The company has been reorganized
five times and is now owned by Clear Channel Communications, billed
as the largest broadcasting concern in the world.
Cody will be CEO of the new firm, as yet untitled. He is now working
with Just Cause Entertainment (2211 Corinth Avenue, Suite 207, Los
Angeles CA 90064, 310-557-0377; fax, 310-557-0388. E-mail:
Formerly an executive at NBC and ABC radio, Cody launched the Smooth
Jazz format at KTWV in Los Angeles some 14 years ago. He and his
left their Belle Mead farm and have bought a house in Hollywood Hills,
looking down on the Capitol Records building, and leased an office
in Los Angeles.
His first California venture was a smooth jazz concert, free by
that raised more than $100,000 for the 911 Fund and had a surprise
appearance by Stevie Wonder. "We have incredible pictures of all
these stars who would never appear together except for charity,"
Cody’s firm will also include Hyman Katz, a record executive who
the careers of jazz artists Keiko Matsui and Paul Taylor, and Dave
Koz, an artist and radio personality. Koz, says Cody, is the "best
known sax player in the format next to Kenny G. Our company advised
his syndicated program on 100 stations."
Brian Stone, the chief operating officer, also left Broadcast
to be a consultant with Brian Stone Media Interests in Boston.
Kepler, the lone remaining executive at Broadcast Architecture, has
been there for 14 years. Cody says Kepler has been influential in
programming smooth jazz in Japan and in creating a smooth jazz
On December 1 he plans to move the company to Burlington (to the
of I-295 and Route 541), and in the meantime he is giving up some
of the Hulfish Street space to the Hermes Group (Mark Massad’s
growing accounting firm).
200, Princeton 08542. Allen Kepler, executive vice president/general
manager. 609-921-1188; fax, 609-921-1915. E-mail: firstname.lastname@example.org
Home page: www.broadcastarchitecture.com
Clarksville Road, Princeton Junction 08550. Sotirios Vahaviolos Ph.D.,
president and CEO. 609-716-4000; fax, 609-716-0706. Home page:
Earlier in October, Physical Acoustics Corp., now known as Mistras
Holdings Group, acquired a 30-year-old company, Vibra-Metrics Inc.,
which has vibration monitoring systems and sensors for predictive
maintenance. Vibra-Metrics is being moved from Hamden, Connecticut
to Mistras headquarters in 50,000 square feet on Clarksville Road,
where more than 100 people work now.
"Vibra-Metrics enhances our leadership position for on-line
monitoring through the use of advanced Internet-based sensor
says Sotirios J. Vahaviolos, president and CEO of Mistras Holdings.
He is a native of Greece, and Mistras is the name of a place there.
His first company, Physical Acoustics, monitors metal fatigue using
sound, and a company he acquired last year integrates PC-based
inspection systems. Other areas are eddy current testing, resistivity
testing, and inspection, through Pennsylvania-based Quality Services
The company keeps close ties to colleges and universities in the area.
"Students graduate, go into the field, and buy your products,"
explains Lee Moyer, marketing services manager. "Also, we offer
and certification in acoustic emission."
"We monitor structural integrity of bridges etc., and we can do
it in real time via the Internet because we can remotely monitor any
structure from our facility’s computers," says Moyer. A 24-hour
team monitors bridges for transportation departments around the city
and around the world, but just which bridges are being monitored is
kept confidential, so as not to arouse public suspicion or curiosity.
Witherspoon Street, Princeton 08540. Gary A. Pudles, president and
CEO. 609-921-7450; fax, 609-921-7632. Home page:
Junction 08852. Tammy Chartier, accounting manager. 732-274-2226;
fax, 732-355-0196. Home page: www.signius.com
The back office for accounting operations of the national call center
firm has opened an enclave at the S.T. Peterson building in Monmouth
Junction. Founded in 1992 as Pro Communications by William Robertshaw,
Signius has a sister company, AnswerNet, which bills itself as the
world’s largest telemessaging call
business and a leading provider of outsourced customer relationship
management. With 31 centers in 15 states and Canada, and more than
30,000 clients, it handles more than 60 million calls and Internet
contacts per year.
University, James Forrestal Campus, Box 451, Princeton 08543-0451.
Robert J. Goldston, director. 609-243-2000; fax, 609-243-2751. Home
Princeton University received a five-year contract from the U.S.
of Energy to continue operating the 50-year-old laboratory. The lab’s
annual budget is about $70 million, and the contract is worth about
$350 million. It is the leading laboratory for plasma physics and
of magnetic fusion energy.
Park, Suite 100, Princeton 08540. Charles E. Metcalf, president.
fax, 609-799-0005. Home page: www.mathematica-mpr.com
As part of $3 million given out by the federal Department of
Mathematica Policy Research is getting $247,976 to do
research on a new set of dietary reference standards, the Dietary
Reference Intakes. This study will use DRIs to analyze the diets of
such high-needs groups as teenage females, elderly people, overweight
and obese children and adults, individuals living in households where
there may not be enough food, and those participating in food and
nutrition assistance programs.
Mathematica’s Washington operation is getting another $200,341 to
study how changes in economic conditions and welfare policies affect
participation in food stamp programs.
The 200-person firm does public policy research and surveys for
and state governments, foundations, and private-sector clients. It
has a telephone call center at 311-H Enterprise Drive.
CN 5308, Princeton 08543-5308. H. Joseph Reiser, president and CEO.
609-987-8200; fax, 609-750-8124. Home page: www.cytogen.com
AxCell Biosciences, a Cytogen subsidiary based in Newtown,
Pennsylvania, will draw on its protein
database for a research contract with the National Cancer Institute.
It will study two major methods that cells signal each other —
tyrosine kinases and serine-threonine kinases. Faulty signaling in
cells is associated with many human diseases and disorders,
including cancer, diabetes, and immune disorders.
Normal cells grow and divide in according to a precise pattern,
responding to such outside signals as hormones and growth patterns.
But with diseases like cancer, the division cycle goes askew, allowing
tumor cells to proliferate and cause uncontrolled and abnormal cell
Any findings that result from this collaboration will be added to
AxCell’s database of protein interaction information. "The NCI
collaboration is an important part of AxCell’s strategy to
expand the content of the ProChart database by collaborating with one
of the world’s leading cancer research organizations," says H. Joseph
Reiser, Cytogen’s CEO.
Suite 206, Princeton 08540. Donald L. Drakeman, president.
609-430-2880; fax, 609-430-2850. Home page: www.medarex.com
Medarex will collaborate with the leading genomics information
company, Incyte Genomics (Nasdaq: INCY), to use Incyte’s comprehensive
database of transcribed genes. The two firms will share the cost and
responsibility for preclinical and clinical development of antibody
products and hope to jointly commercialize these products.
Incyte has more than 600 full-length genes in its commercial patent
portfolio, the industry’s largest. Many of these patents include the
proteins encoded by the gene transcripts and the antibodies to these
proteins. Medarex will take some of the targets covered by these
patents to develop fully human monoclonal antibodies by using its
UltiMAb Human Antibody Development System, using the HuMAb mouse.
Robbinsville 08691. Joseph Mo, chairman, CEO, and president.
609-208-9688; fax, 609-208-1868. Home page: www.nexmed.com
NexMed has received a favorable response (a Notice of Allowance) for
its most recent patent application for treatment of male erectile
dysfunction. The patent covers the method of treatment for Alprox-TD,
a topical drug delivery that uses prostaglandin.
"The NexACT-based products under development incorporate technology
which is supported by patent protection dating back to 1990," says
James L. Yeager, vice president of R&D. With the anticipated issuance
of this patent application, the coverage for methods of treatment
using Alprox TD would extend to 2020.
NexMEd is doing two Phase 3 clinical trials of Alprox TD that will
enroll up to 2,500 patients at about 80 sites in the United States.
For Femprox cream treatment, under development for female sexual
arousal disorder, the company is conducting a Phase 2 study with about
110 patents at up to 12 sites.
Corrections or additions?
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