Mother Daughter Golf Team

Leaving Town: Frank Cody

Expansions

Contracts Awarded

Corrections or additions?

This article by Barbara Fox was prepared for the

October 31, 2001 edition of U.S. 1 Newspaper. All rights

reserved.

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

Newspaper

was completing a write-up of ValiGen for an October 17 cover story

("Hungry

for Space: Pharmaceutical and biotech companies find their niche in

central New Jersey), Monday, October 15, almost all of the 60

ValiGen

employees in Princeton were told to go home and expect no severance

pay.

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

Townsend

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.),

"and

they watched out the window as the towers fell. The papers were

signed,

but the due diligence had not been finished." Some of the

investors

were clearly nervous. First one investor pulled out $2 million.

"On

Friday, October 12, they learned that one of the two lead investors

had pulled out $4 million. Over the weekend, the management team

decided

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

prospects.

The real estate broker who signed ValiGen into the space, Doug

Petrozzini

of Grubb & Ellis, will likely lose his commission. He was also

supposed

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

Thursday,

October 18.

"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

severance

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

clinical

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

circumstances.

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

scientist,

Bernard E. Bihain, became chief scientific officer of the entire firm.

The money stream to Princeton dwindled, and Bihain threatened to

restructure

in a major way. Thus, one small company had four sites spread over

nine

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

for

testing

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.

Barbara Fox

Top Of Page
Mother Daughter Golf Team

Marie Gallagher and her daughters Corinne Gallagher

and Tina Stanton have taken over where Liza Price left off —

offering

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

for corporations.

"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.

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

Spanish

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,

fashioning

a new webpage, and membership, while Tina works on corporate

reservations

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

tournament,

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

tournaments."

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.

NSGA Tour (National Senior Golf Association), 1

Airport Place, Princeton 08540. Marie S. Gallagher, president.

609-921-6300;

fax, 609-921-2707. Home page: www.amgolftour.com

Top Of Page
Leaving Town: Frank Cody

After years at the head of the "Smooth Jazz"

sector in

broadcasting,

Frank Cody has left Broadcast Architecture on Hulfish Street and

headed

out to California to start a new venture. The moving van arrived this

Monday, October 29. Stepping into the post of executive vice

president/general

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

lifetime."

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:

fcody@aol.com).

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

partner

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

donation,

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,"

he says.

Cody’s firm will also include Hyman Katz, a record executive who

launched

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

Architecture

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

network.

On December 1 he plans to move the company to Burlington (to the

intersection

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).

Broadcast Architecture, 17 Hulfish Street, Suite

200, Princeton 08542. Allen Kepler, executive vice president/general

manager. 609-921-1188; fax, 609-921-1915. E-mail: sjnetwork@aol.com

Home page: www.broadcastarchitecture.com

Top Of Page
Expansions

Mistras Holdings Group/Physical Acoustics, 195

Clarksville Road, Princeton Junction 08550. Sotirios Vahaviolos Ph.D.,

president and CEO. 609-716-4000; fax, 609-716-0706. Home page:

www.pacndt.com

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

condition

monitoring through the use of advanced Internet-based sensor

fusion,"

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

ultrasonic

inspection systems. Other areas are eddy current testing, resistivity

testing, and inspection, through Pennsylvania-based Quality Services

Laboratories.

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

training

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.

AnswerNet Inc./Signius Communications Inc., 345

Witherspoon Street, Princeton 08540. Gary A. Pudles, president and

CEO. 609-921-7450; fax, 609-921-7632. Home page:

www.answernetnetwork.com

Signius Communications Inc., 4250 Route 1, Monmouth

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

center

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.

Top Of Page
Contracts Awarded

Princeton Plasma Physics Laboratory, Princeton

University, James Forrestal Campus, Box 451, Princeton 08543-0451.

Robert J. Goldston, director. 609-243-2000; fax, 609-243-2751. Home

page: www.pppl.gov

Princeton University received a five-year contract from the U.S.

Department

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

development

of magnetic fusion energy.

Mathematica Policy Research Inc., 600 Alexander

Park, Suite 100, Princeton 08540. Charles E. Metcalf, president.

609-799-3535;

fax, 609-799-0005. Home page: www.mathematica-mpr.com

As part of $3 million given out by the federal Department of

Agriculture,

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

federal

and state governments, foundations, and private-sector clients. It

has a telephone call center at 311-H Enterprise Drive.

Cytogen Corporation (CYTO), 600 College Road East,

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

growth.

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.

Medarex (MEDX), 707 State Road, Princeton Gateway,

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.

NexMed Inc. (NEXM), 350 Corporate Boulevard,

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.


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