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SEQ’s Biotech Transplant
This article by Barbara Fox was published in U.S. 1 Newspaper
on March 17, 1999. All rights reserved.
Five years ago someone wrote a non-fiction bestseller
about the hidden drama of a biotech startup, a fly-on-the-wall account
of scientists who staked their fortunes on yet-to-be proven theories
and CEOs doing nail-biting high-stakes deals. The company was Vertex,
based in Cambridge, Massachusetts, and Barry Werth’s "The Billion
Dollar Molecule" provoked lots of interest among Princeton’s biotech
CEOs, who surely yearn to come up with their own billion dollar something.
One of the characters in that book, David J. Livingston, a vice president
at Vertex, has left to take the top job at one of Princeton’s younger
biotechs, a gene sequencing firm founded as SEQ Ltd. SEQ was a protegee
of Princeton venture capitalist Bob Johnston; it was incubated in
Johnston’s office, took rental space at Sarnoff Corporation, and then
moved to Princess Road.
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Name Change to Praelux
As president and CEO Livingston is taking the firm in new directions
— changing the name to Praelux Incorporated, adding new income
streams, preparing for a first public round of financing, and hiring
a director of biology. In just a couple of months, says Livingston,
he has found New Jersey to be much friendlier to biotechs than he
had expected.
"I am very impressed with the favorable business climate in New
Jersey, both in terms of the network of companies, small and large,
and their proactivity and professional associations, and also, frankly,
with the state’s involvement," says Livingston. "We are in
discussions with the Economic Development Authority concerning one
of their financing programs, and they have been great to work with."
"In Massachusetts there is anywhere from apathy to antipathy on
the part of local government to emerging businesses. They don’t really
have much of an infrastructure to help such companies," says Livingston.
As programs that Massachusetts lacks, he refers to various EDA loans
and grants plus the state’s new opportunity for young firms to sell
tax credits. "While it won’t make me any friends up there, the
biotech sector grew up in spite of government rather than because
of it."
The new name for SEQ, Praelux, reflects how the company is reaching
out into new areas of its core technology. The original name was chosen
to embody the then primary technology, single molecule sequencing,
and this has been supported by sizable National Institutes of Health
and corporate grants. "The activity level on the single molecule
sequencing is higher than it was a year ago," says Livingston,
"but it was taking longer than the founders had anticipated. We
had to generate some near term income."
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Livingston’s Goals
With the new name, which comes from the Latin for "to shine a
light in front of" Livingston has these goals:
doing high volume testing of compounds, the so-called high throughput
market. Instrument sales and single molecule sequencing are synergistic,
says Livingston. "Both rely on in-depth knowledge of lasers, optics,
computer software, and acquisition and processing of images."
the year. "It will allow customers that can’t buy the equipment
to send samples to us for purposes of screening."
as Livingston says, "at some point we will be doing collaborations
with the Hoechsts of the world."
firm has always been privately funded," says Livingston, "partly
because it is difficult to sell a very very early technology."
end of the year. "I am very impressed with the technical talent
of the company," says Livingston. The two people most responsible
internally are Jay Trautman, in charge of genomics and screening technologies,
and Timothy Harris, a principal scientist concentrating on the screening
technology.
The new vice president of biology, Susan Molineux, came from Pracis
in Cambridge. A biology major at Smith, Class of ’75, she has a PhD
in genetics at Hopkins, did postdocs at NIH and Columbia, and also
worked at Merck. Former president Richard Horan, who helped hatch
SEQ when it was in Bob Johnston’s office, is now running a company
in New Hampshire.
Livingston has moved to Princeton with his wife, Cassandra, a chemistry
major at Rutgers’ Douglass College who has an MBA in finance from
Simmons’ business school.
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Livingston’s Bio
Livingston thinks he might have gotten his entrepreneurial energy
from his parents. As a youth, growing up in Rye, New York, Livingston
saw his mother eventually prosper from getting in on the ground floor
of a young biotech company that became very successful. She left a
travel agency to work for Connecticut-based U.S. Surgical, which pioneered
in dissolvable staples for sutures and disposable products for laparoscopy.
"That was part of the bug for me," says Livingston. "I
saw first hand what stock options could do for somebody." He also
watched what can happen with young firms, which are vulnerable to
getting bought out or squashed. "U.S. Surgical had the market
cornered for a number of years, but Johnson & Johnson came in and
garnered major market share by raw marketing muscle. Both my parents
had a very strong work ethic and are real self starters," says
Livingston. His father is a nutrition consultant.
An alumnus of University of Massachusetts, Class of 1977, Livingston
earned his PhD at the University of California at Davis. He did post
doctoral studies at Hopkins and at MIT and did protein engineering
research for three years at the large Boston-based firm, Genzyme,
and was a founding scientist at Vertex, where he stayed for 10 years.
During that time he earned an MBA at Northeastern University.
When he left Vertex Livingston was managing therapeutic programs with
large pharmaceutical firms. At one point he was responsible for more
than 20 scientists. He worked on a new anti-inflammatory drug in a
five-year partnership with Hoechst Marion Roussel. "Another drug
I worked with, Amprenavir, an HIV protease inhibitor, is very close
to getting FDA new drug approval and is expected to be on the market
this year."
But after attracting $100 million from pharmaceutical companies and
Wall Street, Vertex’s original technology premise fell short of its
original goal. Luckily for Vertex, its products turned out to have
other uses, ones which were never predicted, and it has turned out
extremely well. It has 300 employees and a market capitalization of
$700 million. In addition to Amprenavir it has five compounds in medical
testing and is considered to have one of the deepest new drug pipelines
of any new drug company.
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Barry Werth’s Book
But during the period covered by Werth’s book, Vertex scientists were
on a hair-raising roller coaster road that zigzagged between success
and failure. "The book gave the lay public a feel for how scientific
research is done in this era in the industry setting," says Livingston,
though he suggests some parts of the book were "exaggerated."
Still, he is happier with the book than some of his colleagues were,
perhaps because — though he is not a major character in it —
all references to him are admiring.
For instance, the author often casts Livingston as the conservative
"voice of reason" who counters the notorious arrogance of
founder Joshua Boger. Livingston is singled out among the scientists
for having business sense.
At several points Werth shows Livingston throwing cold water on business
schemes. When Vertex and mega company Glaxo are in hot negotiations,
the author writes, "Only Livingston, formerly a senior scientist
with a once-promising biotech company that had run out of money and
was sold amid layoffs and other misfortunes, debunked the good feeling.
`I think all this hype about this being Vertex’s deal to lose is a
crock,’ he snapped." On another occasion Livingston confides to
a colleague that they are really only "selling smoke."
Livingston doesn’t plan to be selling smoke at Praelux, nee Seq. He
will start out selling instruments and service, but the firm remains
enthusiastic about its original business plan, to do single molecule
gene sequencing.
And there is no "fly on the wall" reporter on Princess Road.
Livingston may be in for an adventure, but from all accounts it won’t
be a hair-raising roller coaster ride. SEQ could use a little luck,
but it holds out to Livingston the promise of an adventure that is
considerably smoother.
— Barbara Fox
08648. David J. Livingston, president and CEO. 609-620-0220; fax,
609-620-0222.
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This page is published by PrincetonInfo.com
— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
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