Tennessean: TN's life sciences sector gains cutting-edge player
But local investment in this hot business sector still lags compared to national tally
Money available in Tennessee under the state-created TNInvestco venture capital program has lured another corporate relocation to Nashville — a company with Vanderbilt University roots.
Molecular Sensing Inc., recently moved its headquarters from California, setting up shop at the Cumberland Emerging Technologies’ Life Sciences Center near downtown. The cross-country switch comes after TriStar Technology Ventures, a TNInvestco fund that focuses on technology emerging from research institutions, invested at least $1 million in the company.
The move was good news for the state’s life sciences industry, which is gaining another cutting-edge player. Industry advocates have long cited insufficient availability of capital as a big barrier to Nashville developing a stronger base of companies in the hot business sector.
Molecular Sensing’s technology came out of the labs of Vanderbilt chemistry professor Darryl Bornhop, and it hopes to ride a wave of interest in determining how and why a specific drug works. This comes as large pharmaceutical companies are cutting research and development jobs, perhaps opening the niche for startups with brain power.
Vanderbilt initially invested in development of the technology, which the university licensed to Molecular Sensing’s founders who set up shop out west. Now, the company has moved here with a small corporate presence that includes research services. Part of its research and development team also remains in the San Francisco Bay area.
William E. Rich, Molecular Sensing’s chairman, chief executive and president whose past jobs included serving as CEO of biotechnology companies such as Ciphergen Biosystems and BioSepra, moved here from Montana. The company employs six people here.
Last year, the company generated a few hundred thousand dollars from its drug discovery services that analyze interactions between drugs and their targets in the body. Successful drugs block disease-causing interactions.
Later, the company expects the instruments it has developed to sell to pharmaceutical and drug discovery laboratories to become an even bigger source of revenue.
The idea is to give drug companies a better way to determine a drug’s effectiveness and any shortcomings to control clinical trial costs and screen for bad side effects.
“The more efficiently you can select the right candidates, the faster and better and cheaper you can make the drug,” said Rich, who estimates a several hundred million dollars market for the company’s instruments and drug discovery services.
In addition to TriStar, JRD Partners of Chattanooga made a small investment in Molecular Sensing. The company also received $2 million to $3 million in grants from the National Institutes of Health’s small business investment program.
Venture funds grow
Overall, venture capital funds invested $15.8 million in Tennessee life sciences companies last year, according to the PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report based on data from Thomson Reuters. That was an increase of 21.5 percent from the previous year.
But the money is just a drop in the syringe when compared with national investments in the life sciences.
Tennessee companies, in fact, received only 0.2 percent of total dollars that venture funds invested in life sciences nationwide last year. That’s something that TriStar and other TNInvestco recipients want to change.
