An Orange County pathologist with an entrepreneurial streak is hoping to capitalize on the increasing cost of developing and bringing drugs to market.
Pathogenesys LLC, a startup based at University Research Park near the University of California, Irvine, provides testing services to drug and biotechnology companies. In particular, Pathogenesys is looking to do testing for companies that are working on drugs to fight cancer.
James Thompson, the Irvine-based laboratory’s founder and chief executive, said he’s worked in the industry for half a dozen years.
Thompson and two unnamed investors formed the company in 2003.
Big drug makers’ research contracting practices, Thompson contended, make a market for companies such as Pathogenesys.
“It turns out that the pharma industry outsources a huge amount of this type of activity,probably the total market value is in the $500 million range,” he said. “But it is dispersed to many academic labs and labs like ours. However they can spend it wisely, they try to.”
Thompson sports several hats. Besides Pathogenesys, he was just appointed medical director of Ambry Genetics Corp., an Irvine company that does specialized testing for cystic fibrosis, colon cancer and pancreatitis.
Thompson also is senior medical director of Laboratory Corporation of America’s local holdings. LabCorp is spending $155 million to buy US Labs Inc. Both Ambry and US Labs are in Irvine, a short drive away from Pathogenesys’ offices.
Pathogenesys, Thompson said, could grow based on contacts within the industry.
“Most of it is reputation,” he said. “I’ve been in the industry a long time. I basically know what they want.”
Thompson’s experience includes several years at Oncotech Inc., an Irvine-based cancer testing company, where he said he “leveraged the R & D; focus towards the pharmaceutical industry.”
“At both places, we started off with about $200,000 in revenue a year and within three years, it got up to about $6 million,” Thompson said. “So, the model was enticing enough to me (to) want to do it on my own.”
Pathogenesys was on track to do some $750,000 in revenue in 2004. Thompson projected that revenue would reach $1 million this year.
Profits tend to be high, Thompson said. Customers usually pay half of a testing contract’s value up front, “so that enables the growth,” he said.
“We’re sustainable right now,” Thompson said. “We’re getting more than enough to pay our rent, salaries and equipment.”
Pathogenesys plans to seek venture capital funding, according to Thompson. He called that a slow process. The company is working on building up a portfolio that includes four patents for what he calls “novel diagnostic tests that will hopefully predict response to drugs in cancer patients.”
Valeant Sued
Valeant Pharmaceuticals International, the Costa Mesa-based drug maker, is facing a lawsuit.
The litigation could be seen as an unlikely milestone for Valeant, which used to be known as ICN Pharmaceuticals Inc.
That’s because Valeant is being sued for a normal part of its business, not allegations of sexual harassment that were common under the days of ousted founder Milan Panic.
During Valeant’s days as ICN, Panic settled six sexual harassment lawsuits.
Even so, the litigation isn’t welcome news for Valeant. A Bay area woman who took part in a clinical trial for the company’s viramidine hepatitis C treatment is alleging that she suffered brain damage and permanent disabilities.
Plaintiff Linda Iaco-vetta’s complaint says that while seeking treatment for the liver disease at California Pacific Medical Center in San Francisco, she was encouraged to be in a clinical trial examining how viramidine and pegylated interferon worked in concert to fight hepatitis C.
The suit says that Iacovetta was on the drug combination for five months in 2003.
Valeant began trials of viramidine and pegylated interferon in 2003 with a goal of reducing anemia in patients, according to Iacovetta’s complaint. She alleges that Valeant and California Pacific physicians who conducted the trial failed to warn users of the risks of taking the drug.
Valeant spokesman Jeff Misakian said the company’s reviewed the suit and believes it’s “completely without merit,” but didn’t comment further.
Bits and Pieces:
Sybron Dental Specialties Inc., Orange, said that William Siart resigned from its board of directors. Siart left the dental products company’s board to devote more time to the California Community Foundation, which he is a newly appointed governor of Thomas Bender, chief executive of Cooper Cos., Lake Forest, spoke at the JP Morgan Healthcare Conference earlier this month in San Francisco Dr. Thomas Ahlering, who practices at UCI Medical Center, Orange, is going to be a featured speaker at the 2005 Multidisciplinary Prostate Cancer Symposium in Orlando, Fla., next month. Ahlering is set to discuss robotic laparoscopy and radical prostatectomy surgeries. Symposium co-sponsors include the American Society of Clinical Oncology and the Society of Urologic Oncology.
