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New biotech startup tackling Alzheimer’s, cancer
By Dennis Quick
Senior Staff Writer
Last year, Dr. Sebastiano Gattoni-Celli and Mark Kindy, both of the Medical University of South Carolina, launched SemiAlloGen Inc., a biotech company developing vaccines and therapeutic treatments for Alzheimer’s and cancer.
More than 5 million people in the United States live with Alzheimer’s, a progressive brain disorder that gradually destroys a person’s memory, and the risk of getting the disease increases with age. With 78 million baby boomers having turned 60 last year, it is estimated someone in the United States develops Alzheimer’s every 72 seconds; by mid-century, the disease will develop in someone every 33 seconds, according to the Chicago-based Alzheimer’s Association.
Meanwhile, the American Cancer Society estimated in the beginning of 2006 that about 565,000 Americans would die from cancer that year and 1.4 million new cases would be diagnosed.
Gattoni-Celli, a cancer investigator, and Kindy, a neurosciences researcher, aim to create vaccines for Alzheimer’s and cancer through experiments in which they treat mice by injecting them with peptides. The researchers will publish the results of their experiments by the end of the year, Gattoni-Celli said.
Ultimately, Alzheimer’s- and cancer-fighting vaccines can be tailored for each person by creating individual cell banks, extracting cells from the bank, injecting the cells with peptides and then injecting those cells into the person, Gattoni-Celli said.
SemiAlloGen is Gattoni-Celli’s brainchild, placing him among six winners in last year’s New Ideas for a New Carolina contest. New Ideas for a New Carolina is a statewide competition in which contestants come up with an idea for a new business.
Although Gattoni-Celli thought of the business, the idea for the treatments was something he and Kindy arrived at together. It just so happened that their offices were next to each other. In passing they would talk about what each was researching—Gattoni-Celli the cells in cancerous tumors, Kindy neurological disorders. They realized the inflammations associated with the different ailments had similarities. That common ground, plus the fact that Gattoni-Celli’s mother died from Alzheimer’s, spurred Gattoni-Celli to partner with Kindy.
Gattoni-Celli and Kindy are seeking from investors either $1 million, which will enable them to complete their research and start a Web site; $5 million, enabling them to install a chief executive, a management team and lease office space; or $20 million, enabling SemiAlloGen to become a fully independent company with its own plant, Gattoni-Celli said.
Gattoni-Celli compares these stages of development with that of Mount Pleasant-based biopharmaceutical company GenPhar Inc., founded in 1999 and a provider of vaccines against infectious diseases.
Kindy anticipates a challenge attracting angel investors to SemiAlloGen, largely because many angels shy away from biotech investment because it can take years to achieve a sizeable return on investment, he said.
Kenneth Roozen, executive director of Charleston Angel Partners, agrees. U.S. Food and Drug Administration regulations, patent protections, market competition and difficulty in understanding the product make many angels reluctant to invest in biotech, Roozen said.
Nevertheless, Charleston Angel Partners’ investment portfolio includes biotech companies, among them North Charleston-based FirstString Research Inc., a tissue-engineering firm and MUSC-spinoff.
Gattoni-Celli and Kindy are in the process of writing their business plan for SemiAlloGen. A key stumbling block many biotech and other start-up companies face when seeking angel investment is an incomplete or not fully developed business plan, Roozen said.
Roozen explained that common deficiencies in business plans include a lack of clarity and specificity with regard to the target market; inaccurate funding estimates and product-development timetables; either no or poor estimates of unit costs of production, which make it difficult to determine profit margins; a weak management team; and a poor understanding of the competition.
Additionally, investors tend to back away from a start-up if the company’s founders refuse to allow investors to influence the company, Roozen said.
The more milestones a startup company accomplishes, including having a product approved by the U.S. Food and Drug Administration, the higher the company’s value rises, Gattoni-Celli said.
Dennis Quick is senior staff writer for the Business Journal. E-mail him at dquick@charlestonbusiness.com.
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