Faster TB test coming to market

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SOUTH PORTLAND (AP) – Companies face the pressure of competition all the time, but Chemogen Inc. is racing both competitors and the grim reaper too.

The company has developed a rapid test for tuberculosis, a contagious disease that infects 10 million to 15 million people each year, killing an estimated 1.7 million people in 2004, according to the World Health Organization. The problem is greatest in Southeast Asia, Africa and other undeveloped regions.

Chemogen’s diagnostic system is now being tested in Tanzania. The test determines whether a patient has TB in about three hours, compared with current systems that take about three days.

Faster detection means faster treatment, which could stop the spread of the disease and cut mortality rates, said Chemogen President David H. Laconi.

Chemogen expects to have its two current tests in the marketplace this fall and continues to work on a super-simple version of the test that’s akin to a home pregnancy test, with an inexpensive strip that tests urine to quickly determine whether a person has TB.

That’s the type of test the WHO and other international groups are clamoring for, said Laconi. The company is very close to a strip-test prototype and hopes to have the product in tests in Cameroon and Tanzania later this year, ideally going to market in 2007.

But other companies are also working to get an inexpensive, simple and quick TB test to market.

Everybody’s waiting for such a test, said Laconi: patients, doctors, nurses, the WHO and others.

Laconi thinks Chemogen is “pretty close to being ahead of the curve” with respect to competition.

“It’s a race. Whoever gets to the market first is in a real prime position,” Laconi said.

The company was founded in 2000 by Vladimir A. Koulchin, who had worked for local biotech company Binax. Today Koulchin is Chemogen’s chief scientific officer.

Chemogen Chief Financial Officer John P. O’Sullivan said TB tests have been unchanged for close to a century. The most common test requires a person’s sputum. It takes about three days, and in Third World countries, TB sufferers often walk for days to get to a clinic where the test can be administered.

“I saw for many years that people needed a product, and I thought I could do it,” said Koulchin.

His idea has evolved into a urine-based test for TB.

It works like this: Rabbits are infected with a dead TB virus. The rabbits produce antibodies to fight the virus, and a small amount of serum is taken from the rabbits. The antibodies are separated from the serum, and Chemogen uses them in its tests to detect the presence of TB in a patient’s urine sample.

Chemogen is unique among many startups in that Koulchin didn’t rely on the standard “family and friends” funding to start the company. Masthead Venture Partners in Portland provided the first funding for the company, according to Robert H. Flory Jr., chairman of Chemogen’s board.

Follow-up funding came from CEI Ventures, a community-development venture-capital firm based in Wiscasset, and the Maine Small Enterprise Growth Fund, as well as from Flory’s own Flory Investments. Chemogen has received $7 million in equity financing to date, said Flory, as well as $700,000 in grants from the Maine Technology Institute.

The company also has a partnership with the Foundation for Innovative New Diagnostics, a global nonprofit supported by the Bill & Melinda Gates Foundation. FIND is funding half of the current trial in Tanzania, which costs a total $400,000.

The partnership with FIND also is important because of the cachet it carries; FIND is exclusive regarding the companies it teams up with, said Laconi.

“It’s a major endorsement,” said Flory.

“It’s a stripe on your shoulder,” added Laconi.

If Chemogen’s current tests go to market this fall, it expects some revenue at that time, with profitability a few years out, said O’Sullivan. O’Sullivan worked at Masthead before leaving to take a full-time position at Chemogen about a year ago. The company is now going down two main tracks, said Flory. It continues to be a research-and-development firm, he said, pushing toward the test strip and also exploring diagnostics for Johne’s disease, also called paratuberculosis, a contagious bacterial disease of the intestinal tract that affects cattle.

Chemogen also is heading toward market with its existing TB tests and is working with an investment banker to develop a package that details the company, its technology and what it means to the marketplace.

The goal is some sort of partnership with a manufacturing company with global reach. That may develop into a licensing agreement, a merger or even the acquisition of Chemogen, said Laconi.

“What we bring to it is an extraordinary technology and more than simply a proof of concept – clinical data that establishes the test’s efficacy in markets throughout the world,” said Flory.

The company has 10 employees and will be hiring two or three more scientists soon, said O’Sullivan.

At least two of the current employees, Koulchin and Joe Grant, have been with the company since the beginning.

Today, Grant is manager of manufacturing and product development at Chemogen, but he joined the company in 2001 as an intern while studying chemistry at Rensselaer Polytechnic Institute. His first job was sweeping the floor, said Grant, who is a Pownal native. He progressed to unpacking boxes.

But he was able to work closely with Koulchin and continued at Chemogen during summer breaks and other vacations. In 2003, he graduated from RPI and decided to work at Chemogen. He was promoted to his current position in August.

The work he and others are doing at Chemogen, aimed at a deadly disease like TB, is of particular importance to Grant. When he was a student at Greely High School, his younger sister Morgan died of brain cancer at the age of 7. Experiencing that loss helped lead Grant into a scientific field.

“You can potentially make a difference in the world through science,” said Grant. “There are huge things that can happen.”

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