News Life Sciences Cee-ing benefit from new EU regs
Cee-ing benefit from new EU regs
Order Reprints
Follow @MiBiz
 |
|
James McKim, left, and Timothy Mitchell are seeing CeeTox’s business grow in Europe in the wake of increased regulation there. PHOTO; NATHAN PECK |
By Nathan Peck | LabWork
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
KALAMAZOO — Can regulation bring business opportunity?
For the Kalamazoo-based contract research organization CeeTox, the answer is yes.
The raft of regulations coming out of the European Union is providing a growing business opportunity as the company looks to grow its cosmetic testing business. The last two years have been difficult, as smaller pharmaceutical startups disappeared into bankruptcy as the global economy foundered. But the company took the opportunity to get lean and is anticipating 50 percent sales growth in 2010.
The CRO does work on the toxicity of compounds utilizing in-vitro models, testing pharmaceuticals, cosmetics and chemicals used in consumer products. CeeTox began in 2003 as James McKim, the senior advisor in the investigative toxic group for Pfizer Inc., and a group of former Pfizer employees founded the CRO.
Located in the Southwest Michigan Innovation Center, the company was acquired in 2005 by North American Science Associates Inc. (NAMSA) and later brought on Timothy Mitchell as president in 2008.
“At that time, we realized that we needed to separate the business and science — we had to have someone to come in and run the business side of things,” McKim, chief scientific officer and founder of CeeTox, told LabWork. “(Mitchell) has the skills to put a business structure around the science. My job is to focus on the science, he gets to focus on all the worries.”
The last two years have been tumultuous as many of CeeTox’s top clients, drug development startups, disappeared almost overnight.
“You had a lot of the venture capital drug development companies that were so leveraged that when the bottom dropped out of the markets, they went bankrupt,” McKim said.
The company recently acquired ADMETRX’s assets, giving the firm the capability to study how drugs are absorbed, metabolized and excreted from cells. The goal is to become the “lab down the hall” for big pharma. During the recession, the company was able to get lean, with Mitchell finding efficiencies and McKim working to develop new tissue models that help predict the effects of chemical compounds on tissues such as the heart and liver.
“We walked into the first quarter of 2009 (starting Oct. 1, 2008) having grown on average 30 percent per year. Our board was encouraging us to prepare for growth. I don’t know anyone who foresaw the depth of what happened in 2009,” Mitchell said. “Our first quarter 2009 revenue was the best in our history. Then it fell off a cliff. It was a tough year, but it was a tough market for everybody. We were fortunate to come out the other side leaner.”
Opportunities are expanding in consumer product safety testing. The European Partnership to Alternative Approaches to Animal Testing banned the use of animals for the testing of components of consumer products, forcing European cosmetic firms to look to in-vitro testing for safety tests.
CeeTox has been able to capitalize on that ban. McKim has developed a skin model that allows companies to test for a variety of ill effects, such as abrasion and sensitivity. The growth in testing for the European markets has grown to the point where CeeTox revenues are split between the U.S. and European and has the company considering a testing lab on the continent.
“We already are attracting a lot of interest from Europe. To be able to attract those clients, to really grow, we are keeping an eye on Europe and Asia,” McKim said. “The question becomes how do you do that in the midst of all you’re already doing? For a small company like us, focus is important.”
Stateside, concerns over the effects of endocrine disrupting chemicals, compounds that act like human hormones such as estrogen and testosterone, is driving manufacturers to test chemicals as the Environmental Protection Agency begins looking at how the chemicals find their way into humans.
“Companies are finding the consumer pressure is huge — but my perception of risk (as a researcher) is very different than that of a mother buying a product used around her child. I’ll say that there is no such thing as zero risk, only the mitigation of risk,” McKim said. “Consumers are saying that they want zero risk — and companies are stuck.”
The company is developing a “research and development for hire” capability, offering clients the ability to project manage compound testing. Revenues are bouncing back, expected to be 50 percent up over 2009, with 2011 projected to be up 40 percent.
“We are already poised to be ahead of our revenue estimates,” Mitchell said. “That’s pretty exciting.”
