Opinions Forging Ahead CFGF loans spark life sciences startups
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By Greg Main
President & CEO,
Michigan Economic Development Corp.
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Late last month, Governor Granholm and I announced that three West Michigan companies — Single Source Procurement LLC, Venntis LLC and Syzygy Biotech Solutions LLC — were among those selected to receive support under the state’s Company Formation and Growth Fund (CFGF), an initiative aimed at retaining Pfizer assets and talent for advancing life sciences technologies in Michigan.
The CFGF is part of our continuing effort to diversify Michigan’s economy. It also enables highly skilled former Pfizer employees to lend their expertise to helping Michigan companies grow and create high-tech jobs.
The Michigan Strategic Fund (MSF) board created the $8 million CFGF in June 2007 to accelerate company growth and form new companies, creating jobs based on employees, technologies and high-tech equipment connected with Pfizer’s closed facilities in Ann Arbor, Holland, Kalamazoo, Plymouth Township and Portage. The MSF board appointed Ann Arbor SPARK, Southwest Michigan First, Lakeshore Advantage and the Michigan Economic Development Corp. to the CFGF committee to make loan recommendations for the $8 million available through the fund. The MSF then awards loans in the amount of $50,000 for every job created, up to a maximum of $500,000 per company.
Since 2007, the CFGF has approved loans to a total of 41 life-science companies, many of which are start-up businesses. The CFGF incorporates our economic diversification strategy that emphasizes entrepreneurship and bringing cutting-edge research and exciting new discoveries to the marketplace. The funding keeps Pfizer scientists working and living in Michigan, and leads directly to the growth of new Michigan businesses and good-paying jobs for Michigan workers. Providing an economic catalyst for entrepreneurial growth is vital to West Michigan’s success, and the CFGF provides essential capital to new companies.
For example, in Kalamazoo, Kalexsyn Inc. used a $350,000 loan to hire seven former Pfizer employees to work on pharmaceutical research. The company, founded by two medicinal chemists formerly employed by Pfizer, is taking advantage of the outsourcing trend in pharmaceutical research. Over the past few years, Kalexyn’s sales have grown by 180 percent with nearly all of their contracts coming from out of state; about a quarter of Kalexsyn’s work comes from outside the United States.
In Portage, PharmOptima used a $400,000 loan to hire eight former Pfizer employees to focus on the mid to late phases of drug discovery between target identification and selection of lead compounds, helping clients select the best candidates to accelerate drug development and increase chances for clinical success. In 2007, PharmOptima was named one of Michigan’s “50 Companies to Watch” by the Edward Lowe Foundation. In 2008, the company was named the best local research lab by the United States Local Business Association. It only took the company three years to outgrow its incubator lab space at the Southwest Michigan Innovation Center; PharmOptima is now housed in a 10,000-square-foot facility in Portage Commerce Park.
The companies receiving CFGF funding announced in August have bright futures, as well. Venntis LLC, located in Holland, is a high-tech company formed primarily to develop and supply integrated flexible and glass circuit assemblies for industrial product applications; the company plans to lease an ex-Pfizer facility and hire one life science employee with its $50,000 loan. The Grand Rapids-based Syzygy Biotech Solutions LLC is an early-stage corporation developing and manufacturing biological diagnostic reagents for the life sciences industry; it plans to lease an ex-Pfizer facility and hire two life sciences employees with its $100,000 loan. In Kalamazoo, Single Source Procurement LLC will use its $80,000 loan to hire one former Pfizer employee to provide specialized purchasing and sourcing services to clients of the Southwest Michigan Innovation Center.
Supporting small businesses and entrepreneurs through programs such as the CFGF is a major pillar in our strategy to create jobs, and we will continue to use every tool in our economic-development arsenal to make sure West Michigan remains a hub for the innovative biotech companies fueling our state’s economic growth.