Newsroom
The Biotech Set Tries Show-Business Flair
Startups test their mettle in a knock-off of the “American Idol” TV show
Thomas Gaudio
NJBIZ Staff
4/24/2006
Princeton - American Idol judges Randy, Paula and Simon were missing and there were no phone-in votes. But the 12 early-stage companies that last week participated in the New Jersey Biotechnology Venture Idol still got plenty of feedback. And that’s just what they were looking for.
Organized by the Biotechnology Council of New Jersey, the event was a dry run for the upcoming BIO VentureForum East to be held this June in Jersey City. There, participants will pitch their young companies in hopes of attracting investment dollars.
Princeton University hosted last week’s competition, which took off from the wildly popular “American Idol” television show. A panel of six venture capitalists judged the young companies on their communications skills and PowerPoint presentations.
The startups and judges were split into three groups, with the winners from each group advancing to the finals. Spectators from the local life sciences community watched the startups hone the art of delivering 10-minute pitches for cash.
Urovalve, based in the New Jersey Institute of Technology’s business incubator in Newark, beat out finalists Vicus Therapeutics, a developer of supportive-care technologies for cancer patients, and LinguaFlex, which is working on a treatment for sleep apnea, to take home the Biotech Idol crown.
Harvey D. Homan, CEO of Urovalve, made a strong case for his company’s proprietary technology that helps male victims of spinal cord injuries and neuromuscular diseases control urine flow. Homan says the user-operator valved catheter is reasonably priced and offers a nonsurgical and complication-reducing alternative to current methods.
The company has three employees and has raised $850,000 so far. Homan says Urovalve needs $500,000 to take the product through a redesign and a second clinical trial, and $5 million to commercialize it. He predicts the device will hit the market late next year.
“Winning [the Biotech Idol] is nice but the goal is to get money,” says Homan, who walked away with a lot of interest in his company but nothing he could take to the bank.
Urovalve captured the imagination of the venture capitalist jury, says Phillip P. Chan, an associate at Mount Laurel-based NJTC Venture Fund and a judge at the event.
“Harvey brings a lot of experience and poise to the company,” says Chan. “The market they [Urovalve] are looking at is very large. The product is addressing a significant unmet clinical need.”
Chan says most venture capitalists are hunting for young companies with management vision, and when it comes to the biotech field, hard clinical data involving human subjects. “Animal studies are important but trials with humans are better,” he says. “They are a very important indication that a product works.”
Chan called other companies in the contest “venture-backable,” but he said many were guilty of what he described as common mistakes. For example, startups often lack credibility because they don’t have people on their team with experience in the markets they are trying to enter. Another common problem is that “they don’t identify upfront what the technology or company does,” he says. “It takes them their whole pitch to explain it. That’s a critical mistake.”
David Golub, CEO of Biotech Idol contestant Profact Proteomics, says it is a matter of finding the perfect investor. “You have to evaluate him,” says Golub. “Different VCs are looking for different things.” Profact, based in the Technology Centre of New Jersey in North Brunswick, identifies and isolates proteins for use in cancer drugs and therapies.
While Golub stressed the importance of a clear vision and a strong business model, he said what is needed most is the ability to convey those things to the right potential backers. “I don’t think we’ve quite learned how to do that yet,” he said.
Golub added that the complexity of his company’s work was difficult to sum up and sell in five-to-10 minute presentations, which is why he prefers wining and dining prospective investors at places like restaurants.
All the Biotech Idol contestants need financial support to survive, says Susan Kaplan, a consultant at the New Jersey State Library in Trenton, which co-sponsored the event.
“It’s very important to get these companies funded and off the ground,” says Kaplan. “They’re the future and they need so many things, from money to lab space to information. They need venture capitalists to give them a shot.”