How do you go from pharmaceutical sales to owning a biological materials tracking company in one year?
In 2009, Keith Nalepka was comfortable in a “cushy” pharma sales job but was taking no risks and, by his own admission, was unhappy. In the course of his work with his customer, The Johns Hopkins University (JHU), Nalepka stumbled across a web page for a new Hopkins program called INNoVATE.
The year-long program, a National Science Foundation funded partnership between JHU, the University of Maryland Baltimore County and Rockville Economic Development Inc., teaches people, primarily postdoctoral fellows, how to evaluate technology developed in federal and university laboratories for commercial viability. Then, it teaches them to write a business plan and assists them in starting a company.
As he read about the program, Nalepka had what he describes as an “epiphany moment. This was what I wanted to do.”
Forward Motion
Nalepka joined the program, which is taught at the JHU Montgomery County campus, and met privately with Lisa Beth Ferstenberg, an INNoVATE instructor. Ferstenberg is a physician and clinical research methodologist who spent more than 25 years designing and managing clinical trial programs, served as chief medical officer for a number of companies and was founding CEO of Cellective Therapeutics Inc.
Nalepka expressed some reluctance about his place in the program, since he did not have a Ph.D. as most of the other students did. But Ferstenberg recognized his entrepreneurial spark. They discussed the problem of monitoring and securing high-value biologics during transit, and Ferstenberg gave Nalepka an assignment: Go find out how to do it.
Nalepka researched the necessary components, but had not found any companies producing a product that could be adapted for his vision. He got a break at an INNoVATE networking event during which the students were expected to pitch to the crowd what they needed. Keith’s pitch fell on Beryl Hosack’s ears.
Hosack worked for Hi-G-Tek, a Rockville company that developed radio frequency identification (RFID) technologies to track and protect high value cargo and sensitive materials. Hosack introduced Nalepka to Hi-G-Tek’s principals, and soon he had an office there and was working with the company to develop his product.
Meanwhile, Nalepka was taking INNoVATE classes once a week, learning to assess feasibility, identify a market, develop financials, build a team and organize a company. INNoVATE lessons include technology licensing, financing strategy, marketing and operations. But Ferstenberg said that the most important thing students learn is how to think about opportunities in a different way.
“We take highly trained, intelligent people and make them think about what they can do. We look very specifically for people in the life sciences who are either finishing up their academic training or who have been involved in startups and would like to start their own.
“Most of the people who apply are postdoctoral fellows working in federal or university laboratories, but we interview every candidate because we want to find all the Keith Nalepkas of the world. They learn the basics of thinking about business, especially the challenges particular to life sciences companies. They also join a lifelong club, because the third phase of the program, which follows the formal one-year program, offers support to the students as they form their companies. We help them find mentors, networks and resources of all kinds.”
Tech Transfer Agents
Ferstenberg is passionate about INNoVATE’s possibilities. “There are some 5,000 postdoctoral fellows working in area federal and academic laboratories. Only seven to 10% of them will get academic jobs. That leaves 90% of them looking for positions, and there aren’t enough local jobs for all of them.
“If we get them thinking differently about themselves, thinking of themselves as entrepreneurs who create companies and create jobs, we can accelerate the growth of the biotech sector in this community.”
Sally Sternbach, executive director of Rockville Economic Development Inc., one of the INNoVATE partners, is just as passionate about the possibilities of postdocs as technology transfer agents.
“We have dozens of federal and university laboratories in this area; no other place in the world has so many, including NIH, FDA and NIST. Combine that with the numerous universities – [Johns] Hopkins, Maryland, George Washington, George Mason, Howard and more – and there are literally hundreds of technologies being developed each year. Exceptionally few of them are commercialized.
“Conflict of interest regulations prevent principal investigators from transferring this technology, but postdocs already have to leave their labs after their fellowships end. They can start the companies based on this technology.”
Innovative Deal
But what happened to Keith Nalepka? As the weeks passed, several of Hi-G-Tek’s principals pulled together to engineer a management buy-out of the company. Nalepka joined them.
Another INNoVATE instructor, Cristine Copple, of Starise Ventures, helped them structure the deal. Through INNoVATE, Nalepka met contacts who helped him raise the necessary capital, and the team has tendered a letter of intent to buy Hi-G-Tek.
And that is how a pharmaceutical salesperson becomes the owner of a company: by learning to INNoVATE.
Lynne Benzion is associate director of Rockville Economic Development Inc. (www.RockvilleREDI.org). She may be reached at Benzion@RockvilleREDI.org or 301-315-8096. INNoVATE is recruiting its next class now; for more information, visit http://carey.jhu.edu/our_programs/Innovate or contact Rockville Economic Development Inc.
