July 23, 2006
By Ted Griggs
Advocate business writer
If the future of Louisiana’s biotechnology industry lies in Baton Rouge, it will begin with Esperance Pharma, which may have discovered the cure for breast and prostate cancers.
“This is a big deal,” said Ross P. Barrett, managing partner of Themelios Venture Partners LP, the venture capital fund that is commercializing the cure. “It’s going to be a high-profile deal. We’re going to be talking about it in much more detail in the coming months.”
Billions of dollars are spent each year treating breast and prostate cancer. Breast cancer will strike around 213,000 women in the United States this year, and kill nearly 41,000, according to the American Cancer Society. There will be 234,460 new cases of prostate cancer this year, and more than 27,000 men will die from it.
Esperance’s nanoparticles kill breast, prostate, ovarian and testicular cancer by attaching to hormone receptors on the cancer cells and destroying the cell membranes.
Nutrition-focused research at Pennington Biomedical Research Center produced the potential cure, Barrett said.
Themelios, Greek for foundation, and Pennington have already signed a term sheet to fund the next round of research and development, Barrett said.
“The money’s not transferred, but the deal is basically done,” Barrett said during a recent Baton Rouge Area Chamber event. “We couldn’t be more excited about that; have folks in Europe, our friends up in New York wanting to take a look at this for a potential investment.”
TVP has $12 million to $13 million in its investment fund now and plans to reach $15 million this summer.
The fund hopes to raise another $15 million from investors outside Louisiana, he added.
Esperance is just one of a number of discoveries at Pennington with the potential for commercial applications, Barrett said. Barrett said he could not discuss the details of that research, other than it will likely involve the areas in which Pennington focuses: nutrition, weight loss, diabetes and cancer treatment.
The major pharmaceutical companies have basically outsourced their research and development to venture capital companies, Barrett said. The reason is that there is so much innovation going on for the drug companies’ budgets to handle.
So the drugmakers rely upon “trusted friends and colleagues,” such as Barrett and his partners, to help them decide what products are worth pursuing, he said. Barrett’s partners have been doing this sort of work for two decades.
Barrett said he hopes that TVP will raise the profile of Pennington in a market-driven way.
The fund will make eight to 12 investments over the next five years, ranging from $100,000 to $3 million. The fund will look for “exit events,” opportunities to sell the companies or take them public, at around the five-year mark but that will depend on each company’s situation.
Barrett said he expects about 60 percent of the fund’s investments will be made in Pennington companies, with the remainder outside the state.
The outside investments will also have a tie to Pennington, through clinical trials or sponsored research deals, Barrett said. Although some people in economic development may not think that’s a great idea, out-of-state firms provide some key advantages.
“We can get a Boston-based company. We can get a San Francisco-based company. We can get a Palo Alto-based company that wants to do trials and research here,” Barrett said. “You simply cannot buy better marketing.”
In addition, Baton Rouge will be able to tap into outside firms’ expertise, developments and different ways of thinking.
“Everyone says we’re a poor state. We’re a rich state. We’re an extremely rich state,” Barrett said. “We’ve been poorly managed for years. I think that’s because we’ve been too insular.”