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North Carolina Supplement: Pappas on NC: There is so much going on here

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Before founding the RTP-based investment management firm AM Pappas & Associates in 1994, Art Pappas held board member and senior executive positions at several big pharmas, including Glaxo, Abbott, and Merrell Dow. He holds a BS in biology from Ohio State and an MBA from Xavier.

What is AM Pappas’ total capital under management?

We manage approximately $150 million. We also provide licensing, M&A, technology assessment, and other advisory services to the life sciences industry.

What North Carolina-based genomics companies have you recently invested in?

Most recently we invested in bioinformatics company Incellico. We have also invested in companies like Novalon Pharmaceutical, acquired by Karo Bio in 2000, and Bio-Informatics Group.

How do you explain the NC biotech boom?

To start you have Duke, UNC, and NC State — world-class research-intensive universities, all with high-quality business schools. Then there’s Research Triangle Park, which attracted large pharmaceuticals like Burroughs Wellcome and Glaxo. Over time, this created an impressive supply of highly-skilled scientists, technicians, and managerial talent. This attracted other companies: There must be at least 100 biotech companies located in the RTP area. You are also seeing the emergence of local VC with expertise to evaluate and commercialize complex life sciences technologies and access to increasingly large amounts of capital. Last but certainly not least, both the North Carolina Biotechnology Center and the Council for Entrepreneurial Development have played valuable roles in furthering the growth.

What does North Carolina have to offer in terms of funding and support for genomics?

There is so much going on here. But let me rattle off just a few: Duke University is creating a $200 million Institute for Genome Sciences and Policy. NC State has committed $300 million to genomics initiatives. UNC Chapel Hill recently announced a $245 million genomics investment over the next decade. And last year UNC recruited one of the world’s most renowned mammalian geneticists, Terry Magnuson from Case Western, to found the med school’s department of genetics. He brought his entire 15-member laboratory group with him. Wake Forest University School of Medicine has authorized $20 million for a new Center for Human Genomics. And the recent establishment of the North Carolina Genomics and Bioinformatics Consortium of more than 60 companies, academic institutions, foundations, and other organizations will likely be an important catalyst for all sorts of collaborative efforts.

What role has your firm played in this?

We have a substantial interest in genomics and we invest regularly in such companies both in North Carolina and throughout the US. In fact, as an advisor to a genomics venture fund, we were among the earliest to really focus on this field. We have brought the perspective of investing in successful companies outside the RTP area to NC startups and act as a bridge between the local and national life sciences industry.

How closely should a venture capitalist work with a company it has invested in?

We strongly believe, given the importance of strategic partnerships for young genomics and biotech companies, industry expertise is just as important as capital. Our company’s greatest strength is that our portfolio companies can draw upon our wide life sciences industry experience and expertise.

What is your relationship with the area universities and medical centers?

We help universities spin out new companies to commercialize their technologies. A year ago, we formed an Enterprise Development group to identify and commercialize emerging technologies from academic and government laboratories. We are also involved with the local universities and medical centers in more personal ways — from teaching at UNC hospitals, as one of our investment professionals does, to helping with fundraising for Duke Children’s Hospital.

 

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