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Chromocell CEO: Drug Discovery Firm Growing Staff and Space in New NJ HQ

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NORTH BRUNSWICK, NJ – The CEO of Chromocell says the drug discovery company's newly-completed $4.2 million headquarters and laboratories aren't the only sign of growth here.

In addition to the facility expansion, which increased the firm's footprint to 15,000 square feet from nearly 6,000 square feet, Chromocell is seeking to hire immediately four employees, including three scientists who would specialize in research, CEO Christian Kopfli told BioRegion News last week.

The four will join the 80 staffers now based at the 15,000-square-foot space within the Biotechnology Development Center, which is part of the 50-acre, 400,000-square-foot Technology Centre of New Jersey.

Chromocell completed the expansion after signing a five-year lease with the center's landlord, the New Jersey Economic Development Authority. Kopfli said the company expects to remain in the new space for at least that duration because the site is large enough to accommodate as many as 40 additional people.

"We hope to grow, and we plan to grow. We don't have any plans to move. We really like it here. It's all we could wish for, basically," Kopfli told BRN.

Kopfli spoke March 25, minutes before leading Chromocell executives, EDA CEO Caren Franzini, and the head of the state's biotech industry group, BioNJ President Debbie Hart, in cutting a ceremonial green ribbon stretched across the interior entrance to the facility.

In its labs, Chromocell sorts and screens some 30,000 cells per second, using fluorogenic probes to identify and isolate cell lines that express multiple genes comprising a given target.

The company's Chromovert technology has a variety of applications, ranging from antibody production to drug-development assays, and flavor and fragrance additives. The technology was developed by Günter Blobel — the 1999 winner of the Nobel Prize in Physiology or Medicine — who went on to co-found Chromocell in 2003 and chair its scientific advisory board, a title he currently holds.

"We test thousands of compounds, millions of compounds. We test them on cells that have the genes that cause disease. You use the cell like a factory to produce the genes, so then you can see what compounds block them. And that's what our technology is about," Kambiz Shekdar, the company's chief scientific officer, told attendees during a tour of the company's laboratories.

Chromocell, which is privately held, does not disclose its revenue, though it said they are in the seven figures. Its receipts are generated either through joint venture or royalty agreements.

For instance, in 2004 publicly traded International Flavors and Fragrances paid Chromocell nearly $1.7 million to develop cell lines and assays, plus undisclosed milestone payments and running royalties on new products discovered using Chromocell technology. It also loaned the biotech $2 million at 6-percent interest, payable in 2007, according to a March 24, 2005, filing with the US Securities and Exchange Commission.

Unlike many life-sci startups, Chromocell has avoided the need for venture capital. "We financed our growth with customer money. We never did a round of [VC] financing, and that has helped us weather the economic downturn. We don't need to raise more money at this point," Kopfli said.

"In the very beginning, we thought we had to keep venture capital out," said Blobel, a Howard Hughes Medical Institute investigator at Rockefeller University in New York. "I know what their way of thinking is: They invest, and after three years of time, or six years, they want their money back, and they sell you on the slave market. No, I don't want this fate to befall Chromocell."

However, "there were crises, where money was almost running out," he added.

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Chromocell's expansion is a triumph for the EDA, which initially housed the company and its initial three employees in a single 800-square-foot lab at the authority's Commercialization Center for Innovative Technologies. Since it was founded, Chromocell has expanded twice: In 2007, when it expanded to seven labs totaling 5,850 square feet within CCIT, and late last year.

After its most-recent expansion, Chromocell became the first tenant within the 26,000 square feet of wet-lab space available at the biotech center, designed for "tweener" companies in between the incubator and their own owned or leased lab space. The center's remaining lab space, totaling 11,000 square feet, is available for lease, according to Franzini.

Over the years, Chromocell has won help from several state sources. During the latest expansion, the EDA agreed to lease Chromocell its lab space at a below-market rate, then build out the company's new space, designed by architectural firm CUH2A, using $4.2 million of $11 million the EDA had set aside for building out tweener space.

"[Chromocell] didn't have to come out-of-pocket for a lot of the tenant fit-out work; we just built it into their lease payment, which is important for a life-science company," Franzini told BRN. "They wanted to spend their money on research, and not money on bricks and mortar. We enabled that to occur."

Representing Chromocell in lease talks were Jon Marks and Mary Ryan, both of the commercial real estate brokerage Cushman & Wakefield's Edison, NJ, office.

In 2006, the state also assisted the company by awarding it $75,000 in first-year salary for a research fellow, Kelly Corcoran, followed a year later by $85,000 in second-year salary.

Funding came from the New Jersey Technology Fellowship Program, which is run by the New Jersey Commission on Science and Technology, using money from the state's Edison Innovation Fund, created in 2006 by Gov. Jon Corzine, a Democrat who plans to seek re-election this year.

Through last year, the Edison fund had spent $125 million to assist life-sci and other technology companies in the Garden State, spending the state credits with those companies that together raised $350 million in private capital.

The fellowship program grew into Chromocell's current internship program, under which the company employs 14 interns from Rutgers University, and the University of Medicine and Dentistry of New Jersey to assist in cell maintenance work. Princeton University and Ryder College are joining the program, Kopfli said.

Chromocell is also looking to hire 10 additional interns, according to Becky Taylor, a spokeswoman. Those interns will help the company run its high-throughput screening instrument and other equipment, Shekdar said on the tour.

"You don’t need PhDs running these things. What we do is have experienced people who train a bunch of interns who come in," Shekdar said. "For them, it's really their first time in a lab. They're really learning lots of things. They get to do things that PhD-level people do in other companies, and we engage them in it from day one."

Kopfli said the internship program and other state incentives were among key factors that kept Chromocell from leaving New Jersey, its home since it was founded by Blobel, Shekdar, and Kopfli, who originally hoped to set up shop in New York across the Hudson River.

"If this firm could find reasonably priced space in [New York] city, they would move back immediately to be close to Rockefeller [University]," said Kathryn Wylde, president and CEO of the CEO membership group Partnership for New York City. She made her comments in testimony in 2004 before a New York state Senate task force designed to advance a package of biotech incentives sought by then-Gov. George Pataki.

Also keeping Chromocell in New Jersey, Kopfli said, was the state's large presence of pharmaceutical giants — some of which are customers — and biotechs, as well as the presence of potential employees trained at the state's colleges and universities.

"I think the environment in New Jersey is really good. And there's also an organizational aspect. You don't want to spread out too much; it's easier to function in one place. There's everything that you need here. You have the universities. You have the pharmaceutical companies. You have the talent pool," Kopfli said. "It's the place to be."

Chromocell is one of three life-sci companies to graduate from CCIT, which opened with 20,000 square feet in 2002 and expanded three years later to its current 50,000. The other two are Amicus Therapeutics, a Cranbury, NJ, developer of oral therapies that bind with proteins to treat several genetic disorders; and Genewiz, which specializes in DNA sequencing, molecular biology, and genomic services.

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