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Momentum is gaining in Tucson on promising early-stage companies

Source: Inside Tuscon Business
By: Joe Pangburn

Dr. Evan Hersh, Left, and Dr. Robert Dorr of AmpliMed.

Momentum is growing in the knowledge-based sector from a growing number of Southern Arizona early-stage companies that bring promising research and ideas to market.

“There are more promising, early-stage companies in Tucson right now with the potential to be huge, than there has ever been that I can think of,” said Harry George, a venture capitalist and managing partner of Solstice Capital. “There’s around a dozen I can think of off the top of my head that are doing completely new and innovative research.”

One company, Tempronics, George says could revolutionize the air conditioning and heating industries as well as potentially double the fuel mileage of hybrid cars. Another is showing a promising cancer-fighting compound. Another is changing the way medications are injected.

Larry Hecker, a lawyer and executive member of the Desert Angels, said he sees the potential as well.

“All these companies, if they are successful, will strengthen and help diversify the local employment base,” Hecker said. “In just the last six months, I can think of eight to 10 start-up companies that successfully raised capital.”

Many of those companies are still in the process of initial fundraising and due to Securities and Exchange Commission rules, are not allowed to talk about themselves or be promoted in the media, according to Hecker.

“These companies are raising money pursuant to the private placement exemption from the registration requirements of federal and state securities laws,” Hecker said.

He said there can be no advertising or general solicitation in connection with the offering and articles in the media could be construed as general solicitation.

The fundraising process can be a long and tiresome process due to the lack of available venture capital in Arizona, and especially in Tucson. Most funds in the state are fully invested and don’t have additional capital to invest currently, according to George.

“We have so much promising work going on here in town that I would hate to see us held back or lose companies due to a lack of funding for them,” George said.

Because the Tucson investing community in small, Hecker and George are involved with these compaines. They’ve put their money and services where their mouths are to help the companies succeed

While there are many great and promising companies in town, here is a look at three of the approximately dozen companies that Hecker and George believe are going places:

Cancer drug shows promising results, low toxicity

Amplimed Corporation has created a new cancer drug with early evidence of effectiveness and low levels of toxicity.

The drug is Amplimexon and has already been through Phase I and II clinical trials and is currently in a double blind Phase II trial in pancreatic cancer.

“There have been some amazing advances in cancer medicine and research over the years,” said Dr. Evan Hersh, vice president for clinical affairs. “But pancreatic cancer still has a 95 percent mortality rate affecting 30,000 people a year who, upon discovering this, typically have around six months left to live.”

The study enrolled around 400 patients and opened at 42 sites around the country in 2008. In June, the group will be able to unveil the trial to see how the drug did.

“The drug certainly works in various clinical models,” Hersh said. “Our drug has been shown to shrink and kill tumors. If it works well in pancreatic cancer we will be very thrilled.”

Amplimexon has a unique way of attacking cancer cells, appears to have only minimal to moderate bone marrow toxicity at the highest doses, and avoids the drug resistance that limits the usefulness of many other cancer chemotherapies.

“This is important, because usually you can’t combine drugs to fight cancer because of the toxicity of the drugs,” said Dr. Robert Dorr, CEO of Amplimed. “But with Amplimexon, you can still use the full dose of another drug and you don’t have a rise in toxicity.”

Getting to this stage of research is no small feat. Researching and developing a new drug then taking it to clinical trial is a very expensive process.

Amplimed has been able to get to this point by taking advantage of grants and its founders’ relationships with the University of Arizona as well as being very frugal with the money they raise.

“The strategy has been to use NIH grant money in our development work and use the investment money in the clinical trials,” said Dorr. “We also have some support from the UA. We are a spin out company from the Arizona Cancer Center.”

Dorr said the company has gotten as far as it has on just $37 million worth of investment.

“Now that sounds like a lot, but when you’re talking drug development, it is not very much at all,” he said. “We’ve been able to do this by running our own clinical trials, which is more work, but sourcing it out can double the costs instantly.”

Dorr hopes with the results of the clinical trial in hand he will be able to partner with a large pharmaceutical company for a Phase III, worldwide clinical trial. He estimated it would take three years and around $40 million to $50 million for the Phase III trial.

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