[Ed. Note: To celebrate the first six months of the White House-led Startup America initiative, this week we are highlighting the stories of real entrepreneurs who are creating jobs across the country.
The Startup America initiative aims to create the right policy environment for entrepreneurs to flourish. For example, the President signed into law a 100% capital gains tax cut for investment in small businesses made throughout 2011. The President’s budget would make this tax incentive permanent.]
I am a molecular biologist with a Ph.D. from Ohio State University, and a serial entrepreneur, having started several venture-backed biotech companies in Pennsylvania. I founded TheraVasc two years ago in Cleveland, OH because I want to bring a promising new therapy from the lab to the marketplace. My team of a dozen leading researchers and clinicians from around the country is developing a drug that has the potential to increase new blood vessel formation and promote wound healing when used continuously at very low doses, which could have major benefits for diabetic patients with limb problems and patients with peripheral artery disease.
In fact, once the research that was done on this drug at Louisiana State University was published, it became very clear that there was a tremendous unmet medical need. We received calls from across the country inquiring about where to obtain the drug, including one from an 84-year-old woman in Shreveport. She had been ranked 7th on the U.S. tennis circuit in her youth, had walked a mile a day when she was 80, but now, because of peripheral artery disease, she couldn’t even walk down to the mailbox without pain.
This is exactly the kind of person we’re trying to help, but unfortunately, the only way we can currently administer the drug is an injectable formulation at doses that are unsafe for the continuous use required for treating vascular diseases. Given the need for truly effective therapies and the properties of this drug, we set up TheraVasc to extend the work initiated at LSU Health Sciences Center to develop a low-dose, oral formulation of the drug for patients like our neighbor in Louisiana.
This kind of research and testing is extremely expensive. But – in large part because of the Obama Administration’s tax incentive for small business investments -- we were able to raise over $2 million for these early clinical trials from individual “angel” investors. In fact, when the incentive was set to originally expire on December 31, 2010 (The President has signed a one-year extension, and wants to make it permanent), one individual wired us $20,000 on December 30 to ensure that they didn’t miss the deadline!
These funds allowed us to complete our Phase I study showing the safety of a single dose, and will allow us to carry out our Phase IIa study, where we believe we will show safety of continuous administration and evidence of biological activity. And this means that patients are now receiving this drug, which we hope will provide a true therapy for these serious problems and provide a much better quality of life.
Although TheraVasc is a small biotech startup with relatively few employees, this investment has allowed us to hire a contract research organization to manage the trial, manufacturing and analytical companies to produce the drug, and up to 10 clinical sites to carry out the Phase IIa clinical trial -- creating and supporting numerous jobs, all in the U.S.
Equally important, the 5-year holding requirement for this tax incentive encourages our investors to build a sustainable company, and not simply pursue a “quick flip.” This means that once we obtain positive Phase IIa results, new jobs will be created at TheraVasc and within our partner organizations, as development continues and the trial size is expanded. Since clinical trials generally take a minimum of 5 years, this holding period will help to ensure that TheraVasc is still an ongoing entity by the time the drug is approved for use in humans.
My father-in-law also has peripheral artery disease and he is anxious to begin receiving our drug. This tax incentive was important to me in raising the funds necessary to carry out our clinical research and hopefully providing my father-in-law, the ex-tennis star and many others the treatment they desperately want. Making the tax incentive permanent would be a tremendous incentive for angel investors to back other longer-term drug development companies, providing more new therapies for poorly treated diseases.