Midwest BioResearch
An interview with CEO Michael Schlosser
Life Science CLUSTERS
Winter, 2007
by Tim Williams
Founded in October 2003 by Michael Schlosser, Ph.D., DABT and Sabrina
Morton, M.S., DABT and initially
capitalised by their own assets including Pfizer stock options and
severance, Midwest BioResearch (MBR) has doubled in size each year and
now has more than 100 clients. From its early days in the Northwestern
University incubator at the
Evanston Research Park, the company has recently moved into premises at
the Illinois Science + Technology Park just outside Chicago, site of the
old Searle headquarters.
MBR’s home is a 16,000 sq. ft. laboratory and office complex in a
building that used to house Pfizer’s labs and has recently been upgraded
and renovated. The company now employs 45 people, mostly recruited from
the large pharma companies around the Chicago area. MBR is a Contract
Research Organization (CRO) specialising in drug
disposition and toxicology with experience in protein and small molecule
bioanalysis, genetic toxicology, and the risk assessment and management
of a wide range of compounds, including protein therapeutics. MBR’s
labs, equipment and facilities are GLP-compliant. MBR’s core
competencies and techniques include immuno-analytical assays, cell-based
assays, and traditional chromatography coupled to mass spectrometers for
drug and/ or antibody detection and characterization.
Michael Schlosser serves as the President of MBR. His 25 years of
experience including work as head of Experimental Toxicology at
Ciba-Geigy, head of Experimental Toxicology and Pathology at Astra
Pharmaceuticals and Senior Director of Safety Sciences at Pfizer gave
him the know-how and confidence to launch his company. And in the highly
competitive world of CROs, with their niche markets between the in-house
big pharma facilities and the thousands of universitylabs wishing to
rent their expertise, you need confidence, business acumen and a fair
share of luck.
*Q: How did you find your first customer? Can you tell us who it was?
*For confidentiality I can’t tell you who it was, and they don’t know
that they were the first customer, but it was a small, local biotech
company who needed our expertise for developing an antibody screening
assay to support their protein therapeutic entering late-stage clinical
trials; the FDA requested this assay. I still have a copy of this first
cheque. They knew the quality and integrity of our team from previous
work at Pfizer and trusted us to deliver a rather complicated assay for
a complex protein. They were pleased with the results and our program
services group is continuing to work with this client in support of
their Biologic Licensing Application.
*Q: I see from your website that you studied at the University of
Mississippi, a long way from Chicago! What is your background and how
has it given you the skills and abilities to run MBR?
*I have always been and still am passionately interested in science. I
attended college at Southern Illinois University to pursue zoology and
chemistry within their wildlife biology program and then did graduate
work in toxicology, a practical science that uses both zoology and
chemistry knowledge. I applied to several graduate programs and chose
University of Mississippi’s toxicology and pharmacology program because
of the quality of the faculty, graduate students, and science there at
the time, plus they were offering a stipend higher than the other
universities! That program laid a solid foundation in classically taught
toxicology and pharmacology, disciplines which require education in
biochemistry, organic chemistry, physiology and statistics to name a
few. After graduate school, I conducted postdoctoral work at Thomas
Jefferson University in Philadelphia where my research focused on the
molecular aspects of benzene toxicity.
My first industry job was with Ciba-Geigy in Summit, New Jersey where I
left after four years as head of their experimental toxicology unit,
just prior to Ciba’s merger with Sandoz. I went to a small British
company call Fisons Pharmaceuticals which had a CNS research unit in
Rochester, New York where I headed up the toxicology department. In the
early 1990’s we had one of the first exploratory development
departments, where a group of about 90 scientists were focused on moving
a portfolio of CNS drugs from discovery to proof-of-concept testing in
the clinic.
Believe it or not, most pharmaceutical companies at that time considered
discovery and early clinical development as two separate activities. In
1995 that company was sold to Astra Pharmaceuticals which shut down the
Rochester site in 1998. At this time I took a position with Searle, the
pharmaceutical arm of Monsanto which soon merged with Pharmacia-Upjohn
in 2000 to become a new company with the same name, Pharmacia. Three
years later Phamacia was sold to Pfizer which shut down the Chicago site
where I worked. So at the end of all those mergers and acquisitions, I
had worked for seven different companies but moved only twice.
Through all this I had picked up valuable experience and close
friendships, plus my contact with friends from college days, who were
now entrepreneurs, had given me the confidence to start up a new company.
*Q: What were the biggest challenges during the early days of MBR and
what are the major challenges ahead?
*We had all the usual start-up problems. We were the new kid on the
block and, despite our vast experience, impressive laboratories and
state-of-the art equipment, it was difficult to be recognised as a
viable, long-term Contract Research Organisation (CRO). Luckily we found
an excellent and affordable marketing group and, coupled with our
industry contacts and quality of work, quickly generated an impressive
track record of new and repeat clients to establish ourselves as a CRO
during the those early years. To start MBR, we cashed in Pfizer stock
options and used our severance pay to cover personal income.
We initially started with two partners and then four others quickly
joined us. We also managed to pick up state-of-the-art
equipment from Pfizer at very reasonable prices. These events, and
having access to a selection of very talented scientists from the
Pfizer-Chicago closure, a group already with an entrepreneurial
character, presented an ideal, once-in-a-lifetime opportunity.
Now that we have weathered the storm and have a financially sound track
record, we tripled our laboratory space by moving back to the old Searle
site just outside Chicago. It is great being back in these
state-of-the-art labs, with the Searle / Pharmacia ghosts providing fond
memories.
*Q: Did any of these challenges affect you and your family personally,
as in start-ups this is often the case?
*Support from family and friends was very important when we set up. My
wife and three daughters were especially supportive – we learned
valuable lessons in going from a fat bigpharma salary to managing our
expenses and family organisation on a leaner budget. I think it was good
for our family, character-forming! And this time helped educate my
growing daughters on the value of money and working together. During the
first year, my eldest daughters would help me clean the labs on weekends
- we all got involved as a family, even my wife worked a while for MBR.
*Q: Now that you are entering the fifth year of MBR’s existence, what is
your forecast for the next year in terms of MBR’s growth and how do you
see the biotech market changing as it slowly matures?
*There are big challenges ahead. We have at least doubled in size every
18 months since we started. We presently have 45 staff and expect to be
employing about 100 people by 2011. The key to growth is access to
capital and a strong management team with an entrepreneurial nature. The
challenge is to grow yet still satisfy customer demand through our
internal programme of continuous change.
Growth is basically limited by our ability to hire and train new
scientists to very high standards: about a third of our staff are
ex-Pharmacia and another third are ex-Abbott – Chicago has an excellent
talent pool of scientists. Our new location gives us a lot of room for
expansion. We are looking at collaborations with pharmaceutical
companies and with other CROs who complement our capabilities.
For example, our consultancy group contracts out millions of dollars of
work to other CROs for services we do not provide within MBR’s labs.
Because of the pharmaceutical industry’s interest in protein
therapeutics and our leadership in this discipline, protein bioanalysis
will be a major growth area for us.
Basic business fundamentals are driving the growth of protein
therapeutics due to recent drug successes, increases in production
capacity, and better industry/ regulatory understanding. Another area
driving our growth is the success of small and virtual companies
developing new therapeutics and requiring consultancy and laboratory
expertise in all areas of preclinical development. There are lots of
virtual companies out there seeking winning products in biologics and
small molecules and they need people like us with expertise in these areas.
Much of Big Pharma are consolidating and outsourcing more of their drug
discovery and development programmes – there is an accelerating trend of
going to innovative exterior companies for R&D. We are well positioned
to take advantage of these future trends.
*Q: How do you structure your personal daily workload? Do you still do
lab work or are you too busy running the business and thinking about how
to win new customers?
*I start work most days at 8 – 8:30 and finish most days about 12 hours
later. I get involved quite a lot with consultancy these days doing risk
assessment and due diligence work. My tasks are split between setting
the course for MBR, the consultancy work, and developing future sales
leads for our company. I do less day-to-day management activities since
we have an excellent and experienced management team to handle the lab work.
*Q: Who are your heroes and why?
*I don’t think I can name any individuals but I think my heroes would be
people who devote their lives to special causes, helping others without
monetary gain. The pastor of our church would be an example.
*Q: What do you do for relaxation?
*I like to get out into wilderness. I draw inspiration from the natural
world and enjoy the seclusion. I try to do special things with my
daughters and have just come back from 3 days back-packing in Northwest
Wisconsin with my eldest daughter who is in high school. It was great to
be outdoors with all the wildlife, black bears, timber wolves and such,
it is still quite wild there.
*Many thanks Michael for your time and sharing your thoughts with us.
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