Wisconsin Biotech Firm to Receive Tech Loan
Madison-based EraGen BioSciences Inc. will receive a $250,000 state Technology Development Loan that will help it continue growing, state and company officials announced Tuesday.
The genetic technology firm, 918 Deming Way, will be spending $1 million to upgrade its manufacturing facility, with 75 jobs ultimately projected to be added to its current 31. The upgrade will enable it to produce its genetic screening test for Cystic Fibrosis.
EraGen last week announced a licensing deal with Bayer under which the global giant will manufacture and market EraGen's Cystic Fibrosis test. The agreement also provides Bayer with additional rights enabling it to expand the deal to other genetic tests.
"We are off to a great start in 2005 and have a number of exciting business opportunities in progress which I anticipate will put us in a powerful position in the molecular diagnostics market in 2006," EraGen President and CEO Irene Hrusovsky said Tuesday.
EraGen Partners with Bayer HealthCare-May 18, 2005
By: Marv Balousek, Wisconsin State Journal
EraGen Biosciences, a Madison biotech company, announced an agreement Wednesday in which Bayer HealthCare of Tarrytown, N.Y., will manufacture and market its genetics-based test for cystic fibrosis.
The exclusive agreement provides Bayer with the patented diagnostic method for rapid testing of people who carry the mutated gene as well as neonatal and newborn testing.
"Most importantly, what this means is they will be manufacturing and marketing this product worldwide to other laboratories," said EraGen chief executive Irene Hrusovsky.
James Prudent, EraGen's chief scientific officer, said the cystic fibrosis test is the first of a range of disease-specific tests the company has under development.
Regina Reynolds, EraGen's corporate communications director, said the open-ended agreement restricts both companies from revealing the deal's dollar value. But she said it involves an initial payment from Bayer plus royalties.
Cystic fibrosis is a genetic disease that affects about 30,000 children and adults in the United States, with about 1,000 new cases reported each year. About 10 million Americans are carriers of the disease, which doesn't develop unless both parents are carriers. Median life expectancy for those diagnosed is the early 30s.
The most common genetic disease among Caucasians, cystic fibrosis causes the body to produce mucus that clogs the lungs, leading to life- threatening infections. The disease also affects the pancreas, and complications include diabetes and osteoporosis.
EraGen's agreement with Bayer HealthCare isn't the first strategic partnership developed by the Madison company. Last year, EraGen signed a licensing agreement allowing Promega Corp. to sell EraGen technology that tests genes for certain diseases. Three weeks ago, EraGen announced a licensing and distribution agreement with Luminex Corp. of Austin, Texas, giving EraGen rights to distribute and sell the Texas company's clinical diagnostic technology.
"Certainly a major part of our business model is strategic partnerships with companies like Bayer, which have a large market presence already," Hrusovksy said. "They have a lot bigger outreach than companies like EraGen can achieve."
Tom Still, president of the Wisconsin Technology Council, said such partnerships strengthen Madison's biotech industry.
"It's a really good sign when technologies and processes that are developed here garner the attention of some of the big companies," he said. "I certainly hope it is a pattern because in order for most of our companies to do well in the long term, they're going to need to form partnerships either with other companies like themselves or with big companies."
Still said the Bayer agreement indicates larger therapeutics and diagnostics companies are paying attention to Madison's smaller biotech companies.
"I think it's a sign that Wisconsin is increasingly on the map," he said. "They know we're producing world- class technology and world-class solutions, and they are investigating with more vigor."
Hrusovsky said the privately held EraGen has 27 employees and about $4 million in annual revenue.
Bayer HealthCare is a subsidiary of the Bayer AG, which has 113,825 employees worldwide. It reported 2004 net income of $817 million on $40.3 billion in sales, according to Dun & Bradstreet.
State Loan Aids EraGen Expansion
The Capital Times: Business
May 25, 2005
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