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in the business? “Randy tried to get them interested. I did too,” Siegall says.
But skepticism ran deep. Alder was trying to develop a platform technology that could give rise to many new drug opportunities, and platforms were out of fashion with investors in those days, says Thong Le, a managing director with WRF Capital in Seattle. Alder’s plan was to develop products, but they were still in their infancy, when the prevailing investment winds favored late-stage product candidates that appeared less risky. “Other people had played with yeast-derived antibodies for years but had never been able to make them work. Investors were very skeptical,” Le says.
Alder knocked on the doors of all the big players in Seattle venture capital who supported life sciences in those days—Arch Venture Partners, Frazier Healthcare Ventures, and Paul Allen’s Vulcan Capital. None of them invested in Alder.
Siegall knew all that, but he says he kept supporting Alder for three reasons. The guys knew their science, they had determination to do what it takes on the long road of drug development, and they were a cohesive group of people with complementary skills.
“What impressed me most was that these guys were top scientists,” Siegall says. “The best companies in this business, like Genentech, are built on a base of great science. Their development team is fabulous, but it has to start with great science.”
By August 2004, Alder caught a break. The early experimental results came in from Cregg’s lab at the Keck Institute. They suggested that the yeast-based process could produce functioning antibodies. That was when Seattle-based WRF Capital decided to take the leap, and lead an angel investment group that pumped in $500,000 of seed capital.
That round of financing took some of the pressure off, but there was still a huge amount of work to do. The founders offered up their next year’s budget without any line item for their own salaries.
“That was when we could start paying our RAs (research associates), and could start buying our own reagents,” Schatzman says.
Watching its pennies carefully, Alder continued to operate “lean and mean,” Schatzman says. The business office stayed inside Seattle Genetics.
Over the next 12 months, Alder stunned investors with its productivity, Le says. Alder showed … Next Page »
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