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Officials Say Fuji’s Purchase of Kalon Boosts Texas’s Biotech Profile

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sure we hire all the right people and get the systems in place so we can execute. I knew at that point 18 months ago, we wanted to look for a partner that can come in and be strategic in nature. We had lots of execution needs, but not so much money, as in venture capital or debt financing. We really wanted to find an operating partner that understood the [contract manufacturing] business.

Now that we’re up and running, it’s time for [Kalon] to be able to have a more significant corporate partner to help it grow. Part of the challenge that under state ownership, we can’t get a loan from the state, from the owners. You can’t get a guarantee; you cant get easy access to capital to grow and take on new projects. We need to have a corporate backed partner to provide money to the company.

I went to Bio2013 in Chicago, and there was strong interest from CEOs there. Ten came for meetings and site tours. Last fall, we had narrowed it down to three. In January, we entered into a term sheet with Fujifilm and in the past 10 months we’ve been in due diligence and contract negotiations.

X: What is next for you? Do you see yourself remaining involved in the biotech area in any way?

A.S.: The past couple of years, there has been a Texas biotech explosion, a significant amount of activity in this arena. When I was looking for counsel—in the legal sense as well as for the business—I realized that there’s not much out there in terms of services to really help a company from formation: getting through debt financing and venture capital financing. I’m going to go back to my law firm, Pillsbury, and lead the life sciences practice and build it in Texas. It’s very exciting to me; I have lots of ideas about what I think we can do to help build the companies here in Houston.

X: It seems that efforts are really gaining momentum here in recent months, with the Texas Medical Center, its new accelerator, and J-Labs, an incubator program run by pharmaceutical giant Johnson & Johson to boost biotechs innovating in therapies, drug development, or diagnostics.

A.S.: In Houston, we have some really incredible minds. [But] we don’t have the critical mass of people [to support commercialization.] I would love to do seminars: anatomy of building a company, legal and finance issues.

X: Tell me about A&M’s biotech ventures and the other international names it works with. What does this acquisition say about the Houston area’s expertise in biotech?

A.S.: I am biased but I think it’s huge. It’s somewhat similar to when Novartis moved to Boston and it really changed Boston for the future in biotech. Two major companies [Fujifilm and GSK] that are putting major dollars into biotech in Texas is a very significant event. The only challenge that we have in Texas—we have incredible biotech clusters—is that we need to makes sure that we are working together to build the greater good, instead of fighting each other for business.

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