Welcoming environment draws growing biotech business to downtown Kalamazoo

Business evolution: From incubation to visibility
Leaving the incubator and finding a visible place in the community can be a big step for a fledgling company. Tolera Therapeutics moved into Kalamazoo's historic Haymarket district, and it's glad it took that step.

"We love it downtown," says John J. Puisis, President and CEO of Tolera Therapeutics, a four-year-old life sciences company that moved into its current location in 2009.

But it took some convincing to bring Puisis around to the idea of moving the business from its previous location in the Southwest Michigan Innovation Center, where it was incubated.

He loved the energy and free flow of ideas in what is commonly called "the SMIC." Desks were set up in a laboratory there, as Tolera Therapeutics primarily needed only office space to analyze results of research and testing. A bioscience incubator, the Southwest Michigan Innovation Center provides a broad range of support and assistance for businesses just getting started. That was essential to the company back then. Tolera officials met the right people and got all the resources they needed to get the business off the ground.

"They were helpful whenever they could be," Puisis says. "I really liked it."
The vintage 1890s building originally was known as the Columbia Hotel and it is one of the success stories of the Haymarket district. It's now home to a number of the region’s leading life science and medical device companies.

Ultimately, however, his staff, which wanted to be downtown and closer to their own homes, convinced him to make the move from the incubator on the WMU campus to the Columbia Plaza Building.

Built in the late 1890s, the building originally was known as the Columbia Hotel and it’s one of the success stories of the historic Haymarket district. Beginning in 1985, the hotel underwent three years of extensive renovations before it re-opened as an office building. It's now home to a number of the region’s leading life science and medical device companies.

Among its many residents are the consultants, management experts and investors of the Apjohn Group; Aursos, where the black bear-derived bone-growth peptide for spinal fusions and other bone defects is being pursued; the contract research group Vida sciences; and the attorneys of Honigman, Miller, Schwartz and Cohn who, in part, concentrate their practices on life sciences, intellectual property and technology, venture capital, corporate law and litigation.

Neighbors like these make for an invigorating work environment for a startup like Tolera Therapeutics, and they in turn contribute to the everyday commercial scene along East Michigan Avenue, which is known for its turn-of-the-century architecture.

So who and what exactly is this business that’s growing downtown as it helps downtown grow?

Dr. Maria Siemionow led the medical team that performed the first U.S. facial transplantation surgery. Chief Operating Officer James J. Herrmann is a senior financial and operations executive with industry experience in long-range and annual planning among many other responsibilities. And Puisis is a senior executive with more than 25 years experience transforming technology-based companies into money-making ventures.

Together they are the co-founders of Tolera Therapeutics, a life sciences company that works with about 12 people, some of them outsourced, and many research partners as it develops a drug that safely suppresses the immune system.

The drug is designed for patients who have received organ transplants. The company’s work could also have implications for therapies for autoimmune conditions, diabetes and some cancers. But Puisis says those are down the road and the company is focused on its drug for transplant patients for now.

The drug goes into Phase 3 clinical trials in 2013, the final testing of trials when a treatment is given to large groups of people to confirm its effectiveness, watch for side effects, and collect information that will allow it to be used safely.

In the company’s early days, Tolera Therapeutics got off to a healthy start with the infusion of $8 million in its initial round of financing. Triathalon Medical Ventures of Cincinnati and Southwest Michigan Life Sciences Fund were among its early investors.
The company also has been named one of Michigan’s 50 to Watch for its use of innovation in creative ways and entrepreneurial leadership.

More good news for the company came in 2009 when its organ transplant drug was granted orphan drug status. Orphan drugs are those that treat rare diseases. Companies developing an orphan drug can apply for grant money to go toward clinical trials. Without such funding, treatment likely would not be developed as the cost of drug development would not be made up when the drug goes to market because of its limited size.

The company also has been named one of Michigan’s 50 to Watch for its use of innovation in creative ways and entrepreneurial leadership.

Financing has come regularly and in 2010 Tolera Therapeutics was reporting it had raised $14 million. On Sept. 17, the company received a $1.5 million grant from the Food and Drug Administration for the work it has done to date on its transplantation clinical trial.

"We make it look easy," Puisis jokingly says of fundraising. But the search for financing is constant, as it is for virtually all biotech startups. "There are many sleepless nights."

There’s good reason to keep at it though. Doctors who have seen the results of the company’s clinical trials are excited about the prospects of a drug that has the ability to help transplant patients, like the one Tolera Therapeutics is developing.

"That keeps us very motivated," Puisis says.

Business evolution: From incubation to visibility
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John J. Puisis
Tolera Therapeutics, SW Michigan

What are the opportunities ahead for Tolera Therapeutics?
We have a product that works very well in helping patients. The physicians that have seen what it can do are very excited about the results and that keeps us very motivated.

What are the challenges do you see facing your company?
Financing is always the big one for any startup. The investment market has been down, but we've been able to move forward in a tough financial market. We are lucky to be in a community that is very supportive. The other challenge is the regulatory environment. We spent a lot of time and resources to deal with the regulatory environment.

How did you end up in the Columbia Plaza Building?
We heard about a vacancy here. We met with the landlord, Mac Waldorf, and he was very enthusiastic about having another biotech business in the building. He was very accommodating and configured our offices to our needs. That and what downtown had to offer convinced us to move to the Columbia Plaza Building.

What do you like about your current location downtown?
There are a number of startups in this building. It's easy to pop over and tell each other our war stories. We have access to restaurants and its nice to be able to get out and take a walk around. That's quite appealing. The environment is very welcoming.

How would you describe your community involvement?
We travel a lot as we seek out funding, but when we can be we are involved with the West Michigan Red Cross and the Chamber of Commerce. We are involved with Western Michigan University and the Southwest Michigan Biotech Institute to help promote the growth of more life science businesses.