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Biotech startup moving to Boston
Ohio Twp. firm aims for deeper talent pool
Thursday, June 14, 2007

A local startup that last year got off the ground with help from a venture capital firm that received money from the state is moving to Boston.

Logical Therapeutics Inc. officials said they are making the move to tap into a deeper pool of talent that they hope will help their firm get their promising painkiller out of the lab and into the commercial marketplace.

Their goal is to capitalize on the billion-dollar hole left by embattled drug Vioxx by making a similar drug that does not have the same harmful side effects.

Logical's co-founders and sole employees, former University of Pittsburgh official Carolyn E. Green and Dr. Mitchell Fink, Pitt's chief of critical care medicine, in recent months visited roughly 30 investment firms around the country that, "almost without exception, asked if we'd be willing to relocate,'' said Ms. Green, the company's chief operating officer.

The Ohio Township-based firm is in the final stages of securing new office space in Boston and plans to begin hiring immediately -- possibly between 10 and 20 employees who are familiar with the second phase of clinical trials to test the drug's effects on humans.

Despite the University of Pittsburgh Medical Cen-ter's global reputation in basic research and clinical trials, particularly in drug development, "What's missing is the expertise in designing and carrying out early tests for new drugs, managing the federal regulatory process and manufacturing material used in clinical trials," Dr. Fink said.

Moreover, biotech firms are risky, so it's difficult to persuade experienced workers to relocate to Pittsburgh without guarantee of success, Ms. Green said. In Boston, there are several hundred companies where workers can go if a venture doesn't work out, she said..

While the loss of a promising local startup that received some state aid may look bad, Logical's departure doesn't really reflect poorly on Pittsburgh's efforts to become a hub of health-related science and business, maintained Marc Malandro, Pitt's chief of technology transfer.

He noted that several local biotech startups that have raised money from out-of-town investors have chosen to stay here, including Knopp Neurosciences, which raised several million dollars earlier this year.

"We are starting to build a critical mass, and when any company leaves, for whatever reason, it has an effect,'' Dr. Malandro said. "But it is better to have an adequately funded company" capable of selling a product.

It's not clear if -- or how much -- of the $1.7 million that Logical's first investor, PA Early Stage Partners, provided to help launch the startup last year will have to be repaid to the state. The private equity firm received $15 million in matching dollars from a state economic development program in 2005 to invest in area biotech startups.

The seed money was used last year to launch the Pitt spinoff, armed with two home-grown technologies -- one aimed at tackling obesity, the other at treating auto-immune diseases.

PA Early State managing partner Paul Schmitt said his venture firm put in "several million to get Logical established as a Pittsburgh based company. PA Early Stage had nothing to do with the decision to relocate its headquarters.''

His firm helped Logical acquire the technology that has excited investors such as Boston-based SV Life Sciences, which recently led a round of new venture for the firm that raised $30 million.

Dr. Lutz Giebel, SV's managing partner, believes Logical's painkiller has the potential to turn the market on its head by altering naproxen (also known commercially in the over-the-counter market as Aleve) in a way that prevents potentially harmful gastrointestinal side effects.

"There's a huge need and huge opportunity," Dr. Giebel said. He added that Boston made sense as a new home for Logical because of its access to experienced biotech scientists and managers. "In our business, there are basically three or four major areas -- the Bay area, Boston, San Diego and New Jersey," he said.

First published on June 13, 2007 at 8:42 pm
Corilyn Shropshire can be reached at cshropshire@post-gazette.com or 412-263-1413.
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