Athenix cultivating new microbe technology

BT Catalyst, Dec, 2001

A group of biotechnology scientists who played a key role in developing the world's first genetically modified corn have founded a new company to cultivate novel gene discovery technology for crop production and biomass conversion.

Athenix Corp. was officially launched recently with $8 million in financial backing from Intersouth Partners of Durham and a duo of Boston-area investors.

The company's mission is to become a world leader in developing genetic solutions that create renewable resources for the agricultural and petrochemical industries.

To meet this formidable mission, Athenix will create a niche in the market by focusing exclusively on microbial gene discovery. "It is easier to determine what you want a plant to do and then find the gene you need in a microbe, as opposed to finding the plant gene that contains the trait you want to alter," said Mike Koziel, Athenix' CEO.

Koziel and two other founders navigated through agchem and seed industry mergers and acquisitions before launching Athenix. Nadine Carozzi, vice president of product development, and Nicholas Duck, vice president of research, worked with Koziel at the former Ciba-Geigy Corp. and then Novartis -- now Syngenta -- where they incorporated new gene traits into plants.

Later, Koziel and Duck worked on similar projects at Pioneer Hi-Bred, the world's largest seed company recently purchased by DuPont. Markus Andres, Athenix' COO, joined the team from Switzerland where he held senior global management positions at Roche and Zurich Financial Services. The "team" felt the need to spring free of the constant merger activity and the big company philosophy that sometimes slowed internal research projects. "We stepped back and said, 'what is next?"' Koziel said. They decided that microbes were an underutilized genetic resource.

With an experienced, ready-made team and financial backing, Athenix was launched in North Carolina instead of possible locations on the West Coast and the Northeast. Cost of living and access to a highly educated labor force are the main reasons why Athenix and other start-up biotechnology companies are choosing North Carolina over these other biotechnology hotbeds.

"This area offers a high standard of living," Andres said.

Athenix was able to secure a short-term lease for laboratory and office space at North Carolina State University's Centennial Campus in Raleigh, where Duck was able to start assembling his research team. "We have gotten some excellent candidates," he said. Athenix now has 20 employees.

In late November, Athenix was scheduled to move into a newly constructed facility in Research Triangle Park. The company will start with about 4,000 square feet and add 8,000 more as it grows.

"Centennial Campus is great, but its incubator space is in high demand and we really needed more space to grow," Carozzi said.

Athenix discovers microbial strains of interest using assays that specifically identify strains carrying value-adding for use in the insecticide, herbicide or biomass conversion These genes are then isolated, and transformed into economically important plants.

The underlying theme of Athenix' biomass conversion component is to help all kinds of industries reduce their dependence on carbon-based molecules derived from petroleum by providing plant-derived carbohydrates as an alternative. Such a process is currently more expensive than using petroleum, but Athenix plans to evolve the technology into an economically competitive package.

"We want to be a recognized leader in biomass conversion," Andres said.

As Athenix settles into its new facility, the company will simultaneously begin another phase of its growth plan when it hires a business development executive to direct alliance and collaboration efforts.

"Alliances are an important part of a small-company strategy," Koziel said.