A Growing Kalamazoo Life Sciences Company

September 2011

The shock to the folks in Kalamazoo in 2003 when Pfizer announced it was shutting down its area operations cannot be overstated.  It was an economic blow to west Michigan.  Pfizer employees at all levels of the organization had family, friends, roots in the community and for many, leaving was not an option.  State and local business leaders, working in conjunction with Pfizer, rallied to do whatever was needed to retain a viable life science presence in the area; an industry that employed 15 percent of the region’s workforce and accounted for more than 50 percent of Michigan’s life science economy. Jim McKim, the director of Pfizer’s Global Center of Excellence for In Vitro Toxicology, sieized the opportunity and pulled together a team of former colleagues to form CeeTox Inc., the first of several Pfizer spinoff companies.  CeeTox located in the new Southwest Michigan Innovation Center, a bioscience incubator developed through a state, local and university partnership and designed to provide wet lab space, equipment and an entrepreneurial environment to life science start-up companies.

Founded as a contract research organization (CRO), CeeTox provides contract support in the area of in vitro technology to help drug discovery scientists understand the potential adverse effects and predict the adverse effects or toxicity of drugs before they get too far down the drug development pipeline. McKim and his team believed that in vitro cell culture studies, the technique of performing a given procedure outside of a living organism such as in a test tube or petri dish rather than in vivo, experiments conducted with living animals, was the most cost-effective, predictive approach for prioritizing and testing the thousands of chemicals that need toxicity assessment.  With financial support from the state, Southwest Michigan First, the local economic development organization and Pfizer, the CRO began in vitro toxicity screening of potential drug candidates and chemicals.

CeeTox grew as it took advantage of new opportunities.  In 2005, the company was approached by North American Science Associates (NAMSA), an established CRO providing safety testing and consulting services to medical device manufacturers.  CeeTox was seeking additional funds and NAMSA was looking to invest in an in vitro toxicity operation.  Following an initial investment that year, NAMSA eventually increased its investment and acquired CeeTox, making it a wholly-owned subsidiary in 2008.  During that time, the company continued to grow, expanding its technology first to the cosmetic industry and then in the chemical industry.  McKim recognized the need to separate the business and the science; he had the science background and wanted someone who had the skills to run the business side of a life science company.

Tim Mitchell became CeeTox CEO in January, 2009 and McKim assumed the role of Chief Scientific Officer.  “It was exciting to become the CEO of a company that was growing on average 30 percent a year. I believed my background  experience in sales, marketing and management of bio science companies would fit well with the team already in place,” relates Mitchell. The opportunities were expanding in the consumer product safety testing. The European market  banned the use of animals for testing components of consumer products, forcing European cosmetic firms to look to in vitro methods for safety tests. Capitalizing on the ban, CeeTox developed its expertise in a skin model that allows companies to test for a variety of ill effects, resulting in an increasing number of European clients.  “The key to our success has been a function of entering other markets,” explains Mitchell.  “In 2005, our business was strictly in the pharmaceutical market.  Today 50 percent of our revenue comes from the personal care market which includes cosmetics, with the balance split equally between pharma and chemicals.”  It is likely that this market mix allowed CeeTox to survive the tough economic months of 2009 which saw the failure of many small life science firms.  “Even with our diversification, we wouldn’t have made it but for our CeeTox team that stepped up and made tremendous sacrifices to ensure we weathered the rough seas,” acknowledges Mitchell.

Last year, CeeTox acquired the assets of ADMETRx, another early Pfizer spinoff.  “This acquisition increases CeeTox research capabilities and is another step in our strategy to expand our range of in vitro services, specifically our ability to study how drugs are absorbed, metabolized and excreted from cells,” explains Mitchell. “What sets us apart from most CROs is our ability to do more than routine testing.”  In fact, CeeTox has created a robust R&D unit that has developed a number of new assays or screens across industries, including an acute toxicity assay that is the only one of its kind in the market.  “The value of serving multiple markets is that it allows us to translate a test designed for one industry to another market; from chemical to cosmetic, for example,” relates Mitchell.

From the outset, CeeTox benefited from the array of public sector service providers available to help start-up companies.  “As a young company, we had many needs – cash, help navigating government bureaucracy, general business assistance to name a few,” says Mitchell.  “The folks who ran and worked in these organizations gave Jim McKim and his team lots of guidance and support that were invaluable to our growth.  It’s extremely doubtful we would be around today without it.  The SBTDC, Michigan Economic Development Corporation, Kalamazoo Chamber, PTAC (Procurement Technical Assistance Center), Southwest Michigan First and the Innovation Center all are integral to our success.”

The SBTDC has been assisting CeeTox since 2003 when business consultant Melissa Angel worked with McKim to develop a business model, including budget and financials.  During the early years, the SBTDC team served as a sounding board, provided business and strategic counseling and helped the company make connections that were important to grow the business.   “I’ve been working with CeeTox for five years and believe their growth potential is tremendous,” says Sandra Cochrane, SBTDC technology business counselor.  “The company has managed to expand into multiple markets despite the economic downturn and with the recent EPA award to use the company’s technology to help EPA understand how human body processes are affected by exposure to chemicals and which chemicals are likely to be toxic.  The future for CeeTox couldn’t be brighter.”

CeeTox was recently awarded a $26 million one-year contract with a potential maximum $130 million over five years as part of EPAs ongoing ToxCast™ program to develop a cost-effective approach for prioritizing and testing the thousands of chemicals that need toxicity assessment.  “We are honored to be helping the EPA understand and mitigate the toxic effects of chemicals in our world and we are proud to be adding jobs to the Kalamazoo area,” says Mitchell.”

Find out more information about the MI-SBTDC Tech Team.