August 28, 2012—Accelr8’s move to Tucson speeds up biotech outlook

ARIZONA DAILY STAR
David Wichner
August 28, 2012

If Larry Mehren’s vision becomes a reality, Tucson could be home to a technology that could revolutionize the treatment of bacterial infections.

And though there are a lot of ifs that must become whens before Mehren’s company, Accelr8 Technology Corp., becomes a biotech powerhouse, the company has taken the first step by making Tucson its home.

Accelr8, which makes systems to rapidly identify and classify bacterial infections, announced last week that it will move its headquarters and operations to Tucson.

The company has been looking to expand and had looked at staying in Denver. Accler8 was courted by officials in Michigan as well.

Tucson won out partly thanks to Pima County’s offer of lab space and cut-rate rent for a period, and a $1 million conditional state grant.

But Mehren – a major investor in Accelr8 as well as president and CEO – said Tucson’s potential as a bioscience hub also had much to do with the decision.

“It really was one of the big factors in our decision – the opportunity here to create a biotech hub,” said Mehren, who was chief financial officer at Oro Valley-based Ventana Medical Systems/Roche Tissue Diagnostics from 2007 to 2010.

Accelr8 (www.accelr8.com) wants to be a big part of that, with flagship technology that Mehren said is both unique and sorely needed.

Accelr8 has developed an automated system that can identify bacteria in samples such as blood in hours – instead of the days it takes labs to culture and analyze specimens by hand – and detect drug resistance in a specific bacteria strain.

The company’s BACcel system is aimed at a deadly and growing problem of “superbugs” – antibiotic-resistant bacterial infections, including hospital-acquired infections.

Such highly drug-resistant pathogens, which are common in hospitals, kill almost 100,000 U.S. patients each year, according to the Centers for Disease Control and Prevention.

“There’s a really intense need for new drug information to guide treatment of hospital-acquired infections,” Mehren said.

Antibiotics exist that could help in each case, Mehren said, but labs need two to three days to find the right drug – far too late to help critically ill patients.

Using an automated, culture-free system, Accelr8’s system can identify multiple pathogens and their major antibiotic resistance types in two to six hours, Mehren said.

Such rapid pinpointing of potentially effective treatment can dramatically improve a patient’s survival chances, Mehren said. That speed also eliminates a scattershot approach of prescribing multiple antibiotics – an all-too-common practice that can lead to toxic reactions and more drug resistance, he said.

While some other rapid-identification systems are available, the BACcel system is the only one Mehren’s aware of that can identify specific drug resistance.

“If we hit all of our development end points, our technology will be adopted, and at this point, there is no competition,” Mehren said.

The system itself consists of cassettes that contain sample material and a special imaging device for analysis. The cassettes contain several fluid tests in a concept sometimes known as a lab-on-a-chip.

The BACcel analyzer extracts and concentrates bacterial cells and uses an internal microscope to count and analyze the cells, exposing them to a series of antibiotics to gauge their resistance.

The idea of applying high-tech methods to bacterial detection isn’t altogether new, nor is it entirely foreign to Tucson.

A California company called Cepheid markets systems and tests to rapidly identify infections, including MRSA. That technology was approved by the Food and Drug Administration in 2007, following clinical trials headed by a University of Arizona microbiologist.

And another local company, Azbil BioVigilant, makes systems that use sophisticated optics to detect environmental microbes.

Accelr8 has attracted some heavyweight biotech investors with prior links to Tucson.

In June, the company finalized an agreement to sell up to $35 million of its stock to an investment group led by Jack Schuler, John Patience and Mehren.

Schuler and Patience, principals and founders of Crabtree Partners LLC, were early investors in Ventana Medical Systems and were founders of Stericycle Inc., a medical-waste management company. Schuler also is a key investor and director of medical-device maker Medtronic Inc.

A local economic-development leader said landing Accelr8 is a big step in elevating Tucson’s status as a hub for the bioscience industry.

With the presence of Ventana and companies like HTG Molecular Diagnostics – a homegrown firm led by former Ventana executives – Tucson may not be the next Boston, but it’s carving out a niche in the diagnostic device sector, said Joe Snell, CEO of Tucson Regional Economic Opportunities Inc.

“We might very well be on our way to being the diagnostics center,” Snell said. “It’s just another piece of the puzzle.”

Incentives like the county’s lab-space offer didn’t hurt.

The county is building out 15,000 square feet including new wet-lab space for Accelr8 at the Herbert K. Abrams Public Health Center, 3950 S. Country Club Road, and the company will pay reduced rent for three years.

The Arizona Commerce Authority has awarded Accelr8 a $1 million grant based on four job-creation milestones. According to a regulatory filing by Accelr8, the company initially must create 15 jobs averaging wages of at least $63,000, with 65 percent of health insurance paid by the company. Subsequent milestones are when the company reaches 30, 40 and 65-plus qualified jobs, plus a minimum $4.5 million in capital investment.

Contact Assistant Business Editor David Wichner at [email protected] or 573-4181.