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Houston Healthcare Start-ups: Starting to achieve escape velocity from the gravitational pull of oil & gas

On March 2, 2018, JLABS @ TMC celebrated its second anniversary. The pace of our evolution over the past 24 months continues to be rapid. We started with 22 companies, and have grown to just under 50, we have quadrupled the size of our device prototyping labs in order to meet the ongoing demands of our medical device resident companies, and our internal team continues to grow in order to support the needs of the many companies on our site.  While these are meaningful growth metrics for us, we find that we are just a part of an emerging healthcare start-up dynamic here in Houston

The growth we are witnessing here has surpassed the expectations that I had when I moved here a year ago from Boston. Our neighbors are the strong team within the TMC Innovation Institute who run the TMCx accelerator program sponsored by the Texas Medical Center.  They opened their doors a year before us and welcomed their first cohort of 21 companies. In three short years, they have had 6 cohorts and hosted 108 companies from around the globe. The current cohort of 22 health tech companies is drawn internationally, only 3 are from Houston, with 20% coming to Texas from Silicon Valley.  Here at JLABS we have welcomed 7 of their graduating companies to stay in Houston and become JLABS residents.

In addition to the accelerator program, the TMC Innovation Institute at 2450 Holcombe also holds X+, a co-working space for healthcare companies that now houses 70 life science companies.  J&J’s Center for Device Innovation is also located here, run by Billy Cohn, and now staffed with over 10 J&J machinists and engineers.  So, in just three short years, this place has gone from being a former cookie factory, to a vibrant life sciences community housing over 175 different healthcare startups, employing hundreds of people, that you could meet here on any given day. I walk down the halls, and I am consistently challenged to remember names of people, companies, and technologies.  This close proximity creates crucial connection points for entrepreneurs, scientists, and venture capitalists that previously did not exist in H-town. And if you ask them, they will all tell you that this is absolutely critical to their success.

With the commitment of time and capital from Bill McKeon and his team at the Texas Medical Center, in addition to our neighbors the institute including BioHouston, TMC BioDesign and angelMD, we have helped establish a strong foundation in Houston for the growing life science community. Houston has begun to creep up on the short list for the hot spots for innovation, and when you come here you can see why. We have all helped to build it, and start-ups have responded by coming. It is our goal to recruit and foster these companies to find continued success, whether that’s in the clinic or through financial partnering. Johnson & Johnson Innovation helps to provide the connective tissue to the east and west, while the Texas Medical Center provides access to one of the largest concentrations of patient populations in the world.

We will continue to look ahead, as more growth at this site is planned. It is an absolute kick to be here every day and be a part of it.  So, if you’re into solving some of the challenges we all face in healthcare, or curious to see for yourself, head down to the former cookie factory. We’ll be happy to show you why the Innovation Institute at 2450 Holcombe is adding rocket fuel to Houston’s growing healthcare footprint (pardon the pun, but it is Houston…).

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Harvey, Helplessness, and Hope

I grew up on the coast of Texas; hurricanes come with the territory. I’ve heard my parents and grandparents swap stories about hurricane Carla in 1961, I remember evacuating to my aunt and uncle’s house in north Houston for Alicia in ’83, watched in horror from my new home in Austin as friends and family were literally trapped on I45 for hours trying to evacuate when Rita hit in 2005, just after Katrina, and lastly, I remember the devastation hurricane Ike brought in 2008. When I got the opportunity to relocate back home to Houston late last year, the threat of a hurricane never entered my mind. When Harvey started showing up on the radar, I had to remind myself, “Oh yeah, it’s hurricane season.” First, it started out as an inconvenience. We were doing the usual preparations, gas in the cars, lots of bottled water, generator in case we lost power, etc., and then they cancelled school on Friday, August 25th. School had just started on Monday, and as a mom of four kids ages 2-9, school starting was a welcome relief. The storm hit Friday night, and it was uneventful for me in my coastal suburb of Houston. It was upgraded to a category 4 just before landfall, and I held my breath for our seaside neighbors in Port Aransas and Rockport. We got a little rain and some lightning, but nothing too crazy. The kids slept through the entire thing. The next day on Facebook, my feed was full of people marking themselves “safe”, and heartbreaking pictures from the coast. I got a notification that a friend in Phoenix was trying to see if I was okay and it offered to mark me safe, and I accepted. I know now this was premature. I don’t remember exactly what time the first warning came through on my phone, but it made me jump a mile. It was a tornado warning, and it was the first of many. At one point, a local news station reported that we’d had 110 tornado warnings caused by Harvey. My phone was buzzing constantly. By Monday, I didn’t even hear them anymore. On Saturday, the rain started and it didn’t stop. The rain came down so hard and so fast, that my husband was in our backyard until 3am digging trenches trying to give the water somewhere to go other than inside our home. We had to drain our pool over a dozen times. After a sleepless night and a brief break in the rain, my husband and I loaded up the kids and drove around the neighborhood to assess the damage. We couldn’t get very far. Our house is located in the center of the subdivision, and we were literally on an island. The water was so high on the outskirts, the streets were unrecognizable and we saw the top halves of cars sitting ominously in the flood waters. We quietly drove back home. Helplessness The next few days were awful. There’s no pretty way to say what was happening in Houston and its surrounding areas, and I have no words to describe the strangling feeling of helplessness as I watched the destruction going on around me. I was dry, had power, and felt incredibly guilty about it. We were lucky. My heart was broken for those who weren’t. Thanks to social media, I had an inside view into what was going on in the lives of friends and family members across town. Every time a new evacuation was called or they showed a particularly bad area on the news, I found myself checking my mental rolodex to remember who lives where and try to reach out or check their Facebook status for an update. I sat horrified and helpless as a friend’s wife from high school posted that she was trapped in her attic with her children, as friends frantically shared her status trying to get someone to rescue her. Address after address popped up of people asking for help because the water rose so quickly, no one had time to get out. With constant digging and pool draining, we continued to stay safe and dry, but I quickly learned of others who weren’t so lucky. Several colleagues and residents of JLABS @ TMC were forced to evacuate, several of their homes took on water, and some confirmed they lost everything. Still I sat in my house, glued to the news, restless, unable to help. Then came the hope One thing about Houstonians, they act fast. The flood waters were still rising when long time business owner Jim McIngvale opened his furniture store to people displaced by the storm. JJ Watt started a donation fund, which he pledged the first $100K, and that fund hit $20M after Labor Day. But it wasn’t the celebrities or the rich that made the biggest impact, it was the people who were suffering themselves. It seems like suddenly the entire boat owning population of Houston were helping people out of their homes. For every “rescue needed” post I saw on Facebook, there were two more saying “We have a boat, text me if you need help.” That’s the thing about the people that inhabit our nation’s most diverse city, in a time of need, they answer the call. When the shelters began to pop up I had the kids clean out their drawers and closets. I also made a mental note to not do a major cleanout next year until after hurricane season. After we curated our pile, I went onto Facebook and Nextdoor to see who nearby was accepting donations. To my surprise, no one was. They were now asking for very specific toiletries, and turning everything else away due to an overwhelming response. We were too late. People who lived here longer knew what was coming, and they were ready. I found a truck heading for Rockport, and I sent our donations with them. I read once that in a tragic situation we’re supposed to look for the helpers. Our operations manager Julie Humphries volunteered at a local church with her husband and two daughters, one of our resident CEO’s reported to the convention center and volunteered as a medic, how our team could contribute to relief efforts was a passionate topic in our daily team check ins, and those are just the stories I know about. Helpers were everywhere. By Wednesday, things were finally settling down. Many areas were still flooded, but the storm had finally turned east, and the sun began to peek out from the clouds. My neighbor’s unofficial rain gauge, which is basically a bucket with measurements, held 51 inches of water. If you look at the map below, I fall into the light gray category just south of Downtown Houston. The U.S. National Weather Service (NWS) actually had to add not one, but two color categories to their map to effectively show the rain totals during Harvey. The news stations are now referring to it as an unprecedented 1000-year flood. Texans are resilient. We are far from being able to rebuild. Most people are still unable to return to their homes. Schools have all been closed until September 11, some indefinitely, and even though our JLABS site had minimal damage, due to highway flooding and accessibility, we were told to stay home and focus on our families until after Labor Day. Looking forward, we will be deprived of life’s conveniences, my trash service and I imagine the rest of the city’s, has been restricted because of landfill flooding and debris, grocery stores are far from being fully stocked, gasoline prices, if you can find it, have spiked. The rest of the country will move on. We, however, will be living with daily reminders of Harvey. I am so grateful and appreciative for the constant check ins and well wishes from colleagues across the world. J&J set up a 2-1 match for employees towards partner charities, and the JLABS team has pledged to donate all event proceeds across JLABS sites for Q3 to the Greater Houston Community Foundation to help those affected by the storm.  The outpouring of support from my personal and professional community is incredible. One of my girlfriend’s commented good heartedly, “Looks like a great time to move back to Austin!” Nope, not in a million years. I’m staying right here, because I know that no matter what happens, Houston has my back.

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JLABS COMPANY STORIES | VIRACYTE: A COMPANY DEDICATED TO FIGHTING TRANSPLANT RELATED INFECTIONS

Imagine being a transplant patient, and you’ve just received the bone marrow transplant you desperately need to survive.  Unfortunately, a full recovery is not a given. Immediately after a transplant, before the immune system reconstitutes, the patients are very vulnerable to infection. In fact, research shows that more than 27,000 patients are projected to receive allogeneic hematopoietic stem cell transplant (allo-HSCT) in 2017 (US and EU), and up to 70 percent of those patients may suffer from a severe viral infection1.  Unfortunately, today there are no FDA approved drugs or effective experimental therapies to treat most of these infections, but ViraCyte is on a mission to change that.                            

ViraCyte, a resident company at JLABS @ TMC in Houston, Texas, focuses on combating these infections. Spun out of Baylor College of Medicine in 2013, the company’s mission is simple: to safely and effectively treat viral infections that attack people with weakened immune systems. ViraCyte’s therapies infuse patients with activated T cells that are highly specific for attacking viruses; these T cells are obtained from normal donors and following activation and expansion, can be kept cryopreserved for years until patients need them.

“I was a pediatric critical care physician prior to joining ViraCyte, and some of the most challenging cases I faced were severe viral infections after stem cell transplant,” said Brett Giroir, M.D., President and CEO of ViraCyte. “Typically when patients contract a virus like this, there’s nothing we can do except to provide supportive care and wait for the immune system to reconstitute.” When I saw the work that ViraCyte was doing, I knew I had to be a part of it.”

The results are positive and encouraging. In the past 8 months, ViraCyte has released its phase 1 and phase 2 clinical results. In phase 1, which focused on the safety and efficacy of Viralym-C, the therapy controlled infections within six weeks of infusion for all ten patients with drug-refractory CMV infection. In the phase 2 results, Viralym-M, ViraCyte’s flagship therapy, achieved a 92% overall clinical response after a single infusion and demonstrated efficacy against all five targeted viruses.

Based on the results of phase 1, ViraCyte was granted a Fast Track designation by the U.S. Food and Drug Administration in early January of 2017.

“Fast Track designation emphasizes the importance of new cell therapies, like Viralym-C, which holds unique promise in treating severe infections in patients with weakened immune systems such as adults and children following stem cell transplants,” said Dr. Giroir. “This was a huge step forward for us as a company.”

The success didn’t stop there.  ViraCyte continued to get positive results and shortly thereafter, Viralym-C was granted an Orphan Drug designation by the FDA. Orphan Drug designation qualifies sponsors who are developing therapies for rare diseases that affect fewer than 200,000 people in the United States for certain development incentives, including tax credits for clinical research costs, frequent FDA interactions, and protocol assistance. 

Although ViraCyte focused on the stem cell transplant population first, their roadmap includes all patients suffering from viruses due to weakened immune systems. Other organizations are starting to take notice, and in early July ViraCyte announced that the NIH National Heart, Lung and Blood Institute (NHLBI) awarded the company a $3 million Phase IIB Small Market Award under the NIH Small Business Innovation Research (SBIR) program. The Program supports the development of innovative technologies addressing rare diseases and/or young pediatric populations to advance the commercialization of promising new products. With this new capital, ViraCyte will perform advanced clinical development of a T cell immunotherapy for BK virus in stem cell transplant recipients. BK virus causes severe disease including hemorrhagic cystitis and nephritis and can lead to renal failure, hemorrhage, and death in transplant recipients.

Additionally, ViraCyte was recently awarded a $750,000 Orphan Products Clinical Trials Grant by the FDA Office of Orphan Product Development (OOPD) for a Phase I clinical trial of Viralym-A in stem cell transplant recipients with Adenovirus.  The OOPD funds the clinical development of products for use in rare diseases for which there are limited or no current therapeutic options. There are currently no FDA-approved treatment options for BK virus or Adenovirus.

With all ViraCyte’s success in the clinic, the most impactful is that on the patient population. Because of the clinical results, and market need for these therapies, the Cancer Prevention and Research Institute of Texas (CPRIT) Oversight Committee recommended funding for a product development research grant totaling $8.99M to support the clinical development of Viralym-M.

So, it begs the question, why would a company with solid funding, strong ties to academia, and nationally recognized leadership come to JLABS? According to Chief Scientific Officer, Dr. Ann M. Leen, it’s all about the infrastructure. “ViraCyte could not have happened without financial backers, professional advisers and JLABS. Here, we have everything we need to be successful. The labs are state of the art, we have access to expertise inside Johnson & Johnson, and the infrastructure allows us to focus solely on the science.”

Congratulations ViraCyte!

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