Athersys, Inc. Company Profile
by Julie Henry

Random activation of gene expression. Synthetic microchromosome vector systems. Validated protein drug targets.

It may sound like Greek to most of us. But it's the language of genetic research conducted everyday at a Cleveland biopharmaceutical company called Athersys. And people around the world are interested in what this seven-year-old company has to say.

Drug manufacturers like Pfizer and Bristol-Myers Squibb are partnering with Athersys to develop technology platforms to speed up the drug discovery process.

Investment groups from as far away as Singapore are betting on the company's future. To date, Athersys has raised about $100 million in capital from institutional investors.

And some northeast Ohio leaders are looking to Athersys to help lead the region into a new era of economic prosperity.

It's fair to say that a lot of people have high hopes for this company. And no one has higher expectations than Athersys Chairman, President, and CEO Gil Van Bokkelen.

Gil Van Bokkelen: We've defined our goal as becoming the most highly valued biopharmaceutical company in the world. And that seems like a very amibitious goal, and it is.

Van Bokkelen is a scientist with degrees in both molecular biology and economics. He started out with plans to become a doctor, but became intrigued with the new field of mapping the human genome. So he dropped his plans for becoming an M.D. and went to Stanford to pursue his Ph.D. in genetics.

Gil Van Bokkelen: All along that way my goal was eventually to be part of an org, if not leading an org, that was going to develop new technologies that were going to reshape the way health care is practiced and delivered.

While at Stanford, Van Bokkelen met a like-minded researcher named John Harrington. The two moved to Cleveland in 1994 to do post-doctoral research with former Stanford Professor Hunt Willard. Willard had recently been recruited to head the Genetics Department at Case Western Reserve University's School of Medicine.

In 1995, Van Bokkelen and Harrington formed Athersys in space provided by a business incubator called Enterprise Development, Inc.

Two years later, Athersys made national headlines when, in collaboration with Hunt Willard, the company created the world's first artificial chromosome.

Gil Van Bokkelen: So it was Hunt's idea for us to come out here to Cleveland originally and of course I think Hunt gets a lot of credit for making the suggestion. And then once we were out here, we saw many things that were going on in the local community, in the local environment that made us decide to stay here. And that's been a very good decision for us. A lot of people have questioned, well why did you decide to stay in Ohio as opposed to going back to California, which is where my wife was living and where our families were and where most of the biotech industry was actually located. But there were a lot of things about N.E. Ohio in particular that we thought were very appealing that we thought would actually make a good place for starting the company and all that's been proven to be correct.

And one of the things that I sensed almost from the very beginning is there's a real community fabric here that's very tight knit that extends throughout N.E. Ohio, basically, and there were a lot of people who extended their hand and extended offers to help us, and that was to me a very important factor in our decision to stay here, just knowing that there was going to be a real strong bond and element of community support in terms of help us get to where we wanted to go.

The other aspects that I think were critical in deciding to stay here were the quality of life. N.E. Ohio offers an attractive quality of life, short commute times, affordable housing, high quality schools in many areas. I mean obviously, it's not a perfect place to live, but there are many positive things about living here in N.E. Ohio. That convinced me that this would be an easy place to recruit talent here from other parts of the country.

And one of the things that, one of the myths that we dispelled that we heard a lot of people telling us very early on was you'll find it very difficult if not impossible to raise venture capital or institutional capital as a company that's based here in N.E. Ohio, especially a biotechnology company.

Over the past seven years Athersys has garnered recognition for business innovation and economic development efforts.

The company now employs 130 full-time workers. And it's combatting local "brain drain" with an aggressive summer internship program designed to expose young talent to the high-tech job opportunities available here in northeastern Ohio.

Gil Van Bokkelen: They come here, they see what life is like in N.E. Ohio and what life is like at Athersys and that creates a whole new set of possibilities in their mind, maybe things that they had never even considered previously in terms of where they might think of working or where they might want to go live. That's what we need to do more of.

Athersys is currently valued at about $325 million. And it's often held up as a model for northeast Ohio's economic revitalization. So it might seem strange to find out the company has not yet turned a profit. Van Bokkelen says that's the norm for bio-tech company at this stage of development.

Gil Van Bokkelen: Yeah, most biotechnology companies don't become profitable until they get their first product approved and on to the market so it has to go thru the FDA regulatory approval process, and that takes a few years. On average, it takes close to a decade to actually get a product thru that process, approved and onto the market.

Van Bokkelen says that athersys is still several years away from getting that first therapeutic product onto the market. But the theory is that once the company hits, it will hit big.

Gil Van Bokkelen: So by the time you actually get to having a product on the market, you could expect the value of a company that actually has made that transition to a discovery and development stage to a company that has its first product, it could be a company that's worth a few billion dollars.

And that's one of the reasons we're excited about the prospect of building facilities that will actually allow us to accomodate the future growth and development of the company on a much grander scale. You know, it's no secret that we had recently acquired an option to move out to the Chagrin Highlands just a few miles east of here, and we think that could be a very important move for the company in two respects. One - allowing us to have the proper environment so we can aggressively grow the business over time.

The other thing is that I think we'd like to be part of an environment that actually accommodates a community of companies, high-tech companies, and I think that that area actually has a unique potential in N.E. Ohio for allowing that to happen and I think a lot of people are excited about the prospect of that.