Houston voices

UH: How biotech companies are withstanding the pandemic

At a time when the coronavirus crisis is impacting most facets of business, biotech startups are standing up to the virus. Miguel Tovar/University of Houston

At a time when the business world is reeling, biotech companies are still hanging on. Many biotech startups have successfully pivoted their entire platforms to focus on coronavirus-related work.

Of course, these companies aren't without their struggles. Clinical trials have come to a pause, finding investors has become more difficult and financing rounds have been surceased.

Even then, there are many biotech startups that have managed to snag government loans via the Paycheck Protection Program among other financial assistance. According to Vivian Doelling, the vice president of emerging company development at the North Carolina Biotechnology Center, COVID-19 has not impacted the bio science industry as much as it has others.

"Some of the smaller biotech companies have pivoted research to be more COVID-centric. This is also true particularly for companies with open platforms or who were developing products in the antiviral space," Doelling told BioSpace, an online biotech publication.

"To add to that, there are research organizations that are receiving more pandemic-centric business from biotech. And that includes clinical trial work," she continued.

Ongoing biotech challenges

It's no surprise that there have been some concerns regarding the delay of clinical trials for products that have nothing to do with coronavirus. It is feared that the delays might create product pipeline problems in the long run. See, companies usually file patent applications before trials even start. So, delays in clinical trials, according to Doelling, "could take up a big chunk of the time in which treatments can have patent exclusivity before generic competition intensifies."

Delays negatively impact smaller biotech startups. These startups' futures typically rely on the success rate of trial outcomes. Any delay in these trials subsequently hurts the small biotech startup. But, even then, the pandemic still doesn't seem to be affecting these startups.

Investment blues

"The expectation is investors are going to hold back more funds than they projected for their portfolio companies. There could be less funding available for new investments," expressed Doelling. However, it is her belief that biotech companies are hot investments right now, and sees new investments on the horizon.

"Investors are cautious at the moment," said Marty Rosendale, the CEO of the Maryland Tech Council, to BioSpace. "They're going to analyze their own portfolio to make sure those companies are solid."

Rosendale, echoing Doelling's investment concerns, says investors want to be more careful right now. They are making it a point to invest less money, which makes it difficult for startups seeking funding.

Keep on keeping on

Many startups are continuing to operate because they've found their rhythm in the virtual workplace. "I have not come across any biotech startup that has closed its doors during the pandemic," Rosendale said. "Sure, some have faced delays and temporarily stopped operations, but overall, haven't heard of any closing for good."

There are a few forces at play when it comes to helping biotech startups stay afloat during the pandemic storm. Landlords are forgiving rent and government loans are helping companies pay employees. "I know of companies that have been out there fundraising since the beginning of the COVID crisis. And they're still out there doing it," Rosendale said. "But I still haven't heard of one company that was forced to end or even delay a round of funding, not one."

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This article originally appeared on the University of Houston's The Big Idea. Rene Cantu, the author of this piece, is the writer and editor at UH Division of Research.

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Building Houston

 
 

Houston-based sustainable plastics manufacturer Inhance Technologies has announced recent growth as business continues to boom. Photo via Getty Images

An under-the-radar company in Houston has ramped up its manufacturing capacity as it seeks to seize upon rising interest in sustainable plastics.

Houston-based Inhance Technologies, a sustainable manufacturer that transforms conventional plastics into high-performance materials, has a new site in St. Louis that comprises 75,000 square feet — more than double the size of the company's old facility there. As a result of the expansion, Inhance Technologies' headcount in St. Louis will rise to about 40. The size of the company's entire workforce wasn't available.

"The expansion in St. Louis is a great moment for the company and a sign of the organization's ambition in sustainable solutions for plastics," Patricia van Ee, chief commercial officer at Inhance Technologies, says in a release. "We know consumers are favoring more recyclable plastics, especially in packaging … ."

In January, the company promoted van Ee to her current role. She joined Inhance Technologies in 2019 as senior vice president of sales and marketing.

Patricia van Ee was recently named chief commercial officer at Inhance Technologies. Photo via inhancetechnologies.com

The announcement of van Ee's elevation to chief commercial officer came on the heels of Inhance Technologies occupying its new global headquarters at 22008 N. Berwick Dr. in northwest Houston. The company was founded in 1983, and about 75 people work at the Houston headquarters, which includes a science and technology center. That location is adjacent to one of its Texas manufacturing plants.

Among other products, the new plant in St. Louis makes Enkase, which transforms conventional plastics into fully recyclable packaging, and DuraBloc, which prevents fuel from seeping through plastic tanks on gas-powered equipment like motorcycles and personal watercraft. Customers include original equipment manufacturers, molders, and retailers in sectors such as consumer packaged goods, health care, and transportation.

"With a large expansion of warehouse space, a doubling of our manufacturing capacity, and new rapid-response lead times, our expanded St. Louis operation is equipped to meet new levels of demand as product brands, retailers, and consumers make a conscious choice to [purchase] more sustainable plastics," Michael Koma, chief operating officer at Inhance Technologies, says in a release.

ResearchAndMarkets.com predicts the global market for sustainable plastic packaging will jump from $89 billion in 2020 to $117.3 billion by 2025.

"The sustainable plastic packaging industry has been growing as a result of stringent laws and regulations levied by governments and governing bodies, as well as a shift in consumer preference toward recyclable and eco-friendly packaging materials," the research firm says.

Inhance Technologies' global presence should put it in a good position to capitalize on that market. The Houston and St. Louis sites are among more than 20 Inhance Technologies locations around the world, including offices in Australia, Brazil, Germany, and Mexico.

Los Angeles-based private equity firm Aurora Capital Partners bought Inhance Technologies from New York City-based private equity firm Arsenal Capital Partners in 2018 for an undisclosed amount. Arsenal bought Inhance Technologies from founders Monty Ballard and Bill Brown in 2012.

"Inhance fits seamlessly into our strategy of partnering with a market leader to support their vision and accelerate both organic and acquisition-driven growth," Michael Marino, a partner at Aurora Capital Partners, said in 2018.

A year after its acquisition by Aurora, Inhance Technologies bought Germany's Fluor Technik System for an undisclosed amount.

"Over the course of its history, Inhance has continually sought to expand both its breadth of technical capabilities and its geographical reach," said Andy Thompson, the company's president and CEO.

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