November 4, 2004

Bio firm keeps focus
Future lies in treating dry eyes
Jodie Snyder
The Arizona Republic

Chad Kennedy and Jeff Bade can’t help themselves.

They have to be tight-lipped about their company’s prospective investors, yet grin broadly whenever they talk about Cynexus’ future.

Cynexus is a Chandler-based bio company developing anti-inflammatories to treat dry eyes.  Its research was first done at Arizona State University and it is just the type of bio company that economic developers hope will spring up in the Valley.

The discovery was made in ASU labs, but now it is being commercialized in Cynexus’ headquarters, chief operations officer Bade’s Chandler house.  Kennedy, the company’s chief executive officer and president, has Bade’s dining-room table as his office.

Their savings are invested in the company.  Their family members are used in cameo roles in Cynexus’ Web site. The two men work so closely together they finish each other’s sentences.

Kennedy and Bade are part of a quartet of researchers who run Cynexus.  The others are Gholamreza Ehteshami, vice president of engineering, and Stephen Massia, the company’s chief technology officer.

The three worked with Massia, an associate bioengineering professor, when he figured out how to create molecules that specifically target inflamed tissues.  The molecules disrupt white blood cells from sticking onto inflamed tissue, limiting the inflammation and reducing side effects such as allergies and autoimmune disorders.

“We didn’t know what we had, but we knew it was big enough that it had to be protected,” Kennedy said.

In fact, at times Massia’s work seemed too big.  Potential uses range from cardiovascular to cancer.  To succeed, the company had to narrow its focus and concentrate on one market.  That was one of the lessons Cynexus learned at Technopolis, an ASU program designed to help start-up technology and life-sciences companies.

The fledgling Cynexus business team went through 10 weeks of business-school boot camp.  They said it was invaluable since none had that type of background.

Technopolis helped them hone the company’s focus.

“They asked us what we wanted to be when we grew up,” Bade said.

Another benefit was that Cynexus business plans were reviewed from experts ranging from attorneys to venture capitalists.  It gave the team real-life insight into how to make presentations.

Another first step for Cynexus was to work with Arizona Technology Enterprises, an ASU organization that helps with tech-transfer and intellectual property issues for research developed on the campus.

AzTE, as it is known, also helped with business development and worked as a go-between for Cynexus and the ASU Foundation, which owns the company’s research.  Because of Massia’s involvement, Cynexus has first crack of commercializing the science, but it must meet certain financial deadlines to keep the exclusivity.

Kennedy said the company could not comment on its finances.  In addition to personal investments, they have received some state funding.

They are working on proposals for federal funding, the first round of which could bring them $50,000 to $300,000.  Subsequent rounds could bring up to $1 million.

The company needs the funds to do its research right, Kennedy said.

Cynexus expects to go to clinical trials in 2006 and wants to use contract research organizations for those tests.  It also will need consultants to help it navigate the Food and Drug Administration rules for approval.

At times, creating a bio company seems overwhelming, yet the teams’ engineering background helps them with problem solving and critical analysis, Kennedy said.

But the practice of business can be different, he said.

“The logic is a lot fuzzier in business than in engineering,” he said.  “Sometimes there are no good answers because it is a difference of opinion rather than fact.”