After crawling, aiming to take flight

Entrepreneur builds biotech company with assist from caterpillars

July 21, 2002|By Julie Bell | Julie Bell,SUN STAFF

Terry Chase has a hard sell.

Imagine trying to get money out of high-powered venture capitalists for a company that turns caterpillars into protein factories. And turns the caterpillars fluorescent pink in the process.

But the 32-year-old president of tiny Chesapeake PERL is, by all accounts, remarkably persistent. And often persuasive.

She got her College Park company started by using little money of her own. She persuaded the federal and state governments to give her $1.3 million in grants and loans. She wrangled rent-subsidized labs and headquarters on the University of Maryland campus. The company's pink caterpillars are raised en masse with donated production equipment in a plant once run by DuPont.

The university pays half the salary of Chesapeake's chief scientific officer, considering him a co-employee.

"Maybe it's improvisation," said Washington venture capitalist Peter Rizik, trying to put his finger on how Chase has gotten others - including him - to back a company with a young chief executive officer and intriguing but unproven technology. "Every good entrepreneur needs to know how to improvise and know how to be resourceful."

Like many biotechnology companies, Chesapeake PERL has a long way to go before it is profitable. It must prove that its technology - which makes use of the cabbage looper caterpillar found in gardens - can produce large volumes of proteins and antibodies more cheaply than conventional methods.

The products, the thinking goes, initially might be sold for such things as chemical kits used by scientific researchers and diagnostic tests. Conceivably, the process might be used to mass-produce therapeutic proteins for medicines.

Still, what Chase and Chesapeake have accomplished reads like a how-to guide for startup companies looking to get ideas out of the lab and into early production. While some might find the company Forrest Gump-like in its propensity to be in the right place at the right time, Chase disagrees. To her, Chesapeake's story is a tale of planning, determination and hard work.

Science-fair junkie

A high school science-fair junkie, as a Columbia teen-ager Chase worked part-time at Martek Biosciences Corp. She later studied biology at the University of Maryland, where she worked at the school's Bioprocess Scale-up Facility.

There, she helped biotech companies produce ever-larger batches of delicate proteins. She managed the facility after graduation, then moved on to management roles at Baltimore's Bio Science Contract Production Corp. while getting her master's in biotechnology management.

It was an autumn 1999 lunch with friend William Bentley, a Maryland chemical engineering professor, that propelled her to become an entrepreneur.

Bentley, an expert on protein production, and his graduate student, Minh-Quan Pham, had been doing experiments using insect larvae to mass-produce proteins. The two had filled out incorporation papers to launch a company based on the technology.

"You should run the company," Bentley said during the lunch at the college's student union.

Chase laughed it off. Two weeks later, she changed her mind.

"I always had an interest in the technology," she said. "I had confidence in the ability of the three of us to make this happen."

Power lunch

One of Chase's early calls was to Daniel Healey, who then directed the state Department of Business and Economic Development's venture capital investing. Healey was intrigued but didn't initially invest.

Undeterred, Chase quit her job at the contract manufacturer, wrote a business plan and drove to Baltimore unannounced to find Healey walking out of DBED's Redwood Street offices.

"Go ahead and leave it upstairs," Healey said of the plan. Chase stood in his path and got herself invited to lunch.

Healey found the business plan "rudimentary" but was impressed with Chase's knowledge of the industry, intelligence and ability to learn quickly.

"You defined it and she'd take it on," he said. "She said, `Well, I'll call this guy and I'll call that guy.'"

Soon, Martek Biosciences co-founder Guy Parr was giving her pro bono advice. Chesapeake had found a home in a business incubator on campus. And Bentley had found out through a fellow scientist about DuPont's desire to unload a Newark, Del., factory that grew insects.

Chase drove up to take a look and then encouraged the University of Maryland to apply to have the plant's equipment and its accompanying intellectual property donated to the school. The college also acquired the plant's lease and subleased it to Chesapeake.

Initially unsure how her company would pay the rent, Chase went to former Bio Science boss Jacques R. Rubin for advice. She left with a loan.

Nikolai van Beek, who is an expert in creating products from insect larvae and whose DuPont department designed and built the plant, is Chesapeake's chief scientific officer. Entomologist Dave Davis, an expert in mass insect rearing and a former DuPont employee, signed on as plant manager.

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