The BioBuzz on… Xceleron

In this series, we talk with Maryland biotech industry executives about their business, and what it takes to be a successful entrepreneur.

Chief executive: Michael J. Butler, Ph.D., CEO

Company: Xceleron

Location: Germantown, MD

Started in: 1997

Products/services: Clinical trial design and analysis services that maximize the use of Accelerator Mass Spectrometry (AMS) to save clients time and money

Customers: Pharma and biotech companies with products in Phases 1, 2 and 3

Employees: 20

Revenue: “Going up” (privately held)

Xceleron was founded in the UK and is now headquartered in Germantown. Why Maryland?

The Eastern seaboard from Boston to North Carolina is strong for biotech. My predecessor, the founder of the company, and a board member were familiar with the area, and introduced us to people with the State and Montgomery County. We had a lot of interaction with the FDA at the time, and being close [to FDA headquarters] helped with that too.

We’re very central here. We have people coming into all three airports, and we’re a couple hours drive from the “medicine chest” of the nation in Pennsylvania and New Jersey. “We’ve done really well being located here; we have clients flying in from all over the world—it’s a great spot to be.”

You’ve built your business around Accelerator Mass Spectrometry (AMS). Tell us about that.

We have a very unique analytical platform. Drug development, in large part, can be boiled down to biology and chemistry. Much of the biology that people look at is in humans [clinical], and that human biology is used in fairly standard ways. We’re bringing more value to investigating that early human biology.

We look predominantly at Phase 1 clinical studies, and investigate some of the major causes of late-stage clinical trial failure. We help companies figure out those critical points in Phase 1, when it’s still relatively cheap; we help them redesign traditional Phase 1 studies to take advantage of this powerful analytical platform. “With a little tweak, we can do some additional analyses that will help you understand something you typically wouldn’t know for two or three years, when you’re spending single millions of dollars rather than tens or hundreds of millions.”

Your customers then are biotechs and large pharma companies?

It’s a mixture. About 70% large pharma at this point. About 60% of what we do is in Phase 1, and the rest is in Phase 2 and 3. We have staff in all of the major biotech areas in the U.S., Europe and Japan. For us, the challenge with big companies isn’t getting repeat business, it’s figuring out how those companies are changing. You can have numerous customers within one company.

Your recent news releases feature several partnerships. How does partnering fit into your business development strategy?

We’re a small company. We have four professional business development people, and all of our senior scientists are involved in client discussions, but we still have a limited client-facing capability. These partnerships give us more access to customers.

They also put us in the context of a wider, but innovative development process. “We’re part of something that’s quite different: a new way of investigating drugs in early development.” We’re able to gather critical information in Phase 1, which is much more cost-effective. We’re working with other companies involved in that process.

For example, we partner with Crystal Pharmatech, a solid-state chemistry company, because solid-state chemistry is an integral part of overcoming pure bioavailability. We can show whether or not a compound is exhibiting pure bioavailability.  Other partners include Kinetigen, whose focus is designing Phase 1 studies, and Intertek for a new business line measuring the renewable content of bio-based products.

How has the economic climate the last few years affected your business?

“We’re seeing a recovery in early development compared to where we’ve been in the last couple years; it’s been a long time coming.”

What makes you different from other analytical service providers?

We’ve been around longer than other AMS companies, and we have people on staff who understand how to design clinical trials to make the most of the technology. We’ve developed much of that over the last five or six years. “We advise our customers on how best to use us.”

You can get the benefit of this cost-effective early development, whereas our competitors generally outsource the trial design. It’s the combination of clinical trial design and analytical services that you won’t find anywhere else.

What advice would you offer to entrepreneurs?

I’ve been here since 2008, and the things we’ve done have been unique, so I do consider myself an entrepreneur. “The best definition I’ve ever heard of an entrepreneur is someone who can effectively overcome resistance to change.” You’re going to see that resistance to change in the marketplace, and with people you work with. About 90% of what I’ve done is overcome resistance to change. If you’re going to be a successful entrepreneur, you have to believe in your core that just about everything is manageable.

“You’re not going to figure it out overnight; it’s  a bit of a journey.” I’ve gone through two or three big milestones in my career. I was lucky enough to work for organizations that went through periods of challenge and change.

Any final thoughts?

“The sheer volume of things that come your way—you have to be adaptable. You have to believe you can manage everything. Once you believe that, there’s nothing stopping you.”

You can connect with Dr. Butler at this year’s BIO conference, where he’ll be talking with new potential partners. This article is based on a conversation between Dr. Butler and April Finnen in March 2013. If you’d like to recommend a CEO for a BioBuzz profile, please contact April.