Heads scratched as Chem-Master gets the boot

If walls could talk: Nobody is really sure why Chem-Master International has been booted from the Stony Brook University Chemistry Building.
By GREGORY ZELLER //

A biotech manufacturer with a 23-year history of servicing Stony Brook University researchers and startups is being evicted from the university’s Chemistry Building – and nobody seems entirely sure why.

Chem-Master International, a producer of unique chemical compounds for research and commercial development, has operated inside the Chemistry Building since it launched in 1994, thanks to a “revocable permit” – special SUNY dispensation allowing nontraditional programs and outside entities to occupy academic spaces.

In January, SBU informed the company its revocable permit would be revoked, and gave Chem-Master six months to clear out. Temporary lease extensions got the lame-duck tenant through the end of August, and now finally, Chem-Master is packing its bags.

Because of its specific equipment needs – particularly, chemical-fume ventilation “hoods” found in the Chemistry Building – the company can’t simply relocate. And that creates a rough spot not only for Chem-Master but for several early-stage enterprises in SBU’s economic-development ecosystem: Numerous researchers and startups, including some neck-deep in financing rounds, may suddenly loss access to the unique chemical compounds fueling their work.

It’s unclear why a custom-pharmaceutical synthesizer with a two-decade history of academic and commercial success – and a current client list stocked with university researchers and promising early-stage enterprises – is being evicted. It’s particularly baffling to some insiders who note that it’s happening in a region Albany’s economic-development professionals have anointed a biotech haven, at a school with legitimate claims as an economic and scientific center point.

Even Chem-Master President Francis Johnson – a former Dow Chemical Co. research scientist-cum-titan of pharmaceutical research, with 70 U.S. patents and numerous National Institutes of Health grant awards – is certain of only one thing: The university’s decision is “absolute.”

“We didn’t get any tangible reasons for the eviction,” Johnson told Innovate LI.

Francis Johnson: Kicked out, ticked off.

Campus rumors suggest a crackdown on commercial enterprises occupying academic spaces.

But that explanation doesn’t hold much water, according to the R&D veteran Johnson.

“The only reason they gave was they said they needed the space for students,” Johnson said. “But already in the Chemistry Building, there are six laboratories that are unoccupied. So, there’s no pressing need.

“There was no request by the Chemistry Department or the Pharmacology Department … for our space,” he added. “It looks like this was just a fabrication.”

After attempts by Innovate LI to reach numerous representatives of the university’s academic faculty and economic-development staff, Stony Brook on Tuesday issued a statement confirming it had notified Chem-Master in January that its facilities-use permit would not be renewed.

It further noted that the university had invited the company to apply for space somewhere in Stony Brook’s incubator system – tricky, because of Chem-Master’s equipment needs – but the statement sidestepped questions about the reason for the permit non-renewal.

If the precise reasons for the university’s decision to end its 23-year permitting arrangement with Chem-Master remain unclear, more certain are the effects of Chem-Master’s departure on several startups in SBU’s biotech ecosystem.

In a July 21 letter to Department of Chemistry Chairwoman Nancy Goroff, Traverse Biosciences CEO Joseph Scaduto questioned the university’s decision, calling Chem-Master “a unique and highly productive resource to the academic and regional bioscience community.”

According to Scaduto, Traverse Biosciences “relied heavily” on Chem-Master during the formulation of core intellectual property that is co-owned by the Research Foundation for SUNY and has been exclusively licensed by Traverse for commercial development.

“Traverse Biosciences is also dependent on Chem-Master for the production of various quantities of compounds for biological testing,” Scaduto wrote, “and to assist in the transfer of the synthesis processes to large-scale contract manufacturers.”

The CEO even credited Chem-Master with a $1.3 million NIH Phase II STTR grant, which Traverse Biosciences is sharing with SBU’s School of Dental Medicine, noting the grant “advances development of our lead compound, TRB-N0224, which is produced by Chem-Master on a fee-for-service basis.”

James Egan: Tragedy in the making.

James Egan, president and CEO of Stony Brook-based cancer-fighting biotech Targagenix, put a finer point on it: “It’s a tragedy that they’re being evicted.”

For Egan, it’s also a head-scratcher. Targagenix was launched in 2013 around a novel cancer-fighting therapeutic licensed from SBU, after founder Iwao Ojima – an SBU distinguished professor and director of the university’s Institute of Chemical Biology and Drug Discovery – worked with Chem-Master to “create the synthetic pathway and a commercial-scale synthetic process,” according to Egan.

“[Chem-Master] helped created the manufacturing process, which is key to being able to make the drug,” he told Innovate LI. “And they’ve provided all the materials we’ve used in our pre-clinical studies.”

Now, with Targagenix attempting to close a $15 million funding round predicated on the successful completion of those clinical studies, its supplier is being shown the door, making it “more difficult and more expensive” for the startup to take its next steps, according to Egan.

“It doesn’t make any sense,” the CEO said. “New York State has put forth a huge initiative to create these economic-development zones, and this sort of collaboration is exactly what the state is looking for.

“But the university is kicking them out,” he added. “We would like them to still exist.”

Egan may get his wish. Although its unique equipment and space needs make relocation a daunting prospect for Chem-Master, getting booted from the Chemistry Building might not mark the end for the longtime manufacturer.

Johnson said his company is “busy looking for space” in the general region, specifically noting discussions with the managers at Broad Hollow Bioscience Park. Farmingdale State College’s wet-lab incubator space might not meet Chem-Master’s exact technical requirements, but “we might be able to adapt,” Johnson noted.

Once a suitable facility is located, Johnson predicted it would take “three months at least to re-establish” Chem-Master operations. That’s irritating, according to the veteran researcher, but not nearly as much as not fully understanding why Chem-Master has to move at all.

“The fact that we haven’t been given a truly valid reason is really annoying,” Johnson said.


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