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Dr. Josep Castells

executive president of Inkemia IUCT Group

He is one of the top Catalan experts in white or industrial biotechnology. He holds a PhD in Organic Chemistry from UB and a postdoc in Organic Synthesis from the University of Berkeley. He was a professor in the UB Department of Pharmacology and Therapeutic Chemistry. He also advised companies from the chemical and pharmaceutical sectors through Escola Sant Gervasi. He created the online company CatWorld in 1996, which years later was acquired by British multinational Claranet. He founded the Institute of Science and Technology, which later became the Inkemia IUCT group.

Inkemia IUCT Group is the second Catalan biotechnology firm to go public on the Spanish Alternative Stock Market (MAB) with the aim of growing internationally. Created 15 years ago in Mollet del Vallès (Barcelona) under the name Institute of Science and Technology (IUCT), this group of high-technology SMEs employs a unique business model as it focuses on creating and exploiting its know-how, which is later transferred to the chemical, pharmaceutical and biotechnology industries.

Over this time, Inkemia has worked with more than 300 industrial clients —like Almirall, Esteve, Novartis, Grifols, Merck, Pfizer, Uriach, and Sandoz, among others— and has developed 33 in-house research projects, 8 technology platforms and 27 customized research projects for various companies.

Their activity, which employs a team of 44 workers and 200 collaborators, is structured into there units: IUCT SA (knowledge division), IUCT Emprèn SL (entrepreneurship and venture capital division) and IUCT Espais SL (facilities division).

When did you decide to take the step to go public on the MAB?

We’ve been watching the MAB since it began in 2006. It’s a project that has matured slowly over time to see which model best fit our situation. Initially, the initial public offerings on the MAB raised significant amounts of resources, but the evolution of these companies afterwards was irregular and entailed certain risks in tackling the following phases. After that, we fell into a deep recession.

What was your strategy?

We opted to put all the available stock up for trading, but without raising funds when going public on the MAB. Since the month of May, there has only been one IPO, which was ours, however there have been four capital increases. It’s difficult to raise capital from nothing for a company that the market doesn’t know, but when it is already publicly traded and the stock stabilizes, it is easier to valorize and attract resources. For example, Eurona has raised €3 millions; AB-Biotics, €4.5 millions; and Gowex, €17 millions.

Would you recommend that other companies in the sector opt for this method of funding?

Yes, but you have to have a very clear idea of things. In order to avoid what had happened in previous cases, when stock plummeted, we tried to go public with a moderate price to allow for a significant upward trend. The initial price was calculated based on an increase of €1.3 millions before going public on the MAB, in which relevant, qualified shareholders entered the company —50% is Escola Sant Gervasi— and based on real numbers. Meaning that the value is based on the history of the company and not on future expectations, which doesn’t mean they don’t exist but just that we will allow the market to assess them. Unlike many technology companies, we haven’t valued a single patent.

A company that acts as a technology center, privately run, with services like technology and knowledge transfer, consultancy, training and a venture capital fund that invests in spin-offs. Your model is atypical...

Yes, as an idea for a company it is innovative in Catalonia, Spain and Europe. At times we are classified as a biotech company, others as a technology services company, or as a training company… but in reality what we are doing is exploiting multiplatform knowledge. A model like this develops over time. We have grown and created this infrastructure through self-financing.

Through IUCT Emprèn, you have created a seed capital fund.

For some of our discoveries, it makes sense to exploit the patent ourselves; it’s not necessary to license it to a large pharmaceutical company. In this case, we decided we could start up a new business line creating spin-offs, but outside the company as otherwise it would distort our activity. As we aren’t specialists, what we must do is join forces with companies and people who know how to exploit our know-how. So far we have closed agreements with Plasmia Biotech, in which we hold 19.6%; Phyture Biotech, with 21%; and Enemce Pharma, with 1%.

Have you been approached to reproduce this model in other places?

For the moment, no. Well, I say no too quickly. We know of a company that has copied some aspects… And one of the companies we are looking to partner with in Brazil likes our model, so there has been some degree of observation. Maybe it isn’t a very well known model, but with our going public on the MAB it will become more visible. In fact, one of our objectives is to gain presence on the market.

Will international expansion be done through subsidiaries or with partners?
Both models. Each country and moment will be different. Doing so with partners or marketing agreements is more affordable economically. Being on the MAB generates more resources and has allowed us to rethink a more direct presence, creating a company with local partners and contributing capital or opening a subsidiary with our own structure.

How has it gone for you on the Brazilian market?

It has gone well, although entering a market isn’t something that’s done from one day to the next. Based on the results of this first phase, we’ll analyze the situation and decide what our next step will be. Inkemia’s plan for the future includes an international expansion policy, the first steps of which have been implemented in Japan and Brazil. The second phase of this strategy is already quite advanced and includes moving into France and the United States.

What research has been the most satisfying since the IUCT was founded in 1997?

That’s hard to say. Second-generation biodiesel (IUCT-S50) may be one that has had the largest repercussion in the media, and proximity to the market, and that is very satisfying. As a result of this first step, we are now working on other biofuel projects, but also developing green solvents and new anti-carcinogenic and antiviral agents. The fact that we are working in this area of knowledge makes our work highly diverse —24 international patents— and satisfying.

What importance does industrial biotechnology have in Catalonia?

The same thing happens as with us: it’s a great unknown! I mean in terms of the media, but on the other hand, on an industrial level it is a reality. We have part of the industry that is innovating and improving productive capacity thanks to white biotechnology. We call them user companies, there are many and could be more because we have a very significant fine chemicals, detergents and agrifood sector. There is also a group of companies that are devoted purely to developing white biotechnology processes like the production of antibiotics and enzymes. But none of that is visible.

What’s happening, then?

We need more recognition and economic resources.  The industry was blasphemed until the crisis and has now once again become important. White biotechnology makes no sense without industry, because white biotechnology is industry! Plus, time to market is much shorter than for red or healthcare biotechnology.

Like with red biotechnology, the weakness is funding.

If there isn’t much funding for what is in fashion, imagine the situation for what isn’t. With this technology there is never zero risk, so the bank won’t give you funding. We aren’t talking about large multinational corporations, but small local companies that have a certain capacity for investment when thinking about implementing biotechnology production. We need more venture capital options and support from the Administration.

At a congress for scientific entrepreneurs in Valencia, you said that there is a huge stock of knowledge but that 90% isn’t useful to the company because it has been published. What innovation mechanisms do companies need?

In Europe, the vast majority of researchers think in terms of basic research, of publishing, of excellence, but they aren’t thinking subconsciously about how that could be transferred to industry. They haven’t had to tackle industrial problems that may arise with a discovery before it can be launched to market. It’s hard to change the system but I’ve seen interesting methods in some European countries like Finland. A technology park in Turku is working from a business standpoint, it is publicly traded in fact, and doesn’t base its work on the same parameters as the university but subcontracts to a company that earns a living doing that and has an entrepreneurial vision. Research that is carried out with the aim of publishing will always be used around the world. It can't be protected so there is no return for society. And I’m not saying it shouldn’t be done, because there is a large part that is training for people.

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