“The fact that IK-1001 progressed from the early concept stage to the completion of a Phase I trial in 18 months speaks volumes about the quality and innovative spirit of the R&D group at Ikaria.”
One of the company’s original venture backers predicts big things ahead: “Ikaria is the leading innovator in the critical care space, is profitable, and has a deep pipeline. It will probably be the biggest biotech IPO ever when it decides to go public,” said Robert Nelsen, managing director of Arch Venture Partners, in an e-mail.
Profitable and biotech don’t usually appear in the same sentence—but Ikaria has an interesting business strategy. The company went through a complicated merger in March 2007 between Ikaria, with its hibernation-on-demand technology, and New Jersey-based INO Therapeutics, which markets nitric oxide gas to help infants with “blue baby” syndrome breathe better. By hitching its wagon to INO, Ikaria got access to people with expertise in drug development, clinical trials, regulatory affairs, and a company with profits to invest. New Mountain Capital, a private equity firm, along with Arch, Venrock Associates, Altitude Life Science Ventures, Washington Research Foundation, and Alexandria Real Estate Equities, pumped $300 million of new equity capital into the company. The combined company generated revenues in 2007 of more than $200 million, chairman David Shaw said in January at the JP Morgan Healthcare Conference in San Francisco.
By merging with a profitable company, Ikaria’s Szabo said he doesn’t need more venture capital to support the research. He instead goes through a conventional budgeting process for resources within a profitable company. He oversees a group of about 25 people in Seattle, who do animal testing and work on new formulations of its drugs. “We do everything we need to move an idea to the clinical trial stage,” he says.
The research will likely grow in Seattle, although Szabo wouldn’t say by how much until the budgeting process is complete. But I could see with my own eyes that they are hiring right now. Szabo insisted that we carry on our interview during his lunch with a job applicant.
