Thursday, August 20, 2009
AZ Bio-Optics Leader Takes On Asia with New Partner
By Eric Swedlund
TNAZ Regional Correspondent
An ambitious partnership with a leading Japanese manufacturing and engineering firm has Tucson's BioVigilant Systems poised for global expansion, with new operating capital and engineering expertise.
In May, the Yamatake Corporation, a $2.5 billion company, became the majority stock holder in BioVigilant. In addition to purchasing the controlling interest, Yamatake is providing the working capital for BioVigilant to grow, said CEO Deward Manzer, with $5 million in 2009 alone.
"What they bring to us is a strong presence in Japan, the third largest pharmaceutical market in the world. They also bring to us engineering and manufacturing strengths to add additional capabilities to our product," Manzer said.
"Yamatake has been a strong corporate partner with a well-established heritage and a long term view, "Manzer notes. "This new, evolved relationship enables us to expand sales, marketing and service in the United States and Europe, while Yamatake will lead Asian expansion," he adds.
BioVigilant was founded in Tucson in 2002. The inventor instantaneous microbial detection technology, the company first focused on security applications, but soon found its niche in the pharmaceutical manufacturing market.
"In 2005 we realized the U.S. government wasn't going to spend that much money on protecting even the armed forces from biological attack," Manzer said. The security aspect spun off into a separate company (see: TNAZ).
By focusing on pharmaceutical manufacturing – particularly drugs that are injected into the blood stream – BioVigilant discovered an even better market than its founders initially intended.
"When you're in the government market or the security market, you're looking for millions or billions of anthrax spores, for example, released inside a building," Manzer said. The pharmaceutical market is different.
"There, you're looking for even one bacteria in a clean room," says Manzer.
"It turns out that our technology, which was invented for the security environment, is even more applicable to the pharmaceutical markets. It's that which makes us unique as compared to potential competitors," Manzer adds.
The availability of cost-effective optical technology has enabled BioVigilant to make a giant leap over the previous methods, which were trying to grow bacteria faster, speeding up the process of culturing once a sample was taken.
"Our partnership with BioVigilant extends our expertise in building automation systems to sense and control all critical parameters of the environment, and is central to our mission to improve human safety," said Yamatake marketing director Mitsuharu Miyazawa in a company statement.
BioVigilant's environmental monitoring devices are used to instantaneously detect microbial contamination. Instead of techniques that originated with Louis Pasteur and take several days, the company's optical technology renders results in real time.
"All of the improvements were trying to improve a process that would still take some time to accomplish," Manzer said. "With optical technology you can get an immediate indication. We just happened to be the first one to apply it."
And so far BioVigilant is the only company in the market.
"There are companies that have the capability to become a competitor, but no one yet has entered the market with optical technology like we have," Manzer claims. "We don't see anyone who has a technology relevant to the pharmaceutical market," he says.
"The pharmaceutical companies are very unlikely to do anything like this on their own because they don't have the necessary technical expertise," Manzer observes. "By practice they don't develop their own environmental tools, they buy them from the outside," he adds.
Now with Yamatake, the company is looking to target the 100 largest pharmaceutical companies in the world, as well as the 100 largest medical device companies in the world and the top 50 companies in consumer products like contact lens solution.
The total market would be about $2 billion over a five-year period, Manzer believes, and BioVigilant expects to penetrate about 30 percent of that market. Importantly for Arizona, BioVigilant's management will remain in Tucson and the company will maintain both its name and product branding, both in the United States and abroad.
"The significance for Tucson is that this is a marriage between two technologies. One is the optics capability here in Tucson and the other is the pharmaceutical manufacturing," Manzer said.
"We would anticipate that here in Tucson, the company's headquarters will remain
and the focus here would be on new product development, the early penetration of new markets and distribution of our products to the U.S. and Europe," he says.
While BioVigilant expects the main manufacturing of its devices to be moved to Yamatake plants in Japan by 2010, the company will maintain a low-rate manufacturing capability in Tucson to handle the introduction of new products.
"BioVigilant was always expecting to use a contract manufacturer. We did not expect to become a volume manufacturer," Manzer said. "There will be growth in Tucson and the higher value jobs will remain here."
Manzer said BioVigilant's partnership with Yamatake could also help to draw some greater attention to Tucson from other companies.
"You have a large, $2.5 billion company that is now very interested in what's going on here in Tucson," Manzer said.
"What we bring to the table is a capability that's helping pharmaceutical manufacturers. We're not a drug manufacturer or a medical device, but we make a tool that assists, and it happens to use readily avail technology from here in Tucson," Manzer said. "This is a niche that Tucson could benefit from by targeting the products that help pharmaceutical manufacturers," he concludes.
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