BUSINESS The right combination ; Copharos Inc.

may be the vehicle to deliver success for two scientists who have developed a way to detect cancer using vitamin B- 12. Star-Tribune Newspaper of the Twin Cities Mpls.-St. Paul Sherri Cruz; Staff Writer 22 October 2001 Chemist Harry Hogenkamp and Dr. Douglas Collins have combined their passions for vitamin B-12 and radiology to produce a way of diagnosing cancer earlier than conventional methods. If things go right for them, their method will one day be used by physicians. In fact, perhaps the toughest challenge Collins and Hogenkamp face isn't science anymore - it's the business of science. Business and science sometimes blend as poorly as oil and water. Business works to make a profit; science wants to advance technology and cure human ailments. But scientific research needs funding to get its discoveries and developments to market. Hogenkamp, a biochemistry professor at the University of Minnesota, and Collins, an assistant professor of radiology at the Mayo Clinic, ran into that problem when they needed more funding to advance their product. They developed a tumor-imaging product that they say will detect cancer earlier than conventional methods such as an ultrasound. The diagnostic technique is based on Hogenkamp's life's work: studying vitamin B-12. More promising than the technique's detection capabilities is its potential to treat cancers by sending along a therapeutic agent with the vitamin. But progress hasn't been easy. And the final outcome is still a few years away. Transferring technology from the lab into a marketable business has been a vexing problem.

"What usually happens is the scientist doesn't want to pursue business," Collins said. "I'm jumping into the business world, which I know nothing about." Hogenkamp agreed. "I have never ever thought of a company," he said. He has studied vitamin B-12 for 45 years. "I'm a chemist, I mix things together," Hogenkamp said. Like cooking with a recipe, he experiments with different compounds that have one thing in common - vitamin B-12. Why B-12? "It's an incredibly complex molecule," he said. Plus, without it, a person dies. Hogenkamp, a native of the Netherlands, went to college in Canada before moving to the United States. His original career goal was to be a crop planter but he found his passion - biochemistry - at the University of California, Berkeley. Friends and colleagues Collins and Hogenkamp met in the mid-1980s. Collins, then a medical student at the University of Minnesota, attended one of Hogenkamp's lectures. It wasn't Hogenkamp's thoughts on metabolism that stuck with Collins, it was the professor's enthusiasm for vitamin B-12. Collins describes Hogenkamp as a "nice, warm individual," a well- liked professor. When they first met, they both were on the university's educational policy committee. "We became friends," Collins said. And they shared theories, too. Hogenkamp said Collins "had a whole bunch of ideas. "Some of them were very, very good." Some of them were iffy at best. But Collins said his friend always said "let's try." In 1988, Collins graduated from medical school with an interest in diagnostics. He left Minnesota to study radiology at the University of Utah.

But he and Hogenkamp kept in touch, and after Collins' four- year stint in Utah, he - and a bunch of mice - drove back to Minnesota eager to try to prove his theories. He also began his fellowship in nuclear radiology at Mayo Clinic. Over the next several years, Collins began experimenting. All cells need vitamin B-12, Collins said, but fast-growing cells like cancers devour the vitamin. It gloms onto tumors. "In my mind," Collins said, "tumors are misbehaving babies." So Hogenkamp and Collins attached a radioactive atom to vitamin B- 12. When they injected the compound into a patient, the radioactive atom highlighted where the B-12 had gathered - the tumor. In addition to helping see tumors, the technique has the potential to deliver therapeutic agents to treat the cancer. Once they determined it worked well in animals, it was time to see how it worked in humans. In 1998, they tested it on their first patient. Since then they have tested it on 60 people with various types of cancer. The results were very good. The technique was able to distinguish between benign and malignant tissues. It was especially useful in detecting tumors in patients with dfficult-to-image breasts, including one woman whose cancer was missed by other methods such as mammography or ultrasound scanning. They come calling It wasn't long before pharmaceutical companies came knocking on the door wanting to license the technology. The university - which patents faculty inventions - and Mayo considered the offers. But Collins wasn't ready to let go of his work - he had more to do. That's when John Deedrick's expertise came in handy. Deedrick is venture manager for Mayo's Medical Ventures' Venture Group, which helps promising medical-technology companies get off the ground. He took a look

at the numbers the pharmaceutical companies were proposing and said "you've got to be nuts." He thought they were too low. Deedrick, the first businessperson to validate the science, thought the technique was worthy of a company if its own. So the Venture Group became an early investor. The next step was finding a CEO and money. Right about that time, Stefan Borg of Ponte Vedra Beach, Fla., had sold his biotechnology company and was looking for another project. Borg, a biochemist, founded SunPharm Corp. in 1991, took it public in 1995 and sold it to Massachussetts-based GelTex Pharmaceuticals in 1999 for $16.5 million. Borg also was familiar with licensing university inventions - SunPharm was a licensed technology out of the University of Florida in Gainesville. Borg met Deedrick when he began looking for opportunities at Mayo, which has a satellite campus in Jacksonville, Fla. By then Borg had put together a group of investors who pooled $5.5 million. The principal investors are Noro-Moseley Partners, Mayo Medical Ventures, Advantage Capital Partners and Adventist Healthcare System. In spring 2000, the major players negotiated terms that everyone could live with. If there are ever royalties from the product, Mayo and the University of Minnesota will split their share. But first, the product has to get to market. In August 2000 the scientists founded Copharos Inc. The name pronounced co-fare-ohs, stems from cobalamin - the technical name for B-12 - and pharos, which is Greek for "beacon." Not based here The one regret Collins and Hogenkamp have is that the company isn't based in Minnesota. Local venture capitalists could have that same regret if the company is successful. The technology was shopped around locally but no one bit, Deedrick said, and Borg couldn't be persuaded to leave Florida. While Copharos was founded to market the product and owns the license to

their research, the scientists are not involved in the day- to-day operations of the company. Hogenkamp owns several thousand shares and is its chief technology adviser. Collins can't directly own shares in the company. His primary employer, Mayo Clinic, prohibits it because of possible conflicts of interest. It will take two to four years to get the tumor-imaging technique to the market. Copharos recently submitted an application to the Food and Drug Administration (FDA) to do further testing on human patients, this time as a company. "Now I have to jump through all these hoops again," Collins said. Borg said the FDA review should take 30 days. The next step will be controlled human trials, which means it's given to patients under watchful circumstances. Once it's shown to be safe, they will do a larger trial with more patients. Then the next phase is to get physicians to use it. After that, the data is reviewed once again and the marketing process begins. The testing must show that Copharos ' technology is better than what's currently available. The process is tedious and complex - but necessary, Borg said. As with any startup, the future of four-employee Copharos is uncertain. For instance, there is the possibility it could be sold out from under Collins and Hogenkamp. "We have to do whatever is good for our shareholders," Borg said. Though Collins is aware of that possibility, it isn't his desire. Nor Hogenkamp's. Building a lucrative business is not their goal. Rather, Collins and Hogenkamp say they want their technique to be a better agent, to be accepted by physicians and at the end of the day, to save people's lives. - Sherri Cruz is at scruz@startribune.com.

Copharos Inc. - Founded: August 2000 - Executives: Stefan Borg, president and CEO; Paul Herron, vice president of finance and administration and CFO; Ronald Sanda, vice president of manufacturing and quality; Cynthia Brody, regulatory associate - Investors: Noro-Moseley Partners, Mayo Medical Ventures, Adventist Healthcare System, Advantage Capital Partners