Chemical giant offshoots establish local start-ups

Second of two parts

Paul A. Friedman was faced with a dilemma when DuPont Pharmaceuticals was sold six years ago: Join the big acquiring company, Bristol-Myers Squibb Co., or leave for a small biotech.

Friedman, who was head of research and drug development at DuPont Pharmaceuticals, and his team wanted to work together. They hooked up with a California genomics company, Incyte Corp., and moved the headquarters to Wilmington.

Incyte's focus is now drug discovery, no longer genomics. The 150 scientists and clinical people who work there - about 70 percent of whom came from DuPont - are in leased space at DuPont's Experimental Station research center. They are in the same labs where they worked previously for the chemical giant.

Friedman and Incyte are an example of the entrepreneurs and companies that have emerged from DuPont over the years. Some left DuPont because of downsizings and restructurings, or after DuPont sold large businesses. Others left to pursue their own ideas.

J. Michael Bowman, a former DuPont executive and now head of Delaware Technology Park, and Bob Dayton, president of the Delaware BioScience Association, have tracked more than 30 companies that were spun off by DuPont or started by former employees. Dayton began informally tracking companies with DuPont roots when he worked in the Delaware Economic Development Office.

What follows is a look at the drug-discovery, nanotechnology, chemical-diagnostics and other firms that count DuPont in their corporate DNA.

Drug discovery. Barry L. Marrs and the 11 employees at Athena Biotechnologies Inc. say they "scare" plants into secreting chemicals that are used by drug manufacturers and agricultural chemical companies as potential leads for new products.

Athena Bio harvests compounds from different plant species, including yarrow and sunflower. "We put their roots in solutions and make them think they are under biological attack," Marrs said. "Then we collect what they secrete from their roots, because those are very interesting molecules for drug development and for pesticide development."

Marrs was director of life-sciences research at DuPont in 1994, when he left to found a couple of different biotech firms. In January 2005, he launched Athena Bio in space leased from DuPont at Stine-Haskell Research Center in Newark, Del. DuPont is also a customer.

In 1993, chemist and biophysicist F. Raymond Salemme left DuPont to found 3-Dimensional Pharmaceuticals Inc., of Exton. The drug-design-and-discovery company moved to Yardley and, in 2003, with 200 employees and a market capitalization of more than $330 million, was bought by Johnson & Johnson for $88 million.

Twenty years ago, Frank Baldino Jr. was a researcher in neurosciences at DuPont. In 1987, he founded Cephalon Inc. and focused initially on treatments for neurological diseases. Through a series of product-licensing deals and acquisitions, Baldino built Cephalon, of Frazer, into the region's largest independent biopharmaceutical company, with $1.76 billion in sales last year.

Former DuPont scientist and executive Carol A. Ammon became one of the highest-paid CEOs in the Philadelphia region as head of Endo Pharmaceuticals Holdings Inc., of Chadds Ford. In 1997, Ammon and two colleagues bought several old pain medications, including Percocet, that DuPont wanted to divest. Their business decision paid off handsomely: Endo, with a market value of about $4.5 billion, expects sales of more than $1 billion this year.

Chemical diagnostics and manufacturing. Three DuPont scientists founded Strategic Diagnostics Inc. in Newark in 1990. None is still with the company, which does diagnostic testing for food safety and water quality and manufactures monoclonal antibodies.

Compact Membrane Systems Inc., of Wilmington, was started in 1993 by Stuart Nemser, who worked in polymers at DuPont and acquired rights to some DuPont patents. The company develops and commercializes membranes and thin films made of fluorinated polymers used by industry for various purposes, including venting air from underground gasoline storage tanks.

Phoenix S&T, of Elkton, Md., was launched by a former DuPont scientist, Sau Lan Tang Staats, who uses micromolding technology to make plastic nozzles used in nanoscale protein analysis by pharmaceutical companies in drug research and development.

CMP Technologies Inc. was formerly Rodel Inc., founded in 1968 by former DuPont employee William Budinger. Rohm & Haas Co. bought its first stake in Rodel in 1997 and completed the acquisition in 2001. CMP, of Newark, manufactures products for the electronics industry, including special urethane pads used to smooth imperfections in computer chips.

Nanotechnology. In North Wilmington, NanoDrop Technologies Inc. was started in 2000 by Charles Robertson, a DuPont physicist for 28 years. Based on technology developed at DuPont Agriculture Genomics Laboratories, NanoDrop manufactures and sells laboratory instruments that analyze samples as tiny as 1/20th of a drop, or 1 to 2 microliters. NanoDrop sells the devices to university and government labs and to the pharmaceutical industry in the United States and 70 countries for use in analyzing DNA and protein samples. NanoDrop has 30 employees, and almost one-third came from DuPont.

Ultrafine Technologies, Delaware Technology Park, Newark, is run by former DuPont chemist Berhan Tecle, who in 1995 took a technology he developed for producing nanoparticles and started the company, which processes fine powders and particles of metals, nonmetals and compounds on a nanoparticle scale. The three-employee company is focused on applications for the electronics, defense, and energy industries.

Chen Wu, a pharmaceutical formulator for 10 years at DuPont, founded Advanced Pharmaceutical Nanotech in 2001. The company uses nanotechnology to manufacture iron supplements, vitamins, over-the-counter medicines, and antiaging skin-care products sold in Asia. Wu's wife, Lei-Shu Wu, a former DuPont pharmaceutical scientist, manages the U.S. research operation with fewer than 10 employees in New Castle, Del. Manufacturing and 70 employees are in Taiwan.

Fibers and fabrics. In April 2004, DuPont spun off its fibers unit to a subsidiary of Koch Industries Inc. for $4.2 billion. Called Invista B.V., the fibers and polymers company is based in Wichita, Kan., and makes former DuPont brands, including Lycra, Dacron, Stainmaster and Cordura. Invista still has a number of operations in Delaware, including the headquarters of two business units, an applied research center for new fibers, and a fiber-manufacturing plant.

Invista is involved in a venture partnership in a company called Textronics, which develops "smart fabrics" embedded with sensors that can tell the wearer's heart rate. The Wilmington firm markets a line of clothes, including its first product, a sports bra, under the brand-name NuMetrex.

W.L. Gore & Associates uses Teflon, a DuPont product, as the basic ingredient in apparel, medical products, electronics like insulated wire and cable, and industrial products such as gaskets and filters. Gore, with 8,500 employees and 45 plants around the world, had revenue of $2.1 billion for the fiscal year ended March 31.

Business services. Jeffrey Fetterman, former chief operating officer of DuPont Consumer Health, started ParagonRx in Wilmington in 2001 with former DuPont Pharmaceuticals colleague Gary Slatko. The firm designs risk-management programs for using pharmaceutical products and consults with pharmaceutical companies about their drug-safety operations.

Gates & Co. is a management-consulting and investment-banking firm in Wilmington founded in 1999 by David C. Gates, who left DuPont after eight years when, in 1996, the diagnostic-imaging business was put up for sale.

Kathleen F. Dunn left the DuPont marketing communications department in 1988 to found KF Dunn & Associates, which is today the life-sciences division of the Wilmington health-care-marketing agency Aloysius Butler & Clark Associates Inc.

In 1985, six retired DuPont scientists and engineers started the Cecon Group Inc., a science- and engineering-consulting firm with a current network of more than 800 technical experts.

After DuPont corporate public affairs spokesman Irv Lipp left DuPont in 2004 after 34 years, he started Hillis Group L.L.C., a communications agency. He also started Lipp Services L.L.C., focusing on management and crisis-management issues, including planning and training.

More than 30 companies have emerged from the 205-year-old chemical giant. Today, a look at drug-discovery, nanotechnology, chemical- diagnostics and other firms. Yesterday, a look

at information- technology, instrument-makers, and life-sciences- services firms that have DuPont in their corporate DNA.

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