Dr. Paul Silver learned many things about the biotech business in the 15 years between his founding of In Vitro Technologies in 1990 until the company’s sale in 2006 to Celsis International.
But one key lesson stands out, according to Silber, who now serves as an advisor to Celsis In Vitro Technologies. “I learned that every business should run as if it’s preparing to sell,” Silber said at the January 9 session of the GBC’s 2007 Bioscience Speaker Series at the UMBC Tech Center. “You’ll be prepared – and run a strong business in the meantime.”
Other important lessons Silber learned along the way included having to completely change plans and business models several times. “I was willing to listen to the marketplace,” said Silber. It’s also important to get a management team and solid outside advisors in place early; do a “zero-based evaluation” annually; accept change; and figure out an exit plan; and understand what it takes to sell.
Silber was already a visionary when he worked as a scientist with Mary Kay Cosmetics in the 1980s. Seeing an opportunity amid the controversy over animal testing, Silber realized there was a huge market for in vitro (in test tube) testing for the pharmaceutical, biotech and chemical industries. In just 15 years, In Vitro grew from a classic bootstrap to a multimillion-dollar, global operation.
Silber originally founded In Vitro in Texas. Shortly after, the start-up company relocated to Baltimore’s UMBC Business Incubator in 1991 to be closer to its primary customer base on the east coast.
In Vitro provides products and services to pharmaceutical and biotech companies for the study of chemical-biological interactions and in vitro testing services related to the drug development process. In Vitro’s scientific and technical team often serves as an extension of customers’ research and development departments.
In November 1991, a pharmaceutical customer asked In Vitro to do liver studies. After being in the incubator for a few years with a lot of slow, but steady business – the company broke even in 1993, said Silber. In addition, a partnership was formed with a tissue bank to process non-transplantable human tissue.
The company graduated from the business incubator in 1995 and subsequently relocated to the UMBC Technology Center, where it became the Center’s largest tenant. Since coming to Baltimore in 1991, the company grew from 2 employees to a staff size of 70, including several employees in Europe, Silber said.
In 2002, the company’s products and services had expanded and included bioanalytical technology. In 2005, it also expanded internationally to Leipzig, Germany.
So the question came – why sell when we are doing so well, said Silber. “I needed to diversity my investments when 95 percent of my net worth was tied up in the company and there are lots of other interests in my personal and professional life … after 15 years, it’s time.”
The right buyer came along in March 2006, Celsis, a strong public company, said Silber. About four and a half months later, the company sold. The relationship was clear – even synergistic – because Celsis also sells products to pharmaceutical companies. The price and the timing were right and Celsis has a good “parent” track record, said Silber.