WUSTL-associated startup Apath is model of success

Originating in University research laboratories, St. Louis-based biotechnology company Apath has generated enough profit in just seven years to contribute $1 million in royalty payments back to the School of Medicine.

The company identifies antiviral compounds effective against a group of viruses that cause serious diseases in humans. These viruses include the hepatitis C virus, the West Nile virus and the Ebola virus.

The company has an annual payroll exceeding $1 million and revenue totaling $15.5 million.

Apath’s managing director is Charles M. Rice, Ph.D., who founded the company in 1997 while at the University.

An expert on viruses, Rice conducted research in the Department of Molecular Microbiology from 1986-2000. During this time, he patented his discoveries for diagnosis and treatment of the hepatitis C virus.

Rice is now head of the Laboratory of Virology and Infectious Disease at Rockefeller University.

His research drew the interest of a commercial diagnostic company, which bought the rights to use one of Rice’s discoveries to develop diagnostic products.

Because the University gave Rice an exclusive license for the discovery, he was able to negotiate a deal with the company that provided funding and laboratory space to help launch Apath.

“Washington University generously granted Apath an exclusive license instead of going to a large company,” Rice said. “They not only took a risk that facilitated the success of Apath, they also took a stand for developing biotechnology startups in the St. Louis area.

“In the ensuing years, Apath has become well-established, branching out from our roots in hepatitis C to tackle several other important human viral pathogens.”

Paul D. Olivo, M.D., Ph.D., president and chief scientific officer, joined Apath in 1998. He was a member of the Department of Internal Medicine from 1989-1998, conducting research that led to patents on methods for detecting infectious viruses.

He now holds an adjunct faculty position in the Department of Molecular Microbiology.

“In choosing Apath’s research direction, we decided to work where the greatest need is,” Olivo said. “There are just not enough treatments for viral infections. And because many viruses can be turned into weapons, our antiviral work ideally positions us to address biodefense concerns.”

As a result of national defense concerns, the company has obtained more than half of its income from federal grants, supplementing income obtained from numerous patent licenses.

“Apath has been in the right place at the right time,” Olivo said. “There is an element of luck involved, I suppose. But it’s the sort of luck that comes from seeing what’s needed and being prepared to take advantage of what comes along.”

Michael G. Douglas, director of the University’s Office of Technology Management, said: “We congratulate the owners and employees of Apath on their success. We’re pleased to see a startup with beginnings at Washington University grow to generate such impressive value.”

The University has more than 150 inventions stemming from research funded by the National Institutes of Health, with about half of these being licensed to private companies.

“Apath’s success reflects the quality of research and discovery at the University, as well as the talents of the company’s founders,” Douglas said. “Apath serves as a model for other faculty members on how to capitalize on the value of their discoveries.”

Apath has its laboratories and offices at the Nidus Center for Scientific Enterprise in Creve Coeur, Mo.

In addition to Rice and Olivo, three other employees have ties to the University. The company’s grants coordinator and senior administrative director, L. Janet Milton, is a former University employee. One of Apath’s doctoral scientists graduated from the University, and another conducted postdoctoral research here.