By Colin Pope, Austin Business Journal
July 9, 2003

A veteran life sciences professor at the University of Texas is spinning off 25 years of academic research into a new biotech company.

UT Professor Robert S. Pearlman, with the help of UT's Office of Technology Licensing, is launching Optive Research Inc. this month. The software company is starting off with more than 15 software products designed to help scientists bring beneficial chemical compounds—primarily new drugs and agrochemicals—to market faster and cheaper.

Pearlman is the Coulter R. Sublett Regents Chair in Pharmacy and the director of the Laboratory for the Development of Computer-Assisted Drug Discovery Software at UT.

Pearlman's previous research on the topic of computer-assisted drug discovery has produced software that is now in use at every major pharmaceutical company in the world and hundreds of other research sites, says Bryan Koontz, Optive's vice president of marketing.

"While most professors choose to go down the path of more academic pursuits, Bob has chosen to work closely with [private] industry," Koontz says. "For the past 25 years Bob has funded his lab almost entirely through pharmaceutical companies rather than with public money."

Optive—which employs 15 people now at a small office at Far West Boulevard and MoPac Expressway—will continue the research and development which Pearlman and his team at UT have conducted during the past 25 years, working collaboratively with many of the world's largest companies engaged in computer-assisted drug discovery, such as Aventis of France and New York-based Bristol-Myers Squibb Co.

Neil Iscoe, director of UT's Office of Technology Licensing, declines to disclose financial details of the agreement between UT and Optive, but he does say that UT has a royalties-based contract. The deal also allows Pearlman to keep his position at UT.

At Optive, Pearlman will serve as the company's president and chief scientific officer.

"One of the most exciting things about this is that it's creating a company that is staying in Austin but has an international client base," Iscoe says. "This is a great example of how UT wants to commercialize technology."

Pearlman says the formation of Optive ensures that the large number of users around the world who rely on his software will receive continued support.

"Operating as a company rather than as an academic lab, we are now positioned to provide a much higher level of support, service, and software R&D to these scientists, their companies, and to the rest of the molecular discovery community," Pearlman says.

He adds that the new company also provides a solid foundation for ongoing scientific innovation and software development.

Koontz says Optive is privately funded and does not anticipate seeking additional capital in the foreseeable future.

Optive's software is designed to be used by both computational chemists and bench chemists who are engaged in molecular design and discovery research in the pharmaceutical, agrochemical, food science, and cosmetics industries.

Optive's software, like Pearlman's previous technology, will be sold under a 15-year distribution relationship with St. Louis-based Tripos Inc. [Nasdaq: TRPS].

Dr. John McAlister, President and CEO of Tripos, says Pearlman's software already plays a critical role in many of his customers' molecular discovery processes, and Tripos itself is using the technology in its own discovery-research business.

Steven Burrill, CEO of Burrill & Co., a San Francisco-based life sciences merchant bank, says the biotech industry is poised for massive growth in the near and short term. After a year of less-than-encouraging news spawned by the overall economic slump, life sciences companies are bouncing back strong with a cascade of high-potential product approvals, excellent results in various pivotal clinical trials, higher earnings and a Food and Drug Administration that has recently demonstrated a commitment to reducing timetables for bringing a product to market.

"What is certain is that the biotech industry is taking off and there is enormous upside yet to be realized," Burrill says. "Biotech's importance in every phase of our life is growing."