WisBusiness: Former Third Wave leader returns to biotech hot spot of Madison
By Brian E. Clark
From the get-go, Kevin Conroy knew he wanted to relocate his new company, Exact Sciences, from Massachusetts back to Madison.
He was so confident he could convince his board or directors that he never moved to the Boston area after being hired as president and CEO in the spring. (The former head of Third Wave left that company in August 2008 after it was acquired by Hologic Inc. for $580 million.)
Instead, Conroy commuted to the East Coast and did his best to persuade the Exact Sciences board and -- this part is key -- the state of Wisconsin to make the move happen.
His efforts paid off in June, when the state Commerce Department advanced a $1 million forgivable loan to Exact Sciences to help it with the transition to the Badger State.
Additional informationConroy tells WisBusiness.com he couldn’t be more pleased to be working with his new company and basing it in Madison.
“What attracted me to Exact Sciences is that is attacking a big problem, colorectal cancer, the second-largest cancer killer in the U.S.,” said Conroy, who called the disease the “most preventable, yet least-prevented cancer.”
He said his new firm has a test with DNA markers that can tell if a patient needs a colonoscopy.
The real benefit of the test, he explained is that it can detect pre-cancerous polyps so they can be removed, “thereby preventing cancer, not just curing it,” he said.
Having lived in Madison for several years and running a biotech company here, he said he believes it was one of the best cities anywhere to grow a technology company.
A patent lawyer by training, Conroy has worked in Chicago, San Francisco, Milwaukee and Sacramento. But he said none compare with his current home.
“In Madison, you have an incredible workforce, a lot of people who have come out of the University of Wisconsin, and a group of scientists and product development and marketing people who would prefer to live here because they like the lifestyle and what this community has to offer.
“So that was the major driving force,” he said. “The cost of living is also lower than in Boston, and our ability to get the very best people could be maximized here.”
He said Madison is now being recognized by life science company leaders as a good place to develop companies.
“That’s being proven by all the successes over the past 10, 15 and 20 years,” he said.
“You have companies like Promega that have been around for more than two decades and really led the charge, followed by others like Lunar, Third Wave, TomoTherapy and a host of smaller biotech companies that are quite successful.
“So certainly the industry recognizes that Madison is a real center for biotech after you leave the two coasts,” he said.
Though Madison is sometimes considered off the beaten path, Conroy said it’s been his experience that large pharma and medical device company executives are used to flying here and don't consider it an inconvenience.
“And once you get here, it’s a nice city to visit,” he said.
Conroy lauded the state for loaning his new company $1 million -- money he said was essential to moving it here.
“As part of convincing the Exact Sciences board of directors to relocate from the Boston area to Wisconsin, we approached the Commerce Department and had lengthy discussions about the company, what our prospects for success were and what impact it could have on the state,” he said.
When the talking was done, the state agreed to give Exact Sciences $1 million, repayable over a decade. However, the loan is forgivable if the company creates 250 jobs.
“If we are successful, that is a loan that will be a great investment on the state’s part because the payroll associated with a 250-employee business would be very significant,” he said.
“The taxes generated, and most importantly the economic development, and the economic activity and taxes associated with that loan would more than pay for itself from the state’s perspective,” he said.
From Exact Sciences point of view, the loan “was very helpful” in convincing the board of directors of a public company to move from Boston, “the hotbed of biotech” to Wisconsin.
Conroy said the firm, which includes former Third Wave CFO Maneesh Arora and office manager June Fontana, should have 25 employees within nine months.
Over the next few years, as it goes through the product development and clinical trial stages, that number should ramp up to 45. But when it enters the commercial stage after that, it could grow significantly.
“This is a test that could be used by 90 million Americans and then be adopted in Europe and throughout the rest of the world,” he said.
Conroy said there are similarities between his former employer, Third Wave, and Exact Sciences.
“At Third Wave, we developed a cervical cancer screening test that was used by otherwise healthy women to let them know if they were at higher risk for cervical disease,” he said.
Similarly, he said his new firm is developing a test healthy men and women over the age of 50 can use to assess their risk for colorectal cancer.
“So there are very strong parallels with what we did at Third Wave and what we are doing at Exact Sciences,” he said.
Though Conroy is now on his second start-up, he said it's premature to think he might eventually move on to another nascent firm.
“Right now my hands are full and I love what we are doing here,” he said. “I’m not personally looking at a next opportunity. This is a company that could grow over a long time, possibly expanding into other types of cancer and other diagnostics.”