ChromoTrax Articles

Business incubator helps new companies grow

Originally published January 30, 2007
By Ed Waters, Jr.
News-Post Staff

Photo by Ed Waters, Jr.
Loretta Chi, left, president of ChromoTrax, talks with
visitors to the Frederick Innovative Technology Center
at Hood College on Monday. Listening to Chi are, from
left, Marie Keegin, director of the county’s economic
development office; Shabri Moore of Moore Wealth
Inc.; and Frederick County Commissioner Jan Gardner.

FREDERICK -- Ron Volpe noted Monday morning that it was three years ago when discussion of a business incubator at Hood College was initiated.

The college president, along with local elected officials and those from the city and county economic offices, talked about the advances made at the incubator.

"It began as a dream," Volpe said of the Frederick Innovative Technology Center Inc. "Some thought it a nightmare or lofty dream in the early days."

Today, Volpe said wherever he goes, someone asks him about FITCI and he proudly tells them that it not only is at capacity, but a second incubator is already open on Metropolitan Court.

The initial incubator, on the third floor of Rosenstock Hall at Hood College, has been filled with tenants in the biotechnology field. The first tenants in the new incubator are in the information technology field.

There are other business incubators in Maryland, from Baltimore to Washington County, but they are not seen as competition. There is a definite need, FITCI board members said, for more incubators. Just as a medical incubator helps a newborn child or an agricultural incubator helps young chicks, the business incubator assists entrepreneurs with funding, workspace and laboratories, and administration. Michael Dailey, FITCI director, said the payback to FITCI is from 1 to 3 percent of revenue, once the company gets on its feet.

"Dell Computer started in an incubator. That's a $200 million company. Think of 3 percent of that," he said.

The incubators are a combination of state and local funding, as well as private support. In the long run, supporters see it as an investment for jobs and economic growth.

"Eighty-seven percent of companies that begin in an incubator are successful within five years," Dailey said. That compares to 80 percent of business that fail in their first five years, according to a Small Business Administration survey.

"FITCI wouldn't be here without the entrepreneurs," Dailey said. "It is they who take the risks. They are the ones who hire people, work 12 hour days, seven days a week. We can help by taking some of the worries a new business has such as funding and administration."

Two-thirds of the entrepreneurs at FITCI wouldn't be in Frederick without the incubator.

Loretta Chi, president of ChromoTrax said she looked at an incubator in Richmond, Va., but found the local one much more impressive.

"The laboratory was not as good, we have better equipment here and I didn't like their attitude," Chi said. "And they had no student program."

Her company has created a better and faster way to detect cancer cells by type. She and her staff are working with the National Institutes of Health, National Cancer Institute and several large universities and medical institutions.

The FITCI set up allowed Chi to have a Hood student working on her master's degree as an intern. Other entrepreneurs at FITCI also are bringing students in to their projects.

Working with what could be potentially hazardous substances, such as viruses and aerosol sprays, FITCI board members said there was a commitment to safety to ensure students on campus were not endangered.

A former Food and Drug Administration attorney, Chi said she lets the scientists in her company handle the research, "while I concentrate on the funding.

"The goal is for the companies to create a product or technique that can be marketed commercially at some point, moving out on their own.

"These are the people who will be creating the new jobs, new factories in Frederick County," Dailey said. Half of the current employees at FITCI tenants are PhDs, he said. "These are not entry level jobs." There are 33 employees at FITCI at Hood College and more are being added at the new incubator.

On Jan. 20, FITCI and representatives from various state and federal agencies discussed the possibility of more incubators in county municipalities.

Although technology and bioscience have been the focus of the Frederick incubator, speakers said similar centers have been used to nurture artists and musicians, retailers and agricultural-oriented businesses from start through successful development.

Funding is available through various agencies for feasibility studies, as well as seed money for entrepreneurs who meet the eligibility of having a product that could be commercially used in the long run.

ChromoTrax switched focus and moved from Virginia to the Frederick incubator last year Thursday, Feb. 23, 2006

by Kevin M. Smith Staff Writer

Like many high-tech entrepreneurs and researchers, Loretta E. Chi and Joseph Lucas thought they were developing a valuable technology — they just had to figure out a profitable application.

Chi, founder and president of ChromoTrax, and Lucas, its chief scientist, think they have found one.

Chromotrax
Founder: Loretta E. Chi Incorporated: 1999 Employees: 4 Investment: $2.5 million

Initially, Chi and Lucas pitched the technology — which ‘‘combines chromosome hybridization in suspension using repeat sequence depleted DNA probes,” according to the company’s Web site — as a biodefense tool. The idea was to detect and gauge damage to humans caused by so-called ‘‘dirty bombs,” nuclear devices that cause little property damage but spread dangerous radiation over a large area.

ChromTrax, a tenant of the Frederick Innovative Technology Center incubator at Hood College since September, is now developing the technology to detect precursor cancer cells.

‘‘We are doing the last of the alpha testing,” Chi said. ‘‘Soon we’re going to start contacting people for beta testing.”

ChromoTrax has garnered a total of ‘‘about $2.5 million” in investments from family, friends and angel investors, Chi said, including a $232,000 Small Business Innovation Research grant from the National Institutes of Health’s National Cancer Institute last year.

The institute’s presence at Fort Detrick helped lure the company to Frederick — as did the efforts of Michael J. Dailey, the incubator’s executive director.

The company was founded in 1997 as a division of American Laboratory Technologies Inc. in Arlington, Va. Two years later, it incorporated in Delaware and began operations under the name ALTech Biomedical Inc. and in December 2004 changed its name to ChromoTrax.

One year ago, the company was on the campus of George Mason University in Fairfax, Va. But Chi felt a move to an incubator was in order.

‘‘We entered [George Mason] because they had a center for biodefense and we were going to collaborate with them,” Chi said. ‘‘The collaboration didn’t get off the ground. Plus, we wanted our own space — we were sharing space with students.”

Chi researched incubators in the region and narrowed the choices to two: the Frederick facility and one in Richmond, Va.

Also, the ‘‘quality of people” who were associated with the Frederick incubator and with whom Dailey put her in contact — including researchers at the cancer institute — helped convince her. And since moving, ChromoTrax has worked with a Hood College intern whom Chi called ‘‘excellent.”

Both Dailey and the Fort Detrick technology transfer office were ‘‘so accommodating,” Chi said. ‘‘I couldn’t believe it.”

‘‘We very actively” recruited ChromoTrax, Dailey said. ‘‘I thought they had a great product.

‘‘There were two things I liked about ChromoTrax,” he said. ‘‘They have a great technology that goes hand-in-hand with the research being performed at the NIH. She has a couple of very impressive milestones occurring towards the end of the year, including the actualization of the licensing of their technology.”

‘‘We already sell products on a limited basis to research and clinical labs that do cytogenetics,” Chi said of a probe that the company makes.

‘‘The solution hybrid will [be marketed] to high-volume clinical testing labs like Qwest Diagnostic and Labcorp — also university labs that do high-volume testing, diagnostic centers in the U.S. and abroad.”