NDSU Magazine logo - Fall 2001

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Fall 2001

Vol. 02, No. 1


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The little biotechnology firm that could

Michael Chambers sat for hours in his stuffy efficiency apartment, his brain vibrating with ideas about how to start a biotechnology company. Oh, the opportunities were absolutely without end: DNA vaccines, cancer cures, veterinary medicines. He turned the possibilities over and over in his mind, mentally fingering the permutations until they became dog-eared. But the problem lurking in the corner stared back at him with beady eyes: Get serious; you don't have a dime.

Yes, but Chambers had something else in surplus: faith in his ability to solve a problem, any problem, by working until he found the solution. With the right mix of grit and ingenuity nothing was insoluble. It was a matter of running through the steps until the equations balanced, and of networking, talking to people until he finally met the one who had the right answer. So he talked to countless teachers, classmates, family members, friends of friends. His grandfather and a few others were willing to lend him money, not a little money, but not enough to get a biotech company off the ground. He wrote letters, e-mail messages, worked the phone like a telemarketer, even scraped up the cash to fly to Atlanta to wheedle some interested moneymen. But in the end all those venture capitalists and bankers, those who flattered him with an answer, said no. He admits that the suits might have had a point. He was, after all, just 22 years old, a college senior working toward degrees in biotechnology and microbiology at North Dakota State University. His business experience involved tending bees for his grandfather's honey company in Carrington, N.D.

Then one day he found the answer in a stack of mail piling up on his desk. Lots of people would bet on Michael Chambers and his partner, John Ballantyne, after all: credit card companies. The pair filled out the forms, naively expecting most banks would turn them down, and were surprised when the cards came back smiling. Suddenly they were armed with lines of credit totaling thousands of dollars. Instead of charming money out of venture capitalists they would just charge it.

They were ready. In those endless talks in Chambers' apartment, bolstered by advice from retired business executives and professors, they'd pieced together the rudiments: an idea for a service, a business plan, a target market, even a logo. Chambers' first purchase was a $2,000 personal computer from Best Buy. They also charged to buy laboratory equipment, supplementing leased apparatus at NDSU so they could breed large colonies of bacteria, the means for replicating snippets of DNA into batches big enough for biomedical researchers to use in experiments. They would provide custom plasmid DNA - tiny loops of genetic material - an essential ingredient for making DNA vaccines and other products.

All they needed was a customer, and finally they found one, a researcher in Puerto Rico. Could they supply him with 250 milligrams of plasmid DNA to test for use in an influenza vaccine? They could, and they did - but had to run out and buy a label maker before they could ship their first order. Through word of mouth, and building themselves an Internet site, they began accumulating customers. By happy coincidence, the start of their business in 1998 came in the early days of Internet commerce - not a small advantage when you are two guys fresh out of college, operating in a rented corner of lab space at your alma mater, using credit cards to finance many of your start-up costs and to weather cash-flow crises. Still, Chambers and Ballantyne were officially in business. The orders began coming in, but so did the bills. At one point Chambers had $80,000 charged to one card. He and Ballantyne kept juggling balances among cards, managing to avoid paying the astronomic interest rates. They named their company Aldevron, a variation on the name of one of the brightest stars in the Milky Way Galaxy. But would Aldevron turn out to be a commercial supernova, or a brown dwarf?

Michael Chambers gets downright rhapsodic when he talks about the network, the invisible lattice of connections that propped up Aldevron in its spindly youth. The network began with his lessons in the honey business, alongside his maternal grandfather, Dewey Robson, and his father, Bruce. They were his first mentors; from them he got his first inkling that he could combine science and business in ways that could be both fun and profitable. Then, at a high school science fair, Chambers' embryonic network made its most cosmic connection when he met Victoria Knudson, a rival competitor from Hazen, N.D. They instantly became friends and soon started dating. They saw each other through high school and college, and now are partners in both business and marriage. "We've really grown up together," Chambers says. Knudson had been involved informally with Aldevron from the beginning, but joined the company two years ago and now serves as chief operating officer. She shares an office with Chambers, and her job is to set goals and free Chambers from many of the details, to make sure his focus doesn't become too diffuse. She is the planner and organizer, Chambers the source of vision and ideas. "His ideas don't always get communicated clearly," she says. "I'd say we complement each other very much."

The network kept branching out from roots grown in high school and college. Both Chambers and Knudson attended Governor's School, a summer seminar on the NDSU campus for promising high school students interested in science, technology and, now, business. For Chambers, it was his first exposure to a real science lab. It also was where he met Matt Belter, a friend of Knudson's. All three attended NDSU, where the friendships deepened and eventually evolved into professional ties. So after Belter graduated, he didn't hesitate to quit his summer job in a bookstore to join the company, still operating out of rented space in Hultz Hall. "I had complete confidence Mike Chambers would make a business like this fly," says Belter, who has a central role in lab production. "I can't honestly say that it was a whole lot of risk, because what did I have to lose at that point? Who knows when something like another Great Plains story" - the Fargo-based business software company - "is going to come around? It would be great to be a part of something like that."

While trying to perfect the plasmid-DNA purification process, Chambers consulted a friend in the university's pharmacy school, and ended up meeting John Ballantyne, who was finishing his doctorate in pharmacy, and had expertise in chromatography, a way of separating products based on physical or chemical properties. Their friendship might seem improbable. Ballantyne came from Waiuku, a dairy and fishing town in New Zealand, and is a history buff and sports fanatic who likes to bet on pro football games. They pose striking contrasts: Chambers, tall and thin, with a boyish face and outgoing manner; Ballantyne, burly and bearded, is more retiring. But when Chambers started talking about his dream of getting into the biotech business, Ballantyne was hooked. He had grown fond of North Dakota's open spaces, which he found similar to his sparsely settled homeland, and didn't want to move to a big city on the East Coast, where most pharmaceuticals giants are based.

Other elements of the network fell into place, with a distinctly NDSU pedigree; 16 of its 18 employees are graduates or current students. Average age: 27 or 28. Ballantyne, chief scientific officer, jokes about Aldevron's "friends and family" plan; Chambers compares it to a family farm. Both say it's common in tech start-ups for close friends to band together and work through the lean times. "I'd say the drive for success is really common here," Knudson says. "We don't just hire all our friends. We want the best people."

Now it all seems to stem from some orderly sequence, a more or less logical chain of events Chambers traces back to his senior thesis project. But Aldevron's success - never assured - owes much to its ability to exploit a niche market in biotechnology services, and to keep costs from suffocating the business in its crib. It all began, in a sense, with Chambers' senior thesis topic that DNA vaccines could be administered by nasal spray instead of by needle. He sniffed around on the Internet, and quickly found a scientist at the Pasteur Institute in France, one of the world's leading authorities on DNA vaccines. His next move was a bit audacious for a college student: He contacted the researcher, Robert Whalen, and quickly struck up a friendship in a series of e-mails and phone calls. In short order, Chambers convinced his professors to fly Whalen in to deliver a seminar on DNA vaccines - a visit that ended up providing Chambers with the idea that became Aldevron.

Whalen pointed out that not all research labs have the capability, or the desire, to do the painstaking work of making their own copies of DNA samples. There is the risk that cells will mutate, and technicians must guard against contamination. Strict purity and quality control are essential. It's vital work, but not considered glamorous. When Whalen visited Fargo, he realized it was the perfect location. It offered well-educated workers, low costs and technical support from experts at NDSU and other campuses. In fact, Chambers says, the help from his professors and several administrators was absolutely critical in establishing the business. "Without NDSU I think I would just have a normal job someplace."

Because Chambers and Ballantyne couldn't attract venture capital, in which investors provide risky start-up funds in return for a stake in a new company, the partners had to break the standard mold for creating a biotech business. They had to start small and grow slowly. Chambers calls it the Fargo model: frugality, lots of hard work and a degree of versatility familiar to any farmer. Chambers and Ballantyne continually must solve their own problems. One day last summer, for instance, Aldevron's Internet service was knocked out in a storm - on the very day his information technology chief was out, and a European company was auditing their Web site. Chambers had to roll up his sleeves and become his own computer expert; he spent most of the day getting the Web site back in shape. "It's exactly like a farmer tinkering around in his garage," Chambers says.

Whalen, now the leading researcher at Maxygen, a California biotech company, says Aldevron has become a leader in supplying research scientists all over the world with custom DNA materials at an affordable price - affordable, that is, in the world of biotech research: a gram of the firm's plasmid DNA sells for $25,000 to $50,000. If that's a little beyond your budget, they'll sell you a milligram for as low as $250, a bargain for tailor-made materials certified as pure. Forty percent of their sales are overseas.

The company took a big step when it moved two years ago from its incubator space at NDSU to a former bingo parlor in south Fargo. The company grew to 10 employees and significantly boosted its production. The firm plans to build an addition to make room for seven new products, but eventually would like to locate in NDSU's Research and Technology Park, where Chambers sits on the board of directors. The secret, Chambers says, will be to grow at a rate that doesn't allow quality to slip. Ballantyne sees the firm moving more into mass production, instead of relying heavily on smaller, custom lab work. Another milestone would be to get federal approval to supply plasmid DNA for clinical trials, which would open up a lucrative new market. "Where we're at is still very early in the road," Chambers says. "Ten years from now I expect to employ a lot of people."

-Patrick Springer

Student Focused. Land Grant. Research University.