Former EntreMed Chief Is Back on the Scene
Monday, June 25, 2007
John Holaday is back. Well, sort of.
About four years after walking away from EntreMed -- a Rockville firm he co-founded in 1992 that soared high and then sank low -- the serial entrepreneur is at the helm of yet another biotech company in Montgomery County.
The company -- QRxPharma -- is only partly here. Its corporate headquarters are in Australia, and its stock began trading there last month. Holaday is setting up the firm's U.S. operations in a Rockville incubator, preparing for final-stage testing of a new drug to treat pain.
The drug is not entirely new. It is a patented combination of two opioids long used separately -- a popular tactic that joins older medicines for newer uses, taking much of the risk and unknowns out of drug development. In this case, the drug also reconnects Holaday to his academic roots in anesthesiology and neuropharmacology.
"This is something I love. I like building things," Holaday said. "It's a return to my roots scientifically. It's a place where I like the people. And it's a short term to market."
The path that Holaday, 62, took to become chief executive of an Australian company is long and meandering, and it has earned him a good number of frequent-flier miles. Like the endeavors of most entrepreneurs, the journey involves Holaday making a series of acquaintances through a network of like-minded people looking for eureka moments.
It went like this: Holaday, acting as an ambassador for Maryland's biotech community, traveled abroad about five years ago to exchange ideas with members of the international life-sciences community. He made a lot of friends. One acquaintance led to another, and eventually he met Gary Pace, an entrepreneur in Australia who had founded a company based on technology from the University of Queensland.
That company was QRxPharma, and it needed another product besides the pain drug. Holaday knew of a promising treatment for central nervous system disorders being developed at the University of Alabama, which he had attended. But QRxPharma had to go public to raise money for testing. That's when the company turned to Holaday. "He seemed like a natural fit," Pace said. "He's been there and done that."
He has. Holaday has started or helped start more than a half-dozen companies, several of which went public. There was Medicis. There was EntreMed. There was MaxCyte. He helped CytImmune get off the ground. After he left EntreMed, he co-founded the Harvest Bank of Maryland, a bank that caters to the technology industry. He left Harvest and started Montgomery Pacific Group, an investment bank. Now he's chief executive of QRxPharma.
Peter C. Farrell, QRxPharma's chairman, called the idea of an American running an Australian company "a nonevent."
"There's the local boy and that sort of stuff," Farrell said. "But this is business, and this is the best person for the job."
Holaday is perhaps best known for his long tenure at EntreMed, particularly for the company's place in a highly publicized cancer research controversy. Drugs that the company had in early-stage development were the subject of a front-page New York Times story in 1998 suggesting that they could cure cancer.
The news set off sustained hype around the company's stock, which eventually rose 330 percent to nearly $100 a share. But the hype subsided after further testing revealed that the drugs weren't a cure. By December 2002, EntreMed's stock fell to less than $1 a share and Holaday had resigned as chief executive. He left EntreMed in 2003.
As for what Holaday took from the experience, he said, "It's difficult to keep promises that others make."
Early-stage drug development has incredible highs, incredible lows, and most of all, incredible risk -- all of which can take a decade or more to sort itself out.
"It's exciting, but you have to be hand-out all the time to pay for it," Holaday said. "I want something that's faster, that makes a difference earlier," and he thinks he has found that in QRxPharma. Because narcotic pain drugs have been around for a while, their safety profiles are well known, and that means the company can get to late-stage testing sooner.
"Everyone's attention span is less than it was a decade ago," Holaday said, reflecting on the biotech boom times in the 1990s. "And so if you can get a drug in to treat people earlier, there's less risk and there's more opportunities to make a difference. It makes great sense."
Holaday has about five employees and plans to add more. He thinks the dual opioids -- oxycodone and morphine -- will be effective pain management tools that avoid the buildup of tolerance and reduce such common side effects as nausea, which he experienced not long ago after taking Percocet after shoulder surgery. He had to stop after two days and then took so much ibuprofen that he irritated his stomach.
QRxPharma raised about $44 million with its initial public offering. So far, the stock has dropped about 14 percent from its opening day closing price. The company hopes to start final testing of the pain drug in the United States by the end of the year.