Leaders: Bio-entrepreneur sees leverage in TNInvestco

Life-sciences entrepreneur and investor Joe Cook Jr. has made clear he wants to devote more energy to helping grow Tennessee's life-sciences sector.

Although Cook has thus far declined to provide details on how he might do that, Cook and other principals in his Nashville-based Mountain Group Capital have collaborated with former Asurion executive Byron Smith to form The Limestone Fund.

Limestone is one of ten finalists announced yesterday and still in-the-running for a berth among the state's soon-to-be certified TNInvestco investment companies.

Cook told the recent annual meeting of the Tennessee Biotechnology Association that he sees pharmaceuticals, diagnostics and medical devices as comprising a life-sciences sector that is "one of the last bastions" of innovation.

He stressed that despite the current "polemics" of healthcare policy debate, the sector continues to produce huge benefits, with commensurate upside for entrepreneurs.

Those venture openings, Cook said, are driven largely by the decay of the internal innovative capacities of large pharmaceutical companies, which he said are now "in desperate need" of the innovation that smaller biopharma companies can better foster. Other speakers during the TBA event seemed to concur, with more than one noting that "Big Pharma's" strength now lies in mustering large resources for clinical development, surmounting regulatory hurdles and marketing products derived from the discoveries of scientists working in smaller organizations.

While there are opportunities to make TNInvestco investments in Tennessee-born life sciences companies, under some scenarios prudence may dictate capturing startups from other states, and relocating them here.

That's a possibility, according to MB Venture Partners Managing Partner Gary Stevenson, whose firm is also oriented toward investment in medical-device and biopharma startups. MBVP-allied Memphis Biomed Ventures Tennessee also made yesterday's TNInvestco cut.

Stevenson (at left) responded to a VNC request for general comment on investing under TNInvestco, explaining that MBVP has done well investing in Tennessee-born firms, explaining, "Two of our portfolio companies are licensing discoveries made at in-state research institutions - GTx licensed technologies from the University of Tennessee Health Sciences Center and Protein Discovery has licensed technologies from Vanderbilt University and the Oak Ridge National Lab." MBVP also led a crucial B-round for Franklin-based BioMimetic Therapeutics.

Nonetheless, Stevenson continued, "One wrinkle we are looking at would be to recruit some of the earliest-stage companies we invest in to Tennessee. We have been founding investors in three of the last four investments we have made, but all three have located elsewhere, usually closer to the location of the largest investor. A TNInvestco allocation would give us the extra capital we might need to locate one of the next founding investments in Tennessee. "

Under Cook and Smith (at left), Limestone could certainly cast its net into technologies other than Pharma. After all, co-founder Smith retired from his chief marketing officer post at cellphone-tethered insurer Asurion in 2007, and has since been investing and serving as an adjunct professor at the Owen Graduate School of Management, at Vanderbilt University. Prior to Asurion, Smith held an array of senior marketing roles with Procter & Gamble, Pepsico, AT&T, Verizon and Excite@Home.

Meanwhile, out-front duties for Limestone have fallen to pharma-oriented Cook, who, at an agile 67, is also co-founder and chairman of the board of Ironwood Pharmaceuticals, based in Cambridge, Mass. Ironwood has raised nearly $300 million in private-equity financing.

Cook (at right) remains deeply involved in Mountain Group, which he co-founded with son Joe Cook III and son-in-law Steven Singleton. The company acquires controlling interests in manufacturing and value-added distribution companies, mainly in the southeast. In addition, the elder Cook is on the board of Corcept Therapeutics, biopharma company (NASDAQ:CORT); and is founder and chairman of St. Louis-based Clinical Products, a Mountain Group portfolio company that markets a medical food for diabetics.

Until earlier this year, Cook spent 11 years leading San Diego-based Amilyn Pharmaceuticals. Prior to that, he spent 28 years with Indianapolis-based Eli Lilly & Co., holding such roles as head of engineering, vice president of production and group vice president of global operations. Among other affiliations, Cook has served since 1994 on the advisory board of Domain Limited Partners, based in Princeton, N.J., and has invested in all of Domain's funds.

Cook earned his bachelor's in industrial engineering, with honors, at the University of Tennessee in 1965, with his education having been funded by an alumni scholarship and proceeds from his work as a co-op student.

He had earlier graduated from Red Bank High School, at Chattanooga. He was the first person in his family to graduate from high school or attend a university. ♦