Reincorporation of financially troubled Renaissance Rx occurred days before multi-million dollar investment

By Kyle Barnett | Mar 12, 2015

Dr. Tarun Jolly, founder of Renaissance Rx

NEW ORLEANS - In the wake of layoffs and restructuring, the viability of New Orleans-based biotech firm Renaissance Rx remains uncertain.

But information uncovered in a records search at the Louisiana Secretary of State's office shows that only days before announcing a multi-million dollar investment last fall, the firm reincorporated itself, stripping two owners as registered agents.

On Oct. 31, 2014, Renaissance Rx (also known as UTC Laboratories LLC) changed its state of incorporation from Louisiana to Delaware, and in the process, it removed co-founders Barry Griffith and Patrick Ridgeway from a list of registered agents.

The change came only days before Renaissance Rx announced an investment from Texas-based TPG Growth, believed to be worth $50 million. With the change in registered agents, the move is believed to have been a buyout of interests that Griffith and Ridgeway held in the company.

Before joining Renaissance Rx, Griffith and Ridgeway, both veteran medical industry businessmen, were involved with Washington state-based Natural Molecular Testing Corp. That company filed bankruptcy in 2013 and listed Griffith and Ridgeway as creditors.

Ridgeway was at one time listed as Natural Molecular’s area sales director/distributor, while at the same time operating a side business, Stone Surgical, which later was named in a 2013 federal lawsuit involving his brother Christopher Ridgeway, now a general manger at Renaissance Rx.

In that lawsuit, Christopher Ridgeway was accused of conspiring to steal $3 million worth of business by medical technology firm Stryker, with whom he was employed as a sales representative. Stryker also made allegations concerning investigations into the business practices of both Natural Molecular and Christopher Ridgeway.

“[I]n August 2013, government complaints related to Natural Molecular forced Ridgeway to shut down this company, but Ridgeway began offering a similar product through Renaissance RX,” Stryker’s lawsuit states.

Less than two months after the investment from TPG Growth, Renaissance Rx’s main stream of funding – a government funded genetics information sharing study named the Diagnosing Adverse Drug Reactions Registry (DART) – was cut off by Medicare and layoffs began to occur.

Renaissance Rx has refused to put a number on how many jobs were lost, but reports from current and former employees who have asked not to be identified put that number at several hundred. In addition, employees have estimated that approximately 90 percent of the firm’s revenues came from the DART study, which is backed up by news reports detailing Renaissance Rx’s meteoric rise from employing only a handful of workers to an estimated 900 after DART was initiated, and up until its suspension.

Employees who have asked not to be identified have said the DART study, which was only authorized to process 250,000 tests, was reaching its conclusion by closing in on that figure. They said that if it were not being renewed the revenue stream would dry up. Because the DART study was only authorized for 250,000 tests, employees have estimated the study would have reached its end in January.

It is unknown if TPG Growth was aware of the impending funding cut off prior to making its investment as the firm refused to comment on the investment and ensuing funding issues faced by Renaissance Rx.

In response to a question on the continuation of the DART study, Renaissance Rx spokesperson Amy Dye was non-committal as to a potential end date for the study should it be reactivated.

“It is difficult to estimate the rate of enrollment or when the study will be concluded,” she said in an emailed statement.

Dye also did not respond to a question concerning the partnership interest of Griffith and Ridgeway. Only after The Louisiana Record published a report in January detailing Renaissance Rx’s financial problems, did the company admit to layoffs and say that the company hopes to soon get back on track soon.

“For the first two years of operation, Renaissance RX experienced rapid, dramatic growth. In 2014 we restructured our company and Medicare initiated a review, which regrettably resulted in layoffs that we do not believe will continue in 2015,” Dye said in a statement. “It was difficult to lose valued members of our team and our best wishes are with them and their families.”

TPG Growth’s investment came on the heels of an announcement by Louisiana Economic Development (LED) in September 2014, in which Renaissance Rx announced it would be moving out of the New Orlean BioInnovation business incubator by investing $8 million into a 30,000 square foot facility located on St. Charles Avenue in New Orleans.

Louisiana Economic Development (LED) made a joint announcement with the company that the move would add 425 high paying jobs at an average annual salary of $54,100. Since the revelations about the layoffs and company restructuring have surfaced, LED has taken down from its website a press release containing information about the taxpayer grant the firm was to receive.

LED did not respond to a request for comment on why the announcement was taken down.

Anonymous posts on the pharmaceutical trade chat board have pointed to a close relationship Renaissance Rx founder Dr. Tarun Jolly has with Gov. Bobby Jindal – Jolly is a first cousin of Louisiana’s first lady Supriya Jindal (née Jolly).

In fact, campaign finance records show the Jollys have been contributors to Jindal’s various political campaigns. In 2004, Tarun Jolly is listed as having provided two contributions of $325 to Jindal's unsuccessful bid for Louisiana Governor in 2003 and of $250 to Jindal's 2004 successful Congressional campaign. Relatives of the Jollys and related businesses additionally combined to provide more than $30,000 in donations to that campaign.

In the same month Louisiana Economic Development announced the $925,000 grant to Renaissance Rx, Jolly provided a $500 contribution to the Believe Again Political Action Committee, a pro-Jindal Super PAC.

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