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ADVANCED TECHNOLOGY
INCUBATORS:
GROWING BIOTECHNOLOGY STARTUPS
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By Brian R.
Hook
From finding early-stage financing to providing laboratory space
for research, the incubation process is helping biotechnology- startup
companies grow across St. Louis.
Part of this incubation process is building the management team
at the fledgling companies, says Robert Calcaterra, president and
CEO of the Nidus Center. The non-profit incubator on the campus
of agricultural-giant Monsanto Co. also assists startups with the
development of business plans and helps startups secure intellectual-property
assets.
Not every biotechnology startup is accepted into the incubator program
at Nidus, which is funded by Monsanto, due to limited space and
resources. “We’re very selective,” Calcaterra says. “We have picked
18 companies out of 500 we’ve looked at.” Among the 18, Nidus currently
houses nine startups. It has had six graduates since it started
in 1998 and three failures. “We look at anything from medical services
to medical devices to ag-biotech to drug discovery,” he says.
Among the current tenants at Nidus: Apath LLC is a pharmaceutical-discovery
company with a focus on human viral pathogens. Chlorogen Inc. is
developing pharmaceutical proteins in tobacco through chloroplast
transformation—a new technique that could increase therapeutic drug
availability. Plus, Divergence Inc. is a biotech-research company
that utilizes bio-informatics and molecular biology tools in order
to develop products to control parasites.
“We have some very promising companies,” Calcaterra says. “I’m only
raising money for two of my client companies. Investment dollars
have become much more available recently.”
Finding space for biotechnology companies once a startup graduates
from an incubator like Nidus has been difficult in the past, Calcaterra
says. Nidus is currently full. But two companies at the incubator
are graduates that are in the process of trying to find new facilities.
| The
non-profit incubator on the campus of agricultural-giant
Monsanto Co. also assists startups with the development
of business plans and helps startups secure intellectual-property
assets. |
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Robert
Calcaterra,
President and CEO
Nidus Center
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Calcaterra says that the first building opened by the Center of
Research, Technology and Entrepreneurial Expertise partnership in
midtown St. Louis has helped to provide space for incubator graduates.
CORTEX is a collaboration of Washington University in St. Louis,
Saint Louis University, University of Missouri-St. Louis, Barnes-Jewish
Hospital Foundation, the Missouri Botanical Garden, the City of
St. Louis, the RCGA and Civic Progress. Calcaterra says he is hopeful
that planned facilities near the Donald Danforth Plant Science Center,
a non-profit research institute near Nidus, will also help.
BioGenerator, with offices in Nidus, is also trying to help biotechnology
companies grow in the St. Louis region. David Broughton, interim
president and CEO, says BioGenerator is trying to bridge the gap
between universities, research institutions as well as entrepreneurs.
BioGenerator is not an incubator in the traditional sense, since
it does not provide office or laboratory space, Broughton says.
Instead, BioGenerator acts like a “virtual” incubator by supporting
management and providing funding to advance the development of startups.
“We often take equity for our investments and expect to realize
a return,” Broughton says. The McDonnell Family Foundation, Danforth
Foundation, Monsanto Fund, and Bunge North America Inc. provided
$6 million in funding to launch BioGenerator in 2003.
Since its launch BioGenerator has invested in several companies:
ISW Group Inc. is researching and developing prescription and over-the-counter
topical dermatological products designed to manage and treat chronic
inflammatory skin conditions. Venganza Inc. is involved in the development
of transgenic technologies for anti-fungal applications in agricultural
crops.
Broughton says he hopes to add three to four new companies to the
roster this year. BioGenerator’s first investment was in Akermin
Inc., based in Nidus. It is developing portable fuel cells for replacing
conventional batteries in a variety of applications based on technology
discovered at Saint Louis University. “After receiving funding from
angel investors and the venture capital community, Akermin became
the first graduate of BioGenerator,” he says.
| “I
think pre-incubation at the university level is critical.
Without it, you’re going to have far fewer companies
from the universities moving into the incubators.” |
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Joe
Zahner
Director of the Office of Innovation and Intellectual
Property,
Saint Louis University
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Joe Zahner, director of the Office of Innovation and Intellectual
Property at Saint Louis University, says his office fits into the
overall incubation process as part of the continuum of innovation
that creates high-tech companies. “A lot of it starts with the universities,”
Zahner says. He describes the university’s role as sort of a pre-incubator
for biotechnology startups.
The university leases space and provides funding to startups developed
within the university and to a few external startups. It set up
a $5 million technology-transfer endowment in 1998. “I think pre-incubation
at the university level is critical. Without it, you’re going to
have far fewer companies from the universities moving into the incubators,”
Zahner says.
The Center for Emerging Technologies, the incubator/accelerator
in midtown St. Louis is a public-private-academic partnership. The
University of Missouri - St. Louis and the Missouri Department of
Economic Development provide a significant amount of support for
CET. Funding for facilities have come from a range of sources, among
them are St. Louis Development Corp., Missouri Development Finance
Board, U.S. Economic Development Administration as well as a number
of St. Louis-based companies..
| “We
focus on finding or creating the critical resources,
local and outside, needed by start-up biomedical companies
to develop their technology and grow their company
and facilitate the connection of individual companies
to what is appropriate at each stage of development.” |
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Marcia
Mellitz
President and CEO
Center for Emerging Technologies
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CET companies have collectively raised over $600 million in funding
since building one opened, says Marcia Mellitz, president and CEO
of CET. Mellitz says CET creates the environment necessary to support
startup companies. This environment includes early-stage venture
capital, educating entrepreneurs and making sure that favorable
tax incentives are in place. “We work on a daily basis with our
public, private and university partners to put in place all of the
pieces necessary to support the development of life science companies,”
Mellitz says.
One of the current tenants at CET is Orion Genomics. It is developing
oncology diagnostic products and generating revenue through commercialization
of existing products and services. Another is Kereos Inc. It is
developing targeted therapeutics and imaging agents, focused primarily
on cancer and cardiovascular disease earlier than previously possible.
“We focus on finding or creating the critical resources, local and
outside, needed by start-up biomedical companies to develop their
technology and grow their company and facilitate the connection
of individual companies to what is appropriate at each stage of
development,” Mellitz says.
Across the Mississippi River, Southern Illinois University Edwardsville
is building lab space for biotechnology-startup companies. The $1.6
million project involves the construction of a building with 11,076
square feet. It will be located in University Park, a 330-acre portion
of the 2,660-acre campus at SIUE. University Park is designated
as a research and technology park.
Southern
Illinois University Edwardsville is building lab space
for biotechnology-start-up companies in an area called
University Park. |
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James Pennekamp, special assistant to the chancellor for regional
economic development and executive director of University Park,
says the new facility set to open this spring could be divided into
between eight and 12 separate labs, depending upon tenet interest
and specification.
University Park is also home to the National Corn-to-Ethanol Research
Center, a not-for-profit research center, focused on the validation
of near-term technologies for enhancing the economics and sustainability
of renewable fuel production. The facility has all of the unit operations
and laboratory capabilities of a commercial facility, but on a smaller
scale.
“As we work with folks interested in ethanol production, we believe
that there will be a demand for laboratory space,” Pennekamp says.
The funding for the new facility is from the State of Illinois Department
of Commerce and Economic Development and from the Madison County
Community Development Department. “A lot of what we’re focused on
is research, leading to discovery and then moving that from discovery
to commercialization,” he says.
“I think we’re putting a lot of elements in place in metropolitan
St. Louis on both sides of the river. I think part of that involves
developing real estate to support emerging research.” |
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