BioMatters - Fall 2008

22 BioMatters | Fall 2008

BioMattersA MichBio Publication Showcasing Michigan’s Biosciences Industry

Pfizer’s Downsizing Opens New Doors

F A L L 2 0 0 8

Also Featured:

State Manufacturers Exploring Opportunities in Medical Devices

Clinical Trials Industry Deep, Broad and People-Centered

BioMatters | Fall 2008

> Portage and Kalamazoo

Pfizer’s largest manufacturing site in the world

> Downtown Kalamazoo

Pfizer’s global headquarters for Veterinary Medicine Research and Development

> Richland Township

Pfizer’s premier Animal Health research farm

More than 3,000 colleagues in Michigan work to address human and animal diseases, advancing the proud history of pharmaceutical research, development and manufacturing in our state.

Working For A Healthier World In Michigan

ad_biomatters_0908.indd 1 9/15/08 12:31:50 PM


BioMattersT A B L E O F C O N T E N T S

A D V E R T I S E R S

Ash Stevens .................................................. 31Asterand ....................................................... 21Bank of Ann Arbor ....................................... 17The Brooks Industrial & Research Park ....... 12Brooks Kushman P.C. .................................. 14Creative Technology Services ....................... 19Dykema ........................................................ 13Farnell Equipment Co. ................................. 20

Pfizer .......................................................... IFCPinnacle Insurance ....................................... 10Quest Research Institute .............................. 25Rader, Fishman & Grauer PLLC ................... 21Smith Haughey Rice & Roegge ..................... 17University of Michigan Department of Biomedical Engineering ..................... 31Varnum Riddering Schmidt Howlett ........... 19

Great Lakes Entrepreneur’s Quest ................ 31Henry Ford Community College .................. 21Hylant Group ................................................ 17Michigan Economic Development Corporation ............................................... 5Michigan State University ............................ 30 Midwest Cleanroom Associates ................... 17Miller Canfield ............................................. 31Oakland University .................................... IBC

4 MichBio Corporate Sponsors, Officers, Directors and Committees

11 Feature StOry:aDMetrx: technologies unique

8Feature StOry:Pfizer’s DownsizingOpens New Doors

18 MaNuFaCturiNg: Marquette’s “Pioneer” Blazing New Paths Overseas

26eNtrePreNeurS: Newcomers Find Michigan Has Much to Offer

32FiNaNCial MatterS:Show Me the Money: Venture Capital Beginning to Flow.

233615

reSearCH: Quest trials Benefit Participants

gueSt OPiNiON: Federal Funding One Key to Michigan’s New economy

MaNuFaCturiNg: State Manufacturers exploring Opportunities in Medical Devices

22reSearCH: Clinical trials industry

28teCHNOlOgy:tech transfer on the rise as Faculty Buy into Discovery

Feature stories and sidebars by Steve Raphael. Thanks to Mike DeGraaf.

The following MichBio members are featured in this issue of BioMatters:Accuri Cytometers, ADMETRx, Ann Arbor SPARK, Arboretum Ventures, Ardesta LLC, Beaumont Hospitals, Delphi Medical Systems, GlaxoSmithKline,

International Discovery Sourcing Consultants Co. (IDSC), Jasper Clinical Research & Development Inc., Kalexsyn, Inc., Michigan Economic Development Corporation (MEDC), Michigan Institute for Clinical & Health Research (MICHR), Michigan State University, Miller Canfield, Oakland University, PharmOptima, Proteos, Inc., Quest Research Institute,

Southwest Michigan First, Southwest Michigan Innovation Center, University of Michigan – Tech Transfer Office, Velcura Therapeutics, Velesco Pharmaceutical Services, Wayne State University, West Michigan Science & Technology Initiative

Subscribe to BioMatters:Visit www.michbio.org and click “Subscribe” or call 734.527.9150.

BioMatters | Fall 2008 2

With a top-notch workforce, world-class universities and a legacy of innovative entrepreneurship, Michigan

stands at the center of a vibrant life sciences industry. This vital technology sector is key to our aggressive strategy

to grow and diversify Michigan’s economy through strong partnerships between private enterprise and our top

universities and research centers. Our commercialization funding, venture capital, and other opportunities created

by the 21st Century Jobs Fund, mean Michigan will be an increasingly important life sciences center well into the future.

Michigan leads the nation as one of the fastest growing life sciences states with more than $2 billion invested

in research and development each year and more than 150 new companies since 2000. Michigan’s economic base

now includes 580 life sciences companies with $4.8 billion in sales and nearly 32,000 employees.

Our growth in the life sciences industry has exceeded that of the U.S. with a 27 percent increase in employ-

ment, 32 percent increase in the number of companies, and 165 percent increase in sales. Michigan is the No. 2

state for overall R&D expenditures, has the No. 3 university for R&D, and is the second most business-friendly state

in the nation, according to Site Selection magazine. Michigan also has invested $178 million over the past four

years to foster growth in the state’s life sciences sector and has the fourth-largest high-tech workforce in the nation.

In April, I announced a $330 million expansion in Mattawan and Kalamazoo by MPI Research Inc., a leading

provider of comprehensive preclinical research and development services. The project is expected to create 3,300

new jobs at the company and an additional 3,300 indirect Michigan jobs over the next 15 years. Pfizer plans to

donate buildings to the city of Kalamazoo to facilitate the expansion. This project wouldn’t have happened

without assistance provided by the Michigan Economic Development Corporation which helped convince the

company to choose Michigan for its expansion over competing sites in the U.S. and China.

Every day, companies like MPI Research are discovering that Michigan is better situated than any other state

to attract and retain high-tech companies. I will continue to go anywhere and do anything to ensure that Michigan

is a major player in the high-tech global economy and a recognized leader in the biosciences.

Sincerely,

Jennifer Granholm

Governor of Michigan

G O V E R N O R ’ S M E S S A G E

MichBio Members Value Community MichBio brings community to its members. When there is community, there is more for everyone to share — more ideas, more opportunity, more collaboration. Our commu-nity draws together individuals representing all facets of biosciences to ensure that Michigan is a state where biosciences companies can succeed. Our goal is to drive the growth of Michigan’s biosciences

industry by providing high-value opportunities for:

EDuCATION AND NETWORkING MichBio hosts or sponsors a variety of programs where people

can learn from experts and connect with peers and potential

business partners. These include the MichBio Expo, the state’s

largest annual gathering of biosciences professionals, the popular

MichBio Annual Meeting, regularly scheduled education and net-

working events such as BioArbor, Kalamazoo BioTuesday, Sprouts

and other single-topic workshops. Events are open to members

and non-members, with members afforded reduced rates.

LEGISLATIVE AND BuSINESS ADVOCACy MichBio leads advocacy efforts on behalf of the biosciences

community, representing members’ interests on critical issues at

the local, state and federal levels. MichBio was instrumental in

forming the State Biosciences Legislative Caucus to educate state

legislators on biosciences issues. In addition, through its affilia-

tion with the Biotechnology Industry Organization (BIO), MichBio

regularly attends BIO-organized efforts to positively impact key

congressional votes on biotechnology-related legislation.

COMMuNICATIONS A prolific communications program and website (www.michbio.org)

keeps MichBio members apprised of industry news, events and

issues. BioMatters Magazine will be followed by a second edition

in May that includes the 2009 Michigan Biosciences Directory and

Resources Guide. In the meantime, MichBio’s monthly Michigan

Biosciences LINK e-newsletter and BioBytes updates continue.

C O N T I N U E D O N PA G E 3 0


Welcome to BioMatters! It is with great pleasure and excitement that I welcome you to the inaugural

issue of BioMatters, a semi-annual magazine dedicated to showcasing the notable

biosciences industry in Michigan. BioMatters is an up-front, inside look at our state’s

biosciences community today... and a glimpse at what will be in store for us tomorrow.

In this first issue of BioMatters, you’ll find that Michigan is home to a myriad

of bioscience companies involved in R&D, manufacturing, and contract research/

support services. In addition, the state has world-class academic and clinical research

centers, including the University Research Corridor institutions, a number of private

institutes, and innovative healthcare systems. A strong and expert biomedical

talent pool supports them all. Every industry sub-sector is represented — from drugs

and therapeutics, medical devices and equipment, diagnostics and research tools,

information technology systems and software, clinical research and medical testing,

to industrial biotechnology, bio-agriculture, bio-fuels, bio-defense, and bio-environ-

mental. We are proud of our accomplishments and growth, working hard to nurture

today’s enterprises, and eager to take advantage of the opportunities that lie ahead.

Michigan is a great place to do business in the biosciences. As the many stories

in BioMatters attest, our Midwestern can-do spirit and unsurpassed quality of life as

the “Great Lakes State” is producing tangible results in new research discoveries,

technology transfer and commercialization activities. The integration of resources,

collaborative partnerships, entrepreneurial support, technology innovation, and

investment capital is the reason for the consistent growth of Michigan’s bioscience

community.

MichBio (Michigan Biosciences Industry Association), a statewide, non-profit

trade group devoted to promoting the growth of the bioscience industry in Michigan,

is pleased to present BioMatters for your review. On behalf of the state’s over 550

bioscience companies and organizations, we invite you to enjoy this glimpse of who

we are and the exciting successes being realized.

Welcome to Michigan’s biosciences — and BioMatters!

Stephen Rapundalo, Ph.D.

President & CEO, MichBio

P R E S I D E N T ’ S M E S S A G E

P R O F E S S I O N A L S TA F F

C O N TA C T I N F O R M AT I O N

Stephen T. Rapundalo

President and CEO

[email protected]

734.527.9144

Stephen Field

Director,

Operations and Controller

[email protected]

734.527.9145

Jayne Berkaw

Director,

Marketing and Communications

[email protected]

734.527.9147

Heather kusiak

Administrative Specialist

[email protected]

734.527.9150

Physical Address

3520 Green Court, Suite 450

Ann Arbor, Michigan 48105-1579

Mailing Address

P.O. Box 130199

Ann Arbor, Michigan 48113-0199

Phone

734.527.9150

Fax

734.302.4933

Website

www.michbio.org

BioMatters Next Issue: May 2009FEATuRINGl The Brave New World of Nanomedicinel Michigan’s Leading Edge Research in Bio-Agl And more stories chronicling the news, trends and issues affecting the state’s biosciences industry

PLuS the 2009-2010 Michigan Biosciences Directory and Resources Guide

IS yOuR COMPANy WORkING IN BIOSCIENCES? Now is the time to update your company information for the directory. Visit www.michbio.org and click My Account.

NOT LISTED? Add your company information now. Visit www.michbio.org, click Create an Account and fill in your company information.


CORPORATE SPONSORS

P L AT I N U M

G O L D

S I LV E R

B R O N Z E

O F F I C E R S , D I R E C TO R S A N D C O M M I T T E E S

Ricardo (Richard) Fuentes Jr.Dow Corporate Venture CapitalGlobal Life Science Investment Director

Teri GriebU of M Medical School, Office of ResearchDirector of Administration for ResearchOffice of Research and Graduate Studies

Mark kielbAltarum InstituteChief Financial Officer

Michael kurek, Ph.D.Biotechnology Business ConsultantsPartner/President

Paul MorrisLumigen, Inc.Director of Operations

Stephen Munk, Ph.D.Ash StevensPresident and CEO

Stephen T. Rapundalo, Ph.D.MichBioPresident and CEO

John J.H. Schwarz, M.D.Family Health CenterPhysician,Former U.S. Representative

Eric StiefDelphiLicensing Manager Commercialization and Licensing

karen Studer-RabelerCoy Manufacturing/Coy Laboratory ProductsGeneral ManagerVP of Business Development

David ZimmermannKalexsyn, Inc.Chief Executive Officer

COMMITTEESFacilitiesIntellectual Properties and LegislationMarketing and CommunicationsMembership and ServicesProgramsPublic Policy

ExECUTIVE OFFICERS Chairman Michael kurek, Ph.D.Biotechnology Business ConsultantsPartner/President

Vice ChairmanStephen Munk, Ph.D.Ash StevensPresident and CEO

President and CEOStephen T. Rapundalo, Ph.D.MichBio

Secretary Christina DeHayesAsterand, Inc.General Counsel

Treasurer Matthew L. McCollErnst & Young LLPPartner

Assistant TreasurerRyan Noel Division Administrator, Metabolism, Endocrinology and Diabetes, University of Michigan

DIRECTORSGregory AroninJohnson & JohnsonDirector of State Government Affairs

Dan CalvoAssay Designs, Inc.President and CEO

Linda Chamberlain, Ph.D.West Michigan Science andTechnology InitiativeExecutive Director

David Felten, M.D., Ph.D.Beaumont HospitalsVP, Research and Medical Director Research Institute

James Freeman, Ph.D.Pfizer Animal HealthVice President, Laboratory Sciences

PATRONAltarum, Ash Stevens,

Harness Dickey, LumigenFRIEND

Wayne State universityAdvantage Capital

SUPPORTERsanofi-aventis u.S.

BBC


MichiganAdvantage.org

IN A SERIES OF THOUSANDS

MEDC Asterand Ad rindd 1 9/23/08 1:53:47 PM


The state of Michigan is home to more than 500 bioscience enterprises

running the gamut of the industry from pharmaceutical companies and

medical devices, to diagnostics, bio-agriculture and nutraceuticals.

Most of the companies are clustered near universities, industry, research organizations

and government agencies with Washtenaw and Oakland counties leading in southeast

Michigan, Kalamazoo and Kent counties in Southwest Michigan, and Ingham county in

mid-Michigan.

In 1999, the Michigan Economic Development Corporation (MEDC) established a program

to identify SmartZonesSM — distinct geographical areas where technology-based businesses

locate in close proximity to community assets that assist them in their endeavors.

SmartZoneSM technology clusters help promote resource collaborations between universities,

industry, research organizations, government agencies and other community institutions,

which translates to an increase in the number of technology-based businesses and jobs.

There are currently 12 distinct SmartZonesSM in the state of Michigan and three more will

be designated in the fourth quarter of 2008.

Within those 12 SmartZonesSM are 10 business incubators, including the Southwest

Michigan Innovation Center in Kalamazoo, the Spark Business Accelerator in Ann Arbor

and the New Venture Center, part of the West Michigan Science and Technology Initiative

in Grand Rapids. Eight of the SmartZonesSM offer wet-laboratory services that life science

companies need to perform their daily business operations. Some of the benefits to

locating a business within a SmartZoneSM include: business planning, grant writing,

networking events, shared incubator and wet lab space, SBIR and STTR assistance, and

venture capital preparation and introductions. Michigan SmartZoneSM member companies

can also apply for funding from the Michigan Pre-Seed Fund, established to provide early

stage capital to high-tech start up companies for purposes of accelerating their growth

and development.

Since 2000,

112 new companies have been created, making Michigan’s biosciences industry one of the fastest growing in the nation.


123

1

11

107

26

4

9

8

5

Michigan SmartZonesSM

1 Ann Arbor SPARK

2 Battle Creek Aviation and e-Learning

3 Detroit: TechTown

4 Grand Rapids: West Michigan Science and Technology Initiative

5 Houghton: Michigan Technology Enterprise SmartZoneSM

6 Kalamazoo: Southwest Michigan Business Technology and Research Park

7 Lansing Regional SmartZoneSM

8 Mt. Pleasant: Center for Applied Research and Technology at CMU

8a Mt. Pleasant: MidMichigan Innovation Center

9 Muskegon Lakeshore

10 Rochester Hills: OU INCubator

11 Troy: Automation Alley

12 Wayne County: Pinnacle Aeropark

0

1-10

11-20

21-50

51-90

91-150

over 150

Number of Biosciences Companies

8a

FINANCIAL MATTERS


Pfizer’s Downsizing

Opens New Doors

16 CROs Spawned,

Placing State on National

Stage

FEATURE STORY


The companies couldn’t strike a deal,

but Velesco President Gerry Cox wasn’t

complaining. “David was great, he was

awesome,” he says.

Ultimately nine-month-old Velesco, a

contract research organization (CRO) like

Kalexsyn, got something better – the red

carpet treatment from CROs operating on

the west side of the state. The companies,

led by Proteos Inc., invited Cox to Kalamazoo,

provided him with support, lessons, ideas

and client’s contacts to help ensure Velesco

got off on the right foot.

“They’ve gone through a lot and

learned a lot of lessons,” Cox says. “Part

of our success has resulted from western

Michigan’s willingness to help out.”

Velesco provides drug formulation and

analytical chemistry services, special-

izing in the support of early-stage product

development work for small- and medium-

sized drug companies. Kalexsyn works

with smaller drug and biotech companies,

providing chemistry services at the start

of drug discovery.

If Michigan’s diverse biosciences

industry is going to make it with its many

fledgling companies, it will be because of

a “one-for-all, all-for-one” spirit.

“Those are the kinds of things that all

of us must look for... to build opportunities

for our companies, to build a stronger

biosciences community in Michigan,”

Zimmermann says.

David Zimmermann was in Israel last May on an ambassadorial/business mission to learn more about Israel’s booming biosciences industry and to introduce Israel to Michigan’s companies. One Israeli

company with formulation and solubility issues turned to Zimmermann, CEO of Kalamazoo-based

Kalexsyn Inc., for help. Zimmermann, in turn, suggested contacting a more fitting company, Velesco

Pharmaceutical Services in Ann Arbor.

Medical research outsourcing has

increased in recent years as big pharma’s

profits and pipelines have slowed. According

to industry analysts cited recently in Investor’s

Business Daily, between 25 and 30 percent of

R&D is now outsourced and it could go higher.

PFIZER uNLEASHES ENTREPRENEuRIAL SPIRIT To some degree Pfizer’s downsizing has

been a plus for the state’s biosciences industry.

It freed many of its scientists to discover

their entrepreneurial spirit by creating

CROs. Each scientist brought years of

experience to his or her new company and

each was acutely attuned to what the market

needs. In 2003, 16 CROs were spun out from

Pfizer, boosting the total to more than 50.

“There are a lot of niches,” Cox says.

The drug discovery timeline is long and

requires numerous and tedious steps along

the way to completing Phase III clinical trials.

For every step along the way there is a CRO

able to lend the biotech company, drug com-

pany or scientist a professional hand. A drug

or biotech company anywhere in the world,

choosing to outsource its work, can find every

thing it needs from a Michigan CRO.

Kalexsyn, Velesco, Proteos, ADMETRx in

Kalamazoo and Chelsea-based International

Discovery Sourcing Consultants Co. (IDSC)

are just five companies that rushed to fill a

niche and are generating profits as a result.

Mark Creswell left Pfizer in March 2007

to start IDSC. As a medicinal chemist, he

took with him eight scientists from Pfizer

with an average of 24 years experience

working for pharma companies. He is

president and CEO.

IDSC is a virtual, fully integrated drug

discovery partner, providing drug discovery,

development and outsourcing expertise

from discovery to pre-clinical development

to help clients deliver their medicines to

the clinic faster. The company specializes in

small molecules. At Pfizer Creswell gained

his experience for IDSC by building Pfizer’s

discovery chemistry outsourcing program.

Kalexsyn CeO, DaviD Zimmermann, (left) anD BOB GaDwOOD, fOrmeD Kalexsyn in 2003.

If Michigan’s diverse biosciences industry with its many fledgling companies is going to make it, it will be because of a “one-for-all, all-for-one” spirit.

10BioMatters | Fall 2008

OuTSOuRCING BOOSTS BuSINESS IDSC outsources its laboratory work to

other CROs, many of which are in Michigan.

It has 27 clients, four in Michigan and 23

out of state. Major clients run the gamut

from academia to biotech companies; large,

small, as well as virtual. They include Lycera,

Novel Chemical Solutions, Affinium Phar-

maceuticals and Velcura Therapeutics. IDSC

will be profitable this year and will generate

estimated revenues of $1.2 million in 2009.

Creswell is also a matchmaker, connecting

Michigan companies to IDSC’s out-of-state

companies for business.

IDSC has developed relationships with

at least six companies in Michigan, including

Velesco, MIR Preclinical Services in Ann

Arbor, TransPharm Preclinical Solutions and

PharmOptima in Kalamazoo.

Though Michigan biosciences companies

are beginning to make inroads with com-

panies in other states, “We have a ways to go,”

Creswell says. “A variety of things need to

come together, and despite a nice pool of

venture capital here we need to lure more

venture capital into the state.”

PROTEOS IN THE MIDDLE OF THINGS EARLy When scientists enter the very first steps

of discovery, Proteos Inc. is right there with

them serving as an extension of its clients’

laboratories, says Clark Smith, president and

CEO of the five-year-old Kalamazoo company.

Proteos is the Greek word meaning

“of the highest importance” and is the root

word for protein, so it’s not surprising that

the company’s emphasis is on proteins as

drugs and drug targets.

It provides custom services in protein

expression (tricking cells into producing

the desired protein) and production, protein

products and translational research for

commercialization. Protein products include

recombinant human renin, which is a blood

enzyme, and prorenin that could be involved

in obesity. “People are just figuring out how

important it is,” Smith says.

The company produced a protein for

acute coronary systems for Ann Arbor-based

AlphaCore Pharma, a biotech company that

Targetand

Model Validation

Chemistry Selection and

Characterization

Preclinical Pharmacology and

Toxicology

Development Pharmacology and

Safety

ClinicalDevelopment and

Medical Affairs

Patient useand Post-Market

Activities

Michigan CRO Companies Cross All Phases of the Pharmaceutical R&D Life Cycle

FEATURE STORY

Insurance

CreativeThinkingClient Focus

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Intellectual Property Clinical Trials Liability

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11

needed the protein for research purposes.

A synthetic organic chemist and director

of protein sciences for 20 years at Upjohn,

Smith started Proteos in 2003 with seven

founding members, all pharma alums.

Today the company employs 18 people. “I

hired my current staff when I was at Upjohn

and then hired them again for Proteos,” he

says. The company recorded more than $3

million in sales last year and was growing

at 20 percent annually until this year, when

the general economy suffocated growth.

Proteos boasts 120 clients, including drug

companies and universities. Despite the fact

that the overwhelming majority of its clients

are located out of state, Smith is extremely

bullish about the state’s biosciences industry

thriving in the future despite a shortage of

venture capital.

STATE CROs CAN DO EVERyTHING “Any number of companies are here that

represent the entire line of drug discovery

work,” he says. Out of state companies “can

create their own virtual company by coming

to Michigan and contracting out all of their

work, from discovery through at least

Phase II clinical trials.”

Smith hinted that his company has

developed an intellectual property product

that, “If it works, it will bring a lot of

money into Michigan. It could change

the course of this company.”

Kalexsyn’s Zimmermann is a medicinal

chemist who worked for the state’s largest

drug makers for 23 years, including

supervising the outsourcing of medicinal

chemistry for the company.

The job led him to understand the

client’s needs in the client-company

relationship, valuable information he took

to heart when he and Robert Gadwood,

also a medicinal chemist started Kalexyn

in 2003. Experience, service and commu-

nications became Kalexsyn’s philosophical

business foundation.

Company research capabilities include

medicinal chemistry, molecular modeling,

scale up and process improvement. That

expertise draws companies to us that “need

a certain compound made,” Zimmermann

says, noting that “true medicinal chemistry

experience is more than a synthetic chemist

who has made a biologically active molecule.”

kALExSyN GROWS AND GROWS It took only four years for Kalexsyn

to outgrow its space at the Southwest

Michigan Innovation Center. Last year

the company opened a $5 million,

20,000-square-foot facility in Western

PfiZer’s DOwnsiZinG allOweD many Of its sCientists tO DisCOver their entrePreneurial sPirit By CreatinG CrOs.

A drug or biotech company anywhere in the world, choosing to outsource its work can find everything it needs from a Michigan CRO.

ADMETRx Technologies unique Kalamazoo-based ADMETRx has developed

advanced techniques, technologies and more

effective predictive tools to help its drug

company clients determine in discovery and

pre-clinical trials the efficacy of its clients’

compounds.

The company focuses on ADME properties

(absorption, distribution, metabolism and

elimination), focusing on drug deliverability.

ADMETRx wants to determine what the drug

does to the human body.

“Our commitment is to ensure that the

potential of each of our client’s compounds

is crystal clear,” says ADMETRx CEO and CSO,

Phil Burton. “Our findings allow our clients

to make informed decisions about their drugs.”

Burton says it’s the way ADMETRx interprets

the data back to the clients, with attention

to detail, combined with its ADME expertise

that has resulted in a more effective means

of problem-solving in drug discovery.

Burton and co-founder Jay Goodwin are

former Pfizer scientists who, following their

layoffs five-years ago, founded ADMETRx.

The company, which had a profitable 2007,

employs seven full-time and 10 part-time lab

and clerical workers, with drug industry experi-

ence totaling 150 years. Of the company’s 35-40

clients, five or six are in Michigan, with the

remainder based on the West and East coasts

and the Research Triangle Park in North Carolina.

“Clients tell us it would be easier (for us)

to get more business if we had a local office,”

Burton says. Despite the greener pastures of the

coasts Burton says that by stressing consistent

communications with clients his company has

no need to go anywhere. “Proximity isn’t that

big a deal anymore.”


Jay GOODwin anD Phil BurtOn.


Michigan University’s Business Technology

Research Park. The building currently has

capacity for 32 scientists with enough lab

space to accommodate 24 more. Kalexsyn

employs 30 people, including 22 bench

scientists. Revenues will hit $5 million this

year, and the company has been profitable

the last three years, Zimmermann says.

“If at first you don’t succeed, try, try

again” has not always been the mantra

of drug companies along the drug discovery

continuum. It’s often the opposite. A

compound that flies right through Phase I

clinical trials but fails in succeeding trials

often winds up in the garbage bin, despite

the promise that it could have been a future

blockbuster.

“The failure rate of compounds and

drugs at biotech and pharma companies

is huge,” he adds. The service side of bio-

sciences, the CROs, “have recorded strong,

sustainable double-digit growth” in recent

years with the forecast equally as sunny

in the foreseeable future. “Let the pharma

companies take the risk and roll the dice.

We get to play with everyone,” he adds.

Velesco assists its clients in its pre-

clinical work as its clients head into first

human trials. The company was formed

in early 2008 by Cox, COO, and former

senior finance director for Pfizer’s Michigan

operations, and David Barnes, CEO, and

a former Pfizer scientist. At Pfizer Barnes,

moved compounds through the drug

development process.

“We didn’t get our labs up and running

until spring,” Cox says, noting his company

also won a $450,000 Michigan Economic

Development Corp. grant. Velesco has built

up a strong base of five or six in-state clients

and hired six people. Cox and Barnes are

busy courting new business on the East and

West coasts. “We have to build our business

outside of Michigan,” Cox says.

FEATURE STORY

miChiGan CrOs sPan the sPeCtrum Of the PharmaCeutiCal r&D PiPeline.

“A variety of things need to come together, and despite a nice pool of venture capital here we need to lure more venture capital into the state.”

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GOT BIOTECH?

Michigan Office: 1000 Town Center, Twenty-Second Floor, Southfield, MI, 48075-1238 Phone: 248-358-4400California Office: 6100 Center Drive, Suite 630, Los Angeles, CA, 90045 Phone: 310-348-8200

I N T E L L E C T U A L P R O P E R T Y A N DT E C H N O L O G Y R E L A T E D C A U S E S

Mark MizrahiB.S. Genetics Biotech patent & litigationexperience

Stephanie MansfieldPh.D. Biomedical EngineeringBiotech/biomedical patentexperience

James ProsciaPh.D. Chemical PhysicsFormer Intellectual PropertyAttorney, Pfizer

Susan BanksPh.D. Immunology & MicrobiologyFormer Regulatory, Compliance & Science Officer, FDA

Zoe ChenPh.D. Physical ChemistryFormer Research Scientist,Nanotherapy,University of MichiganFluent in Russian & Hebrew

Tom CunninghamM.S. Molecular BiologyBiotech litigation experience

Junqi HangPh.D. Biochemistry & PhysiologyFormer Senior Scientist, PfizerFluent in Chinese

William CongerM.S. ChemistryFormer Director of Patents,BASF

Sangeeta ShahB.A. ChemistryChemical patent & litigationexperience


“I retrained myself,” says Nesky, medical

account manager of Kentwood-based

Autocam Medical, a contract manufacturer

for OEMs that assembles high-precision

components, instruments, implants and

hand pieces for a wide variety of medical

applications. Preaching caution, he adds

it would be difficult for companies “doing

other things to transition themselves into

medical devices.”

Difficult, but not impossible.

“We see (medical devices) as an

opportunity for growth and expansion,”

says Al Hoffmann, director of sales and

marketing for Delphi Medical Systems,

a Delphi Corp. subsidiary in Troy. “We have

a mix of automotive people and people from

the medical industry to bring it all together.”

The “it” is contract manufacturing for

20 clients and its own three medical device

product lines.

WEST SIDE COMPANIES BANDING TOGETHER There’s no doubt in the mind of Linda

Chamberlain that medical devices represent

a bright future for those companies taking

the plunge. Nor is there doubt in the minds

of the 22 medical device-related companies

that joined the West Michigan Medical Device

Consortium that began last December. The

consortium represents companies on the

west side of the state.

It was created to focus on product inno-

vation, business collaboration, advancement

of lean manufacturing technologies, business

attraction, marketing, public relations and

networking. Leading the effort is the West

Michigan Science & Technology Initiative.

Chamberlain is executive director of WMSTI

and coordinates the consortium.

Michigan’s giant device manufacturer,

Kalamazoo-based Stryker Corp. is not a

MANUFACTURING

consortium member but is “graciously

participating with us,” Chamberlain says.

The 22 members have expertise in

stamping plastic parts, packaging and mold-

ing. Others make cardiac surgical disposal

products and handheld dose calculators.

Some members distribute walkers and beds

and some are in the early product develop-

ment stage. The majority of members have

manufacturing bases all of which must

generate revenues in the medical devices

industry.

State Manufacturers Exploring

Opportunitiesin Medical Devices

Robert Nesky has been there and done that so he’s the perfect man to answer the burning question: Can Michigan’s financially struggling

manufacturing companies convert some of their human resources and plant capacity into medical

device production and do it successfully?

“manufacturers are inter-ested in learning more about medical devices, from design engineering to regulatory and manufacturing excellence.

GOT BIOTECH?

Michigan Office: 1000 Town Center, Twenty-Second Floor, Southfield, MI, 48075-1238 Phone: 248-358-4400California Office: 6100 Center Drive, Suite 630, Los Angeles, CA, 90045 Phone: 310-348-8200

I N T E L L E C T U A L P R O P E R T Y A N DT E C H N O L O G Y R E L A T E D C A U S E S

Mark MizrahiB.S. Genetics Biotech patent & litigationexperience

Stephanie MansfieldPh.D. Biomedical EngineeringBiotech/biomedical patentexperience

James ProsciaPh.D. Chemical PhysicsFormer Intellectual PropertyAttorney, Pfizer

Susan BanksPh.D. Immunology & MicrobiologyFormer Regulatory, Compliance & Science Officer, FDA

Zoe ChenPh.D. Physical ChemistryFormer Research Scientist,Nanotherapy,University of MichiganFluent in Russian & Hebrew

Tom CunninghamM.S. Molecular BiologyBiotech litigation experience

Junqi HangPh.D. Biochemistry & PhysiologyFormer Senior Scientist, PfizerFluent in Chinese

William CongerM.S. ChemistryFormer Director of Patents,BASF

Sangeeta ShahB.A. ChemistryChemical patent & litigationexperience


In early September the consortium hosted

a half-day conference “absolutely geared

to manufacturers” interested in learning

more about opportunities in medical device

manufacturing, Chamberlain says. More

than 150 attended the event.

MANuFACTuRERS WANT TO GET IN THE GAME She adds that “manufacturers are inter-

ested in learning more about medical devices,

from design engineering to regulatory and

manufacturing excellence. Companies call,

wanting to understand what they need to

learn.”

Creative Technology Services (CTS) in

Canton is a contract assembly and supply

chain manager company for its clients. It

is particularly skilled in the assembly of

sophisticated electro mechanical devices.

The company might be best known for

helping build the iBOT®, a mobility device

for the disabled, developed by Independence

Technology, a Johnson & Johnson company,

and DEKA, founded by Dean Kamen,

inventor of the Segway.

Though it boasts non-medical, as well

as medical clients, Jim Smyth, CTS’s vice

president of sales calls the company’s

medical device capability “our sweet spot.”

In the last two years CTS has more

than doubled in size in the medical device

arena alone.

It is building new product lines, medical

and non-medical, and adding sub-assemblies

for several new clients it has won in the past

two years.

The company employs 80 people, plans

to hire more and is profitable, though Smyth

declined to reveal net income or sales figures.

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Creative teChnOlOGy serviCes was COntraCteD By inDePenDenCe teChnOlOGy, a JOhnsOn & JOhnsOn COmPany, tO manufaCture the inDePenDenCe® iBOt® 4000 mOBility system, the wOrlD’s mOst aDvanCeD anD sOPhistiCateD multi-funCtiOnal mOBility DeviCe.

Though it boasts non-medical, as well as medical clients, Jim Smyth, CTS’ vice president of sales calls the company’s medical device capability “our sweet spot.”

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Marquette’s “Pioneer” Blazing New Paths Overseas

MANUFACTURING

A courtesy extended by a Northern

Michigan University professor to Pioneer

in 1992 has blossomed into an invaluable

collaborative relationship for the company,

the university and its students.

“They were a fledgling company…

they didn’t have sophisticated equipment

for testing,” says Thomas Meravis, a now retired professor of

manufacturing at Northern Michigan University. “So we opened

our material testing lab and allowed them to test their initial

cable system.”

Meravis started a one-year numerical controls certificate

program to supply Pioneer with skilled employees. Perhaps as

many 50 students “have gone through the program,” he says.

Pioneer also hires students from NMU’s four-year technology

mechanic engineering program. It provides scholarships and

internships for students, as well as equipment to the manufac-

turing department.

The job opportunities at Pioneer go a long way to ensuring

that the region’s brightest youth

can stay in the community after

college and hold meaningful

employment, a result of the

alliance that Songer calls

“very rewarding.”

Tucked away in the spectacular beauty of Michigan’s Upper

Peninsula in Marquette sits one of the most successful medical

device companies in Michigan, if not the nation, and soon

enough, the world. Its name is Pioneer Surgical Technology Inc.

Just 16 years old, Pioneer has built a worldwide empire

on high-quality spinal products and owns three divisions —

orthopedic, spinal and biologic.

The company was started in 1992 by Dr. Matthew Songer,

an orthopedic surgeon and his father, Robert, a retired

engineer, now deceased. The pair sought innovative ways to

improve operating room times and patient outcomes and today

is considered national leaders in the design and manufacture

of spinal and orthopedic implants and instruments.

Vertically integrated, Pioneer can take an idea from the

drawing board to the marketplace. It has been awarded more

than 50 American and foreign patents, and its programs and

processes are ISO certified.

“We focus on the next generation of technology,” Songer says.

In September the FDA gave Pioneer approval to market

FortrOss, a bone graft substitute, produced using nanotechnology.

The Chinese equivalent of the FDA has

given Pioneer the green light to begin

distributing its products.

Already operating in the global

marketplace, Songer says, “We

want to spread more globally.”

Pioneer’s Netherlands subsidiary

is distributing throughout Europe the NuBac, a nucleus

replacement device for the spine that restores height

and preserves motion without having to fuse the spine,

formerly an invasive procedure. NuBac is available only

in Europe while the equivalent of Phase 3 clinical trials

are underway in America.

The company is expanding domestically, as well. Last

year it enlarged its Marquette manufacturing plant to more

than 110,000 square-feet, from about 70,000 square-feet.

It employs 275 people, including 250 in Marquette, and is

always hiring, Songer says.

Songer says he recently dreamt that Pioneer would some-

day rack up $100 million in sales, a dream that will come true

in 2010 when the company returns to profitability. Investing,

expanding and hiring have cut into profits in recent years.

Dr. matthew sOnGer


FOCuSED EFFORT PAyING OFF FOR CTS A focused team enabled CTS to build

its business. It won FDA approval and holds

ISO 13485 certification, the international

quality standard for medical device manu-

facturing. To win approval and certification

the company had to make huge investments

in infrastructure, such as developing cus-

tomer service, document control depart-

ment capabilities and complaint handling.

“Medical manufacturing is different

than automotive,” says CTS President and

CEO Don Leith. “Because you are dealing

with people’s health, the potential is there

for someone to be injured” and that means

government oversight. “It took us a long

time and a lot of effort to make” approval

and certification happen.

“We understand compliance for the

medical device marketplace,” he adds. “I make

companies aware of our infrastructure because

it is a differentiator. Potential clients recognize

the stringent nature of our quality process.”

The company has talked to manufac-

turers about the feasibility of entering the

medical device field.

DELPHI AuTOMOTIVE’S NEW PARADIGM — MEDICAL DEVICES Nine years ago Delphi Corp. manage-

ment commissioned a study, looking for

areas to diversify into that offered growth

potential, Hoffmann says.

Delphi Medical Systems was created and

is now involved in four different business

segments: contract manufacturing, infusion

equipment, portable oxygen concentrators

and remote patient monitoring. In 2004, it

won a major contract to assemble systems

and components for Sunrise Medical Corp.

in Carlsbad, CA.

The lions’ share of product develop-

ment is conducted in Troy by 50 engineers

devoting themselves to nothing else but

marketing. All sales and marketing are

done in Michigan, though Delphi does not

manufacture its products in Michigan.

Though the jury is still out about rev-

enues and profitability, they’ll know better

in two years. “The goal is to bring Delphi

(Medical) products to market and that is

what we are doing now,” Hoffman says.

“We are expanding into global markets,”

he added. “We just invested about three

years developing products to sell in late

2008 and 2009, and we firmly believe

MANUFACTURING

Being an auto supplier helps Delphi Medical Systems pitch clients, as the “standards for reliability and durability in automotive are really high and this plays well.”

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(Delphi Medical) will grow and prosper.”

Being an auto supplier helps Delphi

Medical Systems pitch clients as the

“standards for reliability and durability

in automotive are really high and this plays

well with its potential clients,” Hoffmann

says. So does the auto industry’s intense

focus on technology, engineering and design

that are cornerstones of medical device

manufacturing, he adds.

Medical device manufacturing “repre-

sents an interesting opportunity for any of the

Michigan automotive companies,” Hoffman

says. “There is a learning curve and the de-

gree is related to where that company wants

leveraging our technology for medical

devices,” Nesky says.

In 1993, Autocam bought a medical

device facility in Hayward, CA, and created

Autocam Medical. It also owns plants in a

Plymouth, MA and Kentwood, MI.

The medical device manufacturing

industry requires different equipment,

volumes, technology and quality standards

than what the auto suppliers are held to

Nesky says.

Despite that, he notes there are great

opportunities in medical devices – which

run the gamut of products – from hospital

beds to needles and syringes – because

devices can be brought to market quickly

and more inexpensively than pharmaceutical

compounds. “Michigan understands

manufacturing,” he adds.

to position itself in the medical industry.”

“A component supplier could translate its

skill sets quickly but a product supplier will

have to learn new skill sets,” Hoffman says.

AuTOCAM GROuP MOVES INTO MEDICAL DEVICES Autocam Medical makes products for

three health sectors, cardiovascular, oph-

thalmology and orthopedic, and is getting

more involved in spine and extremities,

Nesky says. It employs 150 people and is

registering growth, compounded annually

at 20 percent.

Autocam Group of companies began

operations 20 years ago and has built a

reputation on the quality of its precision

metal components solutions. Autocam

Medical relies on its parent’s reputation

in its pursuit of clients. “We are machinists

“We are machinists leveraging our technology for medical devices”

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BioMatters Tells Michigan’s Biosciences Story Tell us what you’d

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NExT ISSuE: May 5, 2009 CONTENT DEADLINE: February 20, 2009

Send ideas to: Jayne [email protected]


Clinical Trials Industry Deep, Broad and People-Centered

Michigan’s clinical research trials industry is as deep as it is broad. The state boasts private companies, hospitals and medical centers conducting

trials in different ways on different populations, healthy and sick, with impressive results.

The presence of the clinical trials industry under the biosciences umbrella is good news business-wise for those biosciences companies that can market their services and products to the R&D industry. “Any time we do a study sponsored by another state or (company), it brings in dollars that could have easily gone some-where else,” says Dean Knuth, president and CEO of Jasper Clinical Research & Development Inc. in Kalamazoo. “And forget competing with Florida, now we’re compet-ing with China and India.”

Privately owned Jasper specializes in Phase I and IIa clinical studies, involving primarily healthy people and a small number of patients. Other major players in clinical trials are: l William Beaumont Hospital in Royal Oak emphasizes translational research where hospital doctors move their research findings to the patient’s bedside. l The Michigan Institute for Clinical and Health Research (MICHR) at the University of Michigan specializes in translational research, clinical trials and compound development, among other scientific trials-related ventures.l Privately owned Quest Research Institute in Bingham Farms collaborates with local physicians, national pharmaceutical and biotech companies, and occasionally the National Institutes of Health to conduct Clinical Phase Ib-IV Trials on patients with medical conditions.

All four are generating huge revenues, and Jasper and Quest are profitable.

NO PLACE LIkE HOME AT BEAuMONT When it comes to performing clinical trials at William Beaumont Hospital, there’s “no place like home,” says Dr. David Felten, Beaumont’s vice president for research and medical director of the hospital’s research institute. “Our doctors are not engaged in theo-retical research; they are engaged in taking care of patients,” Felten says. “Our doctors are thinking clinical, clinical, clinical...that’s what they do.” The research numbers at Beaumont Hospital are impressive. Currently more than 300 investigators in more than 35 depart-ments are conducting at least 900 active research studies. Nearly 50,000 registered Beaumont patients participate in ongoing clinical trials. The hospital receives $30

BeaumOnt DOCtOrs are usinG Ct sCanninG Of the COrOnary arteries in Patients with Chest Pain tO DiaGnOse seriOus COrOnary PrOBlems anD initiate urGent interventiOns in thOse whO neeD it.

“Our doctors are not engaged in theoretical research; they are engaged in taking care of patients,” Felten says. “Our doctors are thinking clinical, clinical, clinical...that’s what they do.”

RESEARCH

million annually in research grants from a combination of sources – the NIH, foundations and commercial sources. “We have never at-tempted to be a grant-getting machine,” Felten says. “It is not a means to an end. We think of NIH funding in the same vein as commercial funding,” to support patient-related research. “The research program grows directly out of our commitment to high-quality patient care.” Beaumont’s past research success has re-sulted in the following medical improvements:l Advanced, precision radiation technology, significantly reducing the time and expense of treating breast cancer; l CT heart scanning that is more accurate, less intrusive, faster and less costly than the standard diagnostic testing for emer- gency room chest pain patients, and l Novel methods to treat painful conditions of incontinence with high-tech implanted devices. In addition to being a clinical trials site, Beaumont is the lead investigative entity conducting one clinical trial nationally at 51 centers in Michigan and nationwide. Beaumont doctors are using CT scanning of the coronary arteries in patients with chest pain to diagnose serious coronary problems and initiate urgent interventions in those

who need it, Felten says. The scan provides “quick and accurate information to determine which patients need intervention” and which do not, he adds. The procedure is cost effective and Felten believes that it is likely to become the national standard of care for evaluating chest pain.

Ct heart sCanninG that is mOre aCCurate, less intrusive, faster anD less COstly than stanDarD DiaGnOstiC tests fOr Chest Pain Patients in the er.

Quest Trials Benefit Participants Dolly Niles bought 12-year-old Quest Research Institute from its original owner

two years ago. She has maintained the company’s niche, conducting Phase 1 through

Phase IV patient studies of existing compounds, primarily on volunteers with a medical

condition. Company clients include Merck, Pfizer and QuatRx Pharmaceuticals in Ann

Arbor. “We have participated in investigator-initiated research, but our current docket

only includes clinical trials sponsored by drug companies,” she says.

The company’s areas of expertise are internal medicine, neurology and the growing

area of women’s health.

Some early phase studies “last only a few days and will not provide long-term

relief for a patient, but later-phase studies certainly can,” Niles says. The duration of

a research study can span days, weeks or even months. Quest Research did a study of

an Essential Tremor drug that ran for two weeks and a three-year study on a treatment

for obesity.

Niles employs eight people full time, including five clinical coordinators and

contracts with seven local doctors. Company revenue runs $1-2 million annually.

The company has 15-20 studies ongoing at any given time.

Some of Quest’s participants come from the underserved population with few or no

health insurance benefits. Those participants get a modest stipend for participating in

a Quest clinical trial, a physical exam and some direction in dealing with their illness.

Others are exploring their options. “We like to market that we are providing access to

new treatments, such as Parkinson’s disease,” Niles says. “A lot of people are looking

to try something different if other drugs aren’t working.”

Niles makes it a point to reach this population through community education

programs, broadcast and print advertising. “Sponsors like to hear that we have local

ties to the community,” she says. “We need to do a better job educating the community

on the opportunities in research, particularly in a state where we hear about people

losing medical coverage every day.”

Accessibility to small companies such as Quest Research Institute and Jasper Clinical

R&D (see next page) “allow small biotech companies to explore a compound at the early

stage and then involve a big player when there is proven promise in the compound,”

she says.

Further, Quest and Jasper are tailor-made for Michigan’s smaller biotech companies

so both are close to their clients, making for convenient monitoring and partnership,

“not to mention that the (biotech) companies’ money stays in state,” she says. “One

of our corporate strategies this year is to ensure Michigan companies doing clinical

research know about our site and our offerings to keep the business in the state.”

DOlly niles (riGht) anD Kara BarDram



BEAuMONT AND OAkLAND uNIVERSITy TO SEEk CANCER DESIGNATION As Beaumont and Oakland University establish their medical school they plan to secure a Comprehensive Cancer Center designation from the National Cancer Institute. “We intend to establish a Phase I oncology drug development program to enhance the Beaumont-initiated pipeline of potential chemotherapeutic agents for treating cancers,” he says. Felten joined Beaumont three years ago following a distinguished academic and clinical career that included serving as the lead investigator on a University of Rochester medical team breakthrough research program that spanned the late 1980s into the early 1990s. The findings unequivocally established the connection between the brain and the immune system. For his work Felten won the prestigious MacArthur Foundation Award, often referred to as the “genius award.” “I’ve been in academics for more than three decades and this is the most satisfy-ing experience I’ve had; being able to see the strong impact on patient health,” he says. Most of Jasper’s studies involve inpatient stays ranging from a couple of days to as long as 25 consecutive days. The company con-ducts more than 25 studies each year, typically involving from 10 to 50 healthy volunteers. Sponsors include the largest pharmaceuti-cal companies, start-up biotechs with two employees, diagnostic and device companies. The company has done “relatively little grant-funded work,” Knuth says.

JASPER TRIALS uSE STATE-OF-THE ART SCIENCE Jasper’s success is based on a new clinical trials model based on modern scientific tools, such as biomarkers and genetics that, when ap-plied in novel ways, allows Jasper to move faster and generate better quality clinical information for making decisions as to whether the develop-ment of a new drug should continue. The specific makeup of each volunteer’s biology makes him react differently to drugs, and these differences can now be quantified, as well, Knuth says. Jasper was founded in 2003 by Pfizer scientists surprised by the company’s

decision to exit drug discovery and clinical development in Kalamazoo. Most of Jasper’s revenues come from out-of-state companies, including a number of international clients, Knuth says. The company employs 100 people and saw revenues grow by 20 percent last year. Knuth dismisses the notion that Michigan needs large biotech drug discovery compa-nies to propel the state’s biosciences industry into national prominence. “Once these companies make a discovery it gets expensive for them to maintain the jobs, especially if a large national company buys them,” he says. “The kinds of jobs that (biosciences) service companies provide remain here.”

STATE’S BIOSCIENCES INDuSTRy CAN DO IT ALL Knuth envisions a state biosciences industry interconnected with one another, to offer the complete range of services needed for a vibrant industry. “We can grow as niche industries but there is a tremendous opportunity to link across related industries,” he says, “such as those that perform pre-clinical and clinical testing, statistics,” analytical chemistry, outsourcing and program management. “It can all be done in Michigan. The whole clinical research and development process – access to patients and

specialists with the right clinical study staff, the right facilities, and the right technology at the right price – is here.” A lot of state companies are looking for alternatives to big (national) contract research organizations. There is no set script and every-one is trying to figure it out, he adds. Knuth believes it is time to involve major insurers in designing, funding and conducting clinical studies that have the potential to provide the insurers with considerable near-term cost savings while significantly improving patient outcomes. The University of Michigan is the center of the research world in Michigan. At the medical school alone 1,100 doctors and scientists are involved in clinical and translational research, supported by more than $340 million in research funds, includ-ing NIH grants that totaled $280 million last year. And that’s just the medical school. Research is a way of life at the university’s engineering, nursing public health, dentistry and pharmacy schools, as well as the Biosciences Institute. But clinical research is only the tip of the research-oriented iceberg.

EVEN MORE TO CLINICAL TRIALS AT u-M The university has “an entire continuum of research... much broader” than clinical research and clinical trials, says Dorene Markel, director of clinical translation research at the Michigan Institute for Clinical and Health Research (MI-CHR). “We will take on clinical research if it gives our patient access to drugs or therapy; it allows researchers have access to a company to develop a relationship and fund our stuff. They want our brand. “Scientists are as likely to study the disease process and how drugs metabolize in

As Beaumont and Oakland University establish their medical school they plan to secure a Comprehensive Cancer Center designation from the National Cancer Institute.

nearly 50,000 reGistereD BeaumOnt Patients PartiCiPate in OnGOinG CliniCal trials.

RESEARCH


the body,” Markel says, research that eventu-ally could lead to discovery of a compound. In an “academic institution you broaden things,” Markel says. “There are so many other things to study to actually change and improve healthcare. We have people who do everything.” Perhaps Michigan’s most famous clinical trial occurred 55 years ago when the School of Public Health announced that its trials confirmed that Jonas Salk’s dead virus polio vaccine could stop polio. To support its physicians and scientists the university created MICHR in 2006. MICHR functions as a contract research organization. Its 100 employees are skilled in a variety of research-related support services, such as biostatistics, informatics and data coordinating centers so as to run multi-site clinical trials. “We can help researchers develop their own ideas, write proposals for funding and then do the pre-clinical and clinical leg work for clinical trials,” Markel says. In the past a scientist with an idea created his own small

staff, most likely unskilled or inexperienced in the nuances of the grant business to do the same thing, she adds.

NIH GRANT RECOGNIZES u-M ROLE IN RESEARCH CHANGES And things should only get better, not just for the university but the state’s biosciences community. In September 2007 NIH, acknowledging the role MICHR was playing in strengthening university research, awarded MICHR a $55 million Clinical and Translational Science Award (CTSA) spread over five years. The award was the third-largest in the university’s history and the

largest NIH award ever to a medical school. The award symbolizes NIH’s para-digm shift regarding research support and acknowledges Michigan’s role in that shift. For years NIH put its money behind basic research, neglecting those scientists who could take their bench knowledge to the hospital bed, Markel says. Michigan created its research infrastructure through MICHR, and CTSA money allows MICHR to strengthen the infrastructure even more. With its CTSA award Michigan joined 33 other elite medical centers as part of a national initiative to transform how clinical and translational research is conducted. CTSA membership translates into prestige, respect and business for biosciences, Markel says. “There will be have and have-not (universities),” she adds “If you were a com-pany wanting to engage a university in clinical trials or research where would you go? Having CTSA is critical for the image of biosciences in the state and will help our faculty bring in their own grants from more sources.”

“The whole clinical research and development process — access to patients and spe-cialists with the right clinical study staff, the right facilities, and the right technology at the right price — is here.”

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are important in the progression of cancer

and inflammatory diseases.

Emiliem was doing just fine in

Emeryville, CA, says President and CEO,

Johnson, who realized his company could

do even better in Kalamazoo, after talking

to David Zimmermann, CEO of Kalamazoo’s

own start-up, Kalexsyn. Johnson also is

president of ddplatform LLC, a biotechnology

incubator and technology generator that

played a major role in Emiliem’s formation.

Newcomers Find Michigan Has Much to Offer

ENTREPRENEURS

Once a mainstay in the biosciences hotbed of northern California, Emiliem, Inc. is now headquartered in the west Michigan commu-nity of Kalamazoo. Created by Grand Rapids native and highly respected scientist Dale

Johnson, Emiliem is a developmental stage biotechnology company, focusing on the discovery and

development of molecularly targeted oncology drugs and other proliferate and inflammatory diseases.

emiliem PresiDent & CeO, Dale JOhnsOn, met with university Of miChiGan GraDuate stuDents fOllOwinG a seminar he COnDuCteD at the COlleGe Of PharmaCy, a Benefit tO BOth teaCher anD stuDents Of JOhnsOn resiDinG in the state.

“David came out to California and

showed us what (Kalamazoo) was doing,”

says Johnson who then did his due diligence

and moved Emiliem’s headquarters to

Kalamazoo nearly three years ago.

“We were convinced that we could create

a ‘virtual’ approach to discover and develop

new molecular targeted therapeutics,” he says.

“Other companies were using this approach

for drug development, and we wanted to be

the first group that combined both discovery

and development in this mode.”

Emiliem operates a business hub in

San Francisco that provides it with business

law, intellectual property and financial

support. It also owns a commuter IT hub

in Emeryville, across the Bay Bridge from

San Francisco, that serves as the company’s

direct link into Bay area universities, par-

ticularly offices of technology transfer, and

other biotechnology companies with whom

it discusses collaborative initiatives.

“We assessed all innovation centers that we felt were appropriate and in operation at that time,” eliminating the San Francisco Bay area, India and China’s east coast…”


He received a Bachelor of Science degree

and Pharm.D degree, completing a clinical

pharmacy residency and receiving the

Roche National Research Award and the

Squibb National Resident of the Year Award.

Johnson has 30 years of experience in

biotechnology and pharmaceutical research

and development activities, all while work-

ing for a who’s who of American science

companies. He has led and managed groups

ranging from small units in start-up compa-

nies to multi-national units in large corpo-

rations. He’s participated in the research and

development of more than 100 compounds,

of which 15 have become marketed health-

care medicinal products and vaccines in

the United States, Japan and Europe.

Johnson was vice president of drug

assessment and development at Chiron

Corp., also in Emeryville, when he decided

in 2005 to leave Chiron to start Emiliem. He

was joined by colleagues Sucha Sudarsanam

and Edwin Ching. They incubated Emiliem,

using ddplatform, creating intellectual

property and proprietary software.

Despite being happily ensconced in

Kalamazoo, Johnson clearly sees that money

will determine the future of biomedical

research in Michigan.

Johnson says he was looking for an “on-

the-ground” R&D hub, allowing Emiliem to

expand as it approached clinical trials with

its lead compounds.

“We assessed all innovation centers that

we felt were appropriate and in operation

at that time,” he says, eliminating the San

Francisco Bay area, India and China’s east

coast. “Since a great deal of our collabora-

tive and service work was being done in the

Midwest (Michigan collaborators include

Kalexsyn, MIR Preclinical Services and

Van Andel Research Institute), we searched

for a convenient location that also had

experienced people in pharmaceutical R&D.

Southwest Michigan turned out to fit the

requirements very nicely.”

State money helped Emiliem, which

received a Pfizer retention loan, as well as

pre-seed investment money from Ann Arbor

SPARK. The company hired two former

Pfizer/Pharmacia/Upjohn employees, Diane

Beuving and Donna Romero. “Finding two

new members of this caliber for our man-

agement team says it all,” Johnson adds.

Paul Neeb from Southwest Michigan

First spearheaded the state loan and Sandra

Cochrane, then the COO of the Southwest

Michigan Innovation Center, and Skip

Simms of Ann Arbor SPARK spearheaded

the pre-seed investment.

What “really had the most influence

on our decision,” Johnson says, was the

continuing contact he had with Cochrane.

It didn’t hurt Michigan’s chances that

Johnson is from Michigan and holds three

degrees from U-M, including a PhD in

toxicology where he was an AFPE Fellow.

Johnson advises start-up companies to get sufficient capital to ensure a realistic exit strategy and make sure there’s an understanding of how to estimate company valuation at exit.

Start-up life science companies that

discover and develop drugs do not fit the

standard business model of the state, he

says. That’s because unlike manufacturers,

“life sciences companies are long-haul com-

panies that generate no short term revenues,

manufacturing or commercialization.”

Factor in lengthy and costly clinical drug

trials that could lead nowhere and it’s obvious

why investors shy away from putting their

money into start-up companies, he says.

Johnson advises start-up companies to

get sufficient capital to ensure a realistic

exit strategy and make sure there’s an

understanding of how to estimate company

valuation at exit.

JOhnsOn has 30 years Of exPerienCe in BiOteChnOlOGy anD PharmaCeutiCal researCh anD DevelOPment aCtivities, all while wOrKinG fOr a whO’s whO Of ameriCan sCienCe COmPanies.

“We searched for a convenient location that also had experienced people in pharmaceutical R&D.” “Southwest Michigan turned out to fit the requirements very nicely.”

TECHNOLOGY

Tech Transfer on the Rise as Faculty Buy Into Discovery


Jeff LaBine has been busier than ever lately; and so have ken Nisbet, Mike Poterala and Fred Reinhart.The four work in the futuristic

scientific world of technology

transfer and intellectual

property and are responsible

for shepherding the newest

and most dazzling technologies

from the laboratory to the

marketplace.

LaBine is a transactional attorney and principal in the Ann Arbor law office of Miller Canfield. Nisbet is executive director of tech transfer at the University of Michi-gan, Poterala is assistant vice president and executive director of MSU Technologies at Michigan State and Reinhart associate vice president of research at Wayne State. “I’m seeing an appreciable increase in venture capital activity, and patent filings are increasing as well,” LaBine says. “Relative to our peers we’re coming on pretty strong.” The U-M, Michigan State and Wayne State are the research gems in Michigan’s higher educational system. Sharing a common research agenda, the three created the University Research Corridor (URC) to advance their mutual interests. Their inventors are busy applying for patents, developing compounds and medical devices – the first stage in tech transfer – that could lead to life-saving and innovative medical treatments. (See charts)

SIGNED AGREEMENTS, DISCLOSuRES SIGNS OF TECH TRANSFER HEALTH The category that serves as the best barometer of a strong tech transfer program is signed agreements “because our goal is to get technology deployed,” Nisbet says. “We would rather achieve that, and the revenue will follow.” Another key benchmark is invention disclosure, when scientists approach tech transfer with ideas they think are valuable. “Disclosure is the fuel by which we operate,” he adds. “It is important because if you want to commercialize something you need quality and quantity of things to work with.” The three universities were on the receiving end of approximately $1.4 billion in total research dollars last year, money that supports research, including more than $800 million to U-M, an all-time university record. U-M consistently ranks among the nation’s top four research universities, based on R&D expenditure statistics compiled by the National Science Foundation. But the universities’ contributions to furthering tech transfer are more subtle and just as vital to the future. They educate undergraduate and graduate students, pique their interest in discovery and provide them with role models, Reinhart says. “It’s all about advancing the collective knowledge of science,” he adds.

WORLD IS A HEALTHIER PLACE THANkS TO STATE’S BIG THREE The universities can lay claim to some significant medical discoveries that could, and have, led to commercial products and high national recognition. For example:l U-M scientists gave the world the anti- flu nasal spray and discovered the gene

Nisbet’s office works with its inventors every step along the way of discovery, pro-viding any support the inventor may need to ensure his or her discovery is technically and commercially feasible. “This makes it more likely that outside business partners would find the technology attractive,” he says. U-M Tech Transfer created a 13-member national advisory board of local and national executives from private industry and the public sector to provide input, resources and strategies to its whole program. The University spun out 49 companies in the past five years (13 last year), and its licensing revenues increased to $12.8 million last year.

MICHIGAN STATE BEEFS uP TECH TRANSFER OFFICE To “energize” its tech transfer opera-tions, last year Michigan State created MSU Technologies, a streamlined and focused approach to more efficiently get ideas out of the lab and into the marketplace, Poterala says. “It’s a new point of emphasis, to better identify those needs for innovations.” To stress its commitment to tech transfer, Michigan State increased its tech transfer staff to 20 from nine and nearly doubled the office’s budget. “We are in an emerging marketplace for technology,” Poterala says. “Everyone is trying to ramp (tech transfer) up.” The office will keep its eyes on discoveries emerging from the labs to ensure they can be commercialized.

for cystic fibrosis. In 2003, they were the first to identify stem cells in solid tumors in breast cancer and the first to find pancreatic and head-and-neck stem cells. l Wayne State’s most famous gift to the world was a failed anti-viral cancer drug that became the most effective drug used to combat AIDs. The compound, AZT, was developed about 25 years ago by inventor Jerome Horwitz. The drug slid into oblivion after failing to make it through Phase II clinical trials. Some years later the National Institutes of Health and the predecessor company to GlaxoSmithKline “toyed around with the drug and tested it as an anti-viral medicine” for AIDs, Reinhart says. l Michigan State scientists discovered that leptin, a hormone produced by fat cells, supports white blood cell production in the body, enhancing immune function. A new nanotechnology material developed at Michigan State enabled XG Sciences Inc. in East Lansing to begin operations. “Stanford and MIT remain the gold standard in tech transfer and we definitely have closed the gap,” Nisbet says. “We can actually overcome it, but it will require some enormous resources and take time.” The university ranks “well within the top 10” of the survey of universities performing tech transfer as compiled by the Association of University Technology Managers.

The best barometer of a strong tech transfer program is signed agreements “because our goal is to get technology deployed,” Nisbet says. “We would rather achieve that, and the revenue will follow.”

university Research Corridor 2007 Results

IP Disclosures Signed License Agreements Patents Issued

university of Michigan 329 91 87

Michigan State university 161 28 35

Wayne State university 16 45 22

university Research Corridor 2002-2005 Results

Patents Received Start-up Companies Revenue Generated

university of Michigan 353 43 $63.6M

Michigan State university 184 28 $105.6M

Wayne State university 95 8 $22.9M



Miller Canfield has a team of six transactional lawyers, focusing on biosci-ences, medical devices and venture capital, and people working exclusively on the intellectual property side in Kalamazoo, Chicago and Cambridge. His firm does a lot of work with academic institutions and companies all over the United States, including Michigan. “Companies, including those in Michigan, want to commercialize university discover-ies. The recent cost cutting on the R&D side of many companies has only increased interest,” LaBine says.

TWO MICHIGAN COMPANIES, TWO uNIVERSITy DISCOVERIES In the past six months Miller Canfield has worked with two Michigan companies interested in two technology spinouts from Michigan public universities. Confidential-ity agreements prohibit him from revealing too much about the players.

One company is eyeing technology for treating osteoporosis based on a piece of DNA from a bone, while the other company is looking at a cancer diagnostic technology. LaBine says both companies are locally funded and staying put once they get possession of the technology. Inventors are focusing on tech transfer for additional revenues for their institutions while tech transfer people “are becoming more entrepreneurial and realizing that revenue can be generated by selling to companies rather than relying on alumni donations,” LaBine says. “These develop-ments foster a culture where companies are launched, funded, go down the path of commercialization and then are acquired.” Ann Arbor, Kalamazoo and Grand Rapids have an opportunity to become key players in international drug development and medical devices, he adds.

TECHNOLOGYCONTINUED FROM PAGE 2

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22

Show Me the Money:

FINANCIAL MATTERS

VENTuRE CAPITAL BEGINNING TO FLOW



The people are there, the ideas are there, the determination is there. All that’s been missing is the money. And now that’s getting there. More and more venture capital companies are finding their way into Michigan

to help finance start-up and later-stage biosciences companies. Venture capital is the vehicle to

transfer ideas from the laboratory into commercialization. Key investors are stepping up to the

plate — the state, public universities, private sector and venture capital companies inside and

outside of Michigan.

“I think the environment for venture

capital is improving dramatically,” says

Michael Psarouthakis, senior portfolio man-

ager of the Michigan Economic Development

Corp.’s (MEDC) 21st Century Jobs Fund. The

Jobs Fund is the conduit for the state to loan

money to deserving biosciences companies.

Some of the nation’s top venture capital

companies that normally invest in hot com-

panies on the two coasts are finding fewer

opportunities because competition is so tight,

he adds. Now they are looking elsewhere for

deals and they are beginning to clearly see

Michigan’s once overlooked advantages.

“It is cheaper to do business in Michigan

than on the coasts,” Psarouthakis says. “We

have advantages in medical devices because

of our manufacturing capabilities and our

state universities are more aggressively”

spinning out new companies through tech

transfer.

ALL TRENDS MOVING uP The Michigan Venture Capital Associa-

tion (MCVA) released a survey in July that

revealed Michigan’s place among 50 states in

the national venture capital market in 2007.

l Of the $30 billion invested nationwide

Michigan received 4 percent out of that

money, or $120 million, to rank 25th

among the 50 states.

l The amount of venture capital under

management in Michigan has increased

by almost 75 percent since 2001.

l As of December 2007, venture firms

based in Michigan had approximately

$900 million in capital under manage-

ment and $100 million available for

new investments.

Mary Campbell, managing director of

EDF Ventures in Ann Arbor and chair of

MVCA told Xology magazine in its fall issue

that there are now “40 dedicated investment

professionals” living in Michigan, compared

to just a handful seven years ago. “I think the

(environment) is much stronger now than it

was six years ago and will be even stronger

six years from now,” she said. EDF is a

19-year-old Ann Arbor venture capital

company investing in early-stage health care

companies. It manages $175 million of invest-

ments and invests one third of its money in

Michigan companies.

Perhaps the poster child for a successful

biosciences company is QuatRx Pharmaceu-

ticals, an eight-year-old Ann Arbor company

run by highly regarded scientists, developing

promising compounds to fight endocrine,

metabolic and cardiovascular diseases.

The company has raised nearly $120

million from venture capital companies,

all of whom are based out of state. QuatRx

President and CEO Robert Zerbe has been

on the ground floor of some of the most

significant drug discoveries of the late 20th

Century. While at Eli Lilly he helped develop

Prozac and Zyprexa. When he moved over to

Parke-Davis/Warner-Lambert in Ann Arbor

he worked on Lipitor and Neurontin.

While working at Parke Davis in 1998

Zerbe was approached by a representative

from Seattle-based Fraser Healthcare, the

largest healthcare venture fund in America,

who “asked me if I would be interested in

starting a company.” Two years later Zerbe

left Parke Davis to start QuatRx. “We were

fortunate...we had a venture group willing

to invest in the team,” he says.

QuatRx has four very promising com-

pounds in various clinical trials, drawing

the eagle eye of investors, notably Ophena

for post menopausal vaginal syndrome,

now in the second phase III clinical trials.

mOney Can COme frOm investOrs larGe anD small, with DeeP POCKets Or mODest sums.

Venture capital companies are looking elsewhere for deals and they are beginning to clearly see Michigan’s once overlooked advantages.


Despite the large outside investments,

the money never came easy, Zerbe says.

To be successful, company management

“should plan well, choose compounds

well, make commitments, fulfill those

commitments and communicate well

to your investors in what you have done.”

“Quite frankly, it’s easier to get an inves-

tor interested in Ann Arbor if they’re already

coming here anyway,” Campbell told Crain’s

Detroit Business. “I can’t tell you how

important QuatRx is as a lightning rod.”

SMALLER COMPANIES NOW ATTRACTING THE BIG BuCkS Smaller companies have had their

own successful stories to crow about. Ann

Arbor-based Accuri Cytometers raised $13

million for the commercialization of its C6

Flow Cytometer System. The technology

provides cell analysis at a fraction of the size

and cost of current cytometer technology.

The financing was led by Cambridge,

MA, investors Fidelity Biosciences and

Flagship Ventures. Current investors include

Milwaukee-based Baird Venture Partners

and Arboretum Ventures in Ann Arbor.

Grand Angels in Grand Rapids provided

seed money and remains involved.

Earlier this year HandyLab Inc. in Ann

Arbor raised $19 million from a number

of venture capital funds, including three in

Ann Arbor: Arboretum Ventures, Ardesta

LLC and EDF Ventures. Mark Powelson, vice

president of sales and marketing, declined

to give specific figures. The company was

founded by two University of Michigan

engineering students and makes instru-

ments to detect infectious diseases.

Money can come from investors large

and small, with deep pockets or modest sums.

Angel groups are the antithesis of the large

venture capital companies, providing fairly

small amounts of money, from $250,000 to

$1 million to kick-start new companies

ANGELS AMONG uS IN HOLLAND Family and friends are the first investors

of start ups, quips Jody Vanderwel, president

of Grand Angels LLC, a nearly five-year-old

company in Holland.

Grand Angels helps its 38 members

decide which companies to back. It serves

primarily the western part of Michigan and

supports industries other than just biosci-

ences. It is one of seven angel groups in

Michigan. Since it began operations Grand

Angels has invested in 12 companies with

investments approaching $5 million.

“An-

gel investing is the farm

system of venture capital,”

Vanderwel says. “Without a

robust angel network to bring

these businesses along there are less

investment opportunities

for the venture capital groups.”

Angel money is patient money, she

adds, noting Grand Angels will wait for five

to seven years for an exit. The company’s

yield rate from application to investment is

somewhere around three percent and all the

companies in its portfolio “are doing well,”

Vanderwel says. Grand Angels typically

takes two seats on the board of the company

it invests in.

“As a state we have not really invested at the

angel level,” she adds. “I would like to encour-

age the state to leverage angel band money and

support the operations of angel bands.”

Grand Angels was founded by former

Grand Bank founder and CEO Charles

Stoddard and entrepreneur Craig Hall. It

is funded through membership fees, corpo-

rate and collegiate sponsorships and a grant

from the MEDC. It is a member of the Angel

Capital Alliance, an organization sponsored

by the Ewing Marion Kauffman Foundation

in Kansas City, MO, that provides leadership

and resources for angel investors across

the country.

Detroit Renaissance is midway through

its $100 million fundraising campaign

to invest in Michigan-based

venture funds. The

money will come from

pension funds of

the state’s major

corpora-

tions. It expects to raise about $50 million

this fall and will continue to raise funds to

achieve the $100 million goal over the next

year.

STATE uNIVERSITIES GETTING AGGRESSIVE The state’s 15 public colleges and

universities have banded together to create

the Michigan Initiative for Innovation

and Entrepreneurship (MIIE) to fund the

commercialization of their research, retain

local talent, become more collaborative with

industry and encourage entrepreneurship

among students.

MIIE will raise money primarily from

state foundations and perhaps even its

own university members to fund the pot.

“They are committed to keep this going for

seven years… raising a total of $75 million,”

says Tina Bissell, MIIE business manager.

The highest single award MIIE will loan is

$150,000 for a single commercialization

To be successful, company management “should plan well, choose compounds well, make commitments, fulfill those commitments and communicate well to your investors in what you have done.”

F INANCIAL MATTERS


project. As part of the grant requirement

the grantee must line up $75,000, or 50

percent, in a matching grant to be eligible.

MIIE finished a pilot program in July

when it announced its first winners. The C.S.

Mott Foundation in Flint put up $2 million

to support the project.

Six-year-old Arboretum Ventures in Ann

Arbor is an early stage venture capital firm

focusing on medical devices and healthcare

services, says company founder and manag-

ing director Jan Garfinkle. In July 2007

Entrepreneur magazine named Arboretum

one of the top 100 venture funds in America.

Garfinkle started Arboretum in 2002

with $24 million from institutional and

private investors. Today it manages $85

million and has 16 companies in its portfolio,

including six in Michigan.

Ten years ago the state committed a total

of $1 billion spread out over 20 years from

its tobacco money settlement to support

companies are at different stages of fund-

raising, Psarouthakis says. The only caveat is

that all companies receiving Jobs Funds loans

must do a significant part of their business

in Michigan and maintain an office here.

In the 2006 competition (there was

no competition in 2007) more than 500

companies and universities and nonprofits

in the four sectors bid for $130 million in

loans. Ultimately the Jobs Funds approved 84

companies. Of those, 31 were in biosciences

and received a total of $50.1 million in loans.

In 2005 the Jobs Fund committed a total

of $400 million to continue the program

through 2015. It also has set aside $12

million for the retention of Pfizer Inc.

assets following the company’s closure of

its Ann Arbor research center. Of that

amount $8.3 million was earmarked to

companies created by former Pfizer

employees and existing companies that

hired former Pfizer people.

biosciences companies. Over the years the

program remains in place, though the state

has added homeland security, advanced

manufacturing and alternative energy

sector companies to compete. The state’s

shrunken economy also has reduced the

amount of money awarded.

STATE JOBS FuND PLAyS MANy ROLES The 21st Century Jobs Fund runs the

program, distributing the money and more,

says Psarouthakis, one of five employees

managing portfolios. All came to the Jobs

Fund from the private sector.

“We manage the portfolio, we take board

seats, we negotiate contracts and we try to

find executives for companies and additional

funding,” he says. “We help companies resolve

issues they may have with state government.”

The office tries to match its portfolio of

companies to venture capital companies in

Michigan and outside of Michigan. These

Michigan Venture Capital FirmsApjohn VenturesArbor Partners Arboretum Ventures ArdestaBioStar VenturesEDF Ventures Endurance Ventures MacBeedon Partners Michigan Venture Capital AssociationNorth Coast Technology Investors Plymouth Venture Partners RPM VenturesTGap VenturesSeneca Partners SWMF Life Science FundWhite Pines VenturesWolverine Venture Fund

Corporate Venture Capital FirmsDelphi CorporationThe Dow Chemical Company DTE Energy VenturesStryker Corporation

Angel Investor OrganizationsAnn Arbor AngelsAurora AngelsBlue Water Angels

Michigan-Based Funding SourcesCapital Community Angels First AngelsGrand AngelsGreat Lakes AngelsTraverse Angels

Private Equity FirmsBeringea Bridge Street Capital PartnersMasco CorporationOracle CapitalRobert W. Baird and Co., Inc.

Entrepreneur OrganizationsAnn Arbor SPARKAutomation AlleyGreat Lakes Entrepreneur’s Quest New Enterprise ForumThe Edward Lowe Foundation

Entrepreneurial BackingMichigan Initiative for Innovation and Entrepreneurship (MIIE)Michigan Universities Commercialization Initiative (MUCI)

Public Policy & Economic Development Michigan Economic Development Corporation (MEDC)Michigan State GovernmentMichigan Legislature

Reserve your Ad Now!

CIRCuLATION Targeted distribution to more than 5,000 Michigan biosciences companies and service providers, state and regional funding sources, economic development organizations, universities and research institutions. ADVERTISING RATES MichBio Members (Non-members add 10%): Back Cover $4,000 Inside Front/Back Covers 3,000 Full page 2,000 Half page 1,000 Quarter page 500

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The May 2009 issue of BioMatters includes the 2009 Michigan Biosciences Directory and Resource Guide


My

Opi

nion

G U E S T O P I N I O N

Federal Funding One key to Michigan’s New Economy By

Lisa Kurek, Managing Partner

Biotechnology Business Consultants, LLC

Encouraging and supporting Michigan’s most innovative companies and entrepreneurs

is key to achieving diversity across the state’s industrial base in the rapidly changing new

economy. While it has worked to increase the availability of venture capital to fund new

technology companies, the State has also recognized the importance of other significant

sources of capital, specifically the federal Small Business Innovation Research (SBIR) and

Small Business Technology Transfer (STTR) programs. Through these competitive programs,

11 federal agencies award a combined $2.5 billion to U.S. technology companies every year.

Unlike most sources of capital, SBIR/STTR funding is available to even the earliest stage

companies — those that are most often overlooked by professional investors. It is also non-

dilutive funding that doesn’t require repayment or the entrepreneur giving up a portion of

the company. In fact, it’s the best source of initial funding for those high-risk, high-reward

technology-based business ideas that can result in fast-growing, job-producing companies.

SBIR/STTR funds R&D projects that are critical for a company trying to demonstrate the

commercial potential of its technology. The largest agencies with SBIR/STTR programs are

the Department of Defense, National Institutes of Health, Department of Energy, and National

Science Foundation. R&D awards from these agencies, which average between $500,000 and

$1 million per Phase I/II SBIR/STTR project, already support hundreds of high-tech jobs in

small companies throughout Michigan, and they also provide that first, critical step toward

commercialization. A company that can compete successfully in the SBIR arena can attract

national and international attention from potential investors and larger companies interested

in partnering. Michigan’s most innovative companies need and deserve this type of exposure.

With funding from the former Michigan Technology Tri-Corridor Fund and current 21st

Century Jobs Fund, firms like Biotechnology Business Consultants and BBCetc, as well as the

Michigan Small Business Technology Development Center, have assisted Michigan companies

in becoming more competitive. Intensive training workshops are offered throughout the State,

with one-on-one proposal preparation assistance and commercialization consulting provided

to qualified companies. This assistance has not only helped increase the number of SBIR

proposals submitted and funded from Michigan companies, but it has increased the overall

percentage funded. In 2005, 675 more Phase I SBIR proposals were submitted and 42 percent

more were funded than in 2001, placing Michigan 10th among all states.

Building successful companies is a process that requires dedication, perseverance, patience

and passion. We can build on that success by maintaining a commitment to providing the tools

and support needed by Michigan’s cutting edge technology.

A company that can compete successfully in the SBIR arena can attract national and international attention from potential investors and larger companies interested in partnering.


Where INNOVATION and OPPORTUNITY MeetOAKLAND UNIVERSITY

APPLIED RESEARCH

Office of Grants, Contracts and Sponsored Research544 O’Dowd Hall2200 North Squirrel RoadRochester, MI [email protected]/research

For further information, contact:

T.C.Yih,Vice Provost for Research • (248) 370-2552

Oakland is a known leader in many applied research

disciplines including biomedical research, manufacturing,

information technology, alternative energy/power train and

homeland defense.To foster emerging discoveries, the

university features several noted research centers, including:

• Fastening and Joining Research Institute

• Automotive Antenna Measurement Instrumentation Lab

• Center for Robotics and Advanced Automation

• Eye Research Institute

• Center for Biomedical Research

• OU’s SmartZone Business Incubator (OU INC)

AAF-2413/9.08

AAF-2413_MIchBio_Ad:UCM-1094advertorial 9/15/08 3:07 PM Page 1

Nurturing an idea into a

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they need to know, find the resources

to keep the pipeline flowing?

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In a state boasting the world’s

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way of life and life is good; in an

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products and prospects.

Join us.

MichBio brings the total continuum

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facets of the biosciences community.

We are your matchmaker, your

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734.527.9150 WWW.MICHBIO.ORG

BioMatters - Fall 2008

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Transcript of BioMatters - Fall 2008