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University Hopes to Build Biotech Infrastructure in Ann Arbor
by Mark Maynard
As researchers across Michigan await notification concerning the disbursement of the first $50 million from the state's Life Sciences Corridor Fund, University of Michigan technology transfer specialists are actively working to establish an infrastructure in Ann Arbor capable of supporting the University spin-off companies that may result.
Although the University of Michigan has been successful in transferring life sciences technology from the lab to the marketplace in the past by forming such companies as Aastrom, Health Media Inc and Selective Genetics, it has not been an easy task. According to Marvin Parnes, Associate Vice President for Research and interim Director of the UM Technology Management Office (OTT), "The job of technology transfer is essentially to see that technologies developed on campus are brought into the marketplace, where they can be put to use as quickly, efficiently and intelligently as possible. Often that means licensing technologies to existing companies. More and more, however, it means starting a new company to act as a vehicle for that technology. When that's the case, we'd like for that company to form and stay in Michigan. Our goal is to make that a more viable, and even attractive, alternative. Right now, it's difficult."
According to a study by the Battelle Memorial Institute that was recently cited in an Ann Arbor News article on the subject of bio-medical research funding, Michigan presently ranks eleventh among states with regard to employment in the life sciences sector. The study, commissioned by the state, also found that Michigan had a less developed business incubator network and fewer venture capital resources than states such as California and New Jersey, which fared much better.
The Director of New Business Development for the OTT, Ken Nisbet, feels as though a positive shift may already be taking place in the local area however. "Ann Arbor," he says, "while a progressive town in terms of its support for information technology (IT) start-ups, has been somewhat slower to develop the core essentials it needs to become a thriving bio-tech center. We're just now seeing a critical mass begin to build in terms of well-connected venture capital, sustainable business incubators and talented business management personnel with life sciences backgrounds. Those are elements that we absolutely must have in order to make the most of our bio-medical technologies."
The challenge facing the University community, the city of Ann Arbor and the state is how to launch businesses in Michigan that result from bio-tech research and how to keep them in Michigan once they begin to grow. "Fortunately, the state is becoming more actively involved and that's helping to accelerate the process," says Nisbet. "Their interest and support, when added to the recent actions taken by the University of Michigan in favor of the life sciences, has really is helping us turn the corner with respect to both local and national perception."
In order to help facilitate the evolution of a community that would encourage such new bio-tech companies to flourish, the state of Michigan has recently created the Life Sciences Corridor Fund. This initiative, funded by Michigan's share of the recent tobacco industry lawsuit settlement, represents a $1 billion commitment by the state to invest in and promote life sciences research and business development. With $50 million each year to invest for the next 20 years, it is the hope of the Michigan Economic Development Corp. (MEDC), who is overseeing the project, that their involvement will encourage private industry to follow suit and invest in the life sciences in Michigan.
Presently the University of Michigan has approximately one hundred researchers with proposals under consideration for funding during this first year of the state's program. They are joined by hundreds of other researchers, both from private enterprise and from other Michigan universities and research institutions that are considered part of the corridor. (The corridor includes the UM, Michigan State University, Wayne State University and the Van Andel Institute in Grand Rapids.) Decisions concerning funding should be announced in November, 2000.
One thing that makes the MEDC program unique, in the eyes of many, is the fact that it is approaching sponsored research with commercialization and economic development in mind. "The Michigan Life Sciences Research Corridor is a very promising initiative being watched by states all around the country," says UM Executive Vice President for Medical Affairs, Gil Omenn. "The high standards for research and the willingness to invest in the intermediate term in both basic and applied research, as well as certain commercialization and tech transfer activities, should be an excellent formula for success."
Fawwaz Ulaby, UM Vice President for Research, says that the four institutions of the Life Sciences Corridor are committed to making this project a success. "We're united in our determination to propel Michigan to becoming a leading state in the life sciences, both in terms of research and business development," says Ulaby. "At no other time in the history of the State of Michigan has there been such a tremendous sense of enthusiasm and spirit of cooperation among the three universities (UM, MSU and WSU), the Van Andel Institute, and our industrial partners. The Life Science Corridor initiative has brought researchers from the various institutions together to explore research topics of mutual interest and to create joint technology transfer agreements that will facilitate intellectual property issues and expedite the transition of inventions into the marketplace."
In order to see this accomplished, the University of Michigan is making a significant investment of its own. While construction has not yet begun on the central physical structure of the University's Life Sciences Initiative, a new six-story, $200 million Life Sciences Institute, departments of the University, such as the OTT, are beginning to gear up. "Great strides are being taken," says Marvin Parnes, "not only by (our) department, which recently opened a technology transfer office on the Medical School campus and brought on a new staff person (Karen Studer-Rabeler) to help launch bio-medical start-ups, but by the entire community. The state is seeing to it that economic development and technology transfer are central to the corridor, and venture capitalists from inside and outside Michigan are becoming interested in the opportunities."
This migration of venture capital and bio-medical resources to the Ann Arbor area is what UM President, Lee Bollinger, had hoped for in 1999, when he announced the launch of a comprehensive, campus-wide Life Sciences strategy to rival those being introduced at other top research institutions. This program, known on the UM campus as the Life Sciences Initiative, aims to coordinate and expand research and teaching in such rapidly advancing fields as genomics, chemical and structural biology, cognitive neuroscience, and bioinformatics, as well as other areas of study that bear on and are influenced by the life sciences.
"It is, the convergence of UM's Life Science Initiative and the State's investment in the Life Sciences Corridor that has created a buoyant climate for research and technology transfer," explains Marvin Parnes. "We have increased the efforts of our technology transfer staff to meet the increased interest and output of our faculty, and we trust that the new infusion of State funds will result in increased growth in life sciences business formation."
What remains to be seen is whether or not this buoyant climate will lead to an increased number of University-initiated start-ups in Ann Arbor and whether or not they will stay if they are launched here. Parnes himself concedes, "We have yet to see how well we can anchor new businesses in Michigan and resist the tug to the coasts."
The challenge to all interested parties, is to find a way to leverage the state of Michigan's $1 billion commitment, the University of Michigan's growing life sciences research base, the national attention and the momentum of the local community to increase job creation and economic development. According to Associate Director, UM Division of Research Development and Administration, Elaine Brock, this is happening. In her view, the current movement in life sciences is building enthusiasm and coalescing previously unfocussed interests of entrepreneurs both inside and outside the University. "This initiative, says Brock, "has created a new community that expands beyond the university walls and into the businesses, venture capitalists and service providers. There is a growing sense of collegiality and respect among all tech transfer sectors; a recognition that we need each other to convert science into technology and technology into products."
Others within the University echo her thoughts. "If this is going to be successful," says Karen Studer-Rabeler, "all of us have to work together to understand our roles in connecting these pieces as part of executing an overall strategy to take advantage of the current rapid changes in the life science industry."
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