University biomedical emphasis a big economic winner for Wisconsin

April 19, 2011

by David Tenenbaum

As Wisconsin struggles with unemployment and anemic growth, a group of health-related university spin-offs continues to benefit from UW-Madison's profound depth in biological sciences, medicine and engineering.

Lynn Allen-Hoffmann holds a piece of StrataGraft at the Stratatech Corporation in the University Research Park on Sept. 21, 2007. StrataGraft, a proprietary human skin cell line that, when properly cultured, forms a fully stratified multilayered human tissue with the physical strength and biological characteristics of intact human skin, is based on a spin-off of university research.

Photo: Jeff Miller

The spin-off businesses focus on everything from regenerative medicine to influenza and infection. Some are in the start-up phase; others have been successful enough to be acquired by multinationals.

These health-related firms are among at least 283 UW-Madison startup businesses that a March report said are contributing an estimated $2 billion to the state's economy each year.

The study, done for UW-Madison by NorthStar Economics, pegged the total statewide annual economic impact of the campus at $12.4 billion. More information on the study can be found here.

Some of the spin-off firms include:

  • Flugen, under the scientific guidance of Yoshihiro Kawaoka, a professor of pathobiological sciences, focuses on influenza vaccine. This fall, to evoke a stronger immune response among older people, the company will sponsor an early trial of a micro-needle patch that injects flu vaccine into the skin, where the immune system is more active than in the muscle, the usual location for vaccination. The company is also developing a flu vaccine that can only reproduce one time, which should confer more immunity than killed virus vaccines. All eight of FluGen's employees have advanced degrees, says company president and CEO Paul Radspinner.

  • Third Wave Technologies was started in 1993 by two UW-Madison scientists and a California entrepreneur, based on the discovery of a new type of enzyme at UW-Madison, and further innovations at the company culminated in a rapid way to detect subtle alterations in DNA.

    "This technology has the ability to specifically recognize single-base mismatches in DNA at any desired region of the genome," says co-founder Lloyd Smith, a professor of chemistry. The company is developing a diagnostic test for human papilloma virus, an important cause of cervical cancer. "Most women in developed countries carry this virus," says Smith, "but only some strains are virulent, so it's important to identify the genotype of the virus."

    In 2008, Third Wave was sold to Hologic, which specializes in women's health, for $580 million, but still maintains facilities in the University Research Park in Madison.

  • A regenerative medicine company, Stratatech Corporation, is moving human skin substitutes to the marketplace based on the discovery of a unique skin cell in the department of pathology laboratory of company founder Lynn Allen-Hoffmann.

    Using these cells, the company has developed living skin substitute tissues that can be used for a number of applications. Stratatech is currently marketing the skin tissue as an alternative to animal testing for various consumer products and chemicals. A clinical trial is also underway to evaluate the skin tissue for the treatment of burns or severe skin injuries.

  • Cellular Dynamics International is using human induced pluripotent stem cells, discovered by company co-founder James Thomson, as a source to generate human tissue-specific cells for research and pharmaceutical applications. Because many candidate drugs can cause life-threatening cardiac side effects, the company is growing stem cells into heart muscle cells to be used for toxicity evaluation, says co-founder Timothy Kamp, a UW-Madison cardiologist.

    "CDI focuses on making quality-controlled human cellular products that provide robust cell-based models for pharmaceutical and biotechnology companies as well as researchers," he says.

    The company's other founders are Craig January, a professor of medicine, and Igor Slukvin, an associate professor of pathology and laboratory medicine. Cellular Dynamics has 105 employees, Kamp says, and has just received another $30 million in private-equity funding. "These are specialized jobs. The company provides a growing job market for talented people trained in stem cell biology and biotechnology."

  • Conjugon, Inc. is developing beneficial bacteria to help overcome the antibiotic-resistance crisis. Building on a discovery that earned the 1958 Nobel Prize for Joshua Lederburg, who founded UW-Madison's department of medical genetics, Conjugon is developing "friendly" bacteria that conjugate with and kill pathogenic bacteria, says Richard Burgess, professor emeritus of oncology, who co-founded the company with Marcin Filutowicz, a professor of bacteriology.

    The company is also attempting to crowd out pathogens with harmless bacteria, says Burgess. "There have not been really useful new ways to get around the rising epidemic of antibiotic resistance. This is biological therapy, and it's fundamentally new," he says.

    Burgess, a veteran advocate of scientific entrepreneurship and technology transfer, says times have changed since he founded the Biotechnology Center on campus in 1984. Back then, professors were not encouraged to start businesses, and only three biotechnology startups were operating in Wisconsin.

    Burgess says the university's strength in biological spin-offs reflects the fact that at least 35 percent of its 2,027 professors work in the life sciences.

    "We are unique because we have colleges of medicine and agriculture, and schools of pharmacy, veterinary medicine and nursing. The college of engineering has a significant biological focus. Because we have strengths in all the major disciplines, brainstorming here can lead to fundamentally new ideas and research collaborations," Burgess says.

    Making money and making inventions require different skills and personalities, and many entrepreneurial scientists look forward to getting back to the lab once their fledgling enterprises have attracted business talent for the management end of things. "Most researchers don't go into academic research because we want make a lot of money, we go in because we think what we can do will be of benefit to society," says Burgess. "If you do well on campus, you get a good salary, promotions, recognition by your peers, but ultimately any invention you make is never going to help anybody until somebody successfully commercializes it."

  • The unexpected confluence of ideas that is only possible at a major research university helped propel another Madison startup, Isomark, which is testing a non-invasive method that, in animals, has detected severe bacterial infections hours sooner than other tests.

    Company co-founder Mark Cook, a professor of animal science, traces the technology's roots to a professor of anthropology who sought to use carbon isotopes to analyze ancient bones to learn when people first grew corn in today's United States.

    For fun and to provide undergraduate students a laboratory experience, Cook, a specialist in nutrition and inflammation, and Isabel Treichel, an isotope chemist, studied isotope patterns in egg shells produced by hens that ate different foods. Opportunity arose when they crossed paths with Warren Porter, a zoology professor, who wanted to use stable isotopes as a one-sample method to determine if field mice were thriving or being harmed by their environment.

    Within an hour the three realized that field mice were only the starting point. "Not only could we monitor mice, we might even be able one day to save human lives," Cook says. On a blackboard, at least, they had discovered how to detect infection using breath — perhaps measured on a device small enough to hold in the hand.

    After Cook, Treichel and Porter proved that the chalkboard idea could work, Cook and Porter were at a crossroads.

    "We had no intention of starting a company, but the technology would have died unless we started it, so we and a group of other scientists interested in early detection of infection anted up some cash and got started," Cook says.

    Isomark, having licensed inventions from co-founders Porter and Cook through the Wisconsin Alumni Research Foundation, plans to test its technology in intensive care and neonatal wards, where bacterial infections cause deadly toxic shock. Studies projected for Milwaukee and Madison will compare healthy and infected individuals; subsequent tests will attempt to prove that the device can detect infection significantly earlier than other methods.

    By non-invasively measuring air near the patient, the instrument "should be able to detect an infection hours before any other technology," Cook says.

    "The clinical people are excited about the ability to detect infection so early," he adds. "We're hoping this can automatically detect the infection well before what is called the 'golden hour.' For every hour after that, if you don't get the patient stabilized, you lose another 7.5 percent of patients to septic shock.