Posted February 23, 2012
Competitive awards designed to expedite innovations from university labs to marketplace, create new Missouri jobs and attract investors
COLUMBIA, Mo. — University of Missouri System President Tim Wolfe today announced that two MU research teams have been chosen to receive close to $1 million in investments from the university, the state and private investors to get their startup companies off to a strong start.
These selections follow an intensive review of 16 research team applications for funds available through the university’s Enterprise Investment Program (EIP)--an initiative launched after the American economic recession began in 2008 to expedite the transfer of researchers’ lab innovations to the marketplace and to create new Missouri businesses and jobs.
“This competition was tough and thorough, but the outcome underscores our commitment to advancing our state’s economy through the creation of new jobs and investing in our faculty,” Wolfe told reporters. “And the university’s willingness to invest up to $600,000 in our researchers through this program has already attracted an additional $300,000 investment from the state as well as private investors for one of the companies.”
The two startup companies created by MU researchers receiving the investments are: EternoGen, a company that has created a longer-lasting “skin filler” for cosmetic needs; and HLB Horizons, LLC, a company that will use a new process developed at MU to manufacture a chemical compound used in semi-conductors and rechargeable batteries.
Upon the successful achievement of milestones along the commercialization pathway, HLB Horizons will receive up to $400,000 from university EIP funding, and EternoGen will receive up to $200,000. EternoGen will also receive $100,000 from the Missouri Technology Corporation IDEA Funds and $200,000 from Centennial Investors, an angel investment organization created by the Columbia Chamber of Commerce to support the technology sector of the mid-Missouri economy.
The MU research teams expressed their appreciation for the university’s support at the press conference.
“Without this investment, we might have been able to start the company, but we wouldn’t have been able to keep it here in the state of Missouri or even in the United States,” said Mark Lee, assistant professor of radiology and chemistry and president of HLB Horizons, LLC. “Through our research at Mizzou, we’ve developed a much safer and environmentally friendly way to create certain chemical compounds that contain boron, a key element. Boron can be used to improve electrical-conducting materials such as semiconductors and the rechargeable batteries found in hybrid vehicles. We’re hoping to start small-scale production of the chemical compound this year and continue to expand the company in Missouri for the next three to four years.”
Currently, the process to create this chemical compound containing boron involves highly explosive gas and is extremely dangerous. Through their fundamental research projects at MU, Lee and Fred Hawthorne, director of MU’s International Institute for Nano and Molecular Medicine, have developed a new, safer and more environmentally friendly process to create the same compound. Lee and Hawthorne are joined in the company by Satish Jalisatgi.
EternoGen—a new medical device company led by CEO and MU Crosby MBA program graduate Luis Jimenez, Chief Scientific Officer Rebecca Rone, and Chief Operations Officer Ron Bassuner--is incorporating nanotechnology and protein engineering to make materials that stimulate tissue regeneration and create biological implants that last longer than the current products on the market. Their current product that attracted university investment--a novel collagen “skin filler”--is undergoing testing for use in a variety of applications, and is differentiated from competitors through its ability to act as an antioxidant, anti-inflammatory and antimicrobial agent. This technology was developed in collaboration with Dr. Grant from the MU Biological Engineering Department.
“Without this investment, our story might have been the usual story of a technology that is stuck between discovery and commercialization,” Jimenez said. “Instead, not only are we moving forward, but we have created enough momentum with this investment that we are beginning to attract other investors. Our ultimate goal is to build a research & development facility here in Missouri that will help us identify needs in health care and optimize our technology to address those needs. We would then partner with other companies to commercialize these innovations.”
Jimenez said that even the process of securing the EIP investment was very helpful for the company. Because the review process demanded so much information, Jimenez and his team were encouraged to develop specific business plans and address some areas that were not clear in the initial proposal prior to the selection process.
Wolfe credited former President Gary Forsee and Mike Nichols, the system’s vice president for research and economic development, for creating the Enterprise Investment Program at a time when the state and country began facing such extraordinary financial pressures. And he announced that the university is seeking its next wave of researchers needing investment for competitive consideration in the EIP programs between March 1 and May 31.
Nick Franano, chief executive officer of Novita Therapeutics, LLC and one of the EIP advisory panel members from Kansas City, added: “If this program continues to bring in such high-quality applicants, it will soon become a magnet for attracting national venture capitalists to the Midwest when looking for the next big thing.”
This, Nichols added, is one of the key goals of the program.
“Typically, if outside investors are going to provide substantial startup funding, they want to own 51 percent or more of the new company due to the high risk of early-stage companies,” he said. “Because of this, many of the new discoveries made by our faculty or students sit on the proverbial shelf. But with seed funding ($100,000-$500,000) enabling a company to provide a marketable proof of concept and a lower risk to potential investors, not only are investors more interested in providing funding, they also require less company ownership. With the university’s EIP funding, we serve as the catalyst to get those other investors interested in our startup companies like, for example, what is happening with EternoGen.”
“Our willingness to invest in our faculty and student innovations makes their business even more attractive to outside investors,” Nichols said. “In addition, a portion of the money that we receive back in royalties or stock is placed back into our Enterprise Investment Program, so we can invest in other innovative ideas originating at the university. This is good for the students and faculty, allowing them to see their discoveries benefit the citizens of the state and nation. It’s good for their companies, giving them capital investment that is needed to get a foothold in the marketplace. And it’s great for the state as these new companies create new jobs and new taxable revenue streams. Everybody wins.”