Correction appended: An earlier version of this article incorrectly identified Meghan Cuddihy.

In response to the new business opportunities rising out of campus-based research, the University’s Venture Accelerator opened yesterday in the North Campus Research Complex.

As part of the University’s Tech Transfer program, an organization that finds ways to use University technology in the marketplace, the Venture Accelerator is laboratory and office space for new businesses and will aid with the commercialization of their products – all with the goal of helping the region. The businesses housed in the 16,000 square-foot space all work with University-owned research.

More than 500 members of the University community, business and economic development leaders, entrepreneurs, venture capitalists, government officials and attendees mingled in the accelerator offices before filling the bridges overlooking the Venture Center.

Speaking before the crowd, University President Mary Sue Coleman said she believes the companies in the accelerator, along with other research and business centers in the NCRC, can help revitalize the economy at the state level and beyond.

“We are eager to collaborate with companies, to drive transformative research that can change the world,” Coleman said. “The NCRC, the Office of Tech Transfer (and) the Business Engagement Center are launch pads for this critical work we have in front of us.”

In addition to the Venture Accelerator, the Office of Tech Transfer and the Business Engagement Center also celebrated their formal openings at the event.

Coleman and other University administrators, including the University’s Executive Vice President for Medical Affairs Ora Pescovitz, the University’s Vice President for Research Stephen Forrest, University Provost Philip Hanlon and the University’s Vice President and General Counsel Suellyn Scarnecchia, cut the ceremonial ribbon to commemorate the opening of the three projects.

Pescovitz said she feels that beyond the NCRC’s large space, the complex has “immeasurable, infinite potential.”

She echoed Coleman, saying that innovation is essential for the “future” of the University and for the nation as a whole.

Forrest said despite his initial concerns about the cost and popularity of the accelerator, it will likely benefit the University community and state economy.

“It started out as a risky venture but promises to be an essential step in the (University’s) promise of being the leaders and best and encouraging and helping faculty and students and our venture partners to start their companies right here in Michigan,” Forrest said.

Ken Nesbit, executive director of Tech Transfer, said one of the goals of the business accelerator is to help transform small startup companies into large, powerful companies that will hopefully stay in the Midwest and create local job opportunities.

Jim O’Connell, associate director of business formation at the Tech Transfer Center, said the accelerator will likely focus on technology and companies that have some kind of link to the University before looking to other companies. The accelerator space, which can house 10 to 15 companies, has several potential tenants waiting to become part of the center, he said.

O’Connell added that he feels there is an increased chance of a company staying in Michigan after being incubated in the Venture Accelerator.

In return for the services offered by the University, each business signs on for a one-year lease and pays a leasing fee.

O’Connell said though the cost of leasing may be higher at the Venture Accelerator, the rate includes many resources available to the companies.

“This is about adding services and values beyond what you can get in a $5 office,” O’Connell said.

Acting as a “feeder” space for beginning businesses, O’Connell said that after a few years, the rate may become too expensive for businesses that no longer need all of the accelerator’s services. The businesses are then encouraged to move out into their own space.

A media tour of the facilities yesterday revealed five startup businesses housed in the new offices and laboratories. One of the businesses, Life Magnetics, moved in on Dec. 20, 2010 and is currently purchasing lab equipment. The other four businesses are expected to move into the space in the coming months.

Founded in 2009 by Brandon McNaughton, a former University applied physics graduate student, Life Magnetics is developing a biosensor to measure the growth of single bacterial cells and the cells’ responses to antibiotics.

McNaughton works on the project with Bill Wood, the project’s interim CEO, and with his previous adviser, Raoul Kopelman, a Richard Smalley distinguished University professor of chemistry, physics and applied physics.

In an interview after the tour, McNaughton said the goal of the device is to determine the best therapy for a patient with a bacterial infection and to speed up the process of discovery, which currently takes two or more days. The goal for the biosensor is to complete the test within one hour, he said.

The biosensor’s ability to monitor individual cells could also be applied to track the growth of cancer cells, McNaughton said.

He added that he believes a clinical prototype of the biosensor will be completed within two to three years, but may be delayed from going to market pending FDA approval. The company currently has five employees and hopes to have 15 by the end of the year and 90 to 100 within the next four to five years, Wood said.

Next door to Life Magnetics is 3D Biomatrix, a business creating three-dimensional cell scaffolds to grow and test cells.

Meghan Cuddihy, one of the company’s researchers and a former Ph.D. student at the University, said most drug tests occur in two-dimensional environments, which don’t mimic the human body. In a three-dimensional scaffold, cells act more like the human body and can be used in the pharmaceutical industry, Cuddihy said.

In an interview after the event, Cuddihy said she and her colleagues are excited to be in the “beautiful facilities” and in close proximity to other emerging companies.

Other businesses in the accelerator include Phrixus Pharmaceuticals, a clinical-development stage company working on a drug to treat heart failure, and Civionics, a company designing low-cost wireless sensors to measure structural health and energy usage in buildings. EngXT is another business housed in the accelerator, and has developed an electric-field monitoring system that gives off signals to monitor electrostatic stress on electronic devices.

In an interview after the tour, Steven Rogacki, an engineer for EngXT and a lead engineer in research at the University, said the business resources at the Venture Accelerator are vital to the future of the company.

“It’s absolutely essential,” Rogacki said. “I wouldn’t know how to proceed without that kind of help.”

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