Spinoffs enjoy success

Friday, Feb. 24, 2006

If 15 years at the University of Maryland Biotechnology Institute taught Philip N. Bryan anything, it’s how nice it is to have a long leash.

Bryan has finally ventured into the commercial world, launching his own small biotechnology company, Potomac Affinity Proteins. But he also remains rooted in academe, a professor at UMBI’s Center for Advanced Research in Biotechnology in Rockville, free to continue research without focusing on a particular technology.

‘‘That kind of long leash is rare in industry,” Bryan said. At UMBI, ‘‘you create potential to develop long-term projects that might lead places that are impossible to anticipate.”

Last year, UMBI helped launch both Bryan’s company, in North Potomac, and Profectus Biosciences, at the University of Maryland, Baltimore County, incubator.

Nationally, the number of new companies launched based on academic research was almost 25 percent higher in 2004 than the previous year, according to the annual licensing survey of the Association of University Technology Managers. This has been one of the key measures of success of universities’ tech-transfer efforts, said John Fraser, who will begin his one-year tenure as president of the technology managers’ association March 3 at its annual meeting in Orlando, Fla.

Bryan began his research in structural biology at CARB 15 years ago without any inkling that he would be launching a company some day, he said. His work focuses on protein folding and stability, the study of the biochemical reaction involved in the formation of proteins and whether the protein is stable enough to function under harsh conditions. It became apparent to him that his research had straightforward applications for protein purification, a central process in biotechnology of isolating proteins from cell debris.

Now Bryan aims to develop technology rather than have somebody else do it. While Potomac Affinity Proteins will be ‘‘a viable growing enterprise,” he said, the company has had a modest beginning.

‘‘We started in the simplest way that we could,” Bryan said. The company was incorporated last March and included only Bryan and his wife, a part-time high school math teacher who deals with the business side of things. Bryan is a ‘‘consultant” who remains a full-time scientist at CARB.

The couple worked without a salary just to get the company off the ground. A full-time scientist came on board in the fall, and Bryan expects to ramp up to three or four full-time scientists this year as the company begins to generate revenue, he said.

Other UMBI spinoffs have already seen success. Verachem of Germantown, another CARB spinoff, made its first royalty payment to UMBI on sales in fiscal 2004.

The fact that CARB is jointly operated by UMBI and the National Institute of Standards and Technology allowed Michael K. Gilson to launch Verachem. Gilson could not start a company as a NIST employee, so when there was an opening for a faculty member at CARB, Gilson said, he took it. He co-founded Verachem in 2000.

Gilson said he appreciates the fact that unlike drug development itself, he can ‘‘make products that are actually finished.” In addition to the company’s interactive software for computer-aided drug design, Verachem provides related partnering and consulting services.

Another UMBI spinoff, Chitin Works America in Cambridge, was launched to find ways to extract a biological polymer from crab shells for industrial uses.

‘‘We’re impressed with the way the university makes expertise available to the business community,” said Pat Condon, the company’s managing partner. Operations will probably move out of the area, however, because the blue crab species found in the Chesapeake Bay aren’t the most cost effective, he added.

Bruce D. Weintraub said his company, Trophogen, probably wouldn’t exist without UMBI. Because of conflict-of-interest policies, those who work within the University System of Maryland face cumbersome hurdles to enter the private sector. Weintraub, who worked under both UMBI and the University of Maryland, Baltimore, couldn’t get a license and didn’t have any money.

UMBI president Jennie Hunter-Cevera and her consultant, J. Kay Noel, wrote a report recommending Weintraub’s technology. Weintraub ultimately got the funds he needed to start his company, which develops superactive hormones and growth factors.

‘‘They came to the rescue for me,” Weintraub said. ‘‘They believed in me.”

Still another UMBI spinoff is Chesapeake Perl, which was awarded a $3 million federal grant last fall to develop a smallpox vaccine based on recombinant proteins, those made through genetic engineering. The grant, from the National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health, might help find an alternative for certain groups that cannot receive the prevalent smallpox vaccine, according to company information.

Chesapeake Perl’s negotiations with UMBI while seeking a license were part of the larger controversy that led to two audits in 2004. The protein manufacturing company ‘‘went into negotiations expecting help and support and found an adversarial atmosphere,” George E. Dieter Jr., a former University of Maryland engineering dean, wrote in one of the audit reports.

After UMBI dismissed the Chesapeake Perl controversy as a ‘‘political issue” in response to Dieter’s report, company president Terry E. Chase issued a statement saying she would ask William E. Kirwan, chancellor of the University System of Maryland, to order an investigation of UMBI’s ‘‘misleading statements.”

In an interview for this report, however, Chase declined to comment on whether she had followed up on that investigation or even to criticize UMBI.

The institute ‘‘has done some good things,” she said. ‘‘We’ve moved on.”

UMBI highlights

Reported $40.5 million in outside funding in fiscal 2005, more than double what it received in fiscal 2000. By contrast, the state provided just $15 million in funding for fiscal 2005, down from $15.5 million in fiscal 2000.

Researchers filed 37 invention disclosures, the first step in seeking patent protection for a new technology, in fiscal 2005, and have doubled the number of disclosures over the last five years to a total of 271, according to UMBI information.

Reported $432,935 in licensing revenue in fiscal 2005 — up 47.6 percent from about $293,300 one year earlier.

Initiated a new patent review board consisting of five faculty members and five others, to strengthen relationships with industry representatives.

Signed 13 research memorandums of understanding with national and international organizations in fiscal 2005 to focus on large programs in the most challenging areas of biotechnology, up from seven in fiscal 2004.

See related story: UMBI regroups