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WMU research and commercialization center attracts new state funding

by Cheryl Roland

July 27, 2011 | WMU News

Photo of WMU biosciences project.
Commercializing new technologies in life sciences
KALAMAZOO--The Michigan Strategic Fund has announced its decision to make an additional investment of $3.8 million in a successful Western Michigan University initiative, which will use the money to launch a new fund aimed at further development of life science startups in Michigan.

The recipient of the award is WMU's Biosciences Research and Commercialization Center, a seven-year-old entity that has recently been placed under the auspices of the University's new School of Medicine. Governed by a separate board, but managed by the medical school's Office of Research, the new fund will further its support in commercializing novel technologies in the life sciences throughout the state of Michigan.

Established in 2003 with an initial cash infusion of $10 million from the Michigan Economic Development Corp., the BRCC has played a critical role in the creation of 30 Michigan companies and more than 200 high-paying jobs. With every dollar of the original $10 million invested in startup companies, new funding will allow the center to transition to a new fund, dubbed by BRCC organizers as BRCC-II.

"Three years ago, when we began looking at the resources this community has in place to launch a medical school, the BRCC already had established a track record for supporting life science research that leads to important innovation and economic development," says WMU President John M. Dunn. "The potential for even greater synergy and economic development is one that we're focusing on as we move forward. This additional investment by the state is an affirmation of both past success and the potential that still exists."

The center's investment in new companies and program-related consulting has already generated nearly $800,000 in income and has allowed the BRCC to honor its obligation to begin to repay the state's initial investment. Companies that have secured BRCC investments to date have been able to leverage that support into more than $100 million in additional funding from investors, federal grants and other funding sources.

Photo of Dr. Jack Luderer, WMU School of Medicine.
The $3.8 million enables a logical continuation of the BRCC's success, according to Dr. Jack Luderer, associate dean for research of the WMU School of Medicine who served as the BRCC's executive director for its first six years.

"Our success is the result of talent and hard work on the part of those startup companies we've had the privilege to help," Luderer says. "This award is an illustration of the MEDC's confidence in us to provide the ongoing financial support needed to establish BRCC-II. Even more important than our economic development success is the fact that these companies are developing the new therapies, devices and diagnostics that will mean improved care for patients."

Until mid-2010, the BRCC was under the direction of Luderer, who left to become interim dean of the medical school. Earlier this year, with the selection of Dr. Hal B. Jenson as founding dean of the School of Medicine, Luderer became the school's associate dean for research. When Luderer moved to the medical school in 2010, the MI-SBTDC, with Technology Business Consultant John Balbach as the point person, was contractually engaged to facilitate fund operations and bridge the program to BRCC-II under the umbrella of the new medical school. Upon receipt of the follow-on funding from the MEDC, a permanent executive director will be hired to launch and manage BRCC-II.

Photo of Donald R. Parfet, Apjohn Venture Fund.
The terms of the 2003 Legislative act that established funding for the BRCC created a Board of Governors for the center that is made up of representatives from the private sector, academia and state government. Since its inception, that board has been chaired by Donald R. Parfet, partner for the Apjohn Venture Fund, former senior executive for the Upjohn Co. and Pharmacia and board member for multiple life science companies.

"The BRCC is a recognized collaborator and funder for early stage life sciences companies throughout the state," Parfet says. "This investment by the State of Michigan and the MEDC will allow the BRCC to continue its valuable work, that of accelerating the commercialization of new medical breakthroughs."

The BRCC was originally funded in the wake of the closing of Pfizer human pharmaceutical discovery programs in Kalamazoo. The early focus of the BRCC was on retaining key personnel by helping them launch new companies that were built on the expertise and talents of individuals leaving Pfizer.

The center focused on Southwest Michigan for its first two years of operation. Since 2006, however, the BRCC has established a statewide footprint in economic development, with as much as 40 percent of companies in its overall portfolio in other parts of the state. The BRCC portfolio companies are working with licensed technology from several universities around the nation. They include such Michigan universities as Wayne State, Michigan State and U of M, as well as public and private research schools that include the universities of Chicago, Connecticut, Kentucky, Maryland and Minnesota.

This has allowed these various companies to investigate new therapies for cancer, new diagnostic tests for prostate cancer, and novel therapies for renal failure to name just a few, Luderer says. In addition, he notes, several pharmaceutical service companies now provide a foundational development hub for Michigan's emerging, early-stage life science industry.

During its first years of operation, Luderer and Parfet say, the BRCC identified funding gaps in the startup process and used the initial $10 million as a pilot project addressing those specific periods in the life cycle of a startup. BRCC-II will focus on those gaps and continue following a statewide strategy for investing in startups and a national strategy for identifying technology at research universities that have potential in the commercial marketplace.

About WMU School of Medicine

WMU's new School of Medicine is a partnership involving WMU and Kalamazoo's two teaching hospitals, Borgess Health and Bronson Healthcare. Planning and fundraising for the new medical school are well under way. Expected to welcome its first class in fall 2014, the school will be a privately funded initiative housed at Western Michigan University, which is one of the nation's 139 public research universities, as designated by the Carnegie Foundation, and one of only five such universities in Michigan.