News Life Sciences Region’s life sciences continue to evolve, blossom
Region’s life sciences continue to evolve, blossom
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By Andrew Domino | MiBiz
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Despite a down economy, one of Kalamazoo County’s largest industries, biomedical, is only getting bigger and more established.
The Southwest Michigan Innovation Center, a business incubator for life sciences companies, currently has 16 clients at its Kalamazoo campus. Some are “veterans,” like drug development company ProNAi, and others are newer additions to the SMIC, like Metabolic Solutions Development Company, which earned a $773,000 grant to fund research into a treatment for Alzheimer’s disease.
Another new offering is the life science laboratory, available for rent to a very small company or even an individual scientist, said Rob DeWit, SMIC CEO. He said the Innovation Center also has a suite of mass spectrometry instruments that few companies would be able to provide for themselves.
Finding life science businesses to use that equipment and lab space isn’t a problem, DeWit said. Right now, the SMIC is about 70-percent full, and he’s shooting for a goal of 85 percent capacity, leaving some space for future companies. One source for those companies might soon be in Kalamazoo. In March, Western Michigan University announced a $100 million gift from an anonymous donor that will go a long way toward helping WMU develop its own School of Medicine.
“We’re studying how we can support that research effort,” DeWit said.
But medical schools already in operation, like those at the University of Michigan and Michigan State University, are “starting to be a good substrate for development,” said Stephen Rapundalo, president and CEO of MichBio, a networking group for the bioscience industry in Michigan.
“Now more than ever, (life sciences are) some of the largest employers in West Michigan,” Rapundalo said, naming companies like Pfizer and MPI. “Even Amway has nutraceuticals,” medical products derived from foods, like vitamins and dietary supplements.
In the Kalamazoo area, the term “life sciences” may first conjure up thoughts of Pfizer and other drug developers. But Stryker and similar medical device manufacturers are a close second in many minds.
“Smaller (device) companies are where pharmaceuticals were 10 years ago,” said Kevin McLeod, managing director of the Michigan Medical Device Accelerator, a parallel to the SMIC and part of Southwest Michigan First. “They can take more risks, move faster, get approved faster.”
McLeod said there about 40 to 50 medical device manufacturers and developers in Kalamazoo County now, a “well-kept secret” hidden in the shadow of more flashy drug development. Many ideas in the field come from working physicians, who recognize the tools that would help them accomplish their jobs. Other ideas come from outside the county. McLeod said he has heard from entrepreneurs in medical device capitals like Minneapolis and San Francisco hoping to outsource their manufacturing to Michigan. He’s open to inviting outsiders to Kalamazoo County, but says there’s plenty of potential here at home.
“We have the infrastructure here,” McLeod said. “There’s room for more (companies). We just need the ideas.”
Patrick Morand, managing director of the Southwest Michigan Life Science Fund, said it’s a great time for venture capital funding of life science firms. His fund is currently supporting seven life science start-ups in the Kalamazoo region. Morand said he’s been in the area for six years, and in that time has seen a steady growth in business, especially since everyone involved realizes that drugs and medical devices can’t be profitable immediately.
“You need a fair amount of patience,” Morand said. “It takes time to establish a business. But nature is unforgiving, and companies that can’t make it won’t.”
The Battelle report, a regular survey of the life sciences industry in the U.S., named the Kalamazoo-Portage area one of the 15 regions in the country with “specialized employment concentration” in bioscience. The list also includes high-profile cities like San Francisco and Boulder, Colo.
“It’s been on that list for quite some time,” Rapundalo said. “It has to do with history and a strong talent pool.”
Industry experts point to the 2003 takeover of Pharmacia by Pfizer as a time of major upheaval in the life sciences in Kalamazoo County. Long-time employees used the change to begin their own drug development companies, like many of the first inhabitants of the SMIC.
“A lot of companies were born out of the consolidation event,” Rapundalo said.
The companies that survived moved out of the incubator space provided by the Innovation Center and established their own offices. Others were folded into bigger companies, which had the resources and staff to take what a small company had developed and bring it to fruition.
“The ‘dream’ is to team up,” Rapundalo said. “They’ll never have the capacity to take a drug to completion. Development is moving away from large employers, being outsourced. It takes time for (small companies) to grow, but now that they have grown, there is diversification.”
For the years 2004-2009, the report shows Michigan’s pharmaceutical industry obtaining 636 patents, nearly twice the number of patents for medical devices and biochemistry. Venture capitalists poured $152.8 million into the industry over the same time period. While some of that production is attributed to major drug developers in Ann Arbor, Midland and other areas, the Kalamazoo-Portage region can stand alone.
Life sciences in southwest Michigan, like the rest of the state, is benefiting now from a governor with a venture capitalist background. Ardesta LLC, the venture capital firm Gov. Rick Snyder co-founded before his campaign for governor, invested mainly in communications and energy companies. But his knowledge will still help the life sciences business.
“He has the instincts of a venture capitalist,” Morand said. “He knows risk management.”
Rapundalo said he appreciates that he doesn’t have to explain the bioscience industry to Snyder. Having a connection like that smoothes the way for a relationship between drug developers and government, he said.
“(Synder’s administration) understands the significance of the industry to the state,” Rapundalo said. He is also beginning to talk with officials from the Michigan Economic Development Corporation about providing support to life science companies looking to grow, or even establish themselves in southwest Michigan and elsewhere.
Drug development and medical devices are a long-established part of business in Kalamazoo County. The next step, experts say, is finding a new area of life science specialization, a new draw that brings entrepreneurs and money to the Kalamazoo area.
DeWit called the 2003 Pfizer takeover a “perfect storm” that led to the explosion of life sciences business in Kalamazoo now. But 2003 was nearly a decade ago. The industry is researching what’s next. It could be any number of things: rapid diagnostics screening, bio-based technology, or biosimilars (biological prescription drugs nearly identical to FDA-approved drugs).
“We want to explore personalized medicine, making sure the medicine you take is right for you,” DeWit said. “We are very fortunate to have a cluster (of business) that is more than 100 years old; we need to continue to bring in new ideas and new people.”
