University of Florida incubation: An 11-year overnight success story
MIT? Caltech? How about the University of Florida, which has quietly become a leader in business incubators.
By Madhusmita Bora, Times Staff Writer
Published July 29, 2007
Tucked in the backwoods of Alachua, the University of Florida's biotechnology incubator is emerging as a sleeping giant, challenging the might of Goliaths such as MIT, Stanford and Caltech.
Last year, the Milken Institute, an independent, economic think tank, ranked the school fifth among universities most skilled in transferring an idea from a lab to a potentially viable product in the marketplace.
This year, UF's Sid Martin Biotechnology Incubator claimed the second spot in the technology category of the National Business Incubation Association's annual Incubator of the Year award program. It also captured a glowing write up in Business Week magazine.
Yes, there's more to UF than just Gators and Gatorade.
"It's one of those 11-year overnight success stories," said David Day, UF director of technology licensing.
The incubator's biotech focus helped it stay on course and succeed in an area that's considered hot and trendy, experts say. It jumped ahead of its peers at USF by attracting more capital, infusing a corporate atmosphere and installing a team of passionate managers.
"When you are number one, it's hard to say that you are not a role model," said George Gordon, a director of the Tampa Bay Technology Forum.
What also sets the incubator apart from its peers is its million-dollar facility, the cutting edge equipment, a climate-controlled greenhouse, an attached animal facility and a pilot fermentation facility, said Patti Breedlove, incubator manager.
Officials there focus on snapping the umbilical cord between the scientists and the companies that emerge. They emphasize water-tight business plans, and encourage bringing in seasoned professionals to run the companies.
"They are doing a pretty good job there now," said Perry Wong, senior managing economist at the Milken Institute. "People look at Florida and say, 'Huh? Florida doing research?' But, UF is definitely emerging as a player."
The demand for a spot in the facility has soared with the rising success of its inhabitants and Breedlove says she increasingly finds herself juggling spaces and companies.
This, despite a late start.
Nationally, incubators began appearing after the passage of the Bayh-Dole Act in 1980. The law handed U.S. universities, small businesses and nonprofits intellectual property control of inventions that arose from federally funded research.
"What it took was the administration's willingness to let professors out of the box," said Dean Gabriel, professor of plant pathology at UF and CEO of Integrated Plant Genetics Inc. Gabriel's company, housed in the incubator, grows genetically engineered plants that are resistant to canker and greening.
Traditionally, professors and teachers were always expected to devote their time to teaching and the university. Getting involved in a business venture was almost frowned upon.
"It was like you sold out for the bucks," Gabriel said.
By the 1990s venture capitalists and universities realized they could tap into a potentially lucrative income stream based on commercially viable university research.
Slowly, incubators began to sprout and blossom. Now research and innovation are increasingly shifting away from the corporate lab and back to where they began: the university campus, says a 2006 Milken Institute report. An increasing share of funding from government, industry and nonprofit donors is going into biotechnology and the life sciences, the report notes. And universities are hankering for their share of the pie.
At UF, the 40,000-square-foot incubator got off the ground with a combination of USDA, University of Florida and state funding. The $11.5-million project opened in 1995. By then, its peers in California, Massachusetts and Texas had a head start.
At first, progress was slow, said Jane Muir, director of UF Tech Connect which helps start-up companies and associate director of the Office of Technology Licensing.
"There was not a lot of other resources in the community that fostered technology-based business creation," she said.
Over time, the incubator began attracting companies that succeeded in luring capital.
In the late 1990s, the university won $280-million in research awards and executed 10 licenses. By 2005-2006, that number climbed to $519-million and 72 licenses.
Its achievements brought glory to a region that's trying to establish itself in the high-tech market, said Randy Berridge, president of Florida High Tech Corridor Council, a central Florida economic development group.
Gabriel, whose company will graduate and find its own quarters within the next year, says his start-up thrived because of his location at the incubator. The tenants help each other out, and incubator officials coach them and serve up funding opportunities.
"The culture here now is one of excellence," he said. "It's becoming more like Harvard."
"It's a tremendous resource for the area," said Karen Zaderej, vice president of marketing and sales at Axogen Nerve Regeneration.
The company on July 20 launched a nerve graft, which enables nerve regeneration and functional recovery. Axogen has been at the incubator less than a year, but says it would have struggled without a space there.
The challenge for UF is to continue such success stories, Wong said of the Milken Institute.
"It's true it's moving in the right direction, but it needs to diversify its licensing income portfolio," he said.
UF's Day at the technology licensing office says the university has 200 licenses that yield income over a broad range of disciplines.
He wouldn't say if a decade from now UF will surpass the might of MIT and Caltech, but said the university is not slowing down. At least, not yet.
Madhusmita Bora can be reached at (813)225-3112 or email@example.com
Sid Martin Biotech Incubator
Location: 12085 Research Drive, Alachua.
Features: The 40,000-square-foot facility has fume hoods and biosafety cabinets and labs with $1-million worth of shared equipment, conference rooms, offices, a 6,000-square-foot small animal facility, climate-controlled greenhouse and a pilot-scale fermentation facility.
Admitted companies: 36
Average years of incubation: 3 to 8
Resident companies: 12
Companies acquired: 3
Companies that have failed: 10
Private funding raised: More than $100-million
2006 revenue: $533,000
Reserve fund balance in 2006: $413,000
Start-ups at the Sid Martin Biotechnology Incubator:
Axogen Nerve Regeneration: Biomedical company develops products that allow surgeons to repair and regenerate peripheral nerves.
Banyan Biomarkers Inc.: Diagnostic company uses elements present in blood to detect and monitor traumatic brain injury.
Bioenergy International LLC: Company develops technologies to produce fuels and specialty chemicals from feedstocks and cellulose.
Biomed Immunotech Inc.: Company developed kits for analyzing immune responses to treatments in diseases such as HIV and cancer.
Ecoarray Inc: Company's technology analyzes pollutants in water supply.
Integrated Plant Genetics Inc.: Develops, produces and licenses genetic technologies for horticultural, agricultural and food production industries.
Nanomedex Inc.: Company uses nanotechnology to improve formulations of certain off-patent drugs.
Nanotherapeutics Inc.: Bio-pharmaceutical company uses nanotechnology to improve drug delivery.
Pasteuria Bioscience LLC: Company develops a safe biopesticide to control plant nematodes.
RFE Pharma Inc: Working on new drug treatments for eye diseases.
St. Charles Pharmaceuticals: Drug development company focuses on pain treatment.
Verenium Corp.: Company develops ethanol using agricultural waste products and other woody and fibrous materials.
Xhale Diagnostics: Company developing a line of breath-based diagnostic devices to detect presence of substances in the blood.
Source: Sid Martin Biotechnology Incubator