Category: Technology

Organization rolls out map for bioscience in Larimer Co.

In 2003 Colorado set the wheels in motion to drive the growth of bioscience in the state. These wheels included an industry association, the Colorado BioScience Association; a leader, Denise Brown, and a blueprint, “Colorado’s Place in the Sun: A Bioscience Future.”

Now, two years after the state rolled out its plan, Larimer County is the first locality to put its own development strategy on paper.

Since January 2004, a group of industry executives, economic development professionals and Colorado State University representatives met once monthly in order to develop the Larimer County Bioscience Initiative Strategic Plan. The plan, disclosed earlier this month, builds on the Colorado plan, adapting many of the state efforts to fit with Northern Colorado.

The plan starts by identifying seven key factors to success in other bioscience clusters in the nation:

• Engaged universities with active leadership.

• An active and coordinated industry.

• Available capital.

• Talent pool.

• Specialized facilities and equipment.

• Supportive business climate.

• Patience and long-term perspective.

The Larimer County strategists used these factors to size up Northern Colorado as a bioscience contender (the bioscience industry includes four segments, including research and testing, drugs and pharmaceuticals, organic and agricultural chemicals and medical devices and instruments). The results: the region only qualifies in the featherweight category, but is still in the competition.

The first and most over-arching factor is the presence of a strong research university. “The anchor of everything we’re doing is CSU,´ said Eric Weber, COO of Gonex Inc. and member of the Bioscience Initiative group.

Fort Collins-based Gonex is one of the darlings of CSU’s tech transfer program. Gonex is a development stage company. The primary product for the company is a hormone-based technology that would replace traditional spay or neuter sterilization surgeries for companion animals with a single injection. The technology also has applications in treating humans with hormone-based cancers, such as prostate and breast cancers.

“We’re in the process of getting funding to move this through the FDA approval process,” Weber said.

For Gonex and many other startups, funding is the biggest issue to overcome. Bioscience companies are particularly dependent on venture capital and angel funding because it can take several years and a lot of money to launch one product.

“Funding for a small company is always an issue,´ said Richard Casey, founder of RMC Biosciences Inc. Fort Collins-based RMC provides bioinformatic services to pharmaceutical companies, including computer-aided drug design.

“Most of the investment community is based on the West or East coasts,” Casey said.

Geography can be an issue since most investors like to be physically close to their investments.

“You don’t need an ocean to create a bioscience cluster,” Gonex’s Weber said.

Larimer County’s bioscience plan reports there are about 30 venture capital funds in Colorado – a third of which invest in bioscience companies.

“The larger problem is the mindset in the Denver-Boulder area towards Fort Collins startups,” Weber said. Many investors overlook the region because it is seen as non-critical and its startups as less successful.

As for angel investors, individuals who invest in startup and early-stage companies, Northern Colorado is lacking an organized network to identify who they are. The plan reports that the underground network of angel investors is actually quite robust considering the size of the region.

Funding is only one of the issues that Northern Colorado needs to address to become a player in the bioscience arena.

The plan divulges four strategies:

• Improve the availability of funding for bioscience companies, especially seed and early stage assistance.

• Enhance the success rate of small or startup bioscience companies and support the needs of existing firms in the region.

• Support Colorado State University’s critical role in the regional and statewide bioscience effort. This includes maximizing the commercialization of bioscience discoveries at the university.

• Utilize the Northern Colorado Economic Development Corp.’s Leadership 2010 program that launches a five-year plan to revitalize the region’s economy.

A set of specific tactics accompanies each of the strategies.

One that carries through to many of the strategies is improved visibility.

“Much like the rest of the state, Northern Colorado isn’t seen as bioscience central,´ said Jerald Kuiken, CEO of CHATA Biosystems Inc. and member of the planning group.

CHATA, founded in 1997, manufactures blended chemistry for pharmaceutical companies and other industries. The companies use the chemistry for analysis, production and shipment. What sets CHATA apart is its patented flexible film bag – similar to a bag used to hold IV fluid. The bag allows for convenient shipping and storage and reduces the risk of contamination or decreased potency.

Kuiken explained that outside of the region, there is a false impression of an absent or nominal bioscience industry. In order to get on the map, the region needs to prove that it is the right place for bioscience to flourish.

Most of the media attention in the region focuses on the technology layoffs, and gives the impression of an exodus out of Northern Colorado, Kuiken said.

Part of increasing the visibility of the industry includes raising the visibility of the university.

“One of the challenges CSU and CSURF has is knowing who is out there and letting them know what we do,´ said Kathleen Henry, president and CEO of the Colorado State University Research Foundation. “It goes back to informing the community.”

CSURF is charged with transferring the technologies created by university research into the commercial realm.

“We’ve already had a fair amount of invention disclosures and spinoffs in the biosciences,” she said.

Part of the burden of raising visibility of the industry in general will land in the lap of the Northern Colorado EDC.

“We’re going to take the findings (of the plan) and network them out to interested parties,´ said J.J. Johnston, president and CEO of the Northern Colorado EDC. Johnston was also a part of the planning group.

Johnston said the Northern Colorado EDC is committed to bring in site selectors, host special events and conduct media tours that will visit local bioscience companies.

The organization is also conducting a workforce survey to determine the employment needs of the bioscience industry.

While the plan is a step in the right direction, Johnston said the region still has a lot of work ahead – a sentiment echoed by several of the plan’s co-authors.

“When you look at the companies that are here and solid, it’s a pretty short list,” he said. “In my mind we need to increase that number by 10 times to really start rocking and rolling on this.”

Some might say the “rocking and rolling” actually started back in October when Denise Brown, executive director for the CBSA, announced that she would maintain a satellite office at the Fort Collins Technology Incubator – the first satellite office for the CBSA in the state.

At any rate, the region and the state are focused on becoming a critical bioscience player.

Brian Vogt, director of Colorado’s Office of Economic Development and International Trade, said that bioscience could become a bubble that promises to never burst.

“The people of the world have an insatiable appetite for bioscience,” he said. “Bioscience is here to stay.”

Lease deal enables incubator to wriggle out of a tight spot

All that remains unused at the Fort Collins Technology Incubator is 500 square feet of windowless space.

But that would never do for the incubator’s newest client, Logisens, a company that specializes in stress-tracking and reducing products.

The cramped and dreary spot would be counterintuitive to the company’s goal of stress-reduction; although, it could have made a good experiment.

Luckily, Logisens didn’t have to squeeze in between the other tenants, thanks to a deal between the incubator and a local property management company.

The Fort Collins Technology Incubator was founded in 1998 as a virtual incubator – without a brick and mortar office – providing professional, planning and critique services at discounted rates to qualified startup companies.

Kathy Kregel, executive director of the incubator, said this focus didn’t change after the incubator got walls last year. “Our deal is to provide the services,” she explained.

The city of Fort Collins provides the building at 200 W. Mountain Ave. and acts as the landlord to the incubator companies. The city doesn’t charge Kregel for her office in the building, where she screens companies applying for incubator assistance and provides accepted clients with services and guidance.

Right now, the incubator’s 6,500-square-foot building is home to two companies – Privacy Networks and Triad Systems Engineering – as well as a rotating office for Denise Brown, executive director of the Colorado Bioscience Association.

Several weeks before Logisens approached Kregel with a request for a location, she had received an offer of more space she couldn’t refuse – or at least had no reason to.

Robin Bachelet, broker of record for Poudre Property Services, had seen the need for expansion for the incubator when she came to visit with Privacy Networks. (Poudre Property Services is an investor in the startup.)

So when Logisens asked for office space, Kregel had a ready alternative to the windowless broom closet.

Bachelet’s building, the Collegio, is located near the intersection of Laurel Street and College Avenue. Logisens occupies 1,650 square-feet in the building. The budgeted market value of the lease is $15 per square foot, but it is available to Logisens for closer to $9 per square foot.

“It’s an investment in the future,” Bachelet said. “I had an empty space, and they had a need.”

She added that there is room for Logisens to expand as it grows and room for more incubator companies to join it.

“I would love to have more incubators in here,” she said. “They seem like a really good risk.”

Having incubator companies as tenants has its advantages. Before becoming an incubator client, companies undergo a rigorous application process. The business plans are screened for viability; therefore, there is less of a chance that one of the companies will default.

Bachelet added that a second location, a 2,300-square-foot garden level on West Elizabeth Street, would be available to incubator companies for around $5 per square foot.

“I think this is a perfect answer for expansion,” Kregel said. She estimates there are three companies in the hopper that might have a need for affordable space.

Maybe not completely perfect. An important element to the incubator concept is the atmosphere created by having several innovative companies sharing space in a large building. However, funding isn’t available to make this happen in Fort Collins.

The incubator receives $100,000 from the city of Fort Collins, the Northern Colorado Economic Development Corp., Colorado State University and the Colorado State University Research Foundation to operate each year.

Markus Pratz, director of investor relations and business development for Logisens, said the company is lucky to have landed space at the Collegio building.

“It’s a very nice location,” he said. The 10-employee company has room and time to grow in its location. Typically, incubator companies have a three-year limit in the incubator building. But this doesn’t apply to Logisens because its contract is with the property management company, not the incubator.

“If we can make it, we could stay here forever,” he said.

Box-of-all-trades: OtterBox delivers power of protection

Otter Products LLC, a Fort Collins-based company, has gained national recognition for its nearly indestructible products. The maker of OtterBox, a waterproof, crushproof protective case, is branching out to other markets by making specially designed cases for devices such as Zippo lighters and the Apple iPod.

The Zippo Cargo Case by OtterBox is the only Transportation Security Administration-approved way to carry fueled Zippo pocket lighters in checked airplane luggage. The case is, like most Otter products, waterproof to a depth of 100 feet, dust-proof and drop-resistant.

The seemingly extravagant level of protection is exactly what allowed the June 2005 change in TSA regulations, which is fitting for Otter’s mission. “We are always looking for a solution to make a product usable in a location that it can’t be used,´ said Curt Richardson, CEO Otter Products, which he founded in 1996.

The company is also making a considerable impact on the iPod market, with its full line of protective cases for the portable music players. The iPod cases, which are available from $14.95 to $49.95, are all water-resistant and impact-protected. According to the iPod Web site, the “OtterBox delivers the ultimate in stylish ruggedness.”

The focus on iPod protection was easy. “Part of our target market is to build cases that are interactive for technology,´ said Richardson. “The iPod was a natural one because they are always getting creamed. Just take one of those iPods out of the wrapper and it’s going to get scratched. Our case allows it to be taken out anywhere.”

This move to participate in niches of various industries is part of Otter Products’ re-invention over the past three years. The company, which started as a sideline for a plastics molding company, has outsourced all manufacturing and now concentrates on marketing. This year, the company hopes to achieve 100 percent growth, due largely to the multitude of new products.

“Every product we have is new in the last three years. Even the OtterBox is completely redone,” remarked Richardson. “We’ve retooled to meet the consumer’s need.”

Interactive technology protection allows people to carry their valued electronics anywhere, he explained. Instead of buying a rugged PDA for a lot of money, just to replace it in a few years for newer technology, a $20 to $100 Otter case can make a less-expensive PDA more rugged.

Otter keeps a close eye on the electronics market, watching for those devices people value most. For Richardson, personal pride in a device is the key to knowing if people will want to invest in a protective case. “We ask: Do people hold their electronics as near and dear to themselves? Cell phones are seen as disposable, whereas if someone has an iPod, it is their precious, their baby. They have invested a lot of time in it. They hold it near and dear.”