NEW YORK (GenomeWeb News) – The Biodesign Institute at Arizona State University is in the process of securing $5 million to $10 million to provide funds for the first startup companies expected to move later this winter into its new Biodesign Impact Accelerator.
"We expect the first three to five startups will enter the Impact Accelerator by February of 2010," Joe Caspermeyer, a spokesman for the Biodesign Institute, told GenomeWeb Daily News on Monday.
Those startup companies — to be selected from proposals now under review by the accelerator's executive committee — will be designed to commercialize the institute's research discoveries and technologies, he said.
The startups will have access to up to 8,000 square feet of research space at the Biodesign Institute, located on ASU's Tempe, Ariz. campus — as well as an entire approximately 25,000-square-foot floor a five-minute drive away at SkySong, the ASU Scottsdale (Ariz.) Innovation Center. The center, co-developed with the city of Scottsdale, is designed to provide expanding companies entering or expanding within the US with services that include access to new technologies, capital networks, business education and skilled workers.
Over the accelerator's first few years of operation, Caspermeyer said, additional space will be built out at both the Biodesign Institute and SkySong to house 10 to 15 companies. Accelerator companies are designed to reach the acquisition stage in three to five years.
The initial $5 million to $10 million now being raised will be supplemented in the future with a goal of $25 million in funds for infrastructure improvements and technical support.
"At full maturity, the accelerator may support 10 to 15 startups, with 'graduation' occurring with each liquidity event of $10 [million] to $20 million from a single acquisition," Caspermeyer said.
Approved in August by ASU's governing body, the Arizona Board of Regents, the accelerator is the brainchild of the Biodesign Institute's Executive Director, Alan Nelson. He has sought to create an academic tech transfer paradigm that minimizes the financial risk of startups in the post-discovery but pre-commercial "Valley of Death" phase.
Rather than wait until outside investors pour money into a company, or until a discovery enters the market and generates revenue from royalties, the accelerator will fund and nurture companies deemed capable of capitalizing on the institute's innovations in personalized medicine, diagnostic systems and devices, cancer research, vaccine platforms, alternative energy solutions, bioremediation technologies, and national security initiatives.
Running the accelerator will be Lee Cheatham, who will take on a newly-created position as the institute's operations director immediately after New Year's Day. Cheatham will oversee administrative functions that include information technology, security, facilities and environmental health and safety, in addition to his role as the accelerator's general manager.
Cheatham is expected to oversee planned expansions to both the research infrastructure at Skysong and the Biodesign Institute, which has held off on facility growth due to the recession. While Biodesign has been master-planned for four buildings totaling 800,000 square feet, the institute now consists of a total 350,000 square feet of space completed between 2004 and 2006 in two buildings — one of which was Arizona's first building to win the top "platinum" rating for Leadership in Energy and Environmental Design, or LEED, sustainability design by the US Green Building Council.
As for the accelerator, its costs will be funded through a combination of federal grants, industrial partners, foundations and individual philanthropic investments, venture investors, and ultimately the commercialization of research, according to the institute.
"Since the Impact Accelerator is a new model, we'll need to discover what the best 'recipe' is. Initially, I anticipate the split being half time for operations (setting up the operation) and the other half roughly split between identifying new candidates and raising funds," Cheatham told GWDN. "Over time, and once the model is developed, identifying and encouraging new ideas into the IA will grow in importance and operations will decrease because additional staff will be added."
"I can imagine that raising money will always be a critical and large part of the position," Cheatham added.
He termed the accelerator "a high value endeavor that will bring together the talents and skills of scientists and entrepreneurs for the benefit of society and regional economic development.
"To successfully create academic startups, the great ideas and innovation coming from academic research must focus on reducing the early-stage risks, which is a place where many companies fail," Cheatham said.
Cheatham's position was needed, Caspermeyer said, because the Biodesign Institute has grown rapidly over the past several years, to its current annual budget of $70 million and work force of more than 600 scientists, research, and administrative staff.
"The institute had reached a level of maturation to require [a manager for] the day-to-day aspects of a world-class research facility," Caspermeyer said.
Cheatham previously served as executive director of the Washington Technology Center, a position he held since 1998. WTC is a state-created economic development organization that assists life-sciences and other tech businesses by linking them with access to capital, potential collaboration partners, support services, and access to lab facilities.
At WTC, Cheatham is being succeeded on an interim basis by Chris Coleman, the center's current CFO and director of business operations, pending a search for a permanent director to take place in 2010.
WTC credits Cheatham with enabling companies and researchers to generate $500 million in external support for product development, manufacturing and jobs during his tenure, following about $3 million annually in spending on the center by the state of Washington. Under Cheatham, the tech center launched the annual "Washington's Innovation Summit" and created its WTC Angel Network, Small Business Innovation Research assistance program, and a nanotechnology research program funded with federal money.
Earlier, Cheatham founded The Strategic Projects Group, a Sandy, Utah, startup company providing software, technology, training and consulting to the real estate sector. Before joining SPG, he was vice president of Ameritech Library Services, a software division of Ameritech; held several senior management positions at Battelle-Pacific Northwest Laboratories; and was an adjunct professor in communications theory and systems analysis at Washington State University Tri-Cities. He received a PhD in electrical engineering from Carnegie-Mellon University in 1984.