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Wayne State University, County Set to Open Incubator Park for Stem-Cell Shops in Michigan

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The research and technology park of Wayne State University in Detroit and the government of neighboring Wayne County plan to open in four months Michigan’s first laboratory designed to help researchers commercialize drugs and other products derived from human embryonic stem cells, according to a TechTown official.

The roughly $3 million Stem Cell Commercialization Facility, which comes less than a year after state voters approved repealing restrictions on such research, will open within 2,508 square feet of TechOne, the 100,000-square-foot former Chevrolet Creative Services auto design facility, converted into the first of as many as three planned buildings that will eventually comprise the technology park, called TechTown.

“We expect the place to be finished by the end of the second quarter, that’s June 30. Companies and research workers will be moving in there from that period onward,” Randal Charlton, TechTown's executive director, told BioRegion News last week. “What we’ve done so far is to do all the basic infrastructure work — air conditioning, and so forth. Over the next 90 days, the equipment will be moved in, and the lab will be built out.”

Five companies — all early-stage spinouts of Wayne State’s School of Medicine and other departments of the university — have committed to using the new stem cell lab. They are Regenerate, GliaGen, Diamond Research, Matthew Research, and Lakeshore Life Sciences. Additional companies are in talks to join them.

The stem-cell center will operate with a manager and “two or three” technicians, and is expected to grow over time based on demand for space and facilities from regenerative-medicine companies, Charlton said.

As that happens, the stem-cell center could expand into 20,000 square feet of as-yet-unrebuilt space at TechOne, as well as two additional existing buildings totaling 200,000 square feet, to be named TechTwo and TechThree. Completed in 1927 as a service facility for Pontiac cars, TechOne was converted by parent company General Motors into the site where its Chevrolet division created the classic design of the Corvette and other cars.

The stem-cell center will join other TechTown amenities for life-sci companies that include centers of excellence in biobanking, alternative energy, public health, and the Great Lakes environment — plus more practical services on site that include business planning professionals, a law firm, a business center, and a microenterprise loan firm.

A “soft landing center” at the tech park focuses on attracting overseas life-sci companies focused on expanding to the US for biobanking purposes, to conduct stem-cell applied research, and for commercialization efforts.

Since it opened in 2004 on the north end of Wayne State’s campus, the nonprofit TechTown has grown to house 73 tenant businesses in TechOne, which was renovated at a cost of about $20 million. The park’s first and largest tenant, publicly traded biotech Asterand, is a supplier of human tissue and human tissue-based research services that was one of just 68 London Stock Exchange companies to show gains in their share prices during 2008.

Charlton co-founded Asterand, and served as its CEO before joining TechTown, succeeding Howard Bell, who became vice president and general manager for assessment at educational publisher Scholastic.

TechTown has also developed collaborations with the state’s two largest academic research institutions — the University of Michigan and Michigan State University — in an effort to expand into stem-cell collaborations, he added.

Also open toward collaborating with the TechTown stem-cell center are life-science leaders in Massachusetts, where the quasi-public Massachusetts Life Sciences Authority has approved $8.3 million to help support a new stem-cell bank and registry, both of which have begun operations in recent months. Some 15 staffers work in a 15,000-square-foot space that houses the bank and registry on the University of Massachusetts Medical School's Shrewsbury campus.

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The bank, which provides stem-cell lines to in- and out-of-state researchers, was recently outfitted with "two lines, but that's going to rapidly expand. That was what we used to test out all of our standard operating procedures," said Gary Stein, interim director of UMass' Center for Stem Cell Biology and Regenerative Medicine, and chair of its committee now searching for a permanent director.

The International Stem Cell Registry, by comparison, details the properties and potential applications of about 500 specific hESC lines, and includes information for researchers on obtaining the cells, including a catalog of references related to each hESC line. The registry also includes information for doctors and patients about advances in stem-cell therapies.

"What we are is a source of quality-controlled, human embryonic stem cell lines and reprogrammed lines, IPS [induced, pluripotent stem cell] lines. We do not develop the lines, but, rather, we receive the lines from the developers," added Stein, who is also chair of UMMS' department of cell biology, deputy director for UMMS' cancer center, and a researcher pursuing a stem cell project.

Stem Sell

The registry and stem-cell bank would welcome collaborations with the TechTown stem-cell commercialization center, according to Stein and Susan Windham-Bannister, the life-science center’s president and CEO.

"I think there is tremendous opportunity for collaboration; I really don’t see [the TechTown center] as a competitor," Windham-Bannister said. "I see them as a way to continue to expand the market for the stem-cell lines that we'll be housing here in Massachusetts, and making available.

“I think there can be some tremendous avenues for collaboration and exchange of information — to share lines and make them available to researchers not just in our state, but also more broadly," Windham-Bannister added.

Windham-Bannister said the bank and registry are two of three anchors of Massachusetts' regenerative medicine effort; the other is the Harvard Stem Cell Institute, which focuses on basic research and clinical translation in five principal disease areas: cancer, diabetes, neurodegenerative diseases such as ALS and Parkinson's, blood disorders, and cardiovascular disease.

The TechTown stem cell-center has no parallel in Massachusetts or California, where companies focused on stem cells and other life-sci specialties have typically emerged privately rather than through government-subsidized incubators.

"There hasn't appeared to be a need in our community,” said Don Gibbons, a spokesman for the California Institute for Regenerative Medicine, the state agency that funds stem-cell research and facilities under a $3 billion, 10-year bond act approved in 2004. “This is the home of Silicon Valley and entrepreneurs and venture capital. That's how they get things done."

He said the idea of an incubator or commercialization center focused on stem-cell businesses hasn’t arisen at recent meetings with life-sci leaders, and the public convened statewide to develop a new strategic plan for CIRM.

California is home to 117 of the world's 687 stem cell companies, Gibbons said, citing a presentation earlier this month at a strategic plan meeting by Proteus Ventures, a VC firm that specializes in investments in stem-cell companies.

At TechTown, Charlton said, the stem-cell center will be “an integral part of a much larger plan in which TechTown, Wayne State, and Wayne County are focusing on this core resource of providing biological samples for the drug-discovery and -development industry. Now we’ve got this stem-cell commercialization center that is hopefully going to move Michigan forward.”

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Charlton spoke Feb. 17, five days after Wayne County Executive Robert Ficano announced the stem-cell commercialization center during his State of the County address. Ficano projected the county would finish this year with a $100 million deficit absent cost-cutting moves now under review by legislators.

During his address, and in a later interview with BRN, Ficano said the new center has been in the works for more than two months, starting soon after Michigan voters last November approved Proposal 2, which lifted restrictions on human embryonic stem cell research.

“In the past, Michigan was probably at the bottom of the list for companies that were looking at doing research,” Ficano told BRN. We think with the new law, it opens it up for more companies to be interested to come here, and to locate here.”

For Ficano and Wayne County, the stem-cell center is the most visible example of a long-term gamble that the life-sciences industry can generate enough jobs to make up for those the county has lost in recent years, especially from automakers and other manufacturers.

"We are creating a new biotechnology industry that will attract new companies, jobs, and alliances with researchers around the world," Ficano said.

That industry is relatively tiny in Wayne County. A study prepared by Anderson Consulting Group for Oakland University and its partners in a healthcare-research park project in neighboring Oakland County found that as of 2006, Wayne was home to 133 establishments with a combined 18,105 jobs:

• Nine pharmaceutical and medicine manufacturing businesses, with a total 448 jobs;
• 40 providers of scientific research and development services, with a total 16,543 jobs;
• 41 medical and diagnostic laboratories, with a total 469 jobs; and
• 43 medical-equipment and supplies-manufacturing businesses, with a total 645 jobs.

A just-released report, however, lists only 7,717 bioscience jobs for Wayne County among the 40,086 it counted for all of Michigan. The figures were prepared for the Pharmaceutical Research and Manufacturers of America, or PhaRMA, by UM’s Institute for Research on Labor, Employment, and the Economy.

As of December 2008, the most recent month available, Wayne County’s unemployment rate stood at 11.7 percent, up from 10.6 percent in November 2008 and 9.0 percent in December 2007. Wayne’s most-recent unemployment rate places it at 39th out of Michigan’s 83 counties, according to figures released Jan. 29 by Michigan’s Department of Energy, Labor, and Economic Growth.

Wayne County also leads Michigan and most of the nation in home-foreclosure and –abandonment rates, trends amplified this year by a collapsing housing market and rabid home-price devaluations. For instance, in 2008, Wayne filed 28,521 foreclosure notices, up almost 4 percent from the 27,425 filed in 2007, according to data furnished to BRN by Default Research.

Default numbers for the first month of 2009 included one ray of hope when it showed that Wayne County’s foreclosure rate declined in January by 23.5 percent to 1,912 from 2,501 in January 2008.

At least some of that change may have been made possible after some 600 people over the past five months have received, or will receive, assistance in resolving mortgage issues through a county foreclosure-assistance program.

Ficano said Wayne County and TechTown will help each other recruit companies for the stem-cell commercialization center, then offer those companies reductions on property taxes and other taxes collected by the county and state. He added that the recruitment effort is planning trips to Boston and Europe in hopes of drawing new companies to the center, and plans to draw on existing overseas.

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For instance, TechTown has a three-year agreement with the government of Mexico to bring Mexican life-sci and other high-tech companies to Michigan, while Wayne County has three trade offices in China trying to convince officials there to move some of their life-sci and tech businesses to the state.

Ficano said those companies will be offered a variety of county tax breaks in addition to state incentives such as the lower-tax “Renaissance” zones distributed through Wayne and the state’s other counties.

TURBO-Charged Renovation Incentives

Wayne County’s Transforming Underdeveloped Residential and Business Opportunities program, known by its acronym TURBO, includes a maximum benefit for new construction projects of a one-year full tax exemption during the year of construction, followed by a 50-percent reimbursement of property taxes over five years.

Under TURBO, partial renovation projects can be exempt from up to the full amount of increase on property tax assessments generated by the projects. Some redevelopment projects involving industrial “brownfield” properties are eligible for an additional reimbursement equal to costs of demolition, remediation, and infrastructure.

Overseen by the Wayne County Land Bank, created to return foreclosed and other vacated properties back to the tax rolls, TURBO is credited by the county with helping generate more than $400 million in new development, and 2,500 jobs since it was introduced.

Ficano said Wayne County is looking to draw biotechs into its Interstate 94 corridor, with one key selling point being the highway’s linking of UM and several healthcare providers that carry out research, such as the Henry Ford Health Systems, the Karmanos Cancer Institute, and the Detroit Medical Center.

It is possible that a sixth startup at the stem-cell center may emerge from Henry Ford Health Systems, which is a supporter of TechTown along with the regional economic groups Detroit Renaissance and Detroit Regional Chamber, Kauffman Foundation, the Kresge Foundation, the Hudson-Webber Foundation, the Herbert H. and Grace A. Dow Foundation, and even General Motors, which donated two buildings to TechTown, including what is now TechOne.

Michigan’s Economic Development Corp. supplied $2 million in early stage financing for TechTown, and has joined with the city of Detroit to fund a team of 40 mentors focusing in early-stage business development to work with entrepreneurs, who are almost always research scientists. Detroit has agreed to commit $4 million toward TechTown’s entrepreneurial support services, of which the tech park has received $1.25 million.

“You don’t have to come to Detroit to know that we’re on the front line of the recession. We’ve been in a recessionary period for several years here. And that means we’ve spent a lot of time, not just the last few months, thinking about how we diversify our economy and grow jobs,” Charlton said. “One of the core challenges that I think you’d find every university around the world would say is how to be really smart about getting things from the research lab into the business environment. And that’s what TechTown is all about, and why we’re trying what we think are new and interesting approaches.”

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