September 1, 2005 (Vol. 25, No. 15)

After Slow Start, Region Catches on to Biotechnology

Ever since electrical engineer Earl Bakken invented the first implantable pacemaker and founded Medtronic in the 1950s, Minnesota has been a leader in the medical device industry. In addition to Medtronic, Guidant, St. Jude Medical, and Boston Scientific head the device sector, which includes 520 FDA-approved medical device businesses. Second only to California, Minnesotas medical device industry employs 21,000 workers.

Minnesota was slower to catch on to biotechnology and even missed some opportunities. In 1980, George Rathmann founded Amgen in Thousand Oaks, CA, after leaving 3M in Minneapolis, where he found little support for his biotechnology ideas.

About 20 start-ups that spun off from the Mayo Clinic in Rochester all left the state because there were no facilities, says Gene Goddard, the bioscience industry specialist at the Minnesota Department of Employment and Economic Development (

Now 200 bioscience companies are based in Minnesota, largely around the University of Minnesota (UM) in Minneapolis-St. Paul and the Mayo Clinic in Rochester.

Bioscience Incubators

Three bioscience incubators opened in the last year to support new companies. In St. Paul, a private investor converted the old state crime laboratory into Menlo Park, a 78,000-sq-ft building thats home to 10 companies. Elliott Park Life Sciences Institute in downtown Minneapolis houses start-ups in 10,000 sq. ft. near the Hennepin County Medical Center.

The newest incubator, University Enterprise Laboratories, is a nonprofit partnership between St. Paul and UM that provides 21 wet laboratories in its 150,000-sq-ft facility.

Minnesota also established a Bioscience Zone in the corridor that stretches from Minneapolis- St. Paul to Rochester. The zone offers tax incentives to existing and start-up bioscience companies who locate there.

Several large pharmaceutical companies operate facilities in the Twin Cities, including 3M Pharmaceuticals (www.3m. com/ pharma), Solvay Pharmaceuticals (www., and Upsher-Smith Laboratories (www.

The growing bioscience industry is a very diverse marketplace that expands beyond traditional pharma, says Goddard, with applications in biofuels, biopolymers, nutraceuticals, and agriculture. In fact, Minnesota is the nations largest producer of ethanol and biofuels.

Medical Alley, the health care trade association, and MNBIO, the state BIO affiliate, merged in March 2005. We shared many dual members, says Don Gerhardt, CEO and president. Driving the merger was a growing convergence of biosciences with medical devices, such as stents that deliver drugs.

The 550 members of Medical Alley/MNBIO employ more than 50,000 workers, and companies with fewer than 100 workers outnumber larger ones. There are lots of spinouts and innovations going on, says Gerhardt.

Medical Alley refers to a 350-mile corridor that stretches from Rochester through the Twin Cities to northern Minnesota, where 8,000 health care companies reside.

The Minnesota Partnership for Biotechnology and Medical Genomics signals the states commitment to medical genomics. The $22 million project is a unique collaborative effort of the Mayo Clinic, UM, and the state, which will result in new medical discoveries, businesses, and jobs.

An independent consulting firm estimated that by 2015, the partnership will create 7,000 jobs and generate more than $30 billion in annual revenues. Data from records of 4.4 million patients at the Mayo Clinic will be analyzed to understand gene characteristics and outcomes of therapies associated with heart disease, cancer, obesity, and Alzheimers disease.

The goal is personalized medicine tailored to a patients genetic makeup. Mayo uses IBMs ( Blue Gene supercomputer to advance its work in molecular modeling, while new algorithms are created at UM. Blue Gene, housed near the Mayo Clinic, is the fourth most powerful supercomputer in the world.

In 2002, Entrepreneur magazine ranked Minneapolis-St. Paul the number one metropolitan region to start a business. Companies are attracted to Minnesotas well-trained workforce, high quality of life, and strong infrastructure. Minnesota also works hard to promote itself.

Spin-offs and Innovations

The first tenant of the new University Enterprise Laboratories was Gel-Del (, founded by David Masters, Ph.D., a biomaterials expert at UM. Gel-Del produces biomatrix-based materials from purified proteins that can be molded like plastic into tubes, wafers, particles, or sheets, or shaped to resemble the bodys own tissues, says Philip Messina, CEO.

The Gel-Del products integrate into the bodys tissues, support cell growth, and can deliver drugs. Gel-Dels blood vessel grafts are being evaluated in pigs. The first commercial product will be an injected Gel-Del matrix to remove wrinkles or tighten urinary sphincters.

Prism Research ( also is a tenant of University Enterprise Laboratories. The company conducts clinical trials for pharmaceutical and medical device companies in its 52-bed, in-patient center. The facility resembles a hotel more than a hospital.

The companys CEO, Charles Halstenson, Ph.D., ran a smaller unit at Hennepin County Medical Center. Were focusing on early Phase I and II trials, says Dr. Halstenson. Prism Research opened in March 2005 and business is brisk, especially trials of drug interactions, dose escalation, and pharmacokinetics on healthy volunteers.

In Maple Plains, TC Tech ( keeps laboratories supplied with sterile fluid handling products, including bags, tubing, fittings, and connectors. The 10-year-old company opened its second manufacturing plant in August 2005. Responding to concerns about infectious prion contamination, TC Tech launched a new line of products that are free of animal materials.

The line features AF Premium bags with capacities from 100 mL to 1,000 L. All carry documentation traceable to the resin supplier certifying the animal-free nature of the materials.

We also manufacture custom disposable bioprocess bag systems and certify them as BSE-free, says Eric Wyatt, marketing manager. Another new line of rigid containers to hold flexible bags, known as BioTote, comes in 5- to 200-L sizes.

Molecular biologist Laura Kakach co-founded ATG Labs ( 10 years ago to fill a need for contract services in molecular biology. The company has a strong client base across the U.S., including pharmaceutical, biotechnology, agricultural, and medical device companies.

The experts at ATG Labs work one-on-one with clients to meet their needs. The companys services include cloning, site-directed mutagenesis, DNA sequence analysis, and recombinant protein expression in E. coli and Baculovirus.

Ruth Shuman, Ph.D., started Gentra Systems (www.gentra. com) in 1988 to develop ways to overcome the slow and tedious drudgery of purifying DNA.

The recently introduced Versagene kit isolates pure RNA or genomic DNA from animal tissues, cultured cells, or whole blood. The kits come complete with the minicolumns and reagents needed to purify samples. In addition, Gentra sells the Autopure instrument for running high throughput DNA purification samples.

Since 1993, BioE (www.bioe. com) in St. Paul has developed antibody-based technologies to isolate therapeutic cells, such as stem cells, from blood sources.

While attempting to find a way to cryopreserve umbilical cord blood, the company accidentally discovered a stem cell line called Multi-Lineage Progenitor Cells (MLPCs), which differentiate into tissues representative of the three germinal layers, including nerve cells, liver/pancreas precursors, skeletal muscle, fat cells, bone cells, and blood vessels.

MLPCs bypass the ethical controversies inspired by embryonic stem cells. In addition, MLPCs are cloned from a single cell, so all the cells are exact genetic copies of each other.

BioE built up a large inventory of three distinct single-cell lines, which the company makes available under a research license agreement at a minimal cost. MLPCs are easy to expand, and they maintain their genetic normalcy.

New Drug Pipelines

Pharmacologist Frank Burton, Ph.D., launched Psyncretis (www. to develop orphan drugs based on discoveries made in his laboratory at UM.

Dr. Burton developed a Ticcy mouse model to prescreen drugs for Tourettes. The mice also exhibit symptoms of obsessive compulsive disorder (OCD) and respond to OCD drugs that work in people.

The pipeline at Psyncretis is broad and includes not only Tourettes and OCD, but also diarrhea. The common denominator is that the Ticcy mouse was created from an understanding of cholera toxin, which causes diarrhea.

Cholera toxin is a protein that tells cells to become hyperactive, says Burton. In the intestines, that means diarrhea. But neurons infected with cholera toxin become hypersensitive and keep firing.

Algos Therapeutics ( develops drugs for chronic pain conditions, such as diabetic neuropathy, herpes neuralgia, and lower back pain. The firms platform is based on findings that pain is caused by inappropriate communication among nerve cells.

The molecular targets in the Algos IP portfolio represent validated starting points to correct neuronal communications. Algos developed a battery of behavioral animal models that mimic different painful conditions, says Susanne Dvorak, co-founder, president, and CEO.

Gretchen Unger, Ph.D., founded GeneSegues (www.genesegues. com) to develop nucleic acid therapeutics for the treatment of solid tumors. The biopharmaceuticals are delivered with a proprietary sub-50 nanometer size modular shell that delivers proteins and nucleic acids.

The therapy targets CK2 (serine/threonine kinase, formerly known as casein kinase), which promotes cell proliferation. The firms biotherapeutics downregulate CK2 and induce apoptosis of cancer cells. In mice and organ cultures, the DNA-based therapy induces complete eradication of some tumors, says Dr. Unger.

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