Thursday, July 17, 2008

This former Target warehouse was turned into a biomedical incubator, but it hasn't panned out for the University of Minnesota, city of St. Paul or other partners. It's in financial trouble now. (MPR Photo/Tim Nelson)

A Cloudy Future For BioScience Research in Minnesota?

University Enterprise Laboratories - A Cautionary Tale

There have been a lot of claims made lately about the abundance of new jobs to be generated by bioscience research, especially by university administrators eager to extract money for new buildings.

Yesterday's post ["People Are Our Greatest Asset, Blowing Smoke in the Here and Now"] brought forth a rather strange submission to the comments section that mentioned University Enterprise Laboratories. Today the poster's comments make a little more sense.

From Minnesota Public Radio:

Bio-science incubator falters
by Tim Nelson, Minnesota Public Radio
July 17, 2008

A plan to make the Twin Cities a center for the emerging bio-science industry is faltering. University Enterprise Laboratories has laid of its staff and is trying to renegotiate the mortgage for its building in St. Paul. Its founders had hoped to spark a medical boom in Minnesota.

St. Paul, Minn. — Four years ago, University Enterprise Laboratories had great promise. Once a giant Target Corporation warehouse, it was going to be the intersection where world-class biomedical research from the nearby University of Minnesota met venture capitalists ready to help bring the ideas to market.

Now, the operation has laid off its program staff and shelved its mission, according to a memo obtained by Minnesota Public Radio.

"On the functional side, the thing is just a thriving success," said Bob Elde, dean of the University of Minnesota's College of Biological Sciences. "We're not worried. We're just having to do some belt tightening."

Elde and other directors are hoping to renegotiate their financing with Wells Fargo and have asked a real-estate management company to take care of the place.

It didn't start out that way.

Six years ago, a University of Minnesota researcher, Catherine Verfaillie, was heading the first stem cell institute in the country.

Her research yielded what looked like a breakthrough. It said adult stem cells might someday substitute for embryonic stem cells to generate new tissue. Genetics and materials science looked promising, too.

Off campus, business and community leaders hoped that biomedical research like Varfaillie's could help put Minnesota on the biomedical map and boost the economy.

Led by Elde and St. Paul mayor Randy Kelly, they refitted the empty warehouse on Highway 280 with lab and office space. It was supposed to be a home for private spin-offs of other university breakthroughs.

The project cost $24 million back in 2004. Corporate money from 3M, Allina and Xcel Energy helped pay for it.

Founders formed a non-profit with the U to run it and hired a start-up expert to help guide the fledgling tenants and hook them up with investors.

But shortly after UEL opened its doors, California voters approved $3 billion in state funding for stem cell research there. Massachusetts and Wisconsin also made big bets on the biomedical sector.

Even in Minnesota, attention was moving elsewhere. The University's Academic Health Center convinced the state to invest about a quarter of a billion dollars into biomedical facilities on campus. Four new buildings are slated for the East Bank in Minneapolis.

Back in St. Paul, it's proven harder than anyone thought to fill a warehouse of 21 wet labs with biomedical startups. There are some. But the hardware and lab space at UEL were expensive for shoestring scientific companies.

The tenant list instead came to include companies like Minnesota Wire and Cable and the Minnesota Lions Eye Bank. Consultants, a law firm and University administrative offices also fill some of the space. It's hard to figure out the mission by reading the building's tenant directory.

Founders, like Elde, hope they can still make UEL more than just regular real estate.

It's going to take more money to restart the startup.

But its hard to say where that money might come from. The state already put a quarter million dollars into UEL in 2006 and the city of St. Paul is already guaranteeing nearly half the project's $14 million in financing.

Added 7/25/08

"Those who cannot remember the past are condemned to repeat it."

An interested reader has sent me a link to an article that appeared earlier in the Daily (10/24/06). It is a reminder of how lack of institutional memory facilitates the pursuit of ambitious, but unrealistic, aspirations:

University lab bustles with activity and plans to expand

The lab would be built next to the current bioscience incubator building.


This article incorrectly stated in which animal an artificial blood-vessel graft technology was tested. The graft was successfully implanted in pigs.

although its doors opened just a year ago, the University Enterprise Laboratories building is already looking to expand.

Known as a bioscience incubator building, the 126,000 square-foot facility is almost 70 percent full and might be close to 85 percent by January, said Randy Olson, the building manager.

A new building might be anywhere from 80,000 to 120,000 square feet and would probably be built on an open field next to the existing one, located on an 11-acre lot along the transitway just inside St. Paul city limits.

"I took the lead in getting that whole thing going," he [Bob Elde] said.

[There is also an amusing mistake,

corrected as noted above.]

Messina said one of its featured products is an artificial blood-vessel graft, which is in clinical trials right now and was proven to be effective when implanted in ticks.

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