Editor’s note: The story below has been updated to correctly identify Brynmor Rees as the University of Colorado Boulder’s assistant vice chancellor for research and innovation.
A chance meeting on a Boulder-area trail could lead to a better understanding of particles suspended in the air that have major impacts on weather, climate and air quality.
A chance meeting on an airliner two years ago could well lead to a way to head off some potentially deadly infections that patients acquire in hospitals.
Increasingly, such discoveries are propelled to the marketplace through technology transfer, an innovation pipeline facilitated by a university or federal laboratory that results in formation of a spinoff company.
“Actually, we don’t use the tech transfer name any more to reflect the level of change that has occurred at our university when it comes to commercializing innovation,” said Brynmor Rees, assistant vice chancellor for research and innovation at the University of Colorado Boulder and managing director for Venture Partners, the office that evolved from CU Boulder’s former Technology Transfer Office. “Rather than just focusing on intellectual property and IP transactions, we are putting our effort and our resources toward developing entrepreneurs and helping them build businesses. It’s a much larger challenge, but it’s needed.”
Inventions that are born in a lab at a university such as CU Boulder or a federal agency such as the National Center for Atmospheric Research or National Oceanic and Atmospheric Administration “are very early stage, inherently disruptive, and so they take more time and more money to go from early-stage concept and early-stage results all the way through to a product,” Rees said. “It’s a long process, and it’s expensive. Many pre-existing companies are not ready to get involved so early, so the startup company becomes not only the most effective but the only path forward.”
CU Venture Partners assists “teams, often of researchers, faculty, grad students and post-doctoral researchers, who deeply believe in the work that they’ve done and that their discovery is a breakthrough,” Rees said. “They’re the ones who take that risk, really apply themselves to develop the technology toward the product to go out and raise the capital and bring the team together to make it work. But even if the technology is high-potential and revolutionary, it needs a team of dedicated entrepreneurs.”
Sometimes, the agencies or labs spin off their own companies and products.
When Dr. Ping Chen, chief executive of Boulder-based Handix Scientific Inc., met NOAA inventor and research physicist Dr. Ru-Shan Gao on an area hiking trail in 2015, Gao told him about NOAA’s recently developed Portable Optical Particle Spectrometer for aerosol measurement. Realizing the technology’s potential, Chen expressed interest in licensing and commercializing it. According to NOAA’s Technology Partnerships Office, more than 200 units of spectrometer have been sold across the world to date, and Handix has grown from one to 12 full-time employees.
More commonly, agencies such as NOAA, the National Institutes of Health, NASA, the National Science Foundation and the departments of Defense and Energy fund tens of billions of dollars in research at U.S. universities nationally — but they want to see a payoff.
“Often, one of the first important steps is ensuring it’s not just technically brilliant but that there’s a strong fit between the technology and what the market needs,” Rees said. “That can be new territory for researchers, who very often are focused on technical performance. Sure, if I can make a medicine 30% cheaper and do it in a very technically complex way, that may sound appealing, but is that what the market needs? Is cost a limiting factor for that particular medicine? Maybe, maybe not, but those are the questions that haven’t been addressed yet.”
The Innovation Corps, started in 2011 by the National Science Foundation, provides grant funding specifically for researchers to test that fit, and in late August, CU Boulder was named one of the initial recipients of I-Corps “Hub” grants. With the new $15 million award, CU Boulder and seven collaborating research universities will help cultivate deep-technology businesses in the western United States. Beginning in January, Venture Partners at CU Boulder will lead efforts to launch and support startups through training, mentorship and programming.
“We are really excited to scale the I-Corps training at CU Boulder but also to other researchers around the state,” Rees said. “This funds mentorship training programs that provide an education to our researchers that is not part of their training as scientists and engineers. Building a business is new territory for them.”
To meet that need, CU Boulder in January also will launch “Ascent,” a startup accelerator offering four months of training especially designed for those university researchers “for whom entrepreneurship is new,” Rees said.
Ascent hopes to help new deep-tech startups follow the lead of CU Boulder spinoffs such as Louisville-based electric-vehicle battery builder Solid Power Inc., which will go public later this year.
“CU did 20 new startups last year and has done 160 for all time,” Rees said. “Venture-capital investing is generally at record levels, but the uptick we saw has been much greater than what was observed across the board nationally. Our startups raised $2.1 billion in VC last year, about 10 times the annual average historically.”
One of the budding CU Boulder spinoff companies of which Rees is most proud is Bactria Pharmaceuticals LLC, which is “addressing a critical unmet medical need. There have been essentially no new medicines coming to the market in the antibiotic space in decades now, and at the same time, there’s been a huge increase in antibiotic resistance — in particular, in multi-drug resistant bacteria acquired in hospital settings. These bacterial infections often strike immuno-compromised individuals or people who are sick or recovering in hospitals. Those infections are resistant against the available antibiotic treatments and have a very high fatality rate” — nearly 100,000 deaths out of nearly 1.3 million health-care associated infections in the United States alone.
The new company “is innovating new antibiotic drugs that operate in totally new mechanisms,” Rees said. “Bacteria will evolve and develop new resistance, but when a new drug can use a totally different mechanism, it’ll be more difficult for the bacteria to acquire that resistance.
Bactria is “a new company but very important medically,” he said, “and a wonderful example of federally funded university research translating into important clinical treatment.”
Corrie Detweiler, a professor of molecular, cellular and developmental biology, had been working on the technology in her lab at CU Boulder with the help of nearly $1.4 million in seed grants from the National Institutes of Health and a $124,400 Advanced Industry Accelerator grant from the state Office of Economic Development and International Trade. “Actually, $97,500 came from the state and the rest from CU’s match,” Detweiler said, “another example of CU supporting the research.”
Her path to commercialization came when, on a flight from Boston to Denver, she met Chris Morl, who holds degrees in both pharmacology and business administration, whose resume includes executive positions at the company then known as miRagen Therapeutics Inc., now Viridian Therapeutics Inc., and who has a 30-year career of licensing startups.
“I lucked out and got the middle seat,” Morl said. “Corrie overheard me talking to a gentleman on the window seat who was going to a conference at Keystone on the subject of autophagy, the biological process where a cell consumes its own contents in order to survive. It’s one of the survival mechanisms cancer cells use. I was working in a cancer company at that time and was interested in what he was doing. Corrie overheard us talking and asked what we both did.”
Detweiler was returning to Colorado from a conference on antibiotics, “and I was all charged about it,” she said, “so I thought, ‘OK, I’ll talk to this guy’ — which was pretty funny because I’m pretty introverted and don’t usually talk to people on planes.”
Her CU Boulder lab had been working on the basic science side of host pathogen interaction, she said, “and a couple years before I met Chris, we had thought maybe we can use some of the standard methods in our field to try to screen for compounds that interfere with host pathogen interaction. So we developed a screening platform.”
That perked up Morl’s entrepreneurial senses.
“So what you have here,” he realized, “is a scalable way of screening for compounds that might affect this post-pathogen interaction, while at the same time trying to eliminate compounds that would be potentially toxic to human cells.
“That intrigued me,” he said. “You wouldn’t want me anywhere near a lab, but I did originally qualify as a pharmacist, and her lab had screened compounds and found some that work.”
Morl knew that commercialization would require “finding drugs that are sufficiently potent — how much of the drug is needed to produce a given effect,” he said. “What was really interesting about the compounds Corrie has is that not only do they work but they have the right kind of characteristics to be potential drugs — and they’re also exquisitely potent. If it’s not, then your patient ends up having to make a very large amount of drug, either a massive pill or a huge injection.
“She also had data that supported the fact that they restore sensitivity to antibiotics that bacteria had grown resistant to,” Morl said. “That’s a really important piece because antibiotic resistance is becoming a huge global problem.”
He knew that “the medical need here is huge” because there had been no new approved classes of antibiotics since 1962 for “gram-negative” bacteria that can trigger “two really nasty diseases” — including ventilator-associated pneumonia, often a deadly result for COVID-19 patients, and central-line-associated bloodstream infections. “Both of those have incremental costs of about $50,000 per patient per state,” Morl said, “and a mortality of about 150 deaths per 1,000 patients.”
From a business perspective, Morl said, “if you want to try to take something out of the university and want to make a success of it and want to go out and raise venture capital, you have to have compelling science behind it. The important part of this was that the science was extremely interesting and compelling.
“So the next thing Corrie and I needed to do was work with CU to make sure the university had all the necessary rights to the assay and the compounds, because that’s the value proposition in the company. We started working on both standing up the company, getting all the requisite approvals, and literally working with CU to negotiate the terms under which Bactria would license that intellectual property. We also negotiated for the company to sponsor research at CU to continue to move the program forward.”
The pair renamed the fledgling company Detweiler had started in summer 2019 and reincorporated it in January.
“This is a perfect example of why academics need a business person like Chris to move it forward,” Detweiler said. “I was having trouble moving forward to a business by myself because I’m an academic and I have to focus on managing my lab and on teaching, and there’s only so many hours in a day. So this is why it’s so crucial that CU Boulder has a really good tech-transfer office — they now call themselves Venture Partners, but whatever — to help facilitate these interactions.”
For the licensing agreement, Morl said, it “took a while” but we got through all the legal and financial terms and got agreement between the company and the university” in June. “Bryn (Rees) did a great job,” he said. “I’ve done a number of these over the years, and this one went more smoothly than most.”
Under the “sponsored research agreement,” Bactria will pay CU Boulder for work being done in Detweiler’s lab. Its revenue stream for the moment is coming from equity he and Detweiler purchased and a convertible loan, but they have applied for state and federal grants and will reach out to angel investors and venture capitalists once their data set becomes “a little more robust,” Morl said, probably by the end of this month.
“We need to prove they work in relevant models of the disease,” Detweiler said, which will include some testing on animals. Then there’s the toxicity testing required by the Food and Drug Administration “before you can go anywhere near a clinical trial in man,” she said. They’ll have to flesh out their data, select which compound they want to take into the expensive studies of investigational new drugs, and “after that, with FDA’s consent, we’ll be allowed to start the clinical-trial program.”
That could be a three-year process, Morl said, and “from there to market, assuming everything went according to plan, it could be another five or six years until we’re in a position to be able to file for a marketing approval. Still, that’s probably 20 to 25 percent faster than a big drug pharmaceutical company would do it.”
What’s Bactria’s future?
One scenario, Morl said, “is that you end up building the next Amgen and you go all the way to commercialization. But the reality is that very rarely happens in biotech. What usually happens is the company gets purchased. Somebody will come along and buy the company. This happens all the time.
“This is where the real value is created,” he said. “A lot of biotech companies are highly reliant on academics to make the basic research discoveries. Big Pharma has largely given up on doing basic research, so these partnerships are really important.
“CU actually has an equity position in Bactria,” he said. “If at some point we were fortunate enough to have a Pfizer or a Merck or an AstraZeneca to actually purchase the company, there would be a significant return to CU from the sale of Bactria. Bryn and I talked a lot about this. We crafted that agreement in a manner that we got good alignment between what’s in the interest of Bactria and what’s in the interest of CU. The terms are confidential, but if Bactria is sold, CU would more than recoup everything it put into Corrie’s lab.”
Rees said Venture Partners’ key aim is that a spinoff startup can get its license quickly and knows it’s getting a good deal, “with terms validated by investors as startup-friendly and investable, and so a startup can spend its time and energy building its business. That’s an important part of scaling up.”
At Venture Partners, he said, “We went to investors and said, ‘Let’s have a pretend negotiation for what a fair deal for a startup would be.’ We said here’s what we think, and they came back and said here’s what we think. So now the negotiation’s been done. Now we have this very rapid process that all the companies can benefit from, and they don’t have to go through that lengthy negotiation.”
The university “has been really supportive and positive,” Detweiler said. “To be honest, about 20 years ago, that wasn’t the feeling among faculty. So I’ve been very pleasantly surprised with CU taking this potential to take research to the market very seriously.
“Bryn has totally changed the venture partners program here,” she said. “It’s amazing now.”
Startups assisted by Venture Partners that formed in 2021
- Infinome, started Jan. 1 in Boulder
- Otoro Energy LLC, started Jan. 21 in Boulder
- Vesicle Therapeutics, Inc., started Feb. 8 in Niwot
- Radanta Corp., started Feb. 23 in Boulder
- Poseidon Photonics, started March 23 in Littleton
- HeapSi LLC, started March 23 in Boulder
- Prometheus Materials, Inc., started March 26 in Niwot
- LumenAstra, started May 5 in Longmont
- Seedling Biosystems, started May 14 in Boulder
- Vetana Animal Health Inc, started May 19 in Boulder
- The Soil Moisture Company, founded June 7 in Boulder
- RIGID Biotech LLC, started June 17 in Bensalem
- Finis Terra LLC, started June 21 in Boulder
- Bactria Pharmaceuticals LLC, started June 28 in Boulder
- SolMate OS, LLC, started June 30 in Boulder
- Modendo, Inc., started July 1 in Boulder
