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UAMS BioVentures Providing Business Guidance

5 min read

Navigating a startup business from idea to execution to turning a profit can be a precarious journey in any field.

But when that field is biomedicine, with its inherent demands for licensing technology and sometimes exorbitant manufacturing and development costs, it helps to have a guide throughout the process.

The University of Arkansas for Medical Sciences BioVentures was launched more than a decade ago with that concept in mind and seeks to combine research at UAMS with entrepreneurship, technology licensing and economic development. BioVentures has since spun off 22 companies using technologies developed at the campus.

Nancy Gray, who became director for the program on Feb. 2, has worked in the biomedical industry for more than 30 years, most recently at the Southern Research Institute in Birmingham, Alabama.

BioVentures receives revenue from intellectual property developed at the university and licensed through BioVentures, and Gray said the university is reporting yearly gains. This fiscal year, which will end next month, BioVentures expects to collect more than $2 million in revenue from 18 license agreements, which includes seven that are now spinoff companies.

That revenue is nearly double the $1.1 million collected in fiscal 2013 and represents a steady increase from the $735,000 in revenue collected in fiscal 2011.

Gray said BioVentures has benefitted from the recent success of its spinoff companies.

“When our spinoff companies grow, our revenues grow as well,” Gray said.

And BioVentures expects more growth in the coming months. The director noted that the program has signed three licensing agreements since she came on board and is working on two new spinoff companies that will be publicly disclosed within the next couple of months.

Helping Hand

Several executives of businesses that spun off from research at the university said the assistance from BioVentures has been key to their success. The program offers a variety of services to the companies, including patent management and securing meetings with investors.

Lydia Carson, the founder, president and CEO of Balm Innovations LLC, said BioVentures has helped guide the direction of her business from the beginning. Carson founded Balm Innovations in 2004 to commercialize a topical cream developed by a researcher at the university.

Carson said that after licensing the technology used in the cream, which is now known as Omnibalm, BioVentures has also assisted in introducing her to potential investors and helped get the product in USA Drug stores in 2005.

“They were just right in the middle of it. We were just partners figuring out how to get it done,” Carson said.

Wal-Mart is now Balm Innovations’ biggest customer, selling the product in stores in seven states, Carson said.

Simply being able to associate a business with the university, through the BioVentures program, adds a certain degree of credibility for investors, said Barry Corkern, the president and CEO of ContourMed Inc. of Little Rock, which manufactures custom breast forms for mastectomy patients.

Corkern said that in addition to that credibility, ContourMed also benefits from BioVentures’ managing its patents. He said BioVentures keeps up with deadlines and renews the patents for the company.

“For people who haven’t done a lot of patent work, that’s huge,” Corkern said.

Rush Deacon, the president and CEO of Safe Foods of North Little Rock, said his company has also benefited from its ties to BioVentures. After licensing its initial technology through the university and spinning off into a company, UAMS held an approximately 10 percent share in the company and continues to provide input.

Tery Baskin, the president and CEO of RxResults, said his company still uses some of the concepts developed with BioVentures in the early days of the business, which launched in late 2008. He said BioVentures worked with him to create his company’s business plan and has set up meetings with several potential investors.

“It’s a good process that UAMS has going for it with BioVentures. We certainly benefited from it,” Baskin said.

Bumps in the Road

But a boost from BioVentures doesn’t necessarily mean its spinoff companies will see immediate, rosy results.

Safe Foods, for instance, predicted for several years that a breakthrough year was just around the corner after it formed in 1999.

During that time, Deacon said, the company benefited from the university’s patience because of delayed royalties payments, but was still required to fulfill its obligations.

It wasn’t until 2010 that the company turned a profit, but Deacon said the company has reported steady gains since 2012.

“We have grown our revenue from 2009 to today by probably 15-x over that period of time,” Deacon said. ContourMed also stumbled financially and was forced to file for Chapter 11 bankruptcy reorganization in 2012. At the time, the company reported $6.7 million in debt and $165,000 in assets.

Corkern said the company struggled with getting people to support the product, which he said was “radically different” from anything else on the market.

Corkern said filing for bankruptcy was “one of the best decisions we’ve made in 10 years” and that the company now expects to exceed $1 million in revenue this year.

“A lot of people underestimate the work and the money and the time to develop” a product, he said.

Looking Ahead

The business of biomedicine is riskier than other areas of research and development, Gray said, and that’s an obstacle.

She cited the regulatory approvals necessary to launch products as one key difference that makes things more difficult in the field. She said that some businesses will inevitably face hurdles along the way, especially when it comes to financing.

“What the companies will struggle with, just because it’s the nature of this startup business, is raising sufficient capital to meet their milestone and especially [because you’re] looking at much bigger capital than you would need” in other industries, Gray said.

Gray said that she was still getting acquainted with all of the processes at BioVentures and meeting researchers and entrepreneurs.

In the meantime, she said, one way to improve the program would be to raise the visibility of BioVentures and the university.

“I think what BioVentures really needs to do is a lot more promotion of its technologies and the potential spinoff companies,” Gray said. “I would call it the marketing of the capabilities. … Universities around the U.S. are all trying to find ways to commercialize their intellectual property, so you have to be pretty aggressive in terms of approaching different companies as potential licensees, meeting with potential investment groups, etc. You really need to make that a large focus of your job.”

BioVentures Spinoff Companies

  • BioVentures Spinoff Companies
  • Acetaminophen Toxicity
  • Diagnostics
  • Air Toco
  • Angel Eye Camera Systems
  • Balm Innovations
  • ContourMed
  • CTEH
  • eDoc America
  • Elder Stay At Home
  • EZRA Innovations
  • HD Nursing
  • InterveXion Therapeutics
  • IRV(Veinviewer)
  • Mesolight
  • Mitogene
  • Naptime Academy
  • PhytoTek
  • RxResults
  • Safe Foods
  • Signal Genetics
  • Stage I Diagnostics
  • Tocol Pharmaceuticals, LLC
  • Type IV Technologies
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