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Sunday, 04 August 2013 21:18

Southwest Michigan Innovation Center looks ahead to next decade

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Kalamazoo’s Southwest Michigan Innovation Center, celebrating its tenth anniversary this year, offers wet lab space and a host of other support services to startup life science companies at an incubator in the Western Michigan University Business Technology and Research Park. Kalamazoo’s Southwest Michigan Innovation Center, celebrating its tenth anniversary this year, offers wet lab space and a host of other support services to startup life science companies at an incubator in the Western Michigan University Business Technology and Research Park. COURTESY PHOTOS

More than a decade after opening and ushering in a new era of entrepreneurism in Kalamazoo — and exceeding even the most optimistic expectations — the Southwest Michigan Innovation Center is preparing to adjust to the changing times.

A haven for displaced Pfizer Inc. scientists and researchers who decided to step off the ledge into entrepreneurship, the Southwest Michigan Innovation Center — commonly referred to as SMIC — is looking at a future based on building more startup life sciences companies, albeit with talent and entrepreneurs who are far earlier in the careers.

The Pfizer downsizings of 2003 and 2008 brought forward a generation of would-be entrepreneurs who were late in their careers, middle-aged, and preferred to stay in Kalamazoo, rather than pull up roots and relocate elsewhere to stay with the company.

Ten years after the first Pfizer downsizing, and five years since the pharmaceutical giant pulled all of its human research operations out of Kalamazoo and Ann Arbor, the SMIC no longer has a concentrated pool of talent in the Kalamazoo area to draw from and turn into entrepreneurs.

As a result, “we’re changing our target audience” to attract younger entrepreneurs who could benefit from the low-cost space and assistance the Innovation Center provides, President and CEO Rob DeWit said.

“We’re at a point where we need to make some critical decisions about what the future of the Innovation Center is. We no longer have a large pharmaceutical company in town, much less in the region and between here and Ann Arbor. So we’re at a point where we need to reach out to a different type of a life science entrepreneur, and we’re trying to identify ways to do that,” DeWit said. “We need to reach out to individual entrepreneurs, we believe, and we need to reach out to the venture capital community to give them reasons for setting up companies in an innovation center such as SMIC.”

In preparing for a future of supporting entrepreneurs who are at a different stage of their lives and careers, the Innovation Center “will have to be much more intentional about providing the early skill sets for business planning and how to reach out for funding,” DeWit said. “We’re learning that we have to have training programs about safety and things like that that we didn’t need to do when people came out of a big company.”

Another new twist is Launch MI Lab, a program that offers smaller, lower-cost lab space to individuals or small groups doing research that need to generate research data that they can use to appeal to investors.

Many of the entrepreneurs who set up shop in the early days of the Innovation Center had left Pfizer with a pension after taking early retirement, DeWit. They had both the time and resources to start their own company and pursue an idea for a new drug or compound, he said.

“When we first started, a lot of the people had decades of experience at the big company, and some were able to move away from the company with some intellectual property that they understood and were probably the world’s experts in,” he said. “Now the people are likely to be earlier in the process.”

Based in Western Michigan University’s Business Technology and Research Park and developed with public- and private-sector backing, the Southwest Michigan Innovation Center was created to attract new scientific talent to Kalamazoo and spur and support new startup companies in the life sciences industry.

More than $15.1 million in public and private money went into developing the original 58,000-square-foot center in 2003 and building an 11,000-square-foot addition in 2009. The biggest financial support came via a $5 million grant from the state, a $2.7 million loan from the Kalamazoo Community Foundation, a $1.35 million grant from Kalamazoo County, and a $1.25 million loan from the City of Kalamazoo. Private contributors put another $3 million into the center.

Over 10 years, the Innovation Center has aided nearly 100 companies through support services it offers and housed dozens of startups in its wet labs and offices. Of the 26 companies that started life in the business incubator, 25 are still active. Sixteen young companies now call the Innovation Center home.

Kalexsyn, Vestaron Corp., CeeTox and Metabolic Solutions Development Co. are among the companies that have been formed at the Innovation Center and eventually “graduated.”

A 2010 analysis by the W.E. Upjohn Institute for Employment Research found that the companies founded at the Innovation Center had a direct payroll of $13.8 million at the time, plus another $4.4 million in indirect economic impact. They directly employed 204 people and indirectly supported 142 jobs.

The companies based in the business incubator collectively have been involved in 11 Phase 1 or Phase 2 human clinical trials over the years, filed for 35 patents and leveraged more than $100 million in investments.

“It’s exceeded everyone’s expectations. No one had a clue what to expect back then” in 2003, said DeWit, who joined the Innovation Center as CEO four years ago. “What we’ve achieved through everyone’s efforts has been quite remarkable.”

The opening in early 2003 virtually coincided with the first Pfizer downsizing in Kalamazoo, which spawned an older generation of entrepreneurs who opted to go into business, rather than leave the community. The job for the community organizations that united to build and operate the Innovation Center was to train those former Pfizer scientists to run a business — from how to solicit investors, recruiting and hiring the right talent, and sales and marketing for their services or products.

“We were very fortunate from that fallout to populate the building rather quickly,” Innovation Center Chairman Don Parfet said during a recent 10-year anniversary celebration. “We were able to tap into that. We were able to assist folks in that transformation, if you will, from a big corporate existence into an entrepreneurial existence, and I think that’s been terribly exciting.”

Parfet views the Innovation Center as continuing and building on the life sciences legacy of Kalamazoo and as contributing to a new era of entrepreneurism across Michigan.

“Over the last 10 years, it’s really become a restoration of the entrepreneurial spirit,” Parfet said. “You have to look no further than here, Grand Rapids, Ann Arbor, Detroit…. There’s a real awakening and a pretty strong entrepreneurial network throughout the state.”

As the Innovation Center begins focusing on the next 10 years, DeWit sees the unique base of contract research organizations, combined with the professional services and business networks that have been established since 2003, as a lure for new entrepreneurs. In pursuing entrepreneurs and new startups, the center will expand its reach beyond the region and look nationally and globally, he said.

The informal mentoring network of successful entrepreneurs who have come out of the Innovation Center and can nurture and help to guide new startups is an invaluable asset in not just supporting new startups but accelerating their growth.

“It’s a very important tool that we have in the toolbox, and not only do we have many of the services needed to develop a life sciences project, most of the people know each other very well, so that the time to get things coordinated here is much, much shorter than it would be anywhere else,” DeWit said.

Amid a sense of camaraderie, collaboration occurs frequently among the companies that have been housed in the Innovation Center. DeWit cites as an example how some client companies, both past and present, that don’t have enough work for a full-time position in a specialty have shared part-time employees, enabling both to attract the talent they needed.

DeWit calls the daily interaction between entrepreneurs the center’s “secret sauce.”

Another key for the future is the Western Michigan University Medical School that opens in the fall of 2014. The medical school and Innovation Center can forge research partnerships that benefit both, DeWit said. The research occurring at the Innovation Center can act as a lure as the medical school recruits talent, and in turn, the faculty can support the research conducted by startup companies.

“The potential is magnificent,” DeWit said. “I think that pathway will be very well worn in five or 10 years. I’m very excited about it.”

With the medical school, the current cadre of contract research organizations and the depth of life science expertise in Kalamazoo, “we are very well positioned” to attract young, middle aged or advanced med school researchers to the center, he said.

Read 3874 times Last modified on Sunday, 04 August 2013 14:10

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