09 Aug Quintessence Biosciences: Saga of a UW spin-off
How research can lead to new companies and good jobs
MADISON, WIS.- With a freshly minted bachelor’s degree from the University of Richmond, 22-year-old Laura Strong arrived at the University of Wisconsin-Madison in 1995 to begin her graduate studies. She chose UW-Madison primarily for the opportunity to work under the tutelage of chemistry professor Laura Kiessling. An expert in the biochemistry of carbohydrates and nucleic acids, Kiessling gained additional recognition when she was awarded a MacArthur Fellowship, or “genius award,” for her discovery of neobiopolymer technology. While Kiessling provided Strong with the training and education she was looking for, little did Strong imagine that this academic relationship would fast-track her directly to a promising career in a new business.
Working in a nearby lab, fellow UW-Madison chemistry professor Ronald Raines was making progress on a novel technology involving the regulation of ribonucleic acid, or RNA. Ribonucleases, the enzymes that degrade RNA, were showing potential as a new line of offense in the targeted killing of cancer cells. The technology was moving forward and there was talk that it could be patented and eventually brought to market and tested in clinical trials. Raines and Kiessling together pursued this idea and began the roller coaster ride of turning their basic research discoveries into a business venture.
Raines and Kiessling christened their company Quintessence Biosciences and incorporated it in 1999. During this time, Strong was completing her doctoral requirements and facing the decision of what to do next. An obvious and logical decision for the company’s founders, they invited Strong to climb aboard as the first official employee of Quintessence after she earned her doctorate in June 2000. While only virtual in its existence at that time, Quintessence held great potential, and so Strong accepted. “This kind of opportunity is not something that happens very often,” she says.
Then began the processes of patenting and licensing the company’s technologies, as well as finding an official home where the fledgling start-up could grow and flourish. UW-Madison was able to offer help on all fronts, saving Raines and Kiessling valuable time and expense in what is typically a challenging journey.
The obvious place to look for space was located just three miles west of their labs at University Research Park. First organized in 1984, URP is a nonprofit entity separate from UW-Madison that leases office space and land to companies interested in maintaining a close relationship with the UW community. Today URP is home to more than 100 start-ups and has proven to be a nurturing environment. Quintessence moved into a space at URP’s specialized technology incubator, the Madison Gas & Electric (MG&E) Innovation Center. The Innovation Center has repeatedly proven the value of its role in the transfer of technology from UW-Madison to the private sector by providing laboratory and office space, support equipment and personnel.
Mark Bugher, director of the research park, was happy to welcome Quintessence Biosciences to his neighborhood. “Quintessence represents one of the prototypical companies at URP,” he says. From the expertise of the faculty scientists that developed the technology, to the great management and entire balance of staff, he believes Quintessence has extraordinary potential to develop therapeutic drug products that can be used for treating cancer.
“We’re very pleased to do whatever we can in the way of providing them with the infrastructure that will assist them in being successful, and we plan to offer help with anything else important that they may need—whether that be referrals, or help with financing.” Bugher has even pledged to remodel existing space or build more space for the growing company should the need arise.
As the year 2000 was coming to a close, Quintessence announced it had executed a license agreement with the Wisconsin Alumni Research Foundation (WARF) for all five of its pending technologies. Located a stone’s throw away from the Kiessling and Raines laboratories on the UW campus, WARF is a private, nonprofit organization like URP. Since its founding in 1925, WARF has patented hundreds of inventions spawned from UW research and licensed the technology for commercialization. The process has translated into an impressive number of start-up companies like Quintessence Biosciences. Michael Falk, WARF’s director of intellectual property, was the licensing manager involved in the negotiations at the time when Raines and Kiessling first approached WARF with their ideas. He recalls being impressed by their science and their commitment, and he realized the potential for many future patents once their company got off the ground.
Throughout the various stages of forming the business, Strong had the opportunity to actively participate. She helped Raines and Kiessling in the critical steps of writing a business plan, as well as negotiating with WARF. Once again, UW-Madison offered the necessary resources for shaping Strong into an effective team player. As a scientist with essentially no business background but a desire to become more savvy, she supplemented her science training with executive-level business courses offered by the UW-Madison School of Business’ Small Business Development Center. Strong acknowledges how helpful her education at the School of Business proved to be as she gained a better handle on financing, management, and intellectual property issues.
With some business courses under her belt, Strong was ready to contribute to Quintessence’s most daunting task yet—finding money. As she puts it, “No matter how cool your science is, you have to somehow translate [the science] into a viable, tangible product in the business world.” With the goal of raising equity investment for the company once the initial start-up funds were used up, the company’s founders did not have to look very far. Wisconsin Investment Partners (WIP), a consortium of local individuals who view themselves as an angel investors group, expressed interest. It turned out to be a productive match, and Quintessence Bioscience successfully closed a financing round in the spring of 2001 with WIP. The ball was officially rolling.
The time had now come to find a leader in guiding the company through its early stages of growth. Raines and Kiessling were looking for a CEO to direct the company’s daily responsibilities and oversee the expansion of employees, as well as handle the regulatory affairs. Enter Ralph Kauten, founder and former president of PanVera Corporation and key individual in pioneering the success of one of the giants of Midwest biotech—Promega Corporation. Again, there was no need to bring in candidates from the East or West coasts, no need to conduct a national search or look beyond the resources that Madison and UW had to offer. Kauten officially joined as president and CEO of Quintessence at the start of 2002.
“Undeniably,” says Kauten, “this company is an excellent poster child for what the university can do in fulfilling the promise of The Wisconsin Idea.” Not only does UW have an impact on the campus, he says, but also an impact that is so much broader. “Clearly UW has played a major role in founding Quintessence, and we continue to look at UW as a fantastic resource to help us further our work and commercialize our technologies.”
One of Kauten’s first missions upon taking the helm at Quintessence was to create two advisory boards—one to handle the business end of things, the other, the science. Again, there was no need to look very far, and both boards are comprised of prominent local individuals with expertise in either business or science. These include on the business side, David G. Walsh, a partner in the Madison office of the law firm Foley & Lardner and member of the UW System Board of Regents, Ted Rolfs, managing director of Red Top Capital in Milwaukee, and Chris Hornung, president and CEO of Pacific Cycle, a Madison company. The scientific advisory board includes Anthony Clemento, former vice president for scientific and regulatory consulting for Covance Laboratories, a major company headquartered in Madison, and two UW Hospital physician/scientists, Dr. Howard Bailey and Dr. Paul Sondel. Dr. Thomas Burke, a UW scientist specializing in protein chemistry, will soon come onboard.
Kauten joined the growing company at a critical turning point. The initial round of financing by WIP had been squeezed dry and the time had come to secure the next level of funding. With his strong local ties and years of experience in the Madison area biotechnology industry, Kauten pulled it off. In the spring of 2003, he helped to secure three million dollars of new financing, primarily from a variety of local individual investors. The additional funding led to Quintessence Biosciences’ first major expansion of employees bringing the total to ten. The majority of new employees were selected from a pool of scientists affiliated with UW-Madison.
Strong now serves as the company’s vice president of business development. Although she no longer works as a scientist, she has proven herself successful at wearing many different hats. Reflecting back on her pathway from graduate student of biochemistry at UW-Madison to high level executive at a start-up biotechnology company, she is well aware of the impact that the university and its many affiliated institutions has had on her career. Especially crucial to Quintessence Biosciences’ current stage of development has been URP. “The Research Park provides the connection to UW,” she says. “This connection has included the founding technologies, as well as access to experts in the life sciences and business, and the ability to recruit great scientists for the company.”
The admiration is clearly mutual. As Falk of WARF summarizes, “I think that Quintessence has the complete package.” He cites the company’s founders, Raines and Kiessling, as a productive team with many ideas with great potential. Add to the formula their company’s highly qualified and respected leader, Kauten, and finally, the products themselves. “The cancer-fighting drugs that Quintessence is commercializing will attract a big market,” he says. “In all, this company is poised to do great things.”
This story was originally published by the University of Wisconsin-Madison Office of Corporate Relations BusinessWire. It is republished here with permission.