02 May Promega Corporation: Wisconsin's quiet innovator
Fitchburg, Wis. – In many ways, Promega Corp. has given Northwestern Mutual Life some competition as “the quiet company.”
Quiet to those outside the life-science realm, that is. Inside the privately held company’s suburban Madison walls, it’s anything but silent, as a constant churn of innovation takes place. Thus far, that innovation has produced about 200 patents and more than 1,500 research products, including 130 new product innovations since 2002.
That pace has resulted in a recent growth spurt in which revenues jumped by just under 10 percent last year. The company now reports $200 million in annual revenue, about 12 percent of which is plowed back into research and development.
The man in charge of this innovation is Martin Rosenberg, chief scientific officer for research and development. CEO Bill Linton sets the strategic direction, but he counts on Rosenberg to oversee a department entrusted with the continuous improvement of the company’s key product lines, including DNA, RNA, protein, and cell-analysis kits.
Rosenberg said there are two major ways that Promega encourages innovation. One is by creating an environment where people feel free to make suggestions, comments, and criticisms without having it reflect on them personally. His experience, which includes 20 years with GlaxoSmithKline, has taught him that nothing helps creativity flourish more than an open, highly communicative scientific environment.
Easier said than innovated
Establishing and maintaining such an atmosphere, however, is far more difficult than one might imagine. Employees must be given some time to nurture their ideas “at the bench,” and Promega has a deep bench. Of its 900 global employees, 115 of them are in R&D, mostly biologists, biochemists, and chemists, but also a smattering of engineers, bioinformatics staffers, and one software developer.
“We try to maintain some 10 to 20 percent, on average, of our scientist’s time to explore new ideas and technologies,” Rosenberg said. “We urge them to share these ideas and concepts as broadly as possible, since feedback from colleagues is the best possible way to help nurture ideas into realities.”
An important aspect of this “environmental” parameter is something Promega calls “NIH,” which stands for “not invented here.” Rosenberg said it’s essential that the company have access to new ideas and technology, whether they emerge from within the confines of R&D, or whether they come from outside and are recognized by someone in the company.
Many of Promega’s best products, such as its bioluminesence technology developed at the University of California-Berkeley, have come through academic collaborations. The company’s scientists receive credit whether an idea is theirs, or they have recognized an outside idea and initiated its internalization within Promega – often by licensing the technology or product.
The second way Promega encourages innovation is by reward, which can be a financial (bonus, advancement, or stock option grant) or a non-financial means such as a journal publication, a talk at a national or international meeting, or a company-wide “atta boy.”
Innovators also are rewarded by being named an inventor on a patent. Perhaps the best reward for scientists that work in this field, Rosenberg noted, is to see their ideas turn into marketable products.
“This feeling of success is heightened by watching the sales numbers climb and, best yet, seeing your product used by the scientific community at large and noted in their publications,” he said. “There is no better feeling than having your ideas turned into real products that get used to advance the field of science.”
Products of innovation
As a result, Promega has generated product innovations in forensics, where it took its DNA analysis tool and remodeled it to help forensic science deal with crime lab backlogs. Promega, which has the second largest global share in the forensics market, also has become a parts supplier to diagnostic kit makers such as Abbott Labs, a line of business stemming from its core capabilities, and it has purchased a Korean instrumentation company to marry its analysis kits with the instrument, which is called the Maxwell, in an integrated platform.
In addition to offering this integrated system for DNA, RNA, or protein purification, Promega would like to build new applications and modify existing ones for use with the instrument. It represents yet another growth opportunity because rather than running the tests manually, researchers can use the integrated platform and examine 16 samples at a time, and the future may hold the possibility for a 32- or 96-sample product.
As a global company with branches in 11 foreign markets, Promega cannot afford a parochial view of innovation. Rosenberg said business operates differently in different parts of the world, and Promega has to be careful not to be too “American centric” in its decision making. Fifty percent of its revenue comes from outside the country, and that’s why Promega solicits management input from its foreign business centers.
“It would be very easy to be stuck in a U.S. mindset, especially in Madison,” he said. “To guard against that, all of the company’s worldwide business executives come here annually to discuss how our product lines can sell better in different parts of the world. It’s a difficult problem for a company that has approximately 1,500 products.”
One decision that wasn’t difficult was not to follow the path of research tool makers that assert “reach-through rights” and claim a percentage of revenue from the commercialization of products developed with their tools. Pharmaceutical companies detest this and argue that tool makers shouldn’t own their drugs because their tools were used to develop them.
Promega sells licenses so that customers use its tools, including reagents, as part of a kit, but anything discovered with Promega tools belongs to the client. That’s one of the reasons Rosenberg came to Promega after two decades with GlaxoSmithKline, a Promega customer.
Boring them with science
Rosenberg, who serves in the department of bacteriology at the University of Wisconsin-Madison, ironically was a philosophy student well into his college years because he couldn’t stand science. Except for that occasional science instructor who taught with flair, K-12 education made science sound boring.
The opportunity to stimulate student interest in science is one of the reasons the BioPharmaceutical Technology Center Institute is housed within Promega. The company and UW-Madison run courses for high school teachers and students who get hands-on science instruction and use real tools and labs. Rosenberg says the proof that the BioPharmaceutical Technology Center Institute, a non-profit entity supported by Promega, is an effective place of learning is that they leave with smiles rather than frowns.
In assessing the status of Wisconsin’s biotechnology industry, Rosenberg offers the vantage point of an outsider. At this point in time, he believes the industry is a mixture of good news in terms of sophisticated science and bad news in terms of funding and technology transfer.
“Madison is interesting,” he said. “The seeds of invention are here. The university is just incredible. The science the university puts out can generate biotech-sales capability. The problem stems from once it is taken out of the UW, what is done with it?
“Where Madison has failed is where it gives companies support in terms of venture capital to get them to an inflection point.”
Jim Leonhart, executive director of the Wisconsin Biotechnology and Medical Device Association, said Promega offers more to the state than science, jobs, and tax base. He cited its strong relationships with UW-Madison and program support of high school biotech curriculums and apprenticeships, and its work with the annual bioethics forum.
“It’s leading edge not only with its scientific prowess, but its impact in the community in all of those areas,” Leonhart said. “I guess my focus is on the corporate citizenship role that they play in a very grand fashion.”
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