14 May Madison stem cell company gets $1M from state
Madison, Wis. – Stemina Biomarker Discovery, a stem cell business launched late last year by former WiCell director Beth Donley, will receive $1 million in state funding, and more help could be on the way in the form of angel investments.
The funding comes in the form of a $500,000 grant and a low-interest loan in the same amount. Stemina Biomarker will use the loan to purchase a mass spectrometer (at a cost of $466,000) and the rest of the funding for other equipment, to build out its laboratory, and to cover the salaries of future scientific staff.
Donley founded the company along with University of Wisconsin-Madison scientist Gabriela Cezar, whose laboratory was the site of the funding announcement.
“This award is crucial for Stemina’s early development, and it secures Wisconsin’s dedication to progress stem cell discoveries into the business sector,” said Cezar, an assistant professor in the university’s department of animal sciences.
In addition to state funding, Stemina is pursuing capital from angel investors. The company has been identified by the state Department of Commerce as a qualified new business venture, which ensures that investors in Stemina Biomarker can earn Wisconsin income tax credits under Act 255.
Donley said the response from angel investors she’s met, most of whom are from Wisconsin, has been positive. She expects to raise an initial $1.5 million in financing well before the scheduled July 1 closing. “Every group has a couple of people interested in writing checks,” she said.
About $250,000 of the grant is inaccessible to the company until it secures matching funds from the federal Small Business Innovation Research grant program. Donley said the company would apply for an SBIR grant in August.
Biomarking territory
Cezar, a former lab manager with Pfizer, came to UW-Madison in 2005 to conduct embryonic stem cell research. Her research into the biochemical pathways of neuro-developmental disorders and cancer is an attempt to identify biomarkers, which are chemical signals that stem cells emit when exposed to disease factors or drugs.
The biomarkers can be predictive of disease, and they can be used to screen drugs for safety and efficacy and identify targets for drugs. Part of the reason the company plans to build a library of biomarkers is to help pharmaceutical manufacturers screen drugs and drug candidates for toxic effects earlier in the drug-development process, which could reduce the cost of bringing drug therapies to market.
Stemina Biomarker is working with two patents held by the Wisconsin Alumni Research Foundation.
Donley serves as its chief executive officer, while Cezar is the chief scientific officer. They are operating in the field of metabolomics, which is the study of metabolism in organisms. The field involves a type of metabolic profiling that studies chemical “fingerprints” that cellular processes leave behind. Such metabolic profiling concentrates on small-molecule or metabolite profiles, and can produce information about the physiology of a cell.
Donley has said the company’s sustainable market advantage is that it’s an early innovator in using biomarkers and metabolomics to study drugs and their effects.
While it hasn’t made any hiring decisions, Donley said Stemina has received unsolicited resumes from employees of Pfizer’s Grand Rapids, Mich. plant, which the company is closing. Researchers in Cezar’s UW lab could be another source of scientific talent.
Stem cell state
The state’s interest in funding stem cell related businesses was reinforced last year, when Doyle announced a partnership with WARF that included financial incentives for stem cell companies that locate or expand in Wisconsin.
Doyle has established a goal of capturing 10 percent of the stem cell market by 2015. Human embryonic stem cell research is controversial because embryos are destroyed in the process of extracting stem cells, but proponents point to potential cures and treatments for a range of debilitating diseases.
“This is a competitive industry and Wisconsin still has a lead,” Doyle said, “but we need to continue to support these efforts in a significant way at the state level.”
Jim Leonhart, executive vice president of the Wisconsin Biotechnology & Medical Device Association, applauded the governor’s decision.
“The state’s support for Stemina strengthens Wisconsin’s position as a leader not only in stem-cell research, but also in helping to move that research from the lab bench to the market,” Leonhart said in a release. “This support also ensures that our industry remains strong by retaining the best ideas and the brightest business and scientific talent here in Wisconsin.”
Stemina is the third stem cell business to receive a funding commitment from the Doyle Administration. The others, Cellular Dynamics and Stem Cell Products, received $2 million and $1 million, respectively. Both were co-founded by UW-Madison stem cell researcher Jamie Thomson.
In addition, the Norwegian biotechnology firm CellCura, which makes products for stem cell research, has opened an office in Madison.
Aruna Biomedical, a Georgia company that produces neural stem cell kits for researchers, might establish an office in Wisconsin if it can attract investment here.
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