Creating drugs, devices and materials costs so much that innovators call the expanse between concept and product the Valley of Death.

Many believe the Valley of Death is more forbidding than ever.

Sam Sanderson, a University of Nebraska Medical Center scientist, is convinced that he and partners in California and Texas have discovered a way to enliven the weakened immune systems of the elderly and hasten the immune system's response to vaccines in people of all ages.

Sanderson, who has worked on his project for more than 20 years, said he has shown that the technology is effective in mice. Now he needs hundreds of thousands of dollars, and eventually a good deal more, to show that it works in dogs or monkeys, then people.

“We are in what they call the Valley of Death,” said Sanderson, who has several patents to protect his findings. “So you're kind of stuck, you know?”

Americans cherish their history of innovation, but politicians and entrepreneurs nationwide agree the Valley of Death threatens to curb that spirit. Job creation and economic strength hinge on small companies designing new products and deploying novel technology.

One of Gov. Dave Heineman's top economic-development goals this year is passage of a state tax credit for investors, or “angels,” who put money into small startup companies. Eighty percent of job growth, he said, comes from small businesses.

“We're a small-business-oriented state, from Scottsbluff to Omaha,” Heineman said. “We've got to help them grow.”

Sanderson said he has engineered a protein fragment to fire up the immune system rapidly and effectively. He believes it could be used against cancers, meningitis, antibiotic-resistant bacteria and other diseases.

“It's got home run written all over it in my opinion and in a lot of other people's opinion,” Sanderson said. “It works.”

UNeMed Corp., which commercializes research for UNMC scientists, has marketed Sanderson's technology to investors. Michael Dixon, who heads UNeMed, said “there's a good chance still” that funding will come through.

The cost to devise new drugs is exorbitant. PhRMA, a trade group for pharmaceutical research companies, estimates that it costs $1.3 billion to create a new medicine, up from $800 million in 2000.

The group says federal regulations call for more trial participants and procedures, such as blood work, and longer trials.

The group also says that for every 250 drugs tested in animals, only five make it to human trials and only one of those makes it to drugstore shelves.

“The chances of success are very small,” said Alicia Loffler, associate vice president of research at Northwestern University in Illinois.

Dixon said a pharmaceutical company that buys the rights to a drug doesn't want to invest hundreds of millions of dollars only to find through clinical trials that it harms patients or isn't effective. So the tendency is to kill ideas “early and often,” he said.

Scientists at the Ames Laboratory at Iowa State University devised a new ceramic product called BAM, for boron aluminum magnesium. Hard, slippery and tough, it can extend the life of cutting tools.

A startup company spun out of the finding three years ago, and New Tech Ceramics in Boone, Iowa, now has three full-time and seven part-time workers, said George Wilson, New Tech's president.

Local investors have put money into the business, which Wilson said has customers but isn't profitable.

“It takes a lot of money to start a company and become self-sustaining,” Wilson said. “That's not a reason to shy away. This is an idea that could return significant income in the future.”

Venture capital is key to moving a product to the marketplace.

Some experts say investors and venture-capital firms over the past few years have provided less money to move products through the Valley of Death, partly because of the weak economy.

From 2008 through 2010, only 90 venture capital-backed initial public offerings, or IPOs, occurred, according to the National Venture Capital Association. From 1998 through 2000, 612 took place.

The federal government spends some $50 billion on research, but university experts say less than 10 percent of that is devoted to research to move products to the marketplace.

“It's so underfunded,” said Pamela York, executive director of the University of Iowa Research Foundation.

President Barack Obama used the word “innovation” repeatedly in his last State of the Union address. “In America, innovation doesn't just change our lives,” he said, “it is how we make our living.”

This year the National Institutes of Health, a key federal funding source for university research, has proposed creating a national center to help move research to the marketplace.

Universities themselves are criticized for rewarding professors for publishing papers rather than producing tangible goods. Iowa's York said universities historically were set up for teaching and basic research but are moving slowly toward creating marketable items.

Heineman agreed. “But we need to take giant steps forward in this area,” he said.

Universities became much bigger players in the marketplace with the federal Bayh-Dole Act. The 1980 law enabled universities to own the inventions they made with money from the NIH, the National Science Foundation and other federal agencies.

“That created a sea change,” University of Nebraska President J.B. Milliken said. “Now virtually every university of a certain size has a technology transfer office or its equivalent.”

The offices assist in gaining licenses, business partnerships, funding and other needs.

Yet universities continue to be dogged for not doing more. Most of the work is still basic research to advance science and knowledge, not to build products.

Milliken said basic research that furthers knowledge is vital. That could include researching drought, weather patterns and countless other topics.

The University of Nebraska-Lincoln nevertheless plans to bring together academic and commercial expertise on its proposed Innovation Campus. The 233-acre, public-private research park in Lincoln would pursue discoveries in agriculture, energy and other areas.

Devendra Agrawal, a Creighton University scientist for 25 years, said he has conducted research into allergies, asthma and cardiovascular disease but has no patents.

Agrawal said that universities in general haven't provided training for research that can be applied to make products to improve the human condition. Many scientists begin their careers by doing research for its own sake and to gain promotion.

“I realized that much later,” he said. “And my goal from now on is to look for knowledge that we can patent” and apply to patient care.

Agrawal said Creighton gave him the chance two years ago to create a Center for Clinical and Translational Science. Graduate students study various scientific areas and work with students from other scientific disciplines.

Students ask questions: What does this mean in the clinical situation? What does this mean to patient care?

Anne York, director of Creighton's entrepreneurship program, said she senses that Nebraska students don't have the risk-taking hunger of students in places like Seattle, North Carolina and Austin, Texas. At Creighton and the University of Nebraska at Omaha, she said, students generally are more interested in working for large companies.

York pointed to UNL's Raikes School as a place that encourages entrepreneurship. The program, for students who excel in computer science and business management, urges them to lead, innovate and bridge the gap between technology and business.

One of the program's successes is Hudl, an online video analysis system developed for sports teams by Raikes School graduates.

“It's a great breeding ground for startups,” one of Hudl's founders, 28-year-old John Wirtz, said of the program.

Hudl enables coaches to easily break down game video into various play formations, down-and-distance situations and other clips and categories.

Wirtz, chief operating officer of the startup company formed around Hudl, said he has 30 employees in Lincoln and seven contractors selling the product. Three National Football League teams subscribe to the service, plus 25 major college programs and thousands of high school and youth teams.

The company, which had $3 million from investors, began making a profit last year, he said.

One of the investors was an innovator who grew up on a Nebraska farm and became a Microsoft executive. He is Jeffrey Raikes, the man for whom the Raikes School is named.

World-Herald librarian Jeanne Hauser contributed to this report.

Contact the writer:

402-444-1123, rick.ruggles@owh.com

« Live Well - Health & Medicine

Share