Incubators Keep High-Tech Companies Going

(Click here for the list of SBA lenders. Click here for the list of private equity firms.)

Although the state has seen numerous business incubators come and go during the past 15 years, two technology incubators have not only survived but are thriving.

Both are associated with the University of Arkansas System — the Genesis Technology Incubator at Fayetteville and the UAMS Arkansas BioVentures Incubator at Little Rock.

Business incubation is, as it sounds, about starting and growing businesses from seed, providing a safe place as well as planning, management and financial services to startup companies so they can “graduate” from the incubator and stand successfully on their own.

According to the National Business Incubation Association, an average of 87 percent of incubator graduates are still in business, while a similar number of startup businesses fail to make it more than five years without that support.

The Genesis incubator has been helping technology-based firms get their start since 1986. Its connection with the university’s College of Engineering gives it a leg up in growing tech companies. There are 18 client companies currently in Genesis.

Although the UAMS Biomedical Biotechnology Center has been cultivating biotech startups since 1997, it only opened its new $3 million, 16,000-SF business accelerator facility, UAMS Arkansas BioVentures, last October.

Timothy O’Brien, director of the center, said UAMS scientists received more than $100 million in grants and contracts for research and related activities last year. UAMS research has produced more than 100 patents with another 120 applied for. UAMS then licenses those patents to spin-off companies that O’Brien hopes will remain in Arkansas and produce new revenue, create high-paying jobs and new biomedical products.

UAMS’ first biotech graduate was ContourMed Inc., which manufactures and markets prosthetic devices. That firm is a finalist in the 2003 Arkansas Business of the Year awards, which will be presented on Feb. 26.

Other graduates include the Center for Toxicology and Environmental Health LLC, Safe Foods Corp. and eDocAm-erica.

Twelve new biomedical/biotech companies have come out of UAMS’ research and intellectual property, and O’Brien thinks it can grow at a rate of two or three new companies a year.

Successes at Genesis

Graduating from the Genesis Incubator last year was TrestleTree Inc., a health care firm that has plans for a 9,000-SF headquarters building at Fayetteville’s Joyce Business Park to house its corporate staff of 25.

TrestleTree uses Webcam conferencing to connect chronically ill patients with “personal health coaches.”

Another company, Process Dynamics, graduated this fall. The company, which is commercializing a dewaxing/de-oiling solvent developed at the UA, employs 30.

Bob Friedman, director of Genesis, said that in the past seven years more than 900 jobs have been created in Northwest Arkansas by the companies in the incubator. And during that time, more than $20 million in funding was raised through grants or contracts that the companies had with private businesses.

In the next couple of months, Friedman said, Acxiom Corp.’s research group, which employs about 30, will graduate.

In the pipeline, Friedman said, are three startups involved in nanotechnology, essentially molecular manufacturing from the atom up. They are NN Labs, Xanodics and Nanomech.

Another high-tech company is Space Photonics Inc., which makes fiber-optic communications components and networks for aerospace applications.

UAMS

Current UAMS clients include:

• IRV Inc., which offers a novel blood vessel viewing device called Infrared Veniscope for use in both clinic and hospital settings as well as multiple Defense Department nighttime combat applications;

• Stage I Diagnostics LLC, which is working to develop and manufacture new test systems for the early diagnosis of breast and ovarian cancer;

• AnaBonix Inc., which has technology that enables researchers to synthesize, identify and develop new small-molecule drugs for the treatment and prevention of osteoporosis;

• Type IV Technologies LLC, which is developing a new therapy for warts by stimulating the immune system;

• Ortho Unique LLC, which has developed an orthopedic device that improves the hip replacement procedure; and

• Seer Pharmaceuticals LLC, which offers new treatments for specific food allergies.

BioVentures

The six companies in BioVentures’ admission pipeline are:

• DCV Technologies Inc., which is working to develop vaccines for cancer in women;

• IntraTherm LLC, which is producing a device designed to eliminate malignant and benign growths with precise heat radiation;

• XenoCept, which deals in organ transplants from one species to another;

• Network Outcomes, which will offer access to therapeutic results databases;

• InfleXion LLC, which promises unique therapeutic approaches for previously untreatable drug overdose and addictions; and

• ArPharm LLC, which will support the Arkansas Agricultural-Medicine Development Initiative that includes producing pharmaceuticals in plants.