Proof-of-Concept Lab Benefits NWA Startups

By Mark Carter
Arkansas Business

A new proof-of-concept lab at the Arkansas Research & Technology Park in Fayetteville is expected to help local biotech startups move closer to taking their products to market.

The lab represents a partnership between the University of Arkansas, which runs the park, and the private Virtual Incubation Co., which operates out of the park and grows high-tech startups, most of which use UA-licensed technology.

Proof-of-concept (PoC) labs serve to validate emerging technologies. The PoC lab in Fayetteville was equipped through a $225,000 U.S. Small Business Administration grant put together by Phil Stafford, president of the University of Arkansas Technology Development Foundation, a nonprofit charged with managing the park and transferring UA technology to startup ventures.

What might appear as an insignificant grant on the surface could become a catalyst to bigger things for the tech-based startups spawned at the park. It's already made a big difference for BiologicsMD, the VIC portfolio firm and Innovate Arkansas client startup that recently signed a deal to develop a manufacturing platform for its osteoporosis treatment.

"This is much more than simply new lab space. This is a fully equipped, up-and-running laboratory that means we're able to complete complicated projects in-house," said BioMD's chief science officer, Robyn Goforth. "This ability is critical to our success."

The lab's presence has enabled the firm to begin in-house production of its product, PTH-CBD, and develop other necessary testing as required by the U.S. Food & Drug Administration.

"The PoC lab is our home base, a facility from where we can accomplish all the in-house tasks needed to move our pharmaceutical product through the FDA process," she said.

Currently, BioMD and Ascendant Diagnostics, another VIC biotech firm, are using the lab. Ascendant is developing a means of detecting breast cancer through the proteins found in tears.

"Having a PoC lab in the park allows VIC and other affiliate companies to import technologies from outside the state and region for proof-of-concept validation," Stafford said. "Moreover, the PoC Lab will provide yet another important research resource from which to foster, grow and retain companies and promote the creation of high-quality, high-wage jobs in the biotechnology sector."

Startups licensing university research often have trouble getting access to the equipment necessary to properly develop the technology. The addition of the PoC lab in Fayetteville eliminates one potential hurdle. "The tax credits are a very important element in making this work," Goforth said. "The income the grants don't cover has been a really important element to how we make this work."

"One of the major challenges in transferring technology out of university laboratories and into startup companies is getting access to the equipment needed to do the development work," said Calvin Goforth, president of VIC, a former UA researcher and Robyn's brother. "The technologies available for license from universities typically require significant development before they can be turned into commercial products. The cost of this development work is often quite significant and the technical risks significant."

Federal funding such as Small Business Innovation Research grants can be crucial in a startup's overall funding strategy, but Phase 1 SBIR grants prohibit spending funds for equipment, he said. Stafford was able to secure SBA funding that paid for the new equipment.

VIC evaluates research from the UA and all over the U.S. It's been forced to pass on technologies it wanted to bring to Fayetteville and incubate but couldn't because of an inability to access the equipment necessary to develop the technology.

"The proof-of-concept facility helps address this need and will lead to more and better startup companies based on licensed intellectual property," he said.

The lab is the result of an ongoing conversation between Calvin Goforth and Stafford, in which the former was looking to address the equipment limitations for his startups and the latter was interested in making the park better.

"Phil is always looking for ways to help grow the park bigger, faster and better," Calvin Goforth said. "He identified a possible funding avenue to acquire some equipment, and then together we set out to come up with a long-term structure for managing the lab, maintaining the equipment and providing oversight on its use."

Stafford works with all park tenants to address their needs, but the PoC lab represented a tangible win for both parties.

"In this case, the equipment needs of VIC were specific to the further development of biotechnologies," Stafford said. "More importantly, having a PoC lab in the park allows VIC and other affiliate companies to import technologies from outside the state and the region for proof-of-concept validation."

Stafford said the lab was poised to help provide a surge in biotech startups if the UA maintains a commitment to biotech research.

"Nonetheless, the laboratory is flexibly equipped to serve as a platform to support a variety of test and simulation requirements, so that we're not limited to a single category of biotech development," he said.

Goforth said the companies had the potential to hire hundreds, if not thousands, of people in the not-too-distant future.

Calvin Goforth thinks the lab could have a significant impact. "It's difficult to quantify, but speaking just on the impact for VIC, it will certainly enable us to create new companies that we wouldn't have been able to before, due to lack of equipment access," he said.