Research bonanza or pipette dream?

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February 2, 2004 // UPDATED 2:48 pm - April 24, 2007
By: Scott Russell
Scott Russell

Leaders hope Life Science corridor breathes new life into Elliot Park and beyond

In a small, windowless office on the edge of the Hennepin County Medical Center (HCMC) campus, machinist and designer Doug Cooper is trying to make a better intermeduliary nail -- a large metal pin surgeons use to fix a broken femur.

It's time-consuming surgery, Cooper said. It involves taking multiple leg X-rays so surgeons can drill holes in the femur in the right places -- allowing screws to go through the bone and secure to the holes in the metal stabilizing pin.

"We are trying to find ways to do it with fewer X-rays or no X-rays at all," Cooper said.

Cooper works with the Midwest Orthopaedic Research Foundation (MORF) a tiny research group that helps HCMC doctors find better ways to fix broken bones, improve artificial joints and reduce post-surgical infections.

MORF is an arm (perhaps more of a finger) of the Minneapolis Medical Research Foundation (MMRF), HCMC's umbrella research group. MMRF has more than 200 researchers and gets $15 million in annual grants. MORF has but a dozen researchers, including students, and a $600,000 budget.

Yet MORF has big aspirations.

MORF hopes to acquire its building, 700 10th Ave. S., from Allina Health Systems. Working with a few supportive orthopaedic doctors, MORF has created the for-profit Elliot Park Life Sciences Institute LLC to redevelop it and launch a new business incubator and other research ventures, including support services such as accountants, graphic designers and marketing firms.

A morphed MORF would play a significant role in the city's proposed Life Science Corridor -- a "Medical Alley" stretched two miles down Chicago Avenue and surrounding streets from Elliot Park to Lake Street.

Gov. Tim Pawlenty included most of the corridor in a Biosciences Zone, making businesses eligible for a range of tax breaks.

An impressive array of leaders is working on the Life Sciences Corridor: Dr. Alan Goldbloom, president and CEO of Children's; Dr. Richard Kyle, HCMC's orthopaedic department chief; and Dr. Robert Van Tassel, founder of the Minneapolis Heart Institute, to name a few.

While rivals, the players at the table share common interests that could benefit Elliot Park and the corridor.

According to Eric Eoloff, Abbott Northwestern's director of public affairs and strategic facilities planning and a corridor planning participant, "We know we can rally together around research and community investment," such as the job training program and neighborhood safety, he said.

A collaborative research front could also attract new companies that might otherwise choose land-rich suburbs, Eoloff said.

Joan Bechtold, director of MORF's biomechanics lab, even floated the idea of having Chicago Avenue become the city's first trial area for Personal Rapid Transit (PRT), a form of mass transit with individual cars, making travel up and down the corridor easier. Researchers, doctors or business people could fly into the airport, take Light Rail Transit to the Metrodome stop and take PRT cars to any corridor institution.

Paper tiger?

The corridor idea looks strong on paper. Still, the city has floated other grand ideas that never came true. MORF, for instance, is one of the proposal's major bookends, but it still hasn't filled its building, let alone closed on the deal.

Jeff Spartz, HCMC's top administrator, has attended some corridor planning meetings but said he is not one of the catalysts. He calls the corridor idea "blue sky," recalling a proposed Downtown-University high-tech corridor. "Except for the University Computing Center, not much else was developed there," he said. "At times, if you don't have the right idea at the right time, it is like pushing a string."

Spartz said the corridor could create potential neighborhood conflicts -- for instance, if a developer proposed tearing down an existing building to build a new lab, he said.

Minneapolis Mayor R.T. Rybak, a corridor backer, said he did not expect to see mega-research developments with teardown plans in Elliot Park. The University Research Park and the Sears building in the Lake Street area have room for businesses to grow. Elliot Park could see new uses for old buildings, he said.

He also said the Life Science Corridor has more advantages than the Technology Corridor did.

"When I was at the Downtown Council, I lived through the Technology Corridor idea," he said. "We were trying to grow it out of its relation to the Supercomputer Institute, but nothing else. There were few if any technology businesses in that area."

In this case, the city can build on a deep base of existing medical institutions, two incubators, including MORF, the early and deep engagement of the institution principals and an existing neighborhood-based hospital-jobs training program, the mayor said.

"We could call it a day and already be successful," Rybak said.

Propping up the bookend

MORF is at what Rybak calls one of the corridor's "bookends." (The other is the Minnesota Cardiovascular Research Center on the Abbott Northwestern campus, further south on Chicago.)

Kyle and Dr. Ray Gustillo started MORF's orthopaedic biomechanics lab two decades ago.

A walk through the lab shows a number of in-progress projects. A Danish researcher is working on improving "acetabular cups," the socket in an artificial hip joint and a key factor in joint durability. The artificial joint gets loaded into a machine that simulates use, while a series of cameras take pictures to see how well it moves.

Kyle said the lab publishes material and sends it to orthopaedic surgeons so they know how well devices work.

MORF also has a skills lab/training facility where outside groups come in to learn new techniques, and a 107-seat conference room where area bone doctors meet weekly for Grand Rounds, discussing interesting or tough cases.

The foundation is entering a critical phase in its history, and the catalyst was a financial punch in the nose and a potential eviction slip.

HCMC had significant state revenue cuts in 2004. It cut several hundred thousand dollars in MORF rent support, said Spartz. "We had to say: what is really a mission-oriented function and what is a nice thing to have but not as critical to the mission?" he said.

Compounding problems, Allina, MORF's landlord, wants to sell its building.

Allina used most of the 63,000-square-foot building for central billing operations, letting MORF and its related activities use 15,000 to 20,000 square feet, Bechtold said. Allina needed more space and moved out in January 2003.

MORF wants to stay in the space -- which is ideally located next to the HCMC campus. Director of operations David Durenberger, one of the Life Science Corridor's early promoters, said the space provides HCMC doctors easy access to research assistance if they have a problem with a particular procedure or device.

"The doctor is done with the surgery, cleans up, walks out and just comes down the hallway -- comes in here and sits down and says, 'I'm sick of this. It happens nine times out of 10. Let's try to figure this out,'" said Durenberger (the son of the former U.S. senator).

Durenberger said he expected MORF to make a pitch to Allina's board of directors this week. If all goes well, it could have a signed purchase agreement before the end of the month.

"We are a small operation, it is a big step forward for us. We are confident we have the financing ready to go for this building," said Durenberger.

Bechtold said the foundation has friendly relations with Allina, which has helped MORF financially. Michael Sharp, Allina's vice president of corporate real estate, said, "We are working in earnest to see if we can do a deal with them."

Bechtold said two companies have already signed leases: Twin Star Medical, a firm developing devices to reduce brain swelling from severe stroke or head trauma, and Orthopaedics Innovations.

Kyle said the new venture could generate money and reduce the lab's grant reliance.

"One of the things that has happened in the research community, the labs have been decreasing in number because funding is drying up," he said. "If we can develop some type of ongoing funding -- you retain your Ph.D. and you retain your research people, and you can assure them a job. Those people are so valuable, if they go somewhere else it is hard to rebuild."

Blood cleaning: A case study

Dan Miller is CEO of a startup ExCorp medical, the kind of business that could have benefited -- and may still benefit -- from MORF's proposed Life Sciences Corridor incubator.

Oakdale-based ExCorp has developed an outside-the-body blood-cleaning process using pig liver cells to remove toxins. It provides temporary support for people in liver failure. He has raised $9 million in eight years and now needs $35 million for clinical trials, product development and marketing--a tall order.

Harlan Jacobs, president of Genesis Business Centers, the group that will run MORF's incubator, said companies such as Miller's that locate in the Life Sciences Corridor could qualify for federal "New Market Tax Credits," which help them raise capital. (They qualify because the corridor is in low-income zip codes.)

For instance, an investor who invests $10 million in Excorp would not only get equity in the company but a 39 percent tax credit -- a $3.9 million tax write-off spread out over seven years. In addition, a company such as Miller's could apply for state tax benefits under Pawlenty's Bioscience Zone designation.

Miller said the federal tax credits make the corridor attractive and he would "absolutely consider locating a significant amount of our operations in that corridor."

Miller has toured MORF's facilities and said he met Dr. Scott Davies, HCMC's chief of internal medicine, and the two began a discussion that could lead to a future collaboration.

Davies told him HCMC saw patients poisoned with Tylenol overdoses and other toxins, Miller recalled, and ExCorp's product could to help those patients avoid liver transplants.

It's a small example of the kind of synergy that could happen in the Life Sciences Corridor, Miller said. Like-minded people are in close proximity and have informal discussions. "It is very important in a startup environment," Miller said.