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ARCHIVED  December 1, 1995

University research spawns spinoffs in varied fields

Northern Colorado is home to several companies launched in university labs and classrooms.
At least five companies spun off from university research exist in Fort Collins alone.
Let’s start with perhaps the most well-known of all the spin-offs: Paravax.
For those unfamiliar with recent breakthroughs in veterinary medicine, Paravax is a privately funded laboratory working to perfect a heart-worm vaccine that company officials hope will ultimately be sold to veterinarians around the world to treat domestic pets.
Paravax was founded in 1988 shortly after California venture capitalist Barr Dolan decided to put his money behind the booming biotechnology market. He approached two people known in the field of parasitic disease technologies. One was CSU pathology professor Robert Grieve, who had developed techniques for making it easier to uncover a vaccine.
The vaccine, which company officials say could hit the market within the next few years, would protect the pet for the rest of its life as opposed to currently used antibiotics, said Carol Talkington Verser, director of intellectual property at Paravax.
Grieve was the company’s scientific co-founder as it launched its first lab in northern California in 1988. The lab moved to Fort Collins to be closer to CSU in 1991. Today, Paravax has more than 65 full-time researchers and about 15 part-time employees. In 1994, Grieve joined Paravax as vice president of research and development. He continues to teach at CSU and is now chief scientific officer at Paravax.
Grieve, who owns stock in the company, continued to teach at CSU even when his researchers were working on Paravax-sponsored projects. But Verser said it’s not uncommon for university faculty to participate in businesses for which they do research.
“Both parties are comfortable with each other,” Verser said. “They disclosed everything to each other. They never had conflicts of interest. While Bob was at CSU ` Anything he invented, even though it would have been with Paravax funds, is owned by the university. However, Paravax got the first rights to exclusively license the technology.”
Verser said part of the license agreement also includes royalty payments to Grieve on products sold. And Paravax, which also focuses on vaccines and ways to reduce flea infestation on cats and dogs, continues to have a “very close” relationship with CSU.
“A number of people here are adjunct professors at CSU,” she said. And, CSU has a small equity position in Paravax, which was donated to the university, Verser said. Because of the donation, CSU didn’t have to give up any patent rights.
Fort Collins- based Chemagnetics Inc., now called Otsuka Electronics USA Inc., is another CSU spinoff, manufacturing nuclear-magnetic resonance machines. It was founded in 1977 by CSU chemistry professors Gary Maciel and Victor Bartuska.
At the time they decided to jump the fence into the private sector, Maciel and Bartuska were researching resonance machines used to analyze oil shale as a potential energy source, company president John Heinrich said.
Today, the company maintains strong ties to CSU. Five or six current staff are CSU alum. In 1989, the company was purchased by a large, private Japanese corporation — Otsuka Pharmaceutical. The corporation’s angle was to “use technology to build a family of products based on magnetics, in addition to tapping into the analytical instruments industry,” Heinrich said.
The company wanted to build instruments for use in animal drug research that would circumvent the need to sacrifice the animals, he said.
Otsuka pursued this course until 1993 when “it became evident that in vivo research instrumentation was not going to lead to a particularly interesting business,” he said.
In January 1995, the medical portion of the company was sold to Israel-based Elscint Ltd., which rents part of Otsuka’s plant space in Fort Collins.
Otsuka Electronics, which has more than 80 employees, has returned to Chemagnetics’ original mission of focusing on analytical instruments. The company is discussing significant research projects to begin next year at CSU.
“(CSU) is of great value to us,” Heinrich said. “They have expertise in some areas we don’t. We’re a small company. We can’t be experts in every segment of our marketplace.”
Fort Collins-based Engineering Data Management is another CSU off-shoot. The timber engineering firm was established in 1982 and now has 15 employees. Company president Jozsef Bodig, CSU professor emeritus in forest sciences, was evaluating the design of utility and power poles when he realized the whole approach was outdated.
Bodig helped develop a nondestructive way to test poles by using electronic sensors to gauge the wood’s strength in the wake of a storm or other natural disaster. When he completed his work, the Electric Power Research Institute came knocking on his door.
“They said, RNice work you did. Now we want to apply it,’ ” Bodig said.
So four professors, including three from CSU’s Department of Civil Engineering, launched the company 13 years ago.
“The research went on for several years,” Bodig said. “We actually developed the process. Our company commercialized it and produced the instrument which we sell to utility companies to do the work.”
Next month, the company, which now has 16 employees, is issuing a newer, more user-friendly version of the $10,000 gadget. And the company maintains close ties to CSU.
“We’re preparing a joint proposal with someone in the Department of Forestry,” Bodig said. “We offer practical field experience. The university offers fundamental technical capabilities. We supplement each other.”

Northern Colorado is home to several companies launched in university labs and classrooms.
At least five companies spun off from university research exist in Fort Collins alone.
Let’s start with perhaps the most well-known of all the spin-offs: Paravax.
For those unfamiliar with recent breakthroughs in veterinary medicine, Paravax is a privately funded laboratory working to perfect a heart-worm vaccine that company officials hope will ultimately be sold to veterinarians around the world to treat domestic pets.
Paravax was founded in 1988 shortly after California venture capitalist Barr Dolan decided to put his money behind the booming biotechnology market.…

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