With the precipitous decline of the region's manufacturing industry, many are looking to health care, and the fledgling life sciences industry, as a new economy. And in some respects the two are inter-related.
While the health industry is a major employer in the communities where hospitals are based, they generally only serve people in this region. Whereas, life sciences companies market worldwide, and some, like Esperion Therapeutics, have been wildly successful.
Founded by Roger Newton in 1998, Esperion Therapeutics made considerable progress researching cholesterol, attracting the interest of Pfizer, which acquired the company in 2004. Recently, Newton has re-established his company with a twist – it will also serve as an incubator for biotech start-ups.
There are also several other companies that have operated under the media radar, such as Essen Instruments. Essen developed the FLYPR (fluorescent incubating plate reader) which makes optical measurements on cell samples. Co-founded by Brad Neagle, the firm was acquired and relocated to California. Neagle later re-established the firm in Southeast Michigan.
Newton and Neagle are cautiously optimistic about the prospects for success of the life sciences industry in Michigan, but it won't be easy and it likely won't be big.
From little seeds big things grow
"There clearly is opportunity for growth," says Steven Rapundalo PhD, executive director of MichBio, the professional association representing the Michigan life sciences industry. The state has more than 500 life sciences companies, most of them in Southeast Michigan, and most with fewer than 100 employees.
The state's health care industry, specifically its academic systems, has helped spawn innovation through instrument and technique development, Rapundalo says. He cites the Beaumont Commercialization Center, "which behaves like an applied technology transfer, working with entrepreneurs."
The departure of Pfizer from Ann Arbor resulted in somewhere between 24 and 27 start-up companies, which reflects a growing culture of entrepreneurial scientists, according to Rapundalo. In Detroit, Caraco Pharmaceutical Laboratories, and Asterand plc represent the larger companies.
While Rapudalo believes there's a critical mass of life science professionals in the region, the state isn't perceived as a life sciences leader. That's partly because of inconsistent state funding and a lack of visibility, he says.
"I don't know why it shouldn't be" a thriving entrepreneurial environment, especially with the proximities to universities and related talent, says Neagle. "I believe it is a good place to start a business. One thing you have in California that you don't have here is better access to capital. But the cost of doing business there is much higher. The cost of living is higher (and) the standard of living, in many ways, is not as good. People can't afford housing on a normal salary. It's the 'cool' factor as much as anything right now."
"Coolness" aside, Newton believes that there is opportunity in the dourest of economies, and ultimately, it's "success" that will draw talent. He's less concerned with attracting young talent as attracting seasoned life sciences managers to bring their knowledge experience to Michigan start-ups.
The challenge to find funding
Newton is leveraging his second generation Esperion Therapeutics to help other start-ups through shared facilities, equipment, and experiential knowledge. "The way I look at it, a lot of people helped me get Esperion off the ground and make it a success. Therefore, I look out for others. I see them in a situation I was in 10 years ago. Why not assist them? Why not build a culture here of people cooperating and helping each other out and being able to create value quicker? … If we need something done – and some company is doing formulations locally, why go to either coast to get them to do it? And if they need to raise money, why can't I open my Rolodex [and contact investors]?
"It's all about networking and connecting people and getting people in the right place at the right time in front of the right people. We have a lot of talent here. In many ways it's not recognized. How many people know that the number one pharmaceutical in the world, Lipitor, was discovered and developed in Ann Arbor?"
William R. Schramm, senior vice president, Strategic Business Development at Henry Ford Health System, believes that the research infrastructure in Southeast Michigan is an economic engine in terms of the National Institutes of Health grants financing research and growing the talent pool .
"As an organization, we have increased our research base by more than 50 percent over the past five years," Schramm says. "When you talk about economic engines, this is all non-Detroit-based revenue; federal NIH grants, other commercial-based research expansion."
More funding enhances reputation and draws talent, Schramm explains. "It's a cycle and it's all about momentum. If you do one project and you can attract a major researcher and a couple junior researchers, then other researchers… are more inclined to consider you."
Ford announced the relocation of its cytogenetic and DNA laboratory research, a drug discovery laboratory focused on cancer research, and a radiation oncology research program to Detroit's Tech Town. The technology incubator also promotes translational research from Wayne State University to private entrepreneurs.
Real world applications
The translational model has less to do with academia and more to do with the practical application of an invention or technique and testing it in a real health care laboratory at the new Beaumont Commercialization Center in Royal Oak. The facility connects companies with end users in the commercialization process, "all of the steps to get something from concept to patent to eventual FDA approval and launch the sales," according to John Shallman, director of Strategic Business Development.
"The voice you need to understand throughout all that is the provider, primarily the hospital, but there are other settings as well. We bring a voice that is quite often absent – not completely – but a lot of times it's inferred or second, third-person removed in the development process. People are aware that there were medical researchers involved in the products, but they're often not staffed at a hospital. It's a key role."
The center lures national companies to the region that wouldn't normally do business here, Shallman says. "We can help stimulate this market and get Michigan-based suppliers that wouldn't normally have that access by working with us and through us." In doing so, Shallman says there can be match-ups between local start-ups and national companies.
"When they come here, we learn a lot about their potential needs in terms of manufacturing or skills or clinical research assistance. There we'd be connecting the dots. A lot of this has to be generated natively, through the growth of our young companies."
Newton, like others, believes that there is enough of an infrastructure in Michigan for the life sciences industry to thrive, but it won't be easy. "I'm cautiously optimistic, but I'm much more optimistic than pessimistic," he says. "It's going to be a hard road. Anyone who thinks it's going to be sitting on a beach drinking a beer and getting a nice tan – you can forget that. It's going to hard work, but it will be through a multidisciplinary approach, depending on who we network with. … The provinciality of attitudes where one part of the state is different than another has got to go.
"The collective 'we' has to buy into it."
Dennis Archambault is a frequent and admired contributor to Metromode. His last article was Ferndale's New NeighborsPhotos:
Bioscientists at Essen Instruments research Lab
Roger Newton, founder
of Esperion TherapeuticsBrad Neagle,
co-founder of Essen Instruments - Ann ArborBinary Gradient Module, enables subsequent isolation and purification of targeted compounds.
John Shallman, director of Strategic Business Development at Beaumont Hospital - Royal Oak
Photographs by Marvin Shaouni
Marvin Shaouni is the managing photographer for Metromode & Model D.