From lab to life

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Author: John Nagy ’00M.A.

Michael Dean

One month before their graduation, a pair of science students strode into the Mendoza College of Business and knocked the McCloskey Business Plan Competition judges flat with a meticulously crafted business plan for a lab kit.

Their idea: Produce a kit that cancer hospitals could use to expand stem cells derived from umbilical-cord blood. For adult patients who need a bone marrow transplant but can’t find a match among relatives, cord-blood-derived transplants are often the last resort. Unfortunately, while this approach often works with juvenile patients, such transplants rarely produce enough cells to meet adult patients’ needs. With the help of a compound called Trichostatin A (TSA), that issue might be resolved.

Tyler Hulett

While the plan for Eptics LLC ultimately finished second in the general competition, Tyler Hulett and Michael Dean did earn top honors in the presentation category. Between their two awards, they banked $5,000.

The science students’ real achievement, their mentors say, was the plan itself, a compelling model for a business based on a piece of Notre Dame intellectual property that could save lives. They convinced the hard-nosed business strategists on the panel that they have what it takes to be successful entrepreneurs in biotechnology, a notoriously costly and heavily regulated field where perseverance is measured in decades rather than years. So naturally Hulett and Dean are realistic about how far they have to go before this business — which they’re now developing as an offsite lab service rather than as a kit — or any other startup they might develop enters the marketplace.

The next step for Eptics is proof of concept, an expensive sequence of laboratory tests to demonstrate that the process will actually work. Five grand doesn’t buy much more than incorporation paperwork and a couple of plane tickets, Dean says, but while the partners have had serious conversations with venture capitalists and a multinational corporation, they have problems to solve before anyone will give them a dime.

Meanwhile, as far as many at the University are concerned, the former Siegfried Hall roommates have already proven another valuable concept: Notre Dame is a place where students can be trained to transform research breakthroughs into products and services of real value to humanity.

Eyes on the prize

Life took Hulett and Dean away from Siegfried after their sophomore year. Having abandoned his initial plan to study chemical engineering, Hulett eventually headed off to Ireland for a semester. Dean, unsure of his interest in medicine, went to Mexico, worked in a hospital through a Notre Dame program and came home ready to find a new career path. Returning after Christmas as juniors, both registered for Scientific Entrepreneurship, a new, two-credit course taught by physics Professor Gregory Crawford, then in his first year as William K. Warren II Dean of Science.

Crawford, the founder of two biotech companies and holder of 16 patents, taught a similar course at Brown University for several years. The Notre Dame class, he says, was designed to introduce students “to what it means to be an entrepreneur, especially in the high-technology sector or the high science-intensive sector.”

The response was explosive. Forty students, mostly science majors with a few engineers mixed in, signed up. Crawford tapped Mark Hubbard ’72, an entrepreneur-in-residence at Mendoza’s Gigot Center for Entrepreneurial Studies, to teach sessions on finance and model building and advise the students as they broke into teams. Each team read through a stack of ND faculty proposals, selected a technology and then worked with that professor to learn the science and craft a business plan.

Hulett, Dean and Kawin Prakobkit ’10 chose Trichostatin A (TSA), a compound with enormous medical potential long left unrealized because its chemical synthesis was too costly and required too many steps. At Notre Dame, however, Professor Paul Helquist’s lab had successfully refined that process. Helquist and Dr. Norbert Wiech ’60, ’63M.S., a bioscience entrepreneur whose company funded Helquist’s work, offered the team their help finding a use for TSA. Wiech shared his expertise in commercializing life science innovations and explained the exacting regulatory standards of the U.S. Food and Drug Administration.

For the other 38 students, Crawford’s inaugural course ended with their projects. But Hulett and Dean had their eyes on the McCloskey competition. Hulett, the more science-minded partner, spent the summer in Helquist’s lab. Dean, leaning business, worked in Crawford’s office to identify more ND technologies with commercial promise. They also continued to talk to Hubbard and Wiech, who helped them see other possibilities for Helquist’s version of TSA.

The long hours began. “I read probably 100 different publications relating to this drug,” Hulett says. Finally, they settled on using TSA with other agents in a process to address the problem of adults needing cord-blood-based bone marrow transplants — a process only one in 10 adult patients survives. The Eptics partners believe their TSA-driven approach will radically improve those odds.

Welcome to the real world

Now seniors, Hulett and Dean thought their business plan was almost ready to go. And more help had arrived, too.

Across Edison Road, crews were finishing work on Innovation Park, the business incubator that the University established to help bring ND-related technologies to market. By October 2009, Hubbard and Mike Vogel ’65, colleagues in the Gigot entrepreneurial studies center, had summoned a group of local IrishAngels — alumni and other business people with Notre Dame ties — to Innovation Park to give the novices some guidance.

“We’d made it to the semifinals, and we’re like, ‘oh, we’ve got a great plan,’” Dean remembers with a shake of his head. Then the pair stumbled on questions from the IrishAngels about marketing and business operations. “They utterly obliterated us. Tyler and I ended up going over to Mulligan’s, grabbing a beer and were like, what just happened?”

For Hubbard, this was just one essential step up a steep learning curve for Hulett and Dean. “This was a real, live project,” he notes. “They’re working with real, live people like me who do this for a living. So we’re not holding back because they’re students. We’re giving them absolutely real-world advice.”

It was a low moment that the students say taught them to take nothing for granted. Humility, Norb Wiech, their bioscience mentor, reminded them, is something every entrepreneur needs to survive. But the hopeful entrepreneurs also needed to survive school. Hulett was hustling to finish his biochemistry major and dropped his anthropology major to a minor to make time for Eptics. Dean had switched into the science business program, catching up on classes in accounting, marketing and management.

The partners put 20 to 40 hours into Eptics some weeks. They say it all worked on trust, teamwork and an agreement they’d made not to let the project harm their friendship. Their schedules and work styles didn’t align, so they’d hand off successive drafts as course requirements ebbed and flowed.

Their mentors also felt the heat. Hubbard, who also teaches at Rensselaer Polytechnic Institute, says he answered about 10 emails a week. From his home near Baltimore, Wiech, who had joined the student team as its CEO and science adviser, would get drafts at 11 o’clock at night and chide them on their time management skills. “I said, ‘Guys I’m too old for this,’” Wiech recalls with a laugh. “I’m not doing all-nighters with you.”

The late nights continued up to the McCloskey competition finals, when Hulett and Dean made one last mistake. They handed in their plan before realizing their balance sheet wasn’t balanced. Dean remembers sending a corrected copy with an apology on the day of the judging.

That night he stayed in Chicago so he could pick Wiech up off a red-eye from San Francisco. When he walked into Mendoza’s Jordan Auditorium for the final public event and saw the crowd of Siegfried Ramblers who’d gathered to support them, he was elated.

“We were hungry,” Dean says. “It was a lot of time, but we had the ambition to go forward. We not only were loving what we were doing, but we loved the possibility of the reward.”

Solving a problem

Dean Crawford’s goal is to instill that passion for entrepreneurship in every student who takes his class. It’s not just about learning how to start a business, he adds. “It’s about seeing, developing and leveraging an idea, or finding an opportunity, or solving a problem.” Crawford’s vision is enthusiastically shared by his fellow deans and the Dome.

Nothing is new about formal business training for ND science and engineering students. Engineering offers a two-course sequence called Integrated Engineering and Business Practices, and its director, Professor Robert Alworth ’72, says more than 60 percent of all undergraduates take at least the first course. The College of Science established its science business degree program in the 1980s. Student demand for that program continues to grow; over the past five years, the number of science business graduates jumped from the mid-30s to 56 in 2010.

Professor Steven Buechler, the former associate dean for undergraduate studies, says this rising interest meshes with the growth of research funding at Notre Dame. Collectively, the faculty won more than $100 million in research grants last year, the first time it passed that milestone. The University has itself invested $80 million in multidisciplinary projects to accelerate scholars’ contributions toward issues of global concern. “Where I see this helping is in transferring technology to society,” Buechler says.

“There has been a profound change in higher education,” notes David Brenner ’73, the president and CEO of Innovation Park. Brenner credits University President Rev. John I. Jenkins ’76, ’78M.A. with setting the tone at Notre Dame for this kind of “translational” research — scholarship that translates into some product, service or activity that helps people.

Soon after it opened, Innovation Park became, at Brenner’s suggestion, the home of the new Engineering, Science and Technology Entrepreneurship Excellence Master’s (ESTEEM) program, a one-year degree similar to a program Crawford had launched at Brown. Scientists and engineers take core business courses along with technical electives that advance their grasp of a field.

Professor Alworth, ESTEEM’s director, says a third component helps distinguish the program from technology management programs at other schools. The students work all year to develop a thesis business plan, which again begins with a potentially marketable intellectual property from a Notre Dame researcher.

Crawford worked closely with his counterparts in engineering and business to create ESTEEM. Peter Kilpatrick, McCloskey Dean of Engineering, believes technical entrepreneurship is the key to the future of the U.S. economy. “We have far too little real scientific and technological innovation in the United States right now resulting in new strong businesses,” he says. “A big part of the reason for that is that scientists and engineers rarely get exposed to innovation, entrepreneurship and the essentials of business that enable the launching of new companies.”

In its first year, ESTEEM graduated 24 students nearly evenly split between men and women with just under 25 percent minority participation. Alworth emphasizes that whether the students generate a business or not, their work only begins a lifetime of learning how to start an enterprise. “The expectation is zero [startups] is okay, because this is an educational program,” Alworth says. “But if, out of 24 projects, one or two becomes some kind of a real business, that’s a great outcome.”

Hard decisions

With Eptics’ future uncertain, Michael Dean has enrolled in ESTEEM’s second class. Entrepreneurship requires tough personal choices of the kind Dean prefers to the long slog of graduate study. He recognizes he may be excluding himself from biotechnology, where executives don’t often get very far without a doctorate or medical degree.

“You’re not getting going with that until you’re in your mid-30s. And I look at entrepreneurship in this way: If you’re going to do it, this is the time,” Dean explains. “I don’t need much. I don’t have car payments, I don’t have kids to worry about, mortgages. I can allocate my time accordingly.”

Gary Clark and Will McLeod can talk about sacrifices. Years ago Clark ’91, ’10M.S. left a successful sales career in an established company for the lures of a startup that didn’t pan out. He’s jumped from one venture to the next, picking up valuable lessons along the way. He lost his most recent job a few months before an email about ESTEEM grabbed his attention.

Clark’s family stayed in Texas while he studied in South Bend. Now his work to commercialize Professor David Lodge’s technique for identifying the presence of aquatic species by the traces of DNA they leave in the water is about to pay off. Clients will include everything from government agencies that manage public lands and waters to power companies whose work threatens endangered species.

McLeod ’09, ’10M.S., who studied both mechanical engineering and industrial design, spent the summer between graduation and enrollment in ESTEEM tracking down a laptop stolen from his apartment rather than trying to recreate technical drawings and business plans. He found the computer. Meanwhile, he got permission to develop his own innovation for his thesis, a technology called SmarterShade, with which he and his original partners won the 2007 McCloskey competition.

“Smart window” technology has been on the market for about 20 years, but McLeod devised a way to achieve the same automatic tinting effect without electronics. His company, Lono LLC, named for the Hawaiian sun god, will likely license the technology to home and automotive window manufacturers and hit the market at a fraction of his competitors’ prices.

McLeod says ESTEEM was the perfect route to the imminent launch of his business. Standing in the open space of Innovation Park’s Greenhouse, where he spent the last year laboring alongside students, professors, mentors and professional entrepreneurs, he talks about the cross-pollination that occurs when people from different backgrounds share their ideas.

Someone in the room always seems to know how to solve a problem, he says. “It’s those unexpected hallway bumps that really make a lot of things click.”

Says a gleeful David Brenner, “That was the whole evil plan.”

Collaboration

No entrepreneur is an island. Carolyn Woo, Martin J. Gillen Dean of the Mendoza College of Business, especially values collaboration across academic disciplines. “This way of thinking removes the mysteries of venturing and empowers students to think more boldly, systematically and creatively,” she says.

For years, Mendoza’s Gigot Center has opened its doors to the whole University, but word has spread slowly. Still, Mike Vogel, who teaches entrepreneurship to non-business students, says the inflow of ideas from outside Mendoza has steadily raised the bar for every plan in the McCloskey competition.

The collaborative work isn’t done. Brenner says he’s seen more of John McGreevy, I.A. O’Shaughnessy Dean of the College of Arts and Letters, at Innovation Park than he expected and talks about McGreevy’s participation in a National Science Foundation grant proposal involving the industrial design program. Meanwhile, Nell Newton, Joseph A. Matson Dean of Law, is developing plans for an entrepreneurship clinic, where students from law, business, science and engineering could advise startups. Intellectual property law isn’t yet something the Law School is known for, but Newton aims to develop it.

The deans are also brainstorming a program to prepare trained lawyers for the rigorous patent bar examination and non-lawyers with technical backgrounds to work as patent consultants and examiners.

Patent advice doesn’t come cheap. Dean and Hulett received theirs pro bono from a relative of Vogel’s. Although the TSA patent is solid, snafus with other components may keep Eptics’ service on the shelf in the short term, a brilliant, life-saving venture that may pose too high an investment risk — for now.

“Worst-case scenario, we’re where we are now,” Dean says. “It dies. It goes on the shelf as an amazing learning experience.” But he knows the value of what he’s gained and he’s working with Wiech on new projects. “People have seen what I can do. It probably could get me a really good job. Same with Tyler. And I’ve met amazing people who care about my future, who really want me to succeed.”

One of those people was an IrishAngel whom Hulett remembers as their harshest critic during that painful October 2009 meeting at Innovation Park. At a reception after the McCloskey final, the man told Hulett that the Angels’ investments were slumping and they were counting on him and Dean to help them recover. “At this point, I was the type of person he would put his money into,” Hulett says. “I took that as a really big compliment and saw it as a really big achievement.”


John Nagy is an associate editor of Notre Dame Magazine.

Photo of Michael Dean by Matt Cashore. Photo of Tyler Hulett by Brian Bloom.


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