Spokane Journal of Business

Spokane concern teams with U of I, pill maker

BioGenetic Ventures creates partnership thatÂ’s developing new way to get plant extracts

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In an aggressive new public-private partnership, a Spokane biotechnology company has joined with a Lolo, Mont., biotech manufacturer and the University of Idaho to launch a venture that expects to commercialize an innovative method for extracting plant compounds for the nutritional-supplement and pharmaceutical industries.

The new venture, which will be based in Post Falls, is called Chien Wai Labs Inc. It is owned principally by Spokane-based BioGenetic Ventures Inc.; U of I chemistry department Chairman Chien Wai; Lolo-based Nutritional Laboratories International Inc.; and Idaho Research Foundation Inc., which is U of Is research foundation.

Though the company isnt expected to employ many people hereprobably a handful at a research laboratory now being built at the University of Idaho Research Park in Post Fallsit represents the kind of regional collaborations that biotech-industry advocates here are trying to develop, says BioGenetic Ventures President Peter Allison.

We keep talking about a region-wide technology area that includes Eastern Washington, Idaho, Montana, and parts of British Columbia and Alberta, Allison says. With this, were bringing together several entities from throughout the region in a single venture of both public and private partners. This is a signature deal for that philosophy.

Chien Wai Labs will lease an about 2,000-square-foot lab that is being built for it at U of Is research park in Post Falls, and is expected to be ready for use by the end of the year, says Doug McQueen, director of the park. There, about four to five researchers employed by Chien Wai Labs will do additional research and development on technology that has been developed by U of I scientist Chien Wai and for which he has applied for a U.S. patent.

The company hopes to complete its research within about a year, after which it expects to begin using the technology in full production at Nutritional Laboratories in Lolo, near Missoula. Nutritional Laboratories is a contract manufacturer of dietary supplementswhat often are called nutriceuticalsin capsule form, and also performs some testing and research on the raw materials that go into supplements, says company President Terry Benishek.

Benishek says that currently Nutritional Laboratories buys all of the raw materials it uses, but it hopes to begin using Chien Wai Labs technology to make some of its own raw materials. The company expects to build a 10,000-square-foot addition to its 23,000-square-foot plant to accommodate that task, and add 15 workers. Nutritional Laboratories currently employs 55 people, he says.

Wais technology centers on a new method for extracting plant compounds for use in nutriceutical products such as echinacea, ginko, and Saint Johnswort, and perhaps later for pharmaceutical products. Wai says that conventional methods use an alcohol-based process for that extraction, which he says is expensive and inefficient.

Wai has developed two new extraction technologies. One uses water and the other uses whats called a carbon dioxide supercritical fluid. For proprietary reasons, Wai declines to elaborate on the technologies, but says that he believes use of them will enable manufacturers to isolate and extract desired compounds much more efficiently and inexpensively than is done now.

The market for such technology is huge, he says. Nutriceutical products are growing in consumer popularity, and an estimated 35 percent of all pharmaceutical products use plant extracts as well, he adds.

BioGenetic Ventures, which put together the Chien Wai Labs venture and is a financial backer of it, has leapt into the public view in recent months with three other partnershipswith Spokane-based Advanced Reproduction Technologies Inc., the Heart Institute of Spokane, and Hollister-Stier Laboratories LLC.

Allison says Doug McQueen, director of the University of Idaho Research Park, was a catalyst for the partnership, having brought together Allison and Wai about eight months ago.

We thought it was a great opportunity and immediately contacted U of Is research foundation, which controls the inventions developed by the Moscow-based universitys scientists, says Allison.

He says the foundations Ron Satterfield, who also is director of technology licensing at the university, took the aggressive step of recommending the foundation become an equity partner in the new venture, rather than receiving a royalty payment on future revenues generated by Wais invention, which would be the typical scenario for such relationships.

Ron Satterfield is the kind of person who knows how to make things happen in a public-private partnership, Allison says, adding that its the first time hes been involved with a financial arrangement in which a university foundation became an equity partner in a for-profit start-up.

BioGenetic Ventures is based in Spokane but recently announced plans to open an about 6,000-square-foot facility in Coeur dAlene, where some of the young companys executives, including Allison, will keep an office.

Its headquarters in the Rock Pointe Corporate Center north of downtown Spokane, which it shares with sister company Allison Johnson Venture Partners Inc., also will be expanded as the activities of both those companies increase, Allison says.

BioGenetic Ventures seeks partnerships in which it can commercialize university-based research. Allison Johnson Venture Partners is a venture-capital company.

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