MitoStem Wins Big at GLEQ; Stays Hopeful About Future of Detroit Biotech
The winner of the top prize at last week’s Great Lakes Entrepreneur’s Quest (GLEQ) competition was TechTown tenant and Wayne State University spin-off company MitoStem. Jim Eliason, the founder and CEO of MitoStem, says he’s thrilled with the win, and will use the $100,000 prize to build the business and marketing side of the regenerative medicine startup.
MitoStem was founded in 2008 by Eliason, a longtime entrepreneur who helped build Asterand (more about that later), another Wayne State biotech company, from the ground up. MitoStem focuses on developing novel stem cell technologies, particularly pluripotent cells, which scientists can use to coax into any other cell and researchers believe will be used in the future to replace diseased and damaged organs. Embryonic stem cells are pluripotent but tightly regulated in Michigan, so MitoStem is looking for other sources of the cells.
MitoStem has one full-time employee and a small army of interns, and in addition to this year’s GLEQ award has gotten two phase one Small Business Innovation Research (SBIR) grants, one for $200,000 and one for $150,000, and awards in previous GLEQ competitions. Eliason says MitoStem has just applied for a phase two SBIR grant, which would be worth $2 million over two years, and funding from the First Step Fund.
Eliason is also the director of the Great Lakes Stem Cell Innovation Center, also housed at TechTown, which is intimately connected to MitoStem. In exchange for free rent and use of the center’s equipment, MitoStem does contract work for the center. For example, Eliason says, the innovation center will soon work on a project to reprogram cells from amniotic fluid in a study of lukemia in patients with Down’s Syndrome. MitoStem will handle the cell differentiation work. The goal of the center is to offer biotech startups access to the lab, charging a rate that depends on the amount of time spent there working, and ultimately to help boost Michigan’s economy through regenerative medicine.
Despite MitoStem’s success, the fortunes of biotech companies in Detroit remain tenuous compared to some of the startups based in Ann Arbor, MI. Though Michigan seemed to be on a life science upswing a few years ago, culminating with Detroit serving as the host of the 2010 World Stem Cell Summit, the climate has cooled in the face of what critics call relentless political attacks against stem-cell research.
The status of fellow TechTown tenant Asterand, which once touted itself as the world’s largest supplier of human tissue samples, also seems uncertain. On June 11, the company announced it had sold its human-tissue-bank business for $9 million to two wholly owned subsidiaries of Cambridge, MA-based Stemgent. Asterand slipped into financial trouble following the February 2010 purchase of South San Francisco-based BioSeek, which tests environmental compounds for the Environmental Protection Agency and other entities by using human cells to predict the effect a chemical will have on the body.
By August 2011, Asterand was seeking funding to meet its loan obligations. By October, Asterand was for sale. After it couldn’t find a buyer for the company as a whole, it split into the tissue-bank portion and BioSeek for sale separately. Once the agreement was reached with Stemgent, Asterand said it intended to run BioSeek as a stand-alone business, but nobody is sure if the operations will stay in Detroit. (Asterand did not respond to my attempts to reach the company by phone and in person for comment.)
When Eliason discusses Asterand, it’s clear he takes it personally. As one of the company’s first employees, he still feels invested in its success and expressed disappointment with the recent turn of events, which he attributes to a faulty management strategy and high employee turnover. “It’s really sad to [Asterand founder Randal Charlton] and me,” he says.
Asterand aside, Eliason is feeling optimistic about Detroit’s biotech future, especially in light of MitoStem’s big GLEQ win. “The biotech sector is definitely growing, but it needs more investment here in Detroit,” Eliason notes. “MitoStem is evidence that if you keep at it, you can get there.”