Cheese makers, dairies, and brewers sprinkled around the U.S. are using prototype equipment developed by a young Spokane biotech company to count live bacteria or yeast during their production processes. The market for the product, born in the labs of Eastern Washington University and the Spokane Intercollegiate Research and Technology Institute, is potentially huge.


Vast also is the potential for biotechnology to become a lucrative new industry for Spokane, says one of the top research scientists here.


Dr. C. Harold Mielke Jr., director of the Health Research & Education Center (HREC) of Washington State University at Spokane, says the Spokane area has what it takes to be a biotechnology center and shouldnt delay another day before making biotech a focus for the future.


Biotech can be developed in Spokane, said Mielke at a research forum held at the Riverpoint Higher Education Park earlier this month. We have already started an infrastructure of health-science education, laboratories, and research.


Mielke, well known in the medical field nationally for his research in hematology, was recruited to Spokane about 10 years ago from San Francisco to head the HREC, which since has attracted roughly $25 million in research funding here and helped to trigger at least one biotech venture. Now he wants Spokane to take biotechnology to the next level.


Ive always been amazed by how Spokane loves to beat on itself and highlight the negative, said the Spokane-area native. We have the opportunity. We have to stop this and get on with it. We have all the ingredients in Spokane to develop a biotechnology industry.


Key ingredients, he says, are Spokanes strong health-care industry and the universities here that are capable of attracting state-of-the art research and clinical studies. Add venture capital; entrepreneurial effort; and some coordination, and biotechnology can emerge here as an industry.


This community seems to think it cant happen here. Im here to tell you it can, and it can do so very rapidly and be a strong contributor, he says. I can remember when Stanford (University) was a farm and Silicon Valley was a pasture.


Another speaker at the forum, Spokane venture capitalist Peter Allison, said there that grabbing biotech as an emerging industry is an opportunity Spokane cant afford to ignore.


The biotech industry is a very good machine for job creation, says Allison, CEO of Bio-Genetic Ventures Inc., which moved to Spokane from Seattle recently and specializes in investing in biotech startups. There is a great opportunity for Spokane to be a part of that industry. We (Bio-Genetic Ventures) want to be a part of that. We are in Spokane and are totally prepared to participate.


Allisons company already is working with three biotech startups in the Spokane area.


More labs, grads


Though Mielke believes Spokane already has the infrastructure in place for biotechnology to grow here, he says that two parts of that infrastructure could use some shoring upresearch lab space and graduate-degree professionals.


There has to be more space available for biotechnology to incubate, Mielke said in an interview last week. If I have an idea that needs to be tested in a lab, I need a place to do that. Thats very expensive, even cost prohibitive for a new or young venture.


Still, both EWU and SIRTI have labs suitable for biotechnology, and both labs have been used by budding biotech ventures here. There also is a patchwork of labs at the local hospitals.


The other limitation Mielke speaks ofadequate graduate-level researcherscould be overcome by the creation of one or more graduate programs in biotechnology here by WSU-Spokane, which is something university officials say they are pursuing. EWU already offers the states only baccalaureate degree in biochemistry/biotechnology.


Mielke lauds EWUs program but says Spokane also needs workers with advanced biotechnology degrees. He envisions a perfect collaboration in which EWU would provide biotech grads who could move right into a masters-level biotech program at WSU-Spokane.


Bill Gray, dean of WSU-Spokane, says the university plans to ask the Legislature next session for $1 million for what it calls a Spokane Health Sciences Initiative.


The initiative likely would forge a consortium of schools that might share core courses, libraries, laboratories, and coordination of clinical placement. The schools also might jointly develop undergraduate programs in molecular pharmacology, toxicology, and neuroscience, as well as a masters level program in molecular pharmacology, toxicology, biotechnology, and other sciences.


As for adding more biotech labs here that entrepreneurs could use to test potential products, Gray says, There is no question in my mind as to the importance of that function and that need. We havent figured out how to do that. What we have not been able to do is to find a financial stream to securely fund biomed incubator space. Its a very expensive proposition.


Research being done


Though Spokanes biotech industry currently is tinyby best estimates there are only a handful of such companies herethere is activity bubbling under the surface, says the HRECs Mielke. The center has been involved in dozens of research projects during the past decade, and in conjunction with WSUs Pullman campus, WSU-Spokane is deeply involved in cutting-edge studies that regularly gain national attention. So is the Heart Institute of Spokane, which has focused its work on cardiac and vascular science. Both have successfully tapped Spokanes large health-care industry and ample study subjects in clinical trials.


SIRTI has been involved in eight biotech research projects, and has had a hand in the creation of six prototype technologies some new ventures.


EWU also has been a regular player. Earlier this month, EWU announced that it had received a $1.2 million grant from the Office of Naval Research to develop prototypes for detecting airborne microbes used in biological warfare. EWU will work with SIRTI and two private companies, Quantum Northwest, of Spokane, and InnovaTek, of Richland, Wash., on the three-year project.


At its research forum here earlier this month, WSU assembled a handful of scientists who presented informal reports on three general areas of research that represent the kind of cutting edge research that Inland Northwest is capable of, WSU officials say.


One presentation, by WSU researcher Norman Lewis, told forum participants about projects that involve plant biotechnology, including efforts to boost the presence of cancer-fighting components in plants that people eat; to increase the efficiency of photosynthesis to improve crop yields; to reduce plants reliance on fertilizer and intolerance to freezes; to take advantage of plant characteristics to fight obesity in humans; and to determine how plants spread viruses.


In a second presentation, WSU microbiology professor Nancy Magnuson told of the Cancer Prevention and Research Center, in Pullman, which, among other things, studies the role of diet and nutrients in cancer prevention as well as in improved diagnosis. Magnuson says that an emphasis of the center is developing partnerships with health-care professionals in Spokane, which also has been chosen as the site for its Inland Northwest Cancer Conference, in November.


In a third presentation, WSU scientist Michael Skinner outlined the joint research efforts that WSU, the University of Idaho, and WSU-Spokane are making in connection with reproductive biology. Those efforts include studies on fertility and infertility in humans, contraception, agricultural reproduction, related matters involving ecology and toxicology, and cancers that affect human reproduction.


Reproductive biology is a field that has spawned one of the few biotech startups in Spokane. It is called Advanced Reproductive Technologies, and it was founded about four years ago by WSU-Spokane researchers Joanna Ellington and Sylvia Adams Oliver. The small company, which Ellington says was launched with the help of the HREC, SIRTI, and EWU, develops fertility-treatment technologies.


Ellington, who spoke at the forum early this month, says infertility has become a $2 billion a year industry. She says that when she launched her firm, there appeared to be a good infrastructure in Spokane, but little seed capital to get a new venture off the ground. WSU, she says, gave us real jobs and helped her and Oliver find funding to get the business going, while SIRTI helped with market analysis and research and development, and EWU provided technical support and lab space. Collaboration, says Ellington, is critical for the creation of a biotechnology industry here.


Future research by Ellington and others at the HREC will involve looking at toxicology, such as the effects of drugs like Prozac on human sperm. We hope to make Spokane a center for that kind of research, she says.


Counting bacteria


EWU adjunct professor Jim Fleming knows well the collaboration that can occur in Spokane. He and three other Spokane-area scientists founded GenPrime Inc., a 3-year-old company that has developed the equipment that can be used in production settings to quickly count live bacteria and yeast. The gear would be helpful on the manufacturing floors in the dairy, brewery, and pharmaceutical industries, as well as in any other settings where bacteria culturing and fermentation occurs.


The equipment, which currently is being tested by several potential customers, can do within minutes what traditionally can take up to four days, Fleming says. He says the company expects to receive its first sale any day and hopes to be in full production by year end.


Flemings partners in the venture, which received funding and market-development help from SIRTI, are Don Lightfoot, an EWU professor and researcher who has been very active in biotechnology here; Buck Somes, an EWU graduate student who has worked with Lightfoot in the past; and Steve McGrew, an expert in holographic science and president of New Light Industry Inc., located on the West Plains. The ventures only other employee is research technician Darby McLean, a graduate of EWUs biochemistry/biotechnology program.


New focus for SIRTI


SIRTI, meanwhile, made biotechnology one of its key focus areas when it developed a new strategic plan last spring. In the past, it had helped biotechnology ventures under its emerging technologies focus, but its board decided to be more aggressive about biotech, based on growing interest in the community to develop that industry, says Anthony Lentz, SIRTIs director of research and operations.


We have strong capabilities (in Spokane) already, Lentz says. We want to grow the biotech industry here.


He says that under its new plan, SIRTI will be more aggressive about seeking relationships with possible biotech ventures, and that the now state-funded agency can fill many of the coordination tasks that Mielke said were needed to grow biotech here. In fact, most of the steps needed to launch a biotech venture that Mielke outlined in his forum presentation earlier this month are steps SIRTI says it specializes in helping with.


Lentz says hes also taking a close look at SIRTIs biotech lab, which currently is used by GenPrime, to see if there is additional equipment needed to keep it state of the art, and to evaluate whether there is demand to increase its size.


If Spokane needs further coordination to build biotech, Lentz says that leadership might come from a young, informal group called the Inland Northwest Biotechnology Alliance, which was funded by Spokane businessman C. Paul Sandifur Jr., whose companies control property in various parts of the county that could be developed for biotechnology-related parks if that industry blossomed here.


Organizers of the biotech alliance say its likely that the fledgling group will merge with another Sandifur brainchild, the Spokane Valley High Technology Council, which is expected to change its name soon to the Inland Northwest Technology Council. The high tech council is more formally organized, and has a board of directors that include such businesspeople as Bernard Daines, founder of Packet Engines Inc. and now World Wide Packets Inc.; Louis E. Sims, CEO of Output Technology Corp.; and Judi Williams, co-founder of Telect Inc.


There are other developments that could boost Spokanes role in the biotech industry. WSU-Spokane recently broke ground on a $39 million Health Sciences Building on the Riverpoint campus that will include state-of-the-art classroom and research laboratories for molecular biology, tissue culture, infectious disease study, clinical study, and biochemistry. The new structure is slated to open in the fall of 2001.


Still, biotechnology is a small industry here, say observers. The most well-known is Hollister-Stier Laboratories LLC, which is the new venture that bought the Spokane operations of Bayer Corp. this summer. Hollister-Stier, which employs about 300 people here, makes allergenic extracts, epinephrine kits to counteract dangerous allergic reactions, and venom extract.


Spokane didnt always think it could become a biotechnology research center. Just 10 years ago, the Spokane Area Economic Development Council launched an effort to attract production centers of biotech companies located elsewhere, saying it wasnt realistic to launch or attract the research end of such companies.


Were not trying to portray ourselves as a research facility, said then EDC President Bob Cooper. Were trying to portray ourselves as a production facility.


That thrust came about at a time when Spokane was heralding its ample, low-cost work force, something economic-development leaders since have backed away from.


As for venture capital, there has been news recently that such funding might be more available to budding technology ventures than in the past.


Bio-Genetic Ventures Allison and another Spokane businessman, Ron Johnson, also have formed Allison Johnson Venture Partners Inc. here to provide venture capital to a broader mix of high-tech companies, Allison says. Allison Johnson Venture Partners manages a new fund called the Inland Northwest Technology Fund LLC, which is expected to grow to $10 million.


Meanwhile, Technet, the Spokane support group for technology executives, has established a forum to which it will invite local high-tech firms to make presentations to selected investors here. The organizers of the Greater Spokane Symposium Series also plan to establish a forum for identifying high-tech venture capital here.