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Making Rochester a regenerative medicine hub

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Think Silicon Valley and computer chips.

Then think Rochester and regenerative medicine.

City leaders, scientists, Mayo Clinic planners and biotech startup companies have been working to pump up the volume on Rochester's potential to become as well-known for healing patients' bodies from the inside out as Silicon Valley is for technology.

"Clearly the effort is a community effort and both the expertise the institution, the Mayo Clinic, will bring — but also the community at large — will be absolutely critical," said Dr. Andre Terzic, director of the Mayo Center for Regenerative Medicine . "So, in that regard, there is an increased build-up of what is called the 'regenerative-medicine cluster' in Rochester ."

Rochester is poised to make that cluster a reality.

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Already, there are local regenerative medicine start-up companies:

•  Mill Creek Life Sciences  makes a human-source protein placed in growth media for growing human stem cells

• ReGen Theranostics makes adult human stem cells for research institutions

• Cardio3 Biosciences is working on heart tissue regeneration

Those startups are housed in the Minnesota Bioscience Center  on First Avenue Southwest in Rochester.

Not only that, students at the University of Minnesota Rochester already are taking coursework that will prepare them for an expertise in regenerative medicine.

Mayo researchers have produced commercialized ideas. The clinic licenses its adult stem cell growth-guidance findings to Cardio3, for example.

So if Rochester has the skilled workforce, focused education system, companies, community support and products needed to make a regenerative-medicine cluster, what's missing?

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Investment dollars, said Judy Lundy, Mill Creek CEO, president and co-founder.

The Minnesota Angel Tax Credit , which gives a benefit to investors who loan to startups, was completely used up by July. If the Minnesota Legislature replenishes "that would be a huge boost to us," Lundy said.

Connections needed

She wishes Rochester had a better way to connect startup companies with investors. 

"How do you find those angel investors?" Lundy asks. "Every penny that we raised is outside-of-Rochester money. So is there money in Rochester, or is there not? And if there is, who are those people, and how do you get into that circle?"

How can a Mayo Clinic patient who wants to fund regenerative medicine companies, a retired IBM-er or Mayo staffer with discretionary funds available for investment uncover startups such as Mill Creek?

It can be a struggle for startups to match themselves with investors interested in the kind of companies they are working to become.

"Those of us who have lived our lives in the lab and in the security and comfort zone of Mayo have never had to interact with that new pool of people — so we don't know who they are," Lundy said.

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Startup entrepreneurs, she said, would benefit from a system to connect investors with startups and help make themselves stand out.

"We watch every single penny. I wear every hat in this company," Lundy said. "So you need somebody with an entrepreneurial spirit and, not really to mentor, but somebody to introduce you to who those angel investors are."

A regenerative medicine startup gets seed funds in its first round of capital.

"That's it, if you can get up and get going," Lundy said. "But boy you're just scratching things out."

Startups typically need enough money not only to rent a laboratory, hire staff and make contacts with potential customers around the world, but to carry them through perhaps a year, three or even several. Once they pass that early stage, they can thrive.

Successful financing takes shoe leather from the business owners themselves to seek out investors, network, make calls, attend meetings, send emails, meet-and-greet and knock on doors.

Young industry

Regenerative medicine is, overall, still a very young industry, said Gary Smith, president of Rochester Area Economic Development, Inc. (RAEDI).

No single economic region in the U.S. yet has captured the market on regenerative medicine.

"Having the research institution, having the clinical practice, which we have, and then having stuff that's coming out of research actually get converted into commercial applications — having that happen here — is obviously what we want to have happen," Smith said. "And we do have the semblance of that beginning."

Cardio3 at the Minnesota BioBusiness Center is at the Phase III clinical trials phase with heart stem cells.

"If this turns out to be successful, then they would commercialize. And when they commercialize, then they would build a facility, or facilities, and they would manufacture stem cells for that specific purpose — for what they're treating," Smith said. 

A cluster has an industrial piece, a clinical piece and a research piece, Smith said.

"If you can play in all those spheres, then there's a better chance that you become a center…and that's what we're trying to do here."

RAEDI's work has attracted both local and international companies to town, said Terzic. As an example, Cardio3 is based in Belgium but now also has a Rochester presence.

"I think there is clearly a growing community of regenerative medicine," Terzic said. There is also an effort in Rochester to increase educational offerings focused on regenerative-medicine workforce development.

"We would like to see Rochester become, for example, increasingly a site for manufacturing of regenerative products, because that will open new opportunities for the city and for the economic growth of the city," Terzic said.

But there are ways to help.

Lundy said tax abatements for startups are needed from the city or the Legislature, as Mill Creek has been hit hard by increasing commercial real estate taxes — both because of a building upgrade and because of rising rates.

Also, passage of the half-cent local-option sales tax in Rochester can help the city support regenerative-medicine startups, Smith said.

"That would be a good use of that money to help fund some of that stuff, particularly the early stages of this stuff," he said. 

Ideas tend to produce startup companies "wherever the capital is," Smith said.

"That's always going to be a challenge. We'll probably never satisfy that 100 percent," he said. "But I think to the extent that we can provide some initial capital for some of these ideas it will go a long way to helping stuff that is invented here stick here."

Flexible workers needed

Startups also will need flexible, free-spirited, "roll-up-your-sleeves-and-I'll-do-anything" workers willing to take a risk and "get in the ground floor and grow with us" in order for Rochester to become a true regenerative medicine cluster, Lundy said.

Smith said a planned Rochester biotech "accelerator" will have office space.

"Hopefully, as we get our feet wet, working with Mayo and the city, working all that out, then the next phase of that would be hopefully to look at doing something in the way of wet-lab space too," he said.

Putting together wet-lab space, connecting startups with capital and bringing in services regenerative-medicine companies need to execute their business plan will play a role. So, too, will creating regenerative-medicine environment where "networks" can provide anything not directly available in Rochester.

Smith bluntly states that "we don't have this figured out by any stretch."

Industry could diversify job base

Creating a Silicon Valley-like home for a new industry could be a game-changer for Rochester, diversifying its jobs base. But it's also a learn-as-we-go process.

The city needs an "ecosystem" to support regenerative medicine, Smith said.

"We've got a long ways to go," he said. But as the city moves forward, planners are learning what the gaps are — and finding ways to fill them.

"The fact that we do have it starting here is a good sign. What we do want to have happen is nurture that and help bring it along — and then we stand a pretty good chance of establishing a foothold," Smith said.

The stream of ideas for regenerative medicine cluster businesses is "going to be stuff that pops out at Mayo," Smith said.

"Regenerative medicine is a next chapter in Mayo Clinic innovation," Terzic said. Mayo's innovation has always been based on learning from the human body, he said.

Mayo a source of ideas

Important to that effort are ideas that can be commercialized and brought to market.

For instance, in sports medicine, platelet-rich plasma injection can enhance tendon healing.

"It's an ultrasound-guided injection of, in this case not cells, but, this whole regenerative cocktail," Terzic said. 

Mayo Sports Medicine practitioners have long used ultrasound to target pain-medicine delivery so drugs to blunt pain go directly to the location from which it is emanating.

That helps decrease the amount of pain medicine needed. Now, regenerative medicine can use that same technique for healing.

Also important is the research behind the use of regenerative medicine. Mayo uses stem cells taken from adult patients and triggers the patients' own cells to develop into heart tissue.

"We are not just blindly injecting stem cells and hoping that they will do a miracle. These stem cells have been taught to become heart-like cells and they are already oriented to become, ultimately, new heart muscle," Terzic said.

Mayo has already completed safety and feasibility testing and is now looking at improving methods so patients' own stem cells can within a few years be broadly used in medicine.

Blood cancers like lymphoma, myeloma and leukemia can be virtually cured by replacing diseased bone marrow with healthy marrow.

"Learning from the specialty of hematology, now other fields would like to see the successes that existed there translated to the brain, the heart and beyond," Terzic said.

Increased range of treatments

The goal is to accumulate regenerative-medicine knowledge faster and to increase the range of conditions treated. 

Regenerative medicine does not always require growth of cells.

A ventricular assist device (VAD), for example, helps the heart until it gets strong enough to go without one. That might not seem like regenerative medicine, but is actually another example of helping the body by giving it time to heal from within, Terzic said.

Another option on the horizon is treatment for spinal cord injury. Instead of trying to re-grow nervous tissue, Terzic asks, why not send radio signals from the brain to the arms or legs?

According to Smith, if another three to five Cardio3- or Mill Creek-like companies can get based in Rochester, the chances of a production facility getting built here will increase.

"In the end, which of those companies would emerge? Maybe they all would. Maybe none would," he said. "It's a function of numbers to a certain degree…it'll be a long time before we know definitively whether or not we're a real player in that area. It's the goal. It's the aspiration. It all starts with us all working together."

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