University program granting $5.1M for tech startups

The Gazette - Dec. 10 by Lindsey Robbins | Staff Writer

For many technology startups, the period when they try to secure investments before their research has reached the viable product stage is known as the "Valley of Death." Now the University System of Maryland is partnering with the Army Research Laboratory to provide financing to bridge this stage.

The Maryland Proof of Concept Alliance devotes $5.1 million in federal grants to technological research projects at the university system, including those connected to outside companies. The goal is to prepare the research for commercializing by showing its potential to investors and forming early contacts with Pentagon contractors.

"This is about commercialization," said Brian Darmody, associate vice president for research and economic development at the University of Maryland, College Park, and special vice chancellor for technology development at the university system. "We're looking at what's going to create jobs, what technology has merit and what the Army wants."

Applications for the funding are vetted through the Maryland Industrial Partnerships Program at the university to see which have the best marketability, innovation and potential for the Defense Department, said Martha Connolly, director of MIPS. MIPS matches university faculty and financing with local businesses to develop their research.

"We're looking for the highest value jobs out of technological startup companies," she said.

"Too many promising technologies never make it beyond university labs, when they could be commercially viable, and go on to create jobs and revenue," Jacques Gansler, the project's principal investigator and administrator and director of the University of Maryland's Center for Public Policy and Private Enterprise, said in a statement.

Since the alliance began this spring, 11 research projects have received $140,000 each, with a final funding round expected in the next few months.

The Pentagon-university grant partnership for commercialization initiatives is new to Maryland, said David Block, who received a grant for his Baltimore biotech Gliknik. The grant allowed Gliknik to test a drug-coated suture in animals to prove it is non-inflammatory.

"We were happy to prevail in this competitive process," Block said, adding the program recognizes the need to bridge the gap in helping researchers and companies move out of the lab and into clinical study. Gliknik develops new therapies for patients with cancer and autoimmune or inflammatory diseases. The company is housed at the University of Maryland BioPark BioInnovation Center.

Zymetis, which was started by a University of Maryland, College Park, professor and is housed in the Technology Advancement Program incubator in College Park, also received a grant through the alliance to develop a system for demonstrating its bio-refining process. The Zymetis Integrated Process shows how the company's marine bacterium can break down biomasses into fermentable sugars used in synthetic sustainable chemicals and biofuels such as ethanol.

"This was nothing short of a godsend in business terms, since it's been very difficult for us to engage private company investment in the market," said Zymetis CEO Scott Laughlin. He said most investors are more interested in seeing results rather than the process itself before plunking down their cash.

Although Zymetis started out focusing on ethanol production, it has begun shifting more of its research into the sustainable chemistry market, Laughlin said. This has the greater potential, he said, because ethanol might sell for $700 per ton while synthetic chemicals can sell for more than $2,000 per ton.

Darmody said the funding for the alliance grants runs out after the next round, although the university system is looking to institutionalize it through a partner such as the National Science Foundation. The foundation already offers funding to similar centers in other states, he said.

The alliance also could tie into the opportunities through the Army's shift from Fort Monmouth, N.J., to Maryland under the Pentagon's Base Closure and Realignment program.

"This is really flexible early-stage money for companies that need sources of funding to move their company to the next level," Darmody said.