Medical District's Bio Center Launches New Orleans Startups

Over a decade ago, local leaders and Louisiana State University hatched plans to make Mid-City New Orleans a bio center. Economists cited a need to diversify beyond tourism, but residents have questioned the destruction of Lower Mid-City homes to make way for the BioDistrict.
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The New Orleans BioInnovation Center or NOBIC -- a glittering, $47 million, state-funded structure that looks as if it might house modern art -- opened a year and a half ago on Canal Street. The downtown edifice is part of the city's larger BioDistrict, to be anchored by the University Medical Center and Veterans Affairs Medical Center, which are under construction, and the new Louisiana Cancer Research Consortium building.

Residents driving past NOBIC wonder what goes on there. The facility moves life-science research, particularly from local universities, into commercial channels by supporting startups and existing firms engaged in health and medical services, diagnostics, therapeutics and environmental applications. NOBIC has 29 tenants, including ten using wet-lab space. And it has another ten clients outside its tenant list.

"We serve forty companies in various stages of development, and they're local and from around the country," NOBIC president Aaron Miscenich said at a Louisiana chapter of the Association for Corporate Growth lunch in New Orleans on Dec. 4. Miscenich is also executive director of the Louisiana Cancer Research Consortium.

NOBIC's collaborative setting includes 66,000 square feet of office, wet-lab and conference space. "We've learned there's a real need for office space now," Miscenich said. The lab area, however, is only 30 to 40 percent occupied.

Dr. Yaye Sarr shares office space at NOBIC with other startups as she prepares to launch Smiles2Geaux in January. S2G, formed as a non-profit a year ago, is a mobile dental clinic for senior citizens and children to the age of 21. "The city is transferring part of its geriatric dental program to S2G in collaboration with the Council on Aging," she said. "They're providing the mobile clinics and some initial start-up support."

Sarr said "in addition to office space, NOBIC has given us business expertise and networking opportunities and held seminars." A fellowship from local nonprofit Propeller, providing pro-bono services and a business consultant, has also aided S2G.

A native of Senegal, Sarr worked in African dental programs before she earned a PhD in Public Health at Tulane in New Orleans. She noticed some of the same access-to-care issues here that she saw back home.

"At some point, I may use lab space at the BioInnovation Center for benches to do work on dentures and other dental devices," Sarr said. Students from Tulane's Public Heath School will help staff her program. Mobile clinics will visit assisted-living facilities, senior centers and schools.

For more than a year, NanoFex, LLC, which makes powders for cleaning contaminated soil and ground water, has rented space in NOBIC. NanoFex CEO David Culpepper said last week "we're using nanotechnology derived from Louisiana crawfish and crab shells and sugar cane, based on research at Tulane by chemical and biomolecular engineering professor Vijay John. We're building a south Louisiana-based venture and hope to market our product within a year. We intend to hire local people."

NanoFex has benefited from NOBIC's expertise. "They have tons of interns and others with advanced degrees," he said. The staff helped him assemble a recent PowerPoint presentation. "They have free monthly seminars, like the one I'm attending today on accounting for startups," he said.

Nanofex has applied for a National Science Foundation grant to rent NOBIC lab space, which is reasonably priced, Culpepper said..

At Xavier University of Louisiana, Gene D'Amour, senior vice president for resource development, explained the need for NOBIC. "Xavier receives $10 million a year in life science funds from the National Institutes of Health, the National Science Foundation, the Dept. of Defense and a variety of foundations," he said. "Our science faculty members do fairly basic research, like designing new drugs and new drug-delivery systems. When they come up with new discoveries, they need to test them on animals and carry out clinical trials on human populations to make sure the drugs aren't toxic and that they have the predicted effects. This process becomes very expensive."

As their costs rise, researchers turn to the NIH for Small Business Investment Research and Small Business Technology Transfer grants, which provide funding from one to five years, he said.

"The BioInnovation Center is uniquely and extraordinary helpful in working with faculty to form and incorporate new, research-based businesses," D'Amour said. Xavier chemistry professor Guangdi Wang is working with NOBIC to develop a business based on a new drug that prevents side effects from breast-cancer medication.

D'Amour said "in addition to access to lawyers and accountants to get a startup moving so it can deliver a new product, NOBIC helps startups attract venture capital and assists them with marketing. Without the center's help, it would be difficult to get scientific research from local universities into commercial channels." D'Amour is a board member of the BioInnovation Center and is also chairman of the BioDistrict of New Orleans board.

Xavier's pharmacy college is one of two in the state, with the other at the University of Louisiana in Monroe. The university's pharmacy program received $12.5 million from the Qatar Katrina Fund to build a pharmacy building addition in 2009.

In September, NOBIC launched a $1.7 million New Orleans BioFund, providing low-interest financing to life science startups, Miscenich said. The fund fills a need since credit for small businesses has been tight. Money from the U.S. Dept. of Housing and Urban Development and the state's Office of Community Development-Disaster Recovery Unit seeded the BioFund, which is managed by NOBIC's Kris Khalil. Loans can be as large as $250,000.

Meanwhile, NOBIC's startups have created more than 47 full-time and 36 part-time jobs so far. The center's tenants have raised $14 million in financing and $2 million in grants.
Miscenich said Louisiana has three life-science hubs -- New Orleans, Baton Rouge and Monroe. NOBIC's challenge will be to keep the companies it incubates within the local economy, he said. Some of the directors of NOBIC-assisted startups are from other states, and they could move firms they've established here. Other states offer credits and grants for bio startups. "We need to make sure the jobs created stay here," Miscenich said.

Over a decade ago, local leaders and Louisiana State University hatched plans to make Mid-City New Orleans a bio center. Economists cited a need to diversify beyond tourism, shipping and public administration. But residents have questioned the destruction of Lower Mid-City homes to make way for the BioDistrict. And strains on the state's health-care budget could impact the number of beds at the new LSU Medical Center.

D'Amour said in the next couple of months, the New Orleans City Council might vote on a 1.5% construction impact fee on new building in the BioDistrict. The fee would help pay for the district's operations and infrastructure. end

This article was published in The Louisiana Weekly in the Dec. 10, 2012 issue.

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