Of Mice and Money
One firm saw opportunity in
By Peter Wagner
cloning work at the University of Hawaii,
giving birth to a unique partnership:
business with science
Star-Bulletin"We felt we were on to something," said Laith Reynolds, whose company stumbled upon the startling research last September.
The venture-capital company, ProBio America Ltd., was looking for a promising investment. It found Prof. Ryuzo Yanagimachi and a team of scientists at the University of Hawaii quietly cloning mice.
"It was totally ignored until we picked it up," said Reynolds, who obtained licensing rights to the process. "The university wasn't even going to patent it."
ProBio is now entertaining nearly $12 million in offers from companies wanting to find a commercial application for the "Honolulu Cloning Technique," a brilliant piece of science turned valuable commodity.
Set up in Honolulu 18 months ago on about $500,000, ProBio is a subsidiary of the Australia-based ForBio Ltd. The parent, an "agritech" company with 16 subsidiaries and 273 employees around the world, pursues genetic research to benefit plantation crops.
Another subsidiary, American Tropical Plants Inc., also headed by Reynolds, earlier this year announced another genetic breakthrough at the University of Hawaii -- a new species of coffee plant bred to grow caffeine-free beans. The plants, now in mass production in Aiea, are to be marketed around the world.
But unlike its siblings, the upstart ProBio is strictly in the business of raising capital. And unlike the others, ProBio is concentrating on animals. The arrangement, Reynolds said, allows ProBio to draw on a broader pool of genetic research.
"There's a common genetic ancestry, so a lot of work on plants has direct application to animals," Reynolds said.
The company's goal, Reynolds said, is to foster research that will lead to medical products."Two years ago people were saying mice would never be cloned," said Reynolds, chief executive at ProBio. "When you can generate 50 animals it is an emphatic answer that this is a feasible and viable technology. The effects on medicine will be huge over the next decade."
A burgeoning company
Riding high on its new association, ProBio is a burgeoning company. Now with five employees in an office in Kakaako, ProBio is establishing an office in Massachusetts, plans to triple its Honolulu staff, and is looking to break away from ForBio to become an independent company listed on the Nasdaq Exchange by the middle of next year.First to approach ForBio for access to the Honolulu Technique was the London-based biotechnology company PPL Therapeutics Plc, famous for its 1996 cloning of "Dolly" the sheep. PPL, which reached verbal agreement with ProBio last month, plans to use the new cloning technique on pigs and sheep.
PPL is to be part of an international consortium licensed by ProBio to find commercial applications for the Honolulu Technique.
The business of science
Reynolds would not disclose terms of the PPL agreement, or agreements he said are in the works with companies in the United States, England and Japan.Under its agreement with the UH, ProBio will support Yanagimachi's research, pay for patents and split royalties with the university, Reynolds said. The company thus far has put about $750,000 into the cloning research and $250,000 into publicizing its ground-breaking results.
ProBio's business partnership with science is something new, Reynolds said.
"We believe it's a unique enterprise. There is a need for a company to act as an interface between science and commerce." Most privately funded research is now done in-house by large corporations, he said. ForBio is looking for a niche in partnerships with smaller companies and universities.
Anthony Perry, a postdoctoral researcher at the university and a key member of Yanagimachi's team, said the arrangement is good for science.
"These people are allowing us to commercialize some absolutely amazing intellectual property," he said.
Perry noted that government funding for research has been scarce in recent years.
"If we're serious about commercializing the scientific ideas that are coming out of the laboratory, we're going to have to commercialize them realistically, he said.
While details of the licensing agreement have yet to be worked out, Perry said he believes Yanagimachi's laboratory will benefit from the deal.
"A significant proportion of any revenue will go back into the research that enabled the revenue," Perry said. "That's the understanding."
ProBio America Ltd.
Where: Honolulu
