University Enterprise Labs director on life science start-ups
Situated toward the westernmost corner of St. Paul bordering Minnesota 280, a sizable glass-paneled building has become an incubator of sorts for emerging life science companies, with efforts ranging from clinical trials of experimental drugs to new lab-based bio-technology start-ups, about a third of them launched by faculty from the University of Minnesota.
University Enterprise Labs, which opened in 2005, is neither funded by nor officially affiliated with the University, but the 60 start-ups gestating in its labs and offices on Westgate Drive draw talent and inspiration from their proximity.
The structure, which spans 144,000 square feet, includes 33 full-size wet labs with fume hoods and about 20 dry labs without fume hoods, in addition to conference rooms, office and common spaces. A $6.4 million addition, which includes shared group lab space, opened in 2019.
Within the health sciences, Minnesota, which is home to 18 Fortune 500 companies, already has a strong profile when it comes to medical device manufacturing, academic research, direct patient care and retail delivery of health goods. As private corporate ventures go, the life science and bio-tech industries have a much less established footprint.
After five years as executive director and chief executive officer of UEL, Diane Rucker stepped down this month to focus on family. Rucker, an engineer who trained at MIT and the University of Michigan, returned to MIT in 2012 for her executive master’s of business administration.
Among her professional titles, she spent 16 years with Seagate Technology in Minnesota and five years with General Motors in Michigan, as well as holding roles with Carrot Health, a Minnesota start-up, and an entrepreneurship accelerator run by MIT and Harvard.
Interim executive director Mike Berthelsen, formerly a vice president of University Services with the U of M, will lead UEL until Rucker’s permanent replacement is chosen by UEL’s 12-member board.
The following interview has been edited for length and clarity.
Q: What kinds of changes have you seen over the past five years?
A: What I’ve actually seen is a stronger start-up pool, more companies that have solid funding — less of the idea-stage companies and more companies that are ready to scale. The pool is getting larger. It’s a very cool thing for Minnesota.
Q: How do you account for that? What are some of the drivers?
A: I’d point to efforts like Launch Minnesota, through the Minnesota Department of Employment and Economic Development, which has funded more than 25 of our UEL companies from $25,000 to $35,000. It’s actually not very much, especially for a bio-tech company, but it’s enough to get them to the next level where they can start raising money. Most of our start-ups have two to three founders. Think of it as organization building, not whether your technology works but what you need to start building a business around that. That’s understanding visibility, marketing, supply chain management and scale and manufacturing.
Q: How would you describe the start-up climate in Minnesota, and what role does UEL play?
A: We saw the need for connective tissue across the start-up eco-system. You have start-ups, risk capital or funding, education like marketplace awareness and start-up support organizations and university courses, government, and corporations — do they support or suppress start-ups from entering the market?
The five elements here in Minnesota are individually strong but the connections across the ecosystem were not. A government can make it easier or harder to start a business, which is why many businesses incorporate in different states than where they run their business.
What’s happened in the last five to seven years, we’ve started to see those connections grow across the ecosystem. We’ve seen more funding. We’ve seen phenomenal growth in Twin Cities Startup Week, which started as just a weekend. We’ve seen more of those interactions across the state, which means when you start a company, you don’t start it in isolation. You have a network of entrepreneurs and funders and mentors to draw from.
The five-year start-up survival rate in Minnesota really varies between first and fourth in the nation. One of the reasons is people really think about it ahead of time. They don’t just jump into the marketplace. They really take their time to prepare.
Q: Can you give me an example of a start-up success story that has grown out of UEL labs?
A: CoreBiome, which does micro-biome analysis of your genetic make-up to understand your disease profile, started around 2016. They were acquired in 2019 by OraSure Technologies and spun off into a separate division of the company called Diversigen. They stayed with us for about another nine months after their acquisition. We wanted them to stay longer but we didn’t have enough space for them, for what they planned to do for the next five years.
Q: Lab space has been a challenge nationally, I hear. You can’t just retrofit an old law office and call it a genetics lab.
A: Honestly, that’s a common problem with companies that incubate at UEL. As they grow, we don’t have enough places in Minnesota to send them next. Within the building, our labs are completely full. We don’t have an extra 5,000 to 10,000 square feet available. I wish we did.
A full-size lab is about 1,000 square feet. As companies come to us, they’ll usually want a full-size lab, a portion of a full-size lab or one to two labs to start. There’s some pretty stringent heating, ventilation and air conditioning requirements and bio-safety requirements. Zepto Life Technology has the second floor of our new addition and is close to 8,000 square feet.
Q: What does the future hold for UEL and life science start-ups in Minnesota?
A: This is a good time for the board to get more involved in strategic planning and think about what it wants to be in the start-up community, and what it could do in the next 5 to 10 years. A big question is what does the community need from us? … In the Twin Cities, and also greater Minnesota, what do we need to be to make Minnesota a place that is really strong in the life sciences world?
We’re already really strong in med-tech. We’re good at insurance with companies like UnitedHealth group, we’re good at retail with companies like Target and Best Buy, we’re good at logistics if you look at CHS. We have a decent amount of movement with people across industry. What do we do really well and what’s applicable to life science and bio-tech? Target and Best Buy have survived by figuring out how the customer thinks. The retail industry has absolutely mastered that.