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Industry consorts with science.

On paper, corporate restructuring is a sound business move that trims the fat and sharpens the competitive edge. But many hard-pressed communities across the nation have found corporate restructuring to be synonymous with job casualties.

And so, afflicted communities frantically look for ways to revitalize area businesses, either by retooling existing industries or creating new ones. Many peg their hopes on research and development, two words usually thought to mean progress.

But R&D by itself is no magic bullet. The risks involved in commercializing technology and moving it from laboratory to marketplace are sometimes greater than industry is able to take. These risks include the cost of investment, the inherent slowness of research projects to pay off, and the likelihood that competitors who have not invested will seize hold of the technology before its cost of development is recouped.

Meanwhile, public sector research has problems of its own. "One serious limiting factor is tailoring our research so that it is market driven," says Richard L. Dunkle, director of the Agricultural Research Service's Midwest Area.

But what if there were a way for corporations to reap the benefits of Agricultural R&D without assuming the risks of investment, slow payoff, and proprietary uncertainty? A way for several government scientific arms to participate in technology transfer with a real-world focus? And a way for communities to profit from the synergy that happens when publicly funded research finds its way to the marketplace via commercial development?

In Peoria, Illinois, that's just what's happening, thanks to ARS' cooperation with the Biotechnology Research and Development Corp. BRDC is a for-profit corporation, based at ARS' National Center for Agricultural Utilization Research (NCAUR) in Peoria, that funds research programs at federal and university laboratories.

The original idea called for an agricultural consortium that would investigate fermentation and biotechnologies as potential sources of economic growth in the Peoria area. Business leaders were searching for ways to diversify their industrial base, which was largely reliant on the manufacture of construction equipment.

Five corporations--Dow Chemical Co.; American Cyanamid Co.; Amoco Technology Corp.; Hewlett Packard Co.; and the IMCERA Group Inc.--are shareholders in the development corporation. ARS, the University of Illinois, and Iowa State University are active participants in its research program.

BRDC's rise in the Peoria area was triggered by poor economic times. "We had 17 to 20 percent unemployment," says Del Schneider, chief executive officer of CILCORP Ventures, Inc., and a driving force behind BRDC. "We looked around the community and looked at NCAUR because it already had a good reputation in technology transfer."

The consortium's role is twofold, Dunkle says. It defines those research projects that have market potential and enables industry to enter into high-risk ventures that might otherwise never be undertaken.

Typically it takes 5 to 7 years of research and development to bring an innovation to market, Dunkle says. And, it may take 10 to 12 years before significant licensing revenues are generated.

Reducing risk is what has made BRDC attractive to its corporate shareholders, according to William Dowd of Dow Chemical. In many cases, research programs funded by BRDC dollars probably would never be undertaken by Dow on its own--even though the technology is important, he says.

Each company invests $200,000 per year in BRDC. "[This investment] lets us access $3.4 million in research and play a significant role in directing that research," Dowd says. "You see the real results of the research. You know in real time.

"I think what business gets is cost efficiency," he adds, "plus something money can't buy--time."

Tech Transfer--It's the Law

The key ingredient to BRDC's success is a structural change in the ways government and business are permitted to interact. And it took an act of Congress to bring this change about.

"The ultimate success of BRDC could not have been achieved until member companies were allowed to secure exclusive rights to federal technology," says Schneider. So, as the consortium was being formed, Schneider supported critical legislation that Congress would ultimately pass, creating the Federal Technology Transfer Act of 1986.

For the first time, private industry was permitted to enter into contractual agreements with federal labs. The law gave industry an incentive to invest dollars in federal research in exchange for proprietary interest. It allowed federal scientists to share in patent royalties. And it gave consumers access to inventions and discoveries much earlier than otherwise possible.

Putting It All Together

Research proposals submitted for BRDC funding are reviewed by its science advisory board. Board members, two of whom are from ARS, study proposals for market potential and quality. Ideas are drawn from all member companies-ideas that might not otherwise have been considered.

This review by representatives of five or six different companies increases competitive access and often leads to an idea being adopted during development, according to Dowd.

Research projects are basically divided into two categories--those that will offer a new product or service and those that will make a current operation more efficient, he says. In some cases, technology developed under a BRDC grant might be used for unrelated purposes by two or more member companies, says Grant Brewen, president and chief executive officer of BRDC.

"We evaluate research proposals on theft commercial potential, and then we do a critical scientific analysis," Brewen says.

ARS has invested about $1.8 million a year over the past 5 years. While ARS doesn't own shares in BRDC, its ability to work with industry and expedite research is greatly enhanced, says Dunkle. The relationship also prevents duplication of previous research, giving taxpayers more for their dollar investment in federal research.

The First Fruits

One of ARS' first BRDC-funded programs deals with a new use for cornstarch in the encapsulation of chemicals and biological pesticides.

"That technology actually started back in 1972," Dunkle says. "Back then industry said 'it really looks good, but it's too expensive.'"

More recently, entomologist Michael R. McGuire and chemist Baruch S. Shasha of NCAUR's Plant Polymer Research Unit looked at various biological controls that can be incorporated in the starch encapsulation technology. A patent application was filed last year and the process has since been licensed to the corporation that in turn sublicensed it to the shareholder companies.

Now it's ready for pilot plant testing to determine the most economical and practical way to produce encapsulated starch-based products. Over the next 2 years, field tests of a number of starch-encapsulated combinations will be conducted in cooperation with USDA in Iowa and Texas.

The technology pinpoints chemical application and improves the efficiency of biological pesticides, such as Bacillus thuringiensis, and it should reduce the number and amount of applications needed. This reduces farm operating expenses as it helps safeguard the environment.

The starch-encapsulation process forms granules of pre-cooked cornstarch, insecticide, water, and organic or inorganic chemicals.

Applying granules to crop plants is a snap: They adhere to leaves very well, and insect attractants can also be added to the mixture.

In addition to the original formulation designed to increase the efficacy of the microorganism against the European corn borer, Shasha and McGuire are developing a number of different formulations to target other insect pests.

"We now have four distinct types to enhance the performance of B. thuringiensis," McGuire says. "Through our cooperation with the BRDC shareholders, we hope to see products based on this technology on the market in the near future."

Starch encapsulation is one of 21 research projects in which ARS has collaborated with BRDC since it was incorporated in 1988. Other ARS/BRDC projects include:

* New sources of natural insecticides that could replace petroleum-based chemicals.

Microbiologist Donald T. Wicklow and entomologist Patrick F. Dowd have identified 75 natural products from the sclerotia of various fungi that may have potential as insecticides. Forty-five of these were previously unknown.

Sclerotia are survival bodies for fungi. They help fungi survive adverse conditions, such as long periods of drought, freezing temperatures, or the absence of a plant or insect host for the fungus to parasitize. Sclerotia of certain plant pathogenic fungi have been shown to survive burial in agricultural fields for up to 10 years.

"The importance of sclerotia to fungal survival suggested to us that compounds produced by sclerotia should provide superior defenses against fungal-feeding insects," Wicklow says.

At first, Wicklow, Patrick Dowd, and J.B. Gloer, a chemist at the University of Iowa in Iowa City, studied sclerotia produced by the fungus Aspergillus flavus. One known compound--dihydroxyaflavinine--was found to be effective against the dried fruit beetle. Dihydroxyaflavinine is related to the pigments that cause leaves on trees to turn to brilliant yellows, oranges, and reds in autumn.

"We began looking for other compounds besides dihydroxyaflavininc as potential natural insecticides," Wicklow says. "Our research led to new compounds that work just as effectively against the corn earworm and cotton boil worm as synthetic insecticides ."

The researchers are investigating other sclerotium-producing species of fungi besides Aspergillus as potential insecticides, he adds.

"There is an urgent need for new sources of insecticides as pests become resistant to existing products," Wicklow says. "It's also important to develop products that are environmentally sound."

Since the research began in 1989, four patents have been issued on the technology and three others are pending, says Curtis P. Ribando, ARS patent application adviser.

* Bacteria, fungi, and plants produce enzymes that can slow the action of certain antiviral drugs, such as those used to treat AIDS and other drugs that activate the body's hormonal system during illness.

These pharmaceuticals would not need to be taken as often if doses were absorbed by the body more slowly, ARS researchers believe.

The enzymes under study attach sugar units to peptides, which are small proteins, to achieve that goal.

"This research could make drugs more stable in the body," says ARS chemist Gregory L. Cote, "and allow more drugs to be taken orally."

* Scientists have developed and are refining infrared sensors to analyze solid materials.

Richard V. Greene, who is in charge of the Peoria center's Biopolymer Research Unit, says the technology could be used to detect fungal contaminants in corn at grain elevators or in industrial processing. This would reduce the risk of natural toxins, such as aflatoxin.

"By using sensors, the disease process can be studied in the intact kernel," says Greene. "This would be an improvement over the typical way to evaluate what is happening in solid materials, which is to destroy the material and then analyze it for compounds."

The sensor study, being done in cooperation with researchers from the University of Illinois, is especially important for studying compounds produced by yeasts and fungi through fermentation.

"Biological materials have complex chemical structures that often exhibit well-defined infrared patterns," Greene says. "These patterns represent the chemical signature of each compound, all of which have distinct traits."

He says this application of the technology is designed to help bioprocessing and fermentation industries monitor microbial growth patterns as well as their production of high-value metabolites, such as antibiotics and vitamins.--By Bruce Kinzel, ARS.

For more information about the Biotechnology Research and Development Corp., contact William H. Tallent, USDA-ARS, Room 358A, Administration Bldg., Washington, DC 20250. Phone (202) 720-3973, fax number (202) 720-5427.

ARS scientists mentioned in this article are at the USDA-ARS National Center for Agricultural Utilization Research, 1815 N. University Street, Peoria, IL 61604. Phone (309) 685-4011, fax number (309) 671-7814.
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Title Annotation:commercializing technology
Author:Kinzel, Bruce
Publication:Agricultural Research
Date:May 1, 1993
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