Climbing out of the Valley of Death

By Jessica Meisinger, Director of Education, Science, and Communication
Fats and Proteins Research Foundation

The phrase “valley of death” sounds very ominous – and it is. It is the phrase used for the time (and resources) between basic research and commercial operation to move projects out of the laboratory and into the marketplace.

The Fats and Proteins Research Foundation (FPRF) is focusing on commercialization of promising research. The primary goal of FPRF projects has been to publish scientific data that could be used to advance the knowledge of rendering processes, the use of products in animal diets, and the quality of fats and proteins. That has dramatically changed with several projects at the Animal Co-Products Research and Education Center (ACREC) at Clemson University having some possibility of patentability or commercialized product. FPRF members fund research that develops the underlying science for groundbreaking projects, but there is an inherent challenge to get these projects to marketplace.

Researchers tend not to know how to bridge the gap between research and business as that is not their role or training. Many are also not interested in commercialization because the usual university reward and advancement systems stress publication over implementation. One ACREC project that has come the furthest along the commercialization path is a novel antioxidant developed by Drs. Alexey Vertegel and Vladimir Reukov. Both researchers realized there was a need in the marketplace for a new antioxidant that could prevent rancidity and provide a longer shelf life in rendered products and pet food. The antioxidant market is a large one and for good reason. Most rendered products are not refrigerated and require antioxidant application to stay fresh.

Vertegel and Reukov were not daunted by taking a path most researchers avoid – forming a business called VRM Labs. The two researchers created a product named “Prot-X,” which is a potent natural antioxidant similar to those already present in the body. Vertegel and Reukov developed a proprietary production process from animal or poultry blood that is as efficient as synthetic antioxidants. All components used in production are designated by the Food and Drug Administration as “generally recognized as safe,” which is essential in the marketplace. The production cost is low so the cost to the customer can be competitive with that of current natural antioxidants. The product also appears to have some antimicrobial properties in early trials.

The path to marketplace can be rocky even for cost-effective, promising products. FPRF funded four studies developing this antioxidant and the intellectual property belongs to Clemson University. VRM Labs has obtained an exclusive license for the technology from Clemson with half the funds the product generates being recycled back into ACREC where they will be available for future rendering research. High-value projects like this one could significantly increase ACREC funding for more rendering research.

Vertegel and Reukov realized they needed the assistance of someone who knew more about starting a business in the animal feed industry so they teamed up with Dr. David Meisinger, executive director, US Pork Center of Excellence, and created VRM Labs. In 2014, the team collaborated with Iowa State University to examine scaling up the process. Iowa State has a pilot plant suited to larger extractions and experiments and they were successful in making large quantities of the antioxidant. However, the next two attempts failed to optimize the process and improve yield as expected, but efforts kept going. Each failed attempt added to the base of knowledge about industrializing the process.

Yet all of these attempts take money and time, making it difficult for such a small business to get off the ground. Vertegel and Reukov spent much time writing grants for small businesses and approaching “angel investors” that have been quite successful, with the company currently valuated at $3.3 million. The product has won or been a finalist for several awards, including winning the Asia Pacific Ag Innovation challenge and the 2014 InnoVision Award in the small business category. All of these awards also bring recognition to FPRF.

Regulation is also a burden that can be costly and time-consuming to bring new products to market. Meetings with government officials in Washington, DC, are often required and can be problematic for a start-up. These trips take time and money, and must be repeated during the process.

The valley of death is a challenge faced by universities, research centers, and granting agencies. FPRF and ACREC are focusing on solutions. Most researchers are not interested in developing a start-up business to market inventions, and established marketers and companies are reluctant to pay for inventions only proven in a lab. FPRF’s budget is well-suited to fund basic research underlying patentable new innovations. However, enthusiastic inventors along with FPRF support beyond the initial funding can bring in venture capital and eventually result in a home run.

Researcher Q&A

What has been the biggest hurdle with bringing your new antibiotic to commercialization and what advice would you give researchers just beginning this process?

Reukov: For me, the biggest hurdle was to find an optimal testing protocol that will suit all industries. My advice is that if your technology requires regulatory approval, start talking to regulatory agencies as early as possible.

Vertegel: From my perspective, getting funding. My advice would be to do some entrepreneurial training, such as with the National Science Foundation (NSF) Innovation Corps (I-Corps), and have good legal support, which is important for negotiations about license and investments.

Meisinger: I’ll answer a different way. First, we were extremely fortunate to find a legal firm that catered to agricultural start-ups that also assumed part of the risk while in early development. They helped us to form and register a new company, including the vesting and shares process, licensing of the technology, the patents, and confidentiality issues with other companies.

Secondly, we were again very fortunate to receive a NSF I-Corps grant that forced us to do market development in the most deliberate and structured way imaginable. We ended up talking to 137 potential customers and partners that led us to completely rethink our customer value proposition. 

I think the biggest challenges are to properly set up the company as a legal entity, to develop a sound business plan and business prospectus, and to do a very robust market development thought process and plan.

Those are the primary components of my advice to anyone beginning this process. It is a very long and detailed path to commercialization that requires endurance and perseverance.

April 2016 RENDER | back