The economic recession has cast a shadow over growth in the Sunshine State. The collapse of the housing market and the lingering effects of what has been the worst economic crisis since the Great Depression have taken their toll. This summer, Florida’s unemployment rate entered double digits for the first time in 34 years, hitting 10.6 percent in June.

But not everyone is downsizing.

In Sarasota, Medical Education Technologies Inc. is expanding its business by building a 70,000-square-foot plant along Interstate 75. The maker of patient simulators employs more than 200 people and has enjoyed 25 percent to 30 percent growth since it was founded with five employees in 1996.

In Alachua, Jamie Grooms, CEO, co-founder and chairman of Axogen Inc., stays busy growing his second biomedical startup company in 10 years. Axogen develops products that allow surgeons to repair and regenerate peripheral nerves. It is having another banner year, attracting venture capital funding and providing hundreds of patients around the world with better nerve repair options.

And in Gainesville, Xhale Diagnostics Inc. is moving its corporate headquarters from a small downtown location to a 20,000-square-foot space on Southwest 34th Street. The company is developing a line of breath-based devices to replace or supplement many conventional diagnostic tests. Its technology is expected to lead to new opportunities for diagnostic testing in the medical, home, law enforcement and industrial settings.

What do these companies and several other biotechnology startups throughout the state have in common? They are manufacturing and marketing products invented by current or former faculty members from the UF College of Medicine. These advances are the result of years, sometimes decades, of research from medical scientists who are dedicated to improving people’s lives by finding solutions to some of our biggest health problems.

And the outcome of bringing these inventions to the marketplace is new business. Business that generates biomedical investment, jobs and tax revenue and stimulates commerce.

The Sid Martin Biotechnology Incubator is a unique component of UF’s successful commercilization efforts. The 40,000-square-foot facility features 22 wet labs, $1 million of shared equipment, an animal facility, pilot fermentation facility and climate-controlled greenhouses. Photo by Allen Cheuvront

Prescription for Recovery

It stands to reason that as Florida works to transform its economy, academic medicine at UF is a growth engine for the state that can help lead the state’s recovery and fuel a knowledge-based economy.

“The College of Medicine has played a significant role in the well-being of the state of Florida for more than 50 years,” said Michael L. Good, MD, interim dean and Folke H. Peterson Dean’s Distinguished Professor. “And the college is poised to play an unprecedented role in helping the state to overcome key challenges, in part by producing research advances that not only help diversify the state economy but also make a difference in the lives of Floridians.”

In addition to spawning business within the biotechnology field, the College of Medicine and its affiliated health system, Shands HealthCare, are an integral part of the state and local economies, employing 10.5 percent of Alachua County’s workforce and almost 4,700 people in Jacksonville. The College of Medicine attracts hundreds of millions of dollars in out-of-state research funding and more National Institutes of Health federal funding than any other public university in Florida.

“The medical school is an undeniable asset to Gainesville and North Central Florida by attracting external funding, whether from federal agencies such as NIH or CDC (Centers for Disease Control and Prevention), or from foundations or industry,” said David Guzick, MD, PhD, UF’s newly appointed senior vice president for health affairs and president of the UF&Shands Health System. “Combined with successful commercialization of intellectual property, the college is a key player in the state’s ability to create jobs and grow its economy.”

In fact, the College of Medicine and Shands HealthCare have contributed an estimated $15 billion to the state’s economy over the last four years, according to projections based on a study by Tripp Umbach, a Pittsburgh consulting firm that provides research, strategy and economic analysis for many of the nation’s academic medical centers. The firm quantified the economic, employment, government revenue and basic research impact of Florida medical schools for the Association of American Medical Colleges in 2005.

“The University of Florida College of Medicine’s flagship status in the state literally puts Gainesville and the entire Heart of Florida region in an elite, global league for breakthrough innovation and technology,” said Brent Christensen, president and CEO of the Gainesville Area Chamber of Commerce. “Whether it concerns the latest discovery in combating human blindness or applying gene therapy methods to thwart cancer, the world is looking at UF.”

“We tend to get distracted, thinking the target is NIH funding. But the target really isn’t funding. The target is the diseases we want to eliminate.”

Stephen Sugrue, PhD, senior associate dean for research affairs

The entrepreneurial spirit

A drive up State Road 441 north of Gainesville to Alachua offers a good example of the market potential of research generated by the College of Medicine, not to mention the rest of the university. Nestled among the green pastures, horse farms and live oaks is the 200-acre Progress Corporate Park, which houses 30 young businesses, the largest physical cluster of biotech/life sciences companies in Florida. More than 80 percent of the 1,200 people working in the corporate park work for startup companies based on technology developed at UF — and more than one-third work for businesses that originated in the College of Medicine, said David Day, director of the Office of Technology Licensing for UF.

“The state of Florida has the 10th-largest research economy in the country,” explained Day, whose office is charged with helping move the university’s discoveries and inventions from the lab to the business community. “More than a third of that research comes from UF, and about half of all the commercialization that is produced by it is in the Gainesville area.

J.S. Gravenstein, MD, founding chair of the department of anesthesiology who passed away in January, was photographed last year observing residents train with the Human Patient Simulator. Gravenstein and colleagues, including Samsun Lampotang, PhD, an associate professor of anesthesiology, and Michael L. Good, MD, interim dean, created the computerized mannequin that displays vital signs and reacts realistically to medical procedures. Photo by Sarah Kiewel

“We are already the innovation hub of Florida, and we are positioned to be even more significant in the recovery,” he said. “If somebody wants to have a stimulus, this is where they should put their money because this is where they’re going to get their biggest and quickest payback.”

It’s not overconfidence that makes Day so certain about UF’s potential in producing successful spinoffs — it’s his team’s track record. Last year the office helped launch 12 new companies and issued 75 licenses and options — more than half the state’s total.

About 10 years ago, the university made a commitment to expand its commercialization efforts and strengthened its programs and services, such as UF Tech Connect — matching entrepreneurs and investors with science — and the Sid Martin Biotechnology Incubator — providing the infrastructure in the form of space, equipment and support services to UF’s biotechnology startups. As a result, a major study by the prestigious Milken Institute ranked UF the No. 1 performing public institution at transferring its research to the marketplace. UF was fifth overall — behind the Massachusetts Institute of Technology, the California Institute of Technology, Stanford University and the universities of the California system.

“When you look at venture capital that’s attracted to startups from state universities, I’ll bet 80 percent of that is right here at UF. And the College of Medicine is the heart and soul of what we do.”

David Day, director of the Office of Technology Licensing for UF

With almost $600 million in research last year, UF accounted for 30 percent of university research funding in Florida, while the College of Medicine claimed 12 percent. And the 299 new disclosures from UF scientists represents 40 percent of Florida’s research disclosures. Half of those, or 20 percent of the total, came out of the Health Science Center.

“When you look at venture capital that’s attracted to startups from state universities, I’ll bet 80 percent of that is right here at UF,” Day said. “And the College of Medicine is the heart and soul of what we do.”

Successful spinoffs usually mean more money coming back to the university’s labs, said Jane Muir, associate director of the OTL. “When we license technology, it needs further development, so the companies quite often sponsor more research at UF, and on occasion, turn around and donate private support to the university.”

Other advantages to creating successful business in the state and the region: It keeps university graduates in the state. It creates an alternative to the state’s traditional reliance on tourism and agriculture for economic growth. A university that fosters a tech-transfer culture attracts young, entrepreneurial-minded faculty and provides more opportunities for trailing spouses.

“But when you talk about the real benefit of doing all of this, it’s that we’re getting these discoveries out of the lab and into the marketplace where they have an impact,” Muir said. “That’s the big motivator: cure for diseases, chips that make computers go faster, delivering drugs for tumors.”

Said Day: “That’s why we pay our taxes; to go to these people who help make it a better world.”

The value of NIH funding

Even before innovative research makes it to the marketplace, a robust research enterprise stimulates the local economy. In June 2008, the health-care advocacy group Families USA released a study titled “In Your Own Backyard: How NIH Funding Helps Your State’s Economy.” The report, which used U.S. Department of Commerce methodology, defined economic impact as the additional state business activities attributed to NIH grants and contracts and concluded that every $1 million invested by the federal agency generated an average of $2.21 million in new state business.

“The federal dollars that NIH sends out into communities provide real, direct economic benefits at the local level, including increased employment; growth opportunities for universities, medical centers, and local companies; and additional economic stimulus for the community,” the report stated.

This is no surprise to Stephen Sugrue, PhD, senior associate dean for research affairs at the College of Medicine, where last year’s NIH awards totaled $80 million.

“A typical RO1 grant (Research Project Grant from the NIH) is worth $200,000 a year for five years,” explained Sugrue, who has received NIH funding since 1983. “Three quarters of that, or $150,000, is for salaries. That, of course, directly affects the local economy.

“Our grants bring people to Gainesville, including faculty, postdocs and lab technicians,” he said. “And usually they come with families.”

According to the Families USA study, the average wage of jobs created by NIH funding nationwide is $52,112, more than 25 percent higher than the average U.S. wage.

“We tend to get distracted, thinking the target is NIH funding,” Sugrue said. “But the target really isn’t funding. The target is our ultimate goal of eradicating disease.”

Good, interim dean since May 2008, said that while the college provides an undeniable benefit to the economic well-being of the region and the state, that is not one of its core missions.

“The most important thing is the significance of the discovery — changing people’s lives,” said Good. “Generating new business and stimulating the economy help fuel the machinery that creates an environment from which great discoveries are made.

“When you think about it, (Dr.) Bob Cade had an idea (Gatorade), but he needed to grow that idea in a place that encouraged the inventive spirit, and he needed first-rate colleagues around him,” Good said.

Gatorade bred a multimillion-dollar sports drink industry and has brought in more than $150 million in royalties to UF since its invention 41 years ago. The money has funded numerous projects and programs in the College of Medicine. Cade also used some of his share of the royalties to fund scholarships and an endowed chair in the department of nephrology.

Good is familiar with the power of translating academic discovery to the marketplace. An inventor himself, he teamed up with colleagues at the department of anesthesiology to develop the Human Patient Simulator, which was licensed to an aerospace company in the early 1990s and is now manufactured by METI Inc. in Sarasota.

“I stayed at UF because I wanted to build something,” Good said. “And UF turned out to be the perfect place to do that.”

With a strong history of tech transfer, a university with a proactive approach toward translating science to the marketplace and recent expansions, the College of Medicine is in position to see its research endeavor soar in the coming year.

“The recent Clinical and Translational Science Award (see page 32) to the university will further enhance research activity and cause a ripple effect in NIH funding,” said Guzick. “Our collaborations with the Moffitt Cancer Center and private institutes such as Burnham and Scripps will enhance our ability to make those discoveries that will have an impact on not just the state but the world.”

Full Circle

At 17, David Gracy nearly lost his life because of an automobile accident on Southwest 34th Street in Gainesville. Thanks to a device invented by UF anesthesiology professor Richard J. Melker, MD, Gracy, now 35, survived the crash and recovered from his injuries. Gracy, his wife, Megan, and their son, Cecil, live in Gainesville with their two dogs and one cat. Photo by Priscilla Santos

College of Medicine researchers make the discoveries. The university helps license and transfer those discoveries to the marketplace. Investors supply the capital to grow the business. Entrepreneurs expand their businesses, hire skilled workers and pay taxes to the government, which funds more research at the College of Medicine. It’s a proven series that is valuable to all parties, especially the patient.

David Gracy is a perfect example of how valuable that full circle is.

In October 1990, Gracy was a senior at Gainesville High School and played strong safety on the football team. He was driving on Southwest 34th Street just south of Archer Road when his car collided with another, and he suffered acute trauma to his head and face and broke his neck.

The 17-year-old’s injuries were so severe, paramedics on the scene could not restore his breathing through the mouth or nose. Within one minute, they used a resuscitation device similar to a tracheotomy tube to open Gracy’s airway, and he began breathing. That device was invented by the father of one of Gracy’s friends at Gainesville High, Richard J. Melker, MD, a critical care physician at UF.

Melker, a professor of anesthesiology and faculty member for 32 years, saw a need and came up with the Melker Emergency Cricothyrotomy Catheter in the 1980s.

“To resuscitate a patient, the first thing we have to do is establish an airway,” said Melker. “Usually that is done with an endotracheal tube, but in some cases, such as with severe facial injuries, that is not possible. That is when this device is useful.”

Melker, who holds 45 U.S. patents and is co-founder of XHale Diagnostics in Gainesville, said the device is used by militaries all over the world. In 1989, shortly after it was approved by the U.S. Food and Drug Administration, Melker said he hoped to learn one day if a patient was saved using his device.

Richard J. Melker, MD, a professor of anesthesiology and inventor at UF for 32 years, displays a sample of the hundreds of response cards he has received over the years from emergency room staff, military medics and other first responders around the world who have used the Melker Emergency Cricothyrotomy Catheter. Melker developed the resuscitation device in the 1980s, which allows medical personnel to establish an airway in patients immediately. Photo by Priscilla Santos

“This is not something that will be used very frequently,” the physician and inventor said in a 1989 interview. “Locally, we may have occasion to use it only once a year.”

Less than a year later, the invention helped save Gracy’s life. And his friend Jeremy Melker’s father was responsible.

“It’s hard to remember much during that time,” said Gracy, now 35 and a financial planner in Gainesville. “I do remember being elated to know that Jeremy’s father had something to do with my being alive.”

Almost 20 years later, Melker is still at it, inventing new ideas, testing new products and growing a business that could soon change the way people with diabetes check their glucose levels.

And while Melker’s work and that of many of his UF College of Medicine colleagues help cultivate the biotechnology and spur growth in the state’s economy, it always starts with the patient.

THE BIOTECH BOOM

Jamie Grooms, co-founder and CEO of AxoGen Inc., knows what it takes to launch and grow a biotechnology company. He is co-founder and former CEO of Regeneration Technologies, which he led through venture capital fundraising and an initial public offering, raising $75 million in proceeds. Both companies were established through technology transferred from the UF College of Medicine.

Biotechnology uses living organisms to solve the world’s problems in agriculture, food science and medicine. What it’s producing in North Central Florida is real live jobs. Thirty companies housed in Alachua’s Progress Corporate Park employ 1,200 people, most of whom work for UF spinoff companies.

RTI Biologics

The cornerstone company and one of UF’s most successful offshoots is Regeneration Technologies Inc., the leading provider of sterile biological implants for surgeries around the world. It expects revenues to reach more than $166 million in 2009.

RTI, co-founded by Jamie Grooms, prepares human-donated tissue and bovine tissue for transplantation in spinal, sports medicine, orthopaedic, dental and other specialty surgeries. The company’s origins can be traced back to a fledgling university tissue bank at UF’s department of orthopaedics and rehabilitation and Grooms’ idea that bone could be machined into screws and dowels to take the place of metal tools. RTI went public in 2000 and UF sold its share of the company’s stock, worth about $60 million. The department used its share to build the Orthopaedics and Sports Medicine Institute on Southwest 34th Street, and the College of Medicine contributed almost $35 million to help construct the 280,000-square-foot Cancer and Genetics Research Complex on Gale Lemerand Drive.

“RTI is the best example of transferring science to the marketplace is,” said David Day, director of the Office of Technology Licensing for UF. “Profit is invested back into the university, having an impact all over the campus.”

AxoGen Inc.

Grooms left RTI to form another business based on medical research from UF, Axogen Inc., which began operation at UF’s Sid Martin Biotechnology Incubator. The company is the leader in the advancement of peripheral nerve repair, and its technology was invented by David Muir, MD, a professor in the division of pediatric neurology and the department of neuroscience.

“I believe we have the best product in the world,” Grooms said. “And it has come full circle. We got our license from the University of Florida, and our product is used by physicians at Shands at UF.”

Grooms’ latest venture into the business of regenerative medicine, and his second experience with capitalizing on UF medical research, has strengthened his commitment to making such gambles and his drive to help improve people’s lives through regenerative medicine.

“You have to zero in on your passion, otherwise it’s just too hard to do,” he said. “Fortunately, the research is never-ending — it’s fuel for the engine. But it’s of no use until somebody deploys it.”

AGTC

Applied Genetic Technologies is a biotechnology company developing gene therapy treatments using the adeno-associated virus, or AAV, as a gene therapy vector, a technology developed by current and former physicians and geneticists from the College of Medicine. In August, AGTC and its founders from the College of Medicine and the University of Massachusetts reported safely giving new, functional genes to patients with a hereditary defect that can lead to fatal lung and liver disease.

Banyan Biomarkers Inc.

Ronald Hayes, PhD, a former professor of neuroscience at the College of Medicine, spent more than a quarter of a century trying to better understand the physiological changes that occur after a head injury. The company he formed based on his decades of research, Banyan Biomarkers Inc., is focused on confirming the relationship between certain brain injury biomarkers and injury severity. Detecting biomarkers present in the patient’s blood after brain injury will provide early indications of trauma essential for rapid treatment.

A Destination for Healing

By April Frawley Birdwell

The disease was worse than doctors originally thought. Six-year-old Christian McGrath sailed through the surgery to remove a salivary gland tumor from his neck. But the first-grader still needed radiation to keep the cancer from spreading.

His doctor, a radiation oncologist at Emory University near his family’s home in Atlanta, gave his parents a choice: standard radiation, which could be performed there, or proton therapy, a precise form of radiation that blasts hard-to-treat tumors while sparing healthy tissue.

Christian McGrath, center, and his family called Jacksonville home for two months while the 7-year-old from Atlanta underwent daily therapy at the UF Proton Therapy Institute at the beginning of the year. Christian’s father, Chris, remained in Atlanta to work, while his mother, Tammy, and his sister, Caitlyn, 4, stayed with him in Jacksonville. Photo by Priscilla Santos

“It wasn’t even a contest,” says Tammy McGrath, Christian’s mother. “Proton saves a lot of healthy tissue and regular radiation does not.”

So in January, McGrath packed for a two-month trip and brought Christian and her 4-year-old daughter, Caitlyn, to the UF Proton Therapy Institute in Jacksonville, one of only six centers in the country to offer this targeted therapy.

Not knowing what to expect, she worried about what lay ahead for her son.

“My fear was my son dreading coming here. I cry even saying it. But God answered my prayers. He loved it,” McGrath says, wiping tears from the corners of her eyes. “They do everything they can to make sure the children have a good time. My son named it the ‘Proton Fun Center’ instead of the hospital.”

The McGrath’s story of an extended stay in an unfamiliar city for first-rate health care is not unique. Although UF and the Shands HealthCare system don’t explicitly market to patients in distant cities and states, certain highly specialized programs in Gainesville and Jacksonville have become hot spots for patients from across the country and globe, feeding dollars into the local economies in the form of lodging, dining, shopping and entertainment. Shands at UF and Shands Jacksonville medical centers admitted 2,300 patients from 44 other states as well as several countries last year.

UF specialists like David Weinstein, MD, MMSc, and David Kays, MD, have built strong reputations in their fields, drawing patients and their families to UF from throughout the world for treatment. Weinstein is an endocrinologist who leads the world’s largest glycogen storage disease program and whose patients travel to Gainesville once a year for check-ups. Kays, chief of pediatric surgery, has a 92 percent success rate treating newborns with congenital diaphragmatic hernias compared with a national survival rate of approximately 55 percent, prompting many expectant parents to come to Gainesville to have their babies.

“The technologically advanced care provided by UF faculty physicians makes it worthwhile for patients to travel great distances, and often at great expense, to benefit from the expertise of our faculty,” said Michael L. Good, MD, College of Medicine interim dean and Folke H. Peterson Dean’s Distinguished Professor. “As the Internet and other technologies such as electronic record and advanced communication systems continue to be implemented, we expect UF to become a central hub for destination medicine.”

“It was winter, the weather was beautiful. We sampled all the delights of Jacksonville, and my son thinks of it as a great experience.”

Rosalie Barnes, of Leicester, England, whose son, Alex, received treatment at the University of Florida Proton Therapy Institute in Jacksonville.

The Fun Center

Dealing with a devastating disease and having to travel to another state or country on top of it — as more than three-fourths of the patients at the UF Proton Therapy Institute do — can be a prescription for depression, says Gerry Troy, MSW, director of patient services for the institute. That’s why the center is cultivating a community atmosphere for patients, making it not only a destination for treatment, but also a destination for healing … and fun.

So how does the institute inspire people to get out, enjoy themselves and bond with other patients? Well, food is a good start. There’s lunch on Tuesday, held at different restaurants across town. Then there are the group dinners at nearby restaurants and the weekly concert series (and wine) in the lobby, not to mention the breaks patients get at other upscale eateries and clubs.

“The ‘community’ of patients shares information, supports each other and enormously contributes to a patient’s confidence and sense of well-being, which means they have a positive treatment experience and are less likely to develop anxiety and depression,” says Nancy Mendenhall, MD ’80, medical director of the UF Proton Therapy Institute. “This may or may not also help in increasing the effectiveness of the treatment.”

For children, there are weekly pizza parties, holiday parties and even graduations to celebrate when kids finish treatment. Most families trek to the zoo or the beach and slip away to Disney World during their stays, too.

“(My son) came away from that treatment thinking he had a giant vacation,” says Rosalie Barnes, who brought her son, Alex, to Jacksonville for treatment last September from their home in Leicester, England. “It was winter, the weather was beautiful. We sampled all the delights of Jacksonville, and my son thinks of it as a great experience.”

Welcome to Florida

Of course, for out-of-state patients, Florida’s sunshine and palm trees are just a bonus. The real draw is the expertise.

“We feel we have world-class facilities located right here, and we have a great place for people to heal,” says Lyndsay Rossman, communications director for VisitJacksonville, the city’s de facto tourism bureau. “We have over 30 significant medical facilities in just Jacksonville alone.”

The number of “medical tourists” visiting Jacksonville each year actually has increased since the UF Proton Therapy Institute opened in 2006. The center sees 100 to 120 patients a day and, on average, about 80 are from out of the area, Troy says.

Back in Jacksonville for his three-month check-up, Christian McGrath scampered across the waiting area with his little sister. He’s still a ball of energy, his mother says.

To Christian, now 7, the institute, with its softly lit gantries and glass-walled lobby, will always be the place where his sister rode on a stretcher to his room, where he got to help give himself his “sleepy medicine” before treatment and where the “Proton Fun Center” sign he and Caitlyn made still hangs in the children’s room.

For his mother, the visit brings different memories.

“Jacksonville is our second home now. This is an extended family here, you feel that from the get-go,” she says. “To have this available for my child to not suffer, and he didn’t one bit, that is why this place is so special. They saved my son.”