February 7, 2006

  

A Publication of the Economic Development Corporation of Utah

 PRESIDENT'S MESSAGE

 USTAR's Potential



During this legislative session, numerous initiatives sure to effect economic development are being presented. We’re nearing a very critical time in this session and keeping a close eye on specific issues such as USTAR. Today’s feature article discusses the important potential of USTAR – the fact that this proposed legislation has broad statewide benefits that reach far beyond our primary research universities. Simply put, it is an exciting and proactive approach to economic development for decades to come.

Today’s Economic Review also includes links to many of the ED-related news stories from the past week. As always, if you have comments, suggestions or topics you’d like to see in the Economic Review, please contact us by clicking the “Comments” button on the bottom of this page.

Enjoy!

Jeff Edwards
Jeff Edwards
President and CEO

FEATURE STORY

USTAR Gains Momentum

The Utah Senate gave the USTAR initiative a big show of support last week, approving the legislation on a 28-0 preliminary vote. After a final vote in the Senate the measure will go to the House.

The USTAR initiative would commit $15 million annually to recruit and attract research teams. Another $200 million would build new laboratories and purchase equipment, develop five technology innovation centers at strategic locations in the state, and accelerate getting new products and technologies to their respective markets.

Western States with High-Tech or Research Funding Initiatives Since 2000

Western States with High-Tech or Research Funding Initiatives

USTAR is the centerpiece of Gov. Huntsman’s and the business community’s economic development platform. It is designed to foster research and development in targeted disciplines where multi-billion dollar markets exist for spin-off companies.

USTAR is designed to greatly accelerate what is already occurring at Utah’s research universities. For example, in the last six months, 14 companies have been launched out of the University of Utah, and the U.’s goal for this year is 20 new companies. “The USTAR Initiative has encouraged many scientists to get involved with the commercialization process, and I am very confident the rate of business development will increase as the USTAR Initiative gains momentum,” said Jack Brittain, VP of technology venture development.

U of U Business Launches in the Past Six Months

1. Intan Technologies LLC - Dr. Reid Harrison - Develops new manufacturing methods for the semiconductor industry using low-power integrated circuits. The company has licensed copyrighted software and source codes developed out the Electrical and Computer Engineering Dept.

2. Medvis - Dr. Stefano Foresti - Uses custom visualization technology developed at the Center for Multi-Dimensional Information. The company is currently working with GE Medical to exploit the technology's potential in surgical procedures and anesthesiology applications in the operating room.

3. Carbalyn - Dr. Glenn Prestwich - Formed by the infusion of a $9 million Series A funding. It develops new products and applications utilizing a novel biopolymer developed at the U. The hydrogel has applications in drug delivery, surgical repair, and medical device coatings.

4. Vestan - Dr. Chuck Grissom - This technology was inspired by the fact that in breast cancer patients some portion of the tumors are left behind in over 40% of all cases. This company will use this novel diagnostic imaging devices and surgical tools, primarily for breast cancers surgery, but eventually will be used for other malignancies such as skin, uterus and intra-abdominal cancers. Vestan was recently awarded a VIP grant for the Technology Commercialization Office.

5. TechnoImaging LLC - Dr. Zhdanov - This new company was started out of the newly created Launch Pad program for New Business Development. It uses new electromagnetic imaging techniques for mineral and petroleum exploration.

6. Nephrogen - Dr. Christof Westenfelder – A new biotechnology start-up located in Research Park. Scientists at Nephrogen are exploring the therapeutic potential of adult stem cells collected from blood to restore kidney function. The company has already attracted the attention of Gambro, an international health care company which has invested substantial funding.

7. Neuroadjuvants - Dr. Steve White - The result of collaborative efforts between the Departments in Pharmacology, Biology and the Brain Institute. The company develops new drugs for nerve related disorders.

8. MicroArray Inc. (Working Title) - Dr. Steve Blair - Uses novel microfluidics and hybridization techniques to reduce sample size and scale to large arrays in an effort to increase the efficiency of biosensor platforms.

9. Fuels Development Group - Focuses on the development of cost effective, more efficient jet fuels. The company is currently sponsoring University research toward a commercial prototype.

10. Intellivis - Dr. Stefano Foresti - Utilizes proprietary visualization software and hardware to create real-time decision making environments for network security, gaming, financial and other industries.

11. Vetrex - Dr. Glenn Prestwich - Uses the hydrogel technologies developed at the U. to assist in the repair and recovery of surgical procedures in animals. This is second company that has been started based on these novel biopolymers.

12. Zicthus - Dr. Dave Jones - Uses a proprietary diagnostic tool for the discovery of new therapeutics for the treatment of colo-rectal cancer.

13. PulmoGen. - Utah Population Database - This new company is the result of research resulting from Lineagen and will focus on new biomarkers and treatments for pulmonary disease.

14. Wasatch Microfluidics Inc. - Focuses on the development of innovative microfluidic devices for pharmaceutical research, with applications in drug discovery, genetics and clinical diagnostics. Microfluidics is the science of designing, manufacturing, and formulating devices and processes that deal with volumes of fluid on the order of nanoliters.

USU Business Launches

Not to be outdone, Utah State University has identified about 60 companies with ties to the institution through faculty or alumni, including seven startup companies that have emerged from USU in the past two years. USU-related companies have had an enormous impact on Utah’s economy, employing more than 1,300 workers, paying $61.3 million in annual salaries, and generating more than $315 million in annual revenues.

Examples of some of these spin-off companies are:

HyClone Laboratories - Rex Spendlove, a USU microbiology professor, founded HyClone to produce and market fetal bovine serum (FBS), a substance used in culturing organic material. Hyclone has become the world leader in FBS production, having established the standard in the industry. Hyclone serves customers worldwide from its locations in the United Kingdom, Belgium, China, and New Zealand, but its headquarters and primary manufacturing sites are in Logan, Utah. Hyclone employs about 500 people at its five facilities in Cache Valley.

Campbell Scientific, Inc. - students Eric and Evan Campbell founded Campbell Scientific as an outgrowth of their research at USU in soil physics in 1974. The company has stayed in the Campbell family and grown to over 200 employees with affiliate companies in England, Canada, Brazil, South Africa and Australia. In 1996, Campbell Scientific, Ltd. moved into a new 17,000 sq. ft. facility in Logan, custom built for its manufacturing, service, and support activities.

Wescor, Inc. - in 1970, a group of USU faculty founded Wescor, a company that develops, manufactures and markets high-quality instrumentation and other products for medicine, science, and industry. Wescor recently acquired Omnidata International, which will allow greater diversification and expansion.

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New Startup Companies, 2004-2005:

Andigen - Continues to rapidly land new customers and build anaerobic digester facilities. Three new facilities have been constructed in the last few months.

CastleRock Engineering, Inc. - a new startup company in Logan, has licensed USU technology called aerodynamic vectoring particle separation, which has the ability to sort tiny particles by size without ever coming in contact with them. CastleRock has recently secured a STTR grant from the National Science Foundation to further develop this technology.

Gemini - started by USU professor John Carman, Gemini has recently been awarded a $2 million federal grant to further develop its seed technology.

Kuchera Defense - a Pennsylvania corporation, signed a license agreement with USU for manufacturing and sale of USU-developed ODIS (Omni-Directional Inspection System) robots. Deployed in Iraq, Afghanistan and Washington D.C., the ODIS robots are credited with saving lives and are planned for expanded use in the war against terror.

RappidMapper - USU researcher Robert Pack has created a Texel (text-element) camera using a tripod-based instrument to make 3-D photography possible. Utah State’s Center of Excellence (Center for Advanced Imaging Lidar) licensed its 3-D camera technology with a Salt Lake City-based company, RappidMapper, Inc.

U of U and USU leaders believe the USTAR initiative will greatly improve their ability to jumpstart new companies and create high-paying jobs for Utahns. The initiative is not a high-risk proposal, but a visionary effort that will simply accelerate what is already happening at the state’s research universities, with the added benefit of leveraging the research and marketing to innovation centers around the state.


IN THE NEWS

Economic Development Headlines

Huntsman Breaks Off Talks with Buyers

- Salt Lake City-based Huntsman Corp. broke off talks with potential buyers after receiving bids that were too low. It also said fourth-quarter profit was hurt by $140 million in hurricane-related costs. (Morning News) (SL Tribune) (Bloomberg)

Spectrum Editorial Says USTAR Isn’t Equitable

- “USTAR is a roll of the dice with an ever-changing and evolving technology industry - and its benefits would be concentrated on the Wasatch Front.” (Spectrum)

Franchises Increasingly Popular

- According to a 2004 study by the International Franchise Association and conducted by PricewaterhouseCoopers, more than 760,000 franchised businesses directly employed about 9.8 million Americans. (Morning News)

Economy in Orem Looking Up

- Orem officials are cautiously optimistic halfway through the fiscal year with a budget that's encouraging growth after years of disappointment. (Daily Herald)

Tribune Writer: Guv Keeps Public in the Dark on Subsidies

- Gov. Jon Huntsman Jr. pledged a more open government during his campaign. Yet after his first year in office, Utah is more secretive than ever in how it doles out millions in taxpayer subsidies to lure companies to expand or relocate to the state. (SL Tribune)

So. Utah ‘Go West Summit’ Draws Tour Operators

- More than 100 tour operators from around the world have been enjoying some quality time in Southern Utah this week for the Go West Summit at the Dixie Center. (Spectrum)

Envirocare CEO Has Big Plans for Waste Giant

- Utah businessman Steve Creamer is anything but done building a nuclear-waste empire. On Thursday, he and his partners in Enivrocare of Utah announced they bought BNG America, a company that manages and cleans up nuclear reactors and highly contaminated sites. (SL Tribune here and here) (Morning News) (Press Release)

Macy’s Plans Strong SLC Presence

- Macy's is the latest retailer to join those who eagerly await the unveiling of final plans for the LDS Church's downtown mixed-use development. But the store, formerly known in Utah as Meier & Frank, said Thursday it "certainly will have a very, very strong presence" in the $500 million project. Macy's now operates eight Meier and Frank stores in Utah. (Morning News)

Utah Forges Ahead on Economic Initiatives

- Utah has fallen short in an attempt to nab millions of dollars in federal funds to boost economic development, but an official who helped prepare the state's application says it will move forward with its initiatives anyway. (Morning News)

Creighton Index: Utah Economy Strong

- Increased activity in the energy sector and growth in demand for big-ticket items helped keep the Utah economy strong and steady in January, according to a monthly index of local business conditions. (Standard-Examiner) (SL Tribune) (Morning News)

Macy’s Promises a Step Up

- Utah's eight Meier & Frank stores may get far more than a Macy's nameplate starting in September. Macy's is planning neater, better organized and more brightly lit stores with wider aisles and a better variety of higher-quality merchandise, a company spokeswoman said Thursday. (SL Tribune)

USTAR Initiative Gains Early Senate Approval

- A science and technology initiative with a nearly $200 million price tag was given preliminary approval Wednesday by the Senate. The Utah Science, Technology and Research Economic Development Initiative, better known as USTAR, is needed to stop the decline in the state's share of the high-tech market, sponsoring Sen. Al Mansell, R-Sandy, said. (Morning News) (Daily Herald) (SL Tribune)

Utah Economy Expected to Grow, Despite Concerns

- Forecasts of moderate economic growth may be tempered by continuing concerns about energy costs, according to the latest report from Wells Fargo. (Morning News) (Daily Herald)

Ogden Redevelopment Indecision Frustrates Businesses

- Some owners of businesses that would be displaced by the Ogden River Redevelopment Project are frustrated by the city's indecision and extended deadlines for buying their properties. (Daily Herald)

Micron Says 50 New Jobs in Lehi Just the Beginning

- Quietly, with nary a microbit of the hopeful fanfare and choreography of its 1995 groundbreaking, Micron Technologies' sprawling Lehi complex has at long last begun ramping up for production. (SL Tribune)

2005 Volume Highest for Envirocare

- Last year was Envirocare of Utah's best, at least in terms of volume. (SL Tribune)

Delegates to Plug SLC in Torino

- Salt Lake City is trying to capitalize on the image it projected four years ago as a gracious Olympic host sister. A few key officials from the city, state and tourism offices will take their promotional message to Torino during the 2006 Winter Olympics, which begin Feb. 10. (Morning News)

DHL Breaks Ground on New SLC Service Center

- DHL, a global express delivery and logistics company, has announced plans to expand its operations in Salt Lake City and construct a new service center facility at the Salt Lake City International Airport. (Utah Business Magazine)

CEDO Names New Incubator Board Members

- The Commission for Economic Development in Orem (CEDO) today announced its Small Business Incubator 2006 board members. (connect)



CALENDAR

Feb. 10-12:  EDCUTAH Site Consultant Event (Park City)

March 8-9:  Big Business and Technology Expo (Orem)

March 23:  EDCUTAH’s Quarterly Investor Update

April 6-7:  Utah League of Cities and Towns Spring Convention (St. George)

April 9-12:  BIO 2006 Annual Conference (Chicago)

April 23-26:  CoreNet Global Summit Spring Convention (Philadelphia)

May 3-4:  Salt Lake Chamber Business-to-Business Expo

May 21-24:  ICSC Spring Convention (Las Vegas)


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