Firm's spin-out agreement with UW targets algal biomass industry

By University of Wyoming | May 13, 2013

PlanktOMICS Algae Bioservices recently finalized a spin-out agreement with the University of Wyoming in a deal that will allow the company to further its goal to be an innovative leader in providing biotechnological services and products for the emerging algal biomass industry.

Located in Laramie, Wyo., PlanktOMICS has developed a service business that expedites the highly technical process of domesticating algae for agricultural and industrial production. These services are designed to maximize algal growth and productivity while saving time and money for clients, which include private companies along with government and university labs that conduct research on algae.

Under the license agreement with UW, PlanktOMICS has the right to develop its patent-pending technologies into commercial ventures, said Davona Douglass, director of the UW Research Products Center. In return, UW will receive some equity in the company. When PlanktOMICS begins selling its commercially developed products, the university will receive royalties on the products that employ the patent-pending technologies. Income derived for the university will support other research and patent activities, Douglass said.

PlanktOMICS principal partners Stephen Herbert, a UW professor of plant sciences, and Levi Lowder, a UW doctoral candidate in molecular and cellular life sciences, will focus on serving small companies that need to solve problems relative to their algae needs.

PlanktOMICS provides advanced phenotype analysis (testing biological traits) and screening services, custom algal vector design and construction, algal transformation and gene-expression analysis, according to its website.

“We’re here to solve problems for other companies that want to produce algae at large scales,” said Herbert, who serves as the company’s CEO. “We see our role as building up research capacity of these small companies that don’t have enough capacity for research.”

“Our services are tailored to companies that want to outsource their biological studies or biological research,” added Lowder, who is PlanktOMICS’ chief technology officer. “We don’t really produce the end products. We do the biology. You have to know how to grow algae. That’s where we come in, to figure out how to farm algae on a large scale (for other companies).”

The five patents that PlanktOMICS has filed, to date, for its technologies do one of two things, Herbert said. One is to control unwanted algae and other microbes in algae ponds where algal biomass is produced. Part of this technology is to make the desired algae resistant to algaecidal chemicals, similar to how crops, such as corn and soybeans, are now resistant to herbicides used to eradicate weeds. The second technology allows low-cost biological harvesting of algal biomass by causing the tiny algal cells to stick together into clumps for easier separation from culture water. This harvesting technology is especially well suited for large-scale production, Lowder said.

Douglass worked with Herbert and Lowder to file patent applications on their novel technologies. The Research Products Center identifies new technologies developed at UW; protects the technologies, usually by filing patent applications; and then negotiates license agreements for the technologies.

“We’re really excited about another Laramie business that will develop UW’s patent-pending technology,” Douglass said. “These are cutting-edge technologies that would never be able to help our country if they were just stuck in the lab. This is a way to get research to the marketplace to benefit society.”

In 2012, Lowder and his PlanktOMICS team were judged the top proposal in the John P. Ellbogen $30K Entrepreneurship Competition at UW. PlanktOMICS won $12,500 and one year of free rent to further develop the company at the Wyoming Technology Business Center.

PlanktOMICS will take advantage of that rent-free year starting later this summer, says Herbert who, in his academic capacity, serves as Lowder’s adviser.

The WTBC is a statewide business development program (under the UW Office of Economic Research and Development) that is developing a business incubator and an outreach program focused on early-stage, high-growth companies.

Lowder termed the WTBC “indispensable” and said the program has helped PlanktOMICS develop a business plan, which included a sales and marketing strategy.

Herbert agreed, saying the WTBC “has been extremely supportive” and was instrumental in giving Herbert and Lowder the push to form a company. One key bit of advice proffered: Avoid taking outside investment money until the company is bringing in revenues.

“Algal biomass production has a bright future, but you want to make small bets at this point,” Herbert said. “We hope to have (office) space in town within three years.”

“I’m really high on PlanktOMICS. I think they have a really great future,” said Jonathan Benson, CEO of the WTBC. “It’s an interesting business. They have a service business, but they also have technology. They can go a lot of different ways.”

Benson added the WTBC just finished creating lab space for the company in the business incubator. He expects PlanktOMICS to move into its space during July.

Herbert and Lowder say PlanktOMICS already has two clients, which they declined to name for reasons of confidentiality. However, the two did elaborate that one company has produced algae as nutritional supplements for more than 30 years. The other company produces chemicals that control algae growth, such as in ponds or roadside ditches.

That initial business will result in PlanktOMICS bringing on two interns for the summer, Lowder said. If the company continues to garner clients, Herbert and Lowder foresee needing 20-25 employees within the next five years.

“We want to create good jobs for people who are trained at UW and at community colleges,” Herbert said.

While providing expertise and service is the initial focus for PlanktOMICS, Herbert and Lowder eventually would like the company to expand into creating high-value, cost-effective products from algae. Animal feed, biodiesel, bioplastics, liquid fuels and nutraceuticals, such as dietary supplements and herbal products, are products currently produced using algae.

“Ultimately, everyone would like to make something,” Herbert said. “One of the best ways to bring new technology about is to cooperate with other companies. Our service model lends to that.”

Herbert has a few ideas. The demand for a cost-effective source of autolysin is rising as companies ramp up their research efforts, he said. Autolysin is an enzyme that digests the cell walls of algae. Such a chemical product could be used to release oils from algal cells with high efficiency. Another near-term opportunity is development of less toxic algaecides to remove unwanted algae from ponds and ditches, Herbert said. In addition, genetically modified algae could be used to remove metals and toxins from water and soil, a process known as bioremediation.

Because Wyoming has a large agricultural economy, there are opportunities for PlanktOMICS to make a difference and help diversify the industry, Lowder said.

Crops in Wyoming are traditionally irrigated, where the water either seeps into the ground or evaporates, Lowder said. By growing algae in tubes or covered ponds, evaporation is minimal and water can be reused, which makes the process water-efficient, he said.

“It’s very applicable to Wyoming agriculture. Algae can be very water-wise,” Lowder said.

Algae also could be grown in Wyoming to produce animal feed, such as fish food, which is high in protein and nutrition for livestock.

“I think this is agriculture for the 21st century,” Lowder said.


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