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MAR. 9, 2017 - VOL. 52 No. 6

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COVER STORY

Research sector flourishes in Sioux falls

On the cutting edge of biotechnology, scientists are crafting materials so the body can regrow chunks of bone. Doctors are identifying the first cell that spawns devastating cancers. Engineers are using micro-organisms to produce new materials for sustainable everyday furnishings. These sorts of innovations were once relegated to the U.S. coasts; now they are happening in Sioux Falls.

Businesses that specialize in biotechnology are moving from fledgling endeavors into rapid expansion. Bioscience uses biology-based techniques to solve problems in life. In Sioux Falls, the focus is primarily in medicine and energy, but biotechnology work ripples across industries.

Medically Necessary

Much of the focus of biotechnology in Sioux Falls interweaves with medicine. South Dakota boasts roughly 275 active medical clinical trials, and a large portion of those are operating in the Sioux Falls region. That is due largely to the presence of the area's two major health systems.

"If Avera were not here, if Sanford were not here, we wouldn't be able to do this," biotechnology business consultant Christoph Bausch says. He says bioscientists see an obvious advantage in this part of the country.

"If you have a drug you're developing or a diagnostic test you're developing, you want to work with the doctors and the physicians at the hospitals, because you know that they're giving you the first boots-on-the-ground feedback of, 'This is why it's important to my patients. This is why it's important to this community here,'" states Bausch. "You need that kind of interaction. If you don't have that, you're off on an island, and you're not going to have a high probability of success without the support."


Christoph Bausch
Independent Biotechnology Industry Consultant

Those partnerships exist on multiple medical projects at the USD Graduate Education and Applied Research (GEAR) Center in Sioux Falls. Dr. Dan Engebretson leads the GEAR Center.

"We're developing the next generation of drug-coated balloons," Engebretson says. "Doctors go in and do angioplasty to open the artery up, and you leave some drug behind so it doesn't scar back up and reclose."

Engebretson says the technology in the works in Sioux Falls will lead to better treatment for patients, and he credits Sanford vascular surgeon Dr. Patrick Kelly with jump starting the venture.

"Pat was seeing these problems in his clinic, and he knew of the limitations that the current treatments have. He was able to sit down and talk with one of our faculty and say, 'Hey, how can we do this?' Then all of the sudden, we've got some new patents being formed, technology is being developed, and students are being trained," Engebretson says.

Collaboration is key, too, for projects at Avera. Dr. Ron Utecht is Chief Scientific Officer for Alumend, an Avera research and development company that is studying proteins to develop innovative therapies.

"If we cross-link proteins together, that can apply to various potential diseases," Utecht explains. "We can apply it to vascular. We can apply it in orthopedics. We can stretch a little bit and apply it to drug delivery."

Utecht says natural vascular scaffolding (NVS) can help doctors repair damage to meniscus cartilage; the liquid solution eliminates additional surgical techniques. "Rather than sutural or stapling, one could place it between the tissue, apply pressure, activate it with a blue light, and then chemically cross-link all the proteins in that tissue to give us basically a healing effect."

Utecht says Alumend could use a related protein strategy to replace stents in arteries. Current technology can fail and blood vessels narrow. "If you put a metal stent in the artery, you severely limit your future options," Utecht says. "If they can treat a patient without sticking metal in a patient, that's good for a number of reasons."

Utecht says NVS allows certain drugs to work inside the body instead of washing out too soon. Because of the robust health care community, efforts to improve medical outcomes and elevate patients' lives are thriving in Sioux Falls.

Rooted In Agriculture

Biotechnology taps into South Dakota's number one industry as scientists work with partners in agriculture to develop new materials. The most prominent example of this is POET discovering how to utilize corn for fuel instead of feed.

"That was the first start of how you can leverage agriculture resources to produce more advanced bioproducts," Bausch says. Companies can utilize dairy products for higher-value proteins, and they can also harness the power of micro-organisms and manipulate them to make real world items.

"Eighty percent of the stuff in this room right now is coming from chemical-derived products, most of it from a petroleum-derived point right now. We can do the same thing with agricultural feedstocks and convert it into the same products," Bausch says.


Rich Naser
USD Discovery District

Proximity to producers is critical to success in the business of bioscience. "If you're in agriculture, you want to be in that environment where you know that you can talk to the customer. You can also talk to the groups that you're getting your feedstock from so that you can build a very good product at the end of the day where you know there's a market for it and you can de-risk this whole investment," Bausch says.

The ag industry allows researchers to start with experiments that lay the foundation for more advanced science, including steps toward stem cell-related research.

"We're going to take the Midwestern conservative approach and build on what we have strategically and find areas that we can be competitive-better than anybody else in the country-and leverage the resources around us," Bausch says. "That allows us to move up that value chain in technology advancement and then start moving into other areas. We get to watch where that puck is going and not skate towards what's today."

Impact: Beyond Biotech

The reach of bioscience extends well beyond medicine and energy. The direct effect of growth means fewer white lab coats and additional suits.

"As you get to a certain point, there's more non-research employees than there are research-based employees. So you have technicians but you're also going to need very sophisticated financing people, legal counsel, all those sorts of things," says Rich Naser, president of the USD Discovery District.

According to Naser, biotechnology companies pay workers an average salary that is 57 percent higher than South Dakota's median income. That means employees often make more than $60,000 each year. Naser says that translates into an infusion for Sioux Falls' economy.

"This is creating new wealth for the community," Naser says. "It's creating new customers, if you own a restaurant, to come dine. If you're a builder, it's people to buy a house or a nicer house." That increases the tax base on commercial and residential properties. Plus it forges connections across industries.

"There's all the supplier relationships," Naser says. "There's a company in this [Zeal] building called Inanovate. They are commercializing a biomarker that was developed by a researcher at Sanford for cancer. As they move forward, they plan to have a manufacturer in Watertown build their piece of equipment for them."

The entire development process requires significant investment. "These types of technologies and the research that go into that aren't cheap," Bausch says. "You have to hire very well-trained research scientists to make sure that the research progresses. And also the technology development is an expensive endeavor, so you want to be surrounded by partners that can support you."

Bausch says the creation of intellectual property (IP) is a crucial facet of scientific work happening in Sioux Falls, because professionals are developing things that are brand new.


Research scientists at the GEAR Center have access to an Atomic Force Microscope-and instrument used to measure mechanical forces between cells and their environment. Dr. Dan Engebretson says that providing access to the necessary tools and lab space is one key element to keeping highly trained students in South Dakota when they start their careers.

"Instead of saying, 'Anybody can do this on the face of the planet; it just takes willpower,' you now have a secret sauce that no one can do it but you, because you own the rights to that technology," Bausch says. "That's another very powerful thing when it comes to developing business."

The drawback is that the limited space available in Sioux Falls means only so many projects can happen right now. "There's no wet lab space for these companies to continue to grow. These companies need that unique environment," Bausch says. "They're either going to leave to find it in someone else's state, or we need to provide that for them."

Educating The Workforce

Graduate students in Sioux Falls work one-on-one with doctors in medical practice and top scientists directing studies. The rationale is that doctors see challenges, but they do not have the time or ability to craft solutions. Scientists can develop fixes, but they lack a full understanding of the common issues. In partnership, they complement one another - and graduate students do most of the hands-on experiments.

"Over the past few years, I've worked hard to make sure that my faculty here have ties with clinicians so that we can better see what the actual problems are that we're trying to solve," Dr. Dan Engebretson says. "Because we're just trying to solve problems."

He says higher education is collaborating with existing industry to keep valuable members of Sioux Falls' workforce. "We bring in these smart, motivated, driven young adults, and we invest a lot in their education and training and get them even better than when they walked in the door with the plan of kicking them out," Dr. Dan Engebretson says. "From a business perspective, that's stupid!"

Engebretson says partners need to foster environments that allow intelligent students the potential to build lives in Sioux Falls, and that starts at the GEAR Center. "I've got millions of dollars' worth of stuff upstairs that they get to get in and work with. Let's try to get them to stay here," Engebretson says. "Rather than training somebody and then sending them off to California, I want to train them and then have them start their own business here. To that end, we're having some success."

Engebretson lists several graduate students either creating businesses or committing to working on other projects in Sioux Falls, and they have access to innovative techniques and modern equipment.

"This is creating a diverse set of opportunities to retain the best and brightest who are coming through our post-secondary schools," Naser says. "It's giving them opportunities to participate in something like diabetes research or genetic research, creating a product and impacting the world in some sort of treatment or cure right here from South Dakota."

Naser says just one generation ago, professionals had to leave South Dakota to gain experience in their fields. Now he says Sioux Falls is poised to nurture careers in science, so people who love the area can design their dream jobs in the place they want to call their forever home.

Collaborating For Discovery

The emerging USD Discovery District in Sioux Falls is a physical manifestation of the burgeoning scientific sector. The academic and research park in development connects education, public efforts, and private business. The final project will boast 1.1 million square feet and offer workspaces for 2,800 people. President Naser says, "We are developing resources, infrastructure, and strategy to grow the industry. This year, we'll be building roads. Hopefully we'll be announcing the first building or buildings this year."

All of that work contributes to the Sioux Falls economy. Local materials and construction work are necessary for construction. Federal grants are helping fund the roads. The University of South Dakota is contributing money; so is the City of Sioux Falls. Forward Sioux Falls is contributing $1.25 million to the USD Discovery District.

"$500,000 of that is for infrastructure construction, and $750,000 is to assist in the development, operations, and marketing of the District," says Dave Rozenboom, Forward Sioux Falls campaign co-chair.


The Graduate Education and Applied Research (GEAR) Center in northwest Sioux Falls (pictured below) is the first research facility in the USD Discovery District. When complete, the 80-acre Discovery District will include up to 26 buildings creating an innovation community combining research, education and business.

Rozenboom says Forward Sioux Falls has a long history of recognizing the value of science and technology. It dates back to 2002 when the Sioux Falls Area Chamber of Commerce and the Sioux Falls Development Foundation created a place now known as the Zeal Center for Entrepreneurship.

"They're the originating institutions, so not only did they provide capital for it but also governance," says Rozenboom. "It was infrastructure, but it wasn't just a facility. It was leadership so that effort could succeed."

In 2009, Forward Sioux Falls helped establish the GEAR Center. Rozenboom says the USD Discovery District is a natural third step. "That really fills out the last piece of the puzzle... creating a research park where now companies can go from an entrepreneurial concept to a more in-depth applied research and now actually to commercialization."

Into The Future

"We're kind of all in it together. There are 850,000 people in South Dakota, which means that we're less than one-third of a percent of the U.S. population," Naser says. "So we'd better work together to be successful."

Naser says the biggest challenge facing biotechnology development in South Dakota is the same one that other industries encounter: finding the right people for the work.

"It's important for Sioux Falls as we struggle and need to attract more people here. Our biggest deficit is human capital today," Naser says. "People move here for what? People move here for jobs. These companies are creating a new level of jobs."

Biotechnology professionals are becoming more mainstream as people recognize the tangible results of work in the lab. "A lot of people think that the research faculty are nerdy and kind of in their own world - and, to some degree, they are," Bausch says. "But they're also very innovative minds that can look at these types of things and look outside the box occasionally in a way the companies can't do on their own, and having those collaborations just helps make it a better environment to find solutions to problems."

State and city leaders are emphasizing bioscience in economic development strategies. Higher education, business leaders, and private professionals are committed to work in biotechnology. This development of innovative materials and strategies in Sioux Falls laboratories not only diversifies the economy and benefits companies across industries, but it has the potential to revolutionize our lives.


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