Tech Tour Day Five: Kalamazoo Tech Rules
Upjohn Co. may be long gone, but the life sciences industry in Kalamazoo is alive and well.
Time and again the legacy of Upjohn, as well as the multibillion-dollar Kalamazoo medical device maker Stryker Corp., turned up in the tech company startups I saw Thursday as the Great Lakes Innovation and Technology Report visited Michigan’s southwest corner.
(Check out my photos from the road: http://detroit.cbslocal.com/category/GLITR-tech-tour/)
My day started bright and early at 8 a.m. in Western Michigan University’s Business, Technology and Research Park, a former university cornfield on Kalamazoo’s southwest side that’s now a thriving tech park.
Kris Eager founded Tekna Inc. in 1988. Eager, a 1980 graduate of Western Michigan University in industrial design, had worked for Huffy Bicycles and Stryker Corp. before striking out on his own — with Stryker as his first customer.
Eager would spend nearly a decade as a one-man company before hiring his first employee in 1997. Not long after that, the company’s explosive growth started, as customers started asking him to expand into mechanical engineering and actual manufacturing of products.
Today Tekna offers full turnkey manufacturing, from designing products to making products to shipping them.
“This works really well for an entrepreneur, somebody with just the idea for a product,” Eager said. “We tell entrepreneurs, we know how to deal with the FDA and regulations, just let us make it here.”
One recent example — a New Jersey obstetrician-gynecologist who came to Stryker with a rough product idea. Stryker referred him to Tekna, which took things from that rough design. This doctor now sells $1 million worth of his product a year, all made in Kalamazoo.
The company moved to the WMU tech park in 2006. Its 34,000-square-foot office and manufacturing plant is now packed to the ceiling, so the company is looking at expanding onto adjacent land. The company now has 40 employees and has worked on a total of 300 medical devices.
Eager said Tekna is currently hiring, and has added seven engineers and designers over the past few months.
“Part of the gift of working with Stryker is that there’s a ton of work,” Eager said. “They have no industrial designers on staff, so all their stuff comes through us. When they find out we have five more, they say, ‘Here are five more ideas.'”
Nice problem, eh? More at www.teknalink.com.
The company has also added a product line of its own — the Medic mobile treatment table for athletic sidelines, from subsidiary Impact Athletic. Coaches, check out www.impact-athletic.com and start begging your athletic director and booster club for them — they’re really cool.
My next stop was at the downtown Kalamazoo office of Southwest Michigan First, the local economic development agency, whose vice president Heather Smith did fantastic work putting together my schedule for the day. At SMF I met with Joel Mueller, founder of the wildly popular Web site MacUpdate.com.
Mueller said he started MacUpdate while still in high school in Suttons Bay. He originally intended to be a Web designer, but learned in an internship that to have much freedom, you have to own the company. So after graduating from Northwestern Michigan College in 2000 and Western Michigan University in 2002, he turned MacUpdate from hobby to business.
And boy, did he keep his freedom. He returned to Kalamazoo a year and a half ago, but before that he ran the company while traveling all over the world for more than four years. Included were jaunts to Mexico and Costa Rica and a cross-country trip in a 2000 Porsche Boxster in which he drove no more than four hours a day, and spent the rest of the time talking with locals. (That trip is on YouTube as the “Porsche diaries.”)
MacUpdate’s 10 employees similarly work out of their homes — “or a coffee shop or wherever the customer is,” Mueller said.
MacUpdate is an online platform where people can communicate about and find Apple software. Developers can list their software free, but pay a small fee to MacUpdate for sales. MacUpdate also sells ads on its site, although consumers can pay $20 a year for a membership that means they won’t see the ads.
Mueller said he was raised around Apple products because his parents were educators. His only computer — an Apple laptop.
He said the Mac Update site follows the Apple example of being very simply designed and easy to use. It sure gets plenty of attention — five million unique visitors and 13 million visits a month.
So why is Mueller, who could live literally anywhere, back in Kalamazoo? “Friends,” he answered instantly. “We have a really tight group of friends from college. And Lake Michigan’s close.”
Then it was a short jaunt to Kalamazoo’s North Side to Alumilite Inc., which contrary to its name works in resins, not aluminum. President Mike Faupel, who recently bought the 22-year-old company from its founder, said the name stemmed from an early claim that the products were lighter than aluminum but would do the same job.
Faupel, a Western Michigan University graduate in industrial marketing, joined the company in 1998 as sales manager. The company markets its silicones, urethanes and epoxies to a wide variety of markets, including automotive, medical devices, hobbies and crafts, electrical equipment and marine.
And despite the fact that the company has only eight employees, its products turn up in some pretty high-profile applications, like the mask actor Michael Keaton wore when he played “Batman” in the movie. Restoration of old cars is also a part, since Alumilite’s products can be molded to any given shape in a three-dimensional printer.
Faupel said the company was founded in Kalamazoo because early on it worked with the legendary Shakespeare fishing rod company there, as well as a toy train maker. Customers today include Roush Industries, Denso and Stryker Corp.
Then it was back to Southwest Michigan First for the day’s final three appointments — starting with Metabolic Solutions Development Co., which chief scientific officer and president Jerry R. Colca said has a modest goal: “We just want to prevent diabetes.” Oh, and cure you if you’ve already got it.
Colca and partner Rolf Kletzien both worked in the 1980s at Upjohn Co., the longtime Kalamazoo pharmaceutical company that got swallowed up by Sweden’s Pharmacia, then acquired again when Pharmacia was purchased by Pfizer. Colca said they were working with compounds called insulin sensitizers that appeared to prevent and cure diabetes in mice. The research got waylaid by competition and in 1993, Upjohn got out of the diabetes cure business.
The two men maintained their interest in the compound, which helps the body create a special cell type called brown fat that contains lots of mitochondria, the organelles within living cells that kick up cells’ energy and in many ways makes complex life possible. Obese people lack brown fat cells, which metabolize more glucose and blood fats.
The company has two compounds that might work in trials. One is a relative of the original 1980s drug. The other is a brand-new molecule developed with Kalamazoo-based Kalexsyn, a company spun out of the Southwest Michigan Innovation Center, Kalamazoo’s life sciences incubator.
The drugs also appear to help prevent cancer and maintain brain health, and prevent mitochondrial DNA damage, which is a biomarker for aging. And the first compound has received research funding from the Alzheimer’s foundation.
Metabolic Solutions has an office in downtown Kalamazoo and labs in the SMIC, 12 full time employees and dozens of part-timers and consultants.
The drugs are now in various stages of Phase II clinical trials to determine their clinical efficacy. What does that mean for bringing them to market? “If everything were to go perfectly , we should be able to file an NDA (New Drug Application with the U.S. Food and Drug Administration) in early 2016,” Colca said. That means the drug could hit the market in late 2016 or early 2017.
More at www.msdrx.com.
The next company through the conference room was one I’ve written about recently in GLITR — Lynx Network Group LLC.
This Kalamazoo-based company, founded in 2003, aims to string 1,500 miles of high-speed fiber optic data cable around secondary and tertiary markets in Michigan that don’t currently have much in the way of fast data service — towns like Jonesville, Three Rivers, Benzonia. Lynx also plans to provide broadband backhaul service to wireless Internet service providers.
Founders Chris Barber, Gerald Philipp and Gregg Rutgers all worked together for the old Ameritech Corp. back when it sold wholesale access to Internet service providers during the original Internet boom.
When that ended, they moved on to form Lynx, and now they’re moving from being a reseller to what the industry called “facilities-based” — with their own fiber and switching gear.
Where will they be? “Wherever the major carriers are not putting in fiber,” Philipp said. “We want to level the playing field in Michigan.”
Rutgers pointed out that without high-speed fiber, small towns and rural areas “can’t attract businesses, they can’t attract remote workers — they can’t even attract vacationers who need to keep in touch.”
Lynx is working with Merit Network Inc. on a federal stimulus-funded project in the effort. They have 13 employees now and plan to establish a network operations center soon in southwest Michigan.
Lynx has its first 60 miles installed, and plans to have its entire 1,500-mile network installed by the end of 2012.
My final conversation of the day was with Ron Kitchens, the CEO of Southwest Michigan First, about SMF’s new Medical Device Incubator.
If you’re looking for a building for this incubator, forget it. It’s virtual, and for good reason, Kitchens said.
“We discovered that in Michigan you don’t need to build a medical device incubator,” he said. “Within a two hour drive of here, we have every supplier, manufacturing firm, engineering firm we could ever dream of needing. We contract with existing Michigan firms to do what they do best.”
The incubator has three consultants actively working on deals, telling would-be medical device entrepreneurs that SMF can help make their idea work and turn it into a company.
Kitchens waxed a bit philosophical about economic development: “We in economic development like to think we grow things. But the point is, you put a seed in the ground and it is either going to grow or not. Our job is to tend the soil and make sure the plant gets plenty of light and water and gets pruned correctly and harvested properly. When it comes to the seed growing, I guess you could say only God can make a seed grow.”
Kitchens said the incubator currently has nine ideas for new medical devices moving forward — and plans in most years to take four or so good ideas to market. And developing a medical device is a lot less costly than developing a new drug — $100 million-plus vs. $1.5 million.
Kitchens said Kalamazoo’s long history in medical devices makes it a natural for this effort. “It’s going to be huge here,” Kitchens said. “We have a 100-year history.”
So that was it for my ancestral homeland (well, close enough) of Kalamazoo. A fine city that’s a good blend between small-town comfort and big-city amenities. And a place with a private sector and a university both cranking out great economic ideas. Now it’s time to move on to the Tech Tour’s final stop, Lansing. Read all about my adventures in the state capital on Monday! (Or Sunday night online if you want to peek early!)
More from my Spring 2001 Tech Tour: http://detroit.cbslocal.com/category/GLITR-tech-tour/.