Biotech company plans Wisconsin facilities

A Minneapolis biotech company plans to open shop in the Madison area, with a factory and headquarters that could employ more than 200 people in two years.

Excorp Medical - an ambitious 9-year old company that also is establishing a branch in China - has developed technology that uses pig liver cells to cleanse toxins from the blood of people whose livers are too diseased to function.

While the company likely will keep some functions in Minneapolis, Excorp Medical wants to move its primary operations to the Madison area. It's a better fit, said Dan Miller, president, chief executive officer and a company founder.

"Minnesota is very successful in the medical device industry," Miller said. "Madison has a different strength altogether that more closely matched."

The idea is to provide temporary help for the liver until it can regenerate - it's the only organ in the human body believed able to do so - or until a liver transplant can be performed.

"Often, people term this 'liver dialysis,' but that's not correct," Miller said. "In dialysis, you filter away the toxins and wash them out. In our case, the benefit comes from the metabolic action of the pig cells. We don't remove anything from the patient."

A patient is treated for a 12- hour period, "and we see a clear effect during that time," Miller said.

Excorp Medical - a contraction of "extracorporeal," or occurring outside the body -was established in 1996 and is based on research at the University of Minnesota. The company has conducted animal trials and has treated five people in initial tests at the University of Pittsburgh's Thomas E. Starzl Transplantation Institute.

"I think it's the best chance the U.S. has right now to have a system up and functional," said Jack Patzer, assistant professor in surgery and bioengineering and coordinator of the artificial liver clinical program. That's not a guarantee the technology will work, but there are no other competitors, Patzer said.

Animal trials have shown that reducing toxins in the liver also protects the heart, lungs, brain and kidneys from damage, Miller said.

"It's the failure of these organs that's actually the lethal event for the patient," he said.

The system could also hold promise for cleansing other types of human cells, such as pancreatic cells, he said.

The Food and Drug Administration has approved phase 1 and 2 clinical trials on the patented system, testing its safety and collecting data. That will take about a year; then phase 3 trials, to test the effectiveness of the technology, are expected to take another year.

If all goes well, Excorp Medical will be ready to begin producing bioreactors in 2007, Miller said. Site selection for a manufacturing plant and eventual company headquarters is expected to get under way this fall.

Miller said Excorp Medical has to be in the Midwest to be close to the source of its key raw material - pigs - and it will need access to good transportation to ship the bioreactors to hospitals and clinics.

He considered several cities for the manufacturing plant, including Memphis, Kansas City and Cleveland, and chose the Madison area.

"When you look at Madison, you see several hundred biotech companies, many of which are very successful, with good transportation and a first-rate research university," Miller said, along with a stable of attorneys, accountants and other business services firms that have experience dealing with biotech companies.

"There's a real sense of what biotechnology is all about, going back about 25 years," he said.

Miller said he has targeted an area "somewhere in the Madison-Milwaukee-Beloit triangle" for a bioreactor factory.

Excorp Medical also will have to set up or contract with a pig farm with exceptionally healthy conditions. Wisconsin is a leading contender for that, too, company spokesman Joel Papa said. (And no, the pigs don't survive, although their liver cells live on.)

With five employees, Excorp has received several federal grants and about $10 million from angel and private equity investors so far, Miller said. He's hoping for help from state programs, also.

"The state of Wisconsin has been enormously responsive," Miller said. No specific promises have been made yet, he said, but added, "Wisconsin gets it. They understand what we do and are already talking about where we can go from here."

Excorp Medical said its system could be used for as many as 700,000 liver procedures a year in the U.S. alone, pegging the market potential at more than $7 billion annually.

"Everything I've seen so far tells me that (Excorp Medical's plans are) realistic," said Tom Still, Wisconsin Technology Council president.

Madison would be a good match for Excorp Medical, Still added, with UW Hospital's highly regarded liver transplant program and UW-Madison's Waisman Center's ability to conduct large-scale clinical trials.

Excorp Medical's plan is "intriguing," said John Neis, senior partner of Venture Investors, a Madison venture capital firm. "It's a very ambitious story," he said. His company has not invested at this time.

Meanwhile, Excorp Medical already has an agreement to start building a bioreactor factory in China, where liver failure is a leading cause of death, Miller said, and it could be ready within two years.

"We think there are 40 million people there with liver cancer; it's clearly a huge public health issue," he said.

Judy Newman Wisconsin State Journal
Contact reporter Judy Newman at 608-252-6156 or jdnewman@madison.com.