BusinessTN

Dr. William L. Stone didn’t intend his prolific academic career as a research scientist to steer him into the business world.

But that’s exactly what happened when East Tennessee State University in Johnson City approached the tenured professor of research at the university’s James H. Quillen College of Medicine with an experiment of its own that molded Stone into a biotech entrepreneur.

Two years ago Stone created Bio- Inventions, a limited liability company and one of the first tenants in the ETSU Innovation Laboratory incubator, nestled conveniently between the university’s campus and Johnson City Medical Center.

Along with two other scientists, Stone is developing three patents donated by Eastman Chemical Co., including a common food antioxidant called TBHQ (tert-butylhydroquinone) that can be found in potato chips and has been shown to lower cholesterol in laboratory rats. Stone himself co-authored this patent, making him a prime candidate for an academic-to-entrepreneur transformation.

Scientists making money from intellectual property is certainly not a new concept, but for Michael Woodruff, vice provost for research at the university, this idea for ETSU was a bit absurd—at first.

“I went ahead and agreed to do it—in part because I thought it was such a stupid idea that nobody would ever fund it. Given our lack of experience in this, I wondered if it would fly. It did, and we got funded,” Woodruff says.

Despite his gut reaction, the vice provost made some calls to Eastman officials who agreed to donate the patents that Woodruff felt best fit the university’s academic strengths.

“Out of all the people in the college of medicine, Dr. Stone is one of the most open-minded and visionary in many ways,” Woodruff says.

Stone jumped at the chance to open and run his own research and development firm, but he wasn’t exactly business management material—at least not yet.

After being led through a whirlwind business how-to program taught by a team of business and technology post-graduate students and local business mentors, Stone learned how to call the shots as a business manager as well as the lead inventor.

Next, the ETSU Research Foundation— the first of its kind in Tennessee to handle not only intellectual property, but also contracts, real estate (including the ETSU Innovation Lab), grant funding and donations—gave part of a federal grant from the National Science Foundation to satisfy Stone’s startup needs.

At the same time, Stone received his first $100,000 of seed money through a coveted small technology transfer grant, compliments of the National Institutes of Health (NIH), to begin research on TBHQ.

“This turns out to be a win-win situation for everyone involved. Now that [we have] secured initial funding, we’ll be able to hire people, therefore creating high-tech, biotechnology jobs in the local area, and also creating a pool of trained people for further expansion,” Stone says.

The potential success of his company also bodes well for the university, since Stone will contract roughly half of his budgeted projects to the college of medicine.

His research on TBHQ soon will make the leap from rats to clinical trials on humans. All the while, he has to keep the grant money flowing.

Pending a second-phase $500,000 fund from the NIH, Stone will be able to approach venture capital firms willing to gamble on biotech in the Tri-Cities area.

The moneymaking potential of these patents, Stone says, can bring million of dollars in research grants into the community.

“It only takes one patent that becomes a real hit to considerably improve the funding situation of the university,” Stone says.

For BioInventions, that one hit may be just a few years away.