MINUTES
Kansas Bioscience Authority
Investment Committee
April 2, 2009
11:00 AM – 12:45 PM
Call to Order: A quorum being present, the meeting of the KBA Investment Committee was called to order at 11:00 a.m. by Chairman Dr. Smilor. Additional Directors participating were Angela Kreps, Sandra Lawrence and Ed McKechnie. The KBA staff in attendance included Tom Thornton, Janice Katterhenry, Chuck Willis, Cary Nourie, Bret Healy, Terry Osborn and Marsh LoScalzo. Various members of the public were in attendance. Jeff Ellis of Lathrop & Gage was present representing legal counsel.
Review of the Minutes: Dr. Smilor asked for a motion to approve the minutes of the March 5, 2009, meeting. Mr. McKechnie moved to approve the minutes, Ms. Kreps seconded and the minutes were unanimously approved by the Committee.
Dr. Smilor noted that there was an error in the minutes from the February 5, 2009, Investment Committee meeting. The minutes reflected recommended funding for consideration as a KBA Rising Star at $700,000. The amount actually approved was only $10,000 for the external evaluation. Funding of the full amount will be considered at a later date after completion of the review.
Dr. Smilor referred the members of the Committee to the detailed presentations contained in the Investment Committee book previously sent to members of the Committee and asked staff to present its recommendations.
Archer Daniels Midland – R&D Voucher Program (Tab 3 of Committee Materials). Bret Healy gave an overview of Archer Daniels Midland (ADM) and its proposal. ADM, an Illinois-based company with five processing plants in Kansas and a technical center in Overland Park, has been working with Kansas University’s (KU) Center for Environmentally Beneficial Catalysis (CEBC). It is a leader in biorefining and has been performing R&D and commercializing new products and processes in the areas of crop-based fuels and chemicals. ADM is a leading producer of ethanol, biopolymers, and other biochemicals. To pursue the R&D and commercialization goal, ADM is proposing to form a multi-year collaborative R&D relationship with the CEBC at KU. This is a three-year project with ADM providing $1.2 million, to be matched by an equal amount of KBA funds. KU will provide in-kind R&D support valued at $334,289 (28% match of KBA funding). It was noted KBA staff recommended waiving the 75% policy given the presence of over 500 ADM employees in Kansas and waiving the usual 2 year limitation as the research will be conducted over a three year period. It was also noted that KBA staff will work with ADM to segregate into the appropriate NAICS codes resultant to deployed research in Kansas ADM facilities.
The Committee members asked questions about the operations and vision of the company. Both Mr. McKechnie and Dr. Smilor expressed their appreciation to ADM for its commitment to Kansas and noted that this project was an excellent example of what KBA was trying to secure for the state. After thorough discussion, Mr. McKechnie made a motion to recommend to the Board for approval the staff's recommendation that KBA provide $1.2 million in matching funds, over the three-year course of the project. Ms. Kreps seconded the motion, which passed unanimously.
Ms. Kreps noted for the record that in her work at Kansas Bio, there have been opportunities to engage with the organization being discussed, but that there is no conflict with regard to her participating in the discussion or voting on the recommendation.
NanoScale, Inc – Matching Fund Program (Tab 4 of Committee Materials). Dr. Smilor noted for the record that Bill Sanford, CEO and Chairman of the Board of NanoScale and member of the KBA Board, has not been involved in any way in the preparation of the proposal, has not participated in the evaluation of the proposal by the KBA and had recused himself from participation in the discussion of this proposal.
Cary Nourie introduced the company and gave an overview. NanoScale is requesting $50,000 as a partial match of the funding for an awarded NIH Phase I SBIR grant related to bioscience research and development in the area of novel detection and treatment agents for cancer. NanoScale will use KBA’s investment to refine its application of iron oxide nanoparticles specifically to improve contrast for MRI imagery when used to detect cancerous tumors in the body.
Staff recommended that KBA invest $50,000 in matching funds to support NanoScale's NIH Phase I SBIR grant of $150,000 to develop Functionalized Bimagnetic Core/Shell Fe/Fe 304 Stealth Nanoparticles for Diagnostics and Treatment of Cancer.
Ms. Kreps stated for the record that the members of the NanoScale organization are represented at Kansas Bio, but that this does not preclude her from the discussion or cause any conflict of interest. She noted that the project was evidence that the non-NIH community was working well together, and she enthusiastically supported the project.
After Committee discussion, Ms. Kreps made a motion to approve staff's recommendation to the Board. The motion was seconded by Mr. McKechnie and passed unanimously.
Presentation Collaborative Cancer Research – Project Prioritization Program (Tab 5 of Committee Materials). Mr. Thornton noted that this discussion is a follow-up to the request of Dr. Smilor and the Investment Committee regarding how the University of Kansas prioritizes its drug and delivery projects internally. The KBA staff has worked with the KU team and believes KU has an excellent strategy. With this discussion and with the Committee's concurrence, this strategy would establish a precondition for KBA to advance other collaborative cancer research initiative applications that were deferred at the last Investment Committee meeting.
In response to a question from Dr. Smilor, it was noted that the budget set aside for the initiative was $2.5 million with $750,000 having been committed to date.
Sandra Lawrence joined the teleconference at 11:43.
Dr. Scott Weir described the prioritization program. He explained that the program establishes an industry approach within the University to prioritize projects and manage its portfolio. The projects funded are milestone driven; Kansas University dos not award block grants. The drug discovery delivery development program is one of the differentiating features.
Mr. McKechnie observed that certain matters related to this discussion would involve disclosure of information which, if disclosed, would be harmful to the competitive position of the KBA. He, therefore, proposed going into executive session before covering the remaining two investments to be considered by the Committee at this meeting.
MOTION TO RECESS INTO EXECUTIVE SESSION: Upon a motion made by Mr. McKechnie, seconded by Ms. Kreps, and unanimously approved, the Committee moved to recess into executive session as permitted under the Kansas Bioscience Authority Act to discuss an investment and operational strategies relating to the potential funding of rising star candidates in order to protect the personal and proprietary information of such candidates and to protect information which, in the opinion of the Committee, would be harmful to the competitive position of the Kansas Bioscience Authority if disclosed . The executive session shall begin at 12:00 p.m. and will last 10 minutes. The meeting will reconvene to open session in this conference room at 12:11 p.m. Included in the meeting will be all members of the Investment Committee, Tom Thornton, Jan Katterhenry, Chuck Willis, and Jeff Ellis, legal counsel.
Return to Open Session: Upon a motion made by Mr. McKechnie, seconded by Ms. Kreps, and unanimously approved, the Committee reconvened in open session at 12:10 p.m. No action was taken in executive session.
MOTION TO RECESS INTO EXECUTIVE SESSION: Upon a motion made by Mr. McKechnie, seconded by Ms. Kreps, and unanimously approved, the Committee moved to recess into executive session, as permitted under the Kansas Bioscience Authority Act, to discuss an investment and matters which, in the opinion of the Committee, would involve information which would be harmful to the competitive position of the Kansas Bioscience Authority if disclosed. The executive session shall begin at 12:15 p.m. and will last 20 minutes. The meeting will reconvene to open session in this conference room at 12:35 p.m. Included in the meeting will be all members of the Investment Committee; Tom Thornton; Jan Katterhenry; Chuck Willis; KU representatives: Roy Jensen, Steve Warren, Scott Weir, and Jeff Reene; and Jeff Ellis, legal counsel.
Return to Open Session: Upon a motion made by Ms. Kreps, seconded by Ms. Lawrence, and unanimously approved, the Committee reconvened in open session at 12:37 p.m. No action was taken from the executive session.
Preclinical Development of CC - 1065 Prodrugs for Breast and Prostate Cancer Treatment – Collaborative Cancer Research Initiative (Tab 6 of Committee Materials): Terry Osborn gave an introduction and overview of the project. The collaborative cancer research studies are proposed by Drs. Weir, Vielhauer, Rajewski, and Boger Research Team. The project will advance promising anti-cancer agents for breast and prostate cancer treatment from drug discovery though preclinical development. The team has requested $500,000 over a two-year period from the KBA. Advancing this area of research will significantly impact research at the University of Kansas Cancer Center, and contribute to NCI designation in 2011.
Staff recommends KBA invest $500,000 over two years in support of this initiative to achieve the milestones identified in the staff report.
Mr. McKechnie made a motion to recommend approval of the staff recommendation to the Board. Ms. Kreps seconded the motion, which passed unanimously.
Conducting Investigator-Initiated Phase I Cancer Clinical Trials in Wichita, Kansas, Through a Collaborative Partnership – Collaborative Cancer Research Initiative (CCRI) (Tab 7 of Committee Materials): Terry Osborn gave an overview of the proposal. The proposal seeks to expand the drug discovery and Phase I programs of the University of Kansas Cancer Center, the Cancer Center of Kansas, the Midwest Cancer Alliance and the Via Christi Regional Medical Center through a collaborative partnership to develop a Phase I clinical trial program in Wichita, Kansas. This would compliment the proven and successful Phase II and Phase III programs and greatly strengthen the rural and regional impact on the cancer community. The team is requesting $500,000 (over two years) in funding from the KBA in support of CCRI.
Staff recommends the KBA invest $500,000 over two years to support this initiative.
After Committee discussion, Dr. Smilor noted that this project represented an excellent collaborative effort which will positively impact many cities throughout Kansas. Mr. McKechnie made a motion to recommend approval of the staff recommendation to the Board. Ms. Kreps seconded and the motion passed unanimously.
Adjournment: There being no further business, a motion was made by Mr. McKechnie to adjourn. The motion was seconded by Dr. Smilor and passed unanimously. The meeting adjourned at 12:45 p.m.