The Cutting Edge

Northwest Indiana emerging as a great place to turn research into products.
by Rick A. Richards

The buckle of the nation’s industrial belt is firmly cinched in Northwest Indiana. Steel and its affiliated suppliers and businesses have been a part of the region’s landscape for generations.

And just a few miles south, Indiana’s cornbelt begins. Within minutes of leaving the northern part of Lake and Porter counties where industry is firmly anchored, agriculture takes over.

These two diverging scenes are how most people think of Indiana – if they happen to think of the Hoosier state at all. It’s not that Indiana has a negative image in the rest of the nation; it’s that Indiana doesn’t have much of an image at all.

So when the state starts grabbing headlines as one of the nation’s burgeoning high-tech and life-sciences centers, Indiana’s image starts to change dramatically.

Thanks to research parks set up around the state by Purdue University, including one in Merrillville, along with other private research incubators in Hammond and Valparaiso, the combined impact of the dozens of small startup companies on the state’s economy is $1.3 billion.

According to a study commissioned by the non-profit Purdue Research Foundation, the four research parks operated by Purdue are home to more than 200 companies that employ 4,000 people; the average salary paid by those companies is more than $63,000 a year.

Kathy DeGuilio-Fox, director of the Purdue Technology Center of Northwest Indiana in Merrillville, says that Indiana – and in particular, Northwest Indiana – is positioned perfectly for high-tech and life-sciences companies.

“Our location really is a plus. We are at the crossroads of the country. The infrastructure is here,” says DeGuilio-Fox. “But this is more than just high-tech and life-science research. This is economic development. We’re providing opportunities for educated individuals to stay in Indiana.”

David Lasser, a commercial real estate broker with Commercial In-Sites in Merrillville, specializes in working with entrepreneurial startups and life-science companies.

“The market in Northwest Indiana has three established incubator properties – in Merrillville, Valparaiso and Hammond. What we see and hope for are companies with very high levels of research that evolve into companies building their own buildings or leasing their own space,” says Lasser. “We’re also looking at where these companies are coming from and most of them are local people – or people with local ties – who have great ideas.”

Even though the region’s economic identity is evolving from manufacturing to high tech, Lasser says Northwest Indiana’s manufacturing roots play an important role for the new high-tech companies.

“As the new companies evolve from research to manufacturing, our precision manufacturing side is there to step in and work with their engineers to help make their products right here,” says Lasser. “And as we’re coming out of a recession, the state has made advances in its tax structure that helps these new companies.”

Lasser says the Purdue Technology Center in Merrillville makes vast resources in communications, fiber optics and the university’s research capability available.

“The companies looking at the Purdue Technology Center are the kinds of companies that I work with. What we’re selling to them is the relationship they’ll have with Purdue. We’re getting more inquiries about the region.”

Nesch LLC
The opportunity in Northwest Indiana for Ivan Nesch was too enticing to pass up. Nesch, a former professor at the Illinois Institute of Technology, moved his research and development out of Chicago to the Purdue Technology Center in Merrillville because of state incentives.

Through the use of the Indiana 21st Century Research and Technology Fund, which was set up by the General Assembly to help diversify the state’s economy, Nesch and other companies have received research grants. That fund has contributed $2 million to Nesch, and coupled with resources from the U.S. Department of Defense and National Institutes of Health, total funding has been $4 million. The state fund helps companies make the transition from research and development to production and job creation.

Nesch LLC has developed a scanning process – diffraction-enhanced x-ray imaging – that has medical, veterinary and security applications. The process, known as DEXI for short, produces high-quality x-ray images using far less radiation than a conventional radiography machine.

For medical and veterinary use, Nesch explains that when an x-ray interacts with matter, one of the more common interactions is absorption. “It is absorption properties of a material that produces the contrast images of a conventional radiography,” says Nesch. “Lowering the energy of the x-ray beam used to image an animal (or a human) will allow the soft tissue or low-density structures to absorb more x-rays, which would then produce higher-contrast images.”

While there is magnificent potential with DEXI in medicine, one area that is surging forward as a potential market is security. The technology being developed by Nesch is something that could be placed in airports around the country to check for contraband and threats of terror.

“Placing our security machines at airports and security gates will ensure dangerous materials are taken out of the control of terrorists who seek to inflict grave harm on the general public,” says Nesch. The machines are 10 feet by 7 feet by 4 feet and use half the radiation generated by conventional machines. Nesch also points out that DEXI is a non-invasive process that shows internals but doesn’t reveal a person’s contours, body or face.

DEXI has received nine patents and Nesch says two of them have his name on it. “It’s been a collaborative effort,” says Nesch.

Making the decision to move from Chicago to Merrillville, Nesch says, was easy. “Northwest Indiana has a better environment for research and development, especially with the incentives offered by Indiana. We’re involved with something that can change the landscape of Indiana from corn producer and steel producer.

“We draw from the local universities and from Chicago, so we have a lot of support to help us in our research,” says Nesch. “Right now, we’re at the point where we need manufacturing money. We’re trying to find the money to produce our product right here in Northwest Indiana.

“We’re having a tough time doing it but we’re going to keep trying because we think something like this needs to stay in Northwest Indiana and provide good jobs,” says Nesch.

NuVant Systems Inc.
For Gene Smotkin, chairman of NuVant Systems Inc., the Purdue Technology Park was the ideal place to get his fuel cell business up and running.

Smotkin, a university professor and researcher, admits he’s still learning about being a businessman. “I’m a professor turned entrepreneur and I built devices that helped us do research in the lab,” says Smotkin. “Professors do what they do and I didn’t have any idea that all this would happen.”

Smotkin admits that developing a product for commercial consumption is a lot different than designing something to use in the lab. There, if the device breaks, you simply build another one. In the real world, says Smotkin, that’s not possible.

After working at IIT in Chicago, Smotkin learned of the Purdue Technology Center in Merrillville from a colleague. He checked into it and with the incentives Purdue offered – including a $50,000 laboratory – Smotkin made the move.

“It’s great here. When you have creative people all around you, it builds a synergy. You can bounce ideas off them and they do the same with you. The whole environment here is exciting,” says Smotkin.

NuVant develops and adapts catalysts and electrolytes for stationary and portable fuel cell assemblies. Although the company has been around since 1999, Smotkin says it didn’t begin selling product until 2009.

That year, says Smotkin, sales were $100,000. Last year, sales topped $280,000, and through the first quarter of 2011, Smotkin says sales were $250,000. “As you can see, things have been taking off.”

Before too long, Smotkin says NuVant will need a place of its own. “Purdue Technology Center wants to keep us, but it’s time for us to graduate,” says Smotkin. “We’re going to need our own place.”

Smotkin says he could have kept the company going strictly as a research and development venture, but he wanted to do more than that. “We weren’t affecting lives. In fuel cell development, what we do now and what we will do in the future, the market is bright. Lots of people have been involved in fuel cell development, but the market just wasn’t there five or eight years ago.

“We’re working on a portable fuel cell for the Army that could be used by the individual solider. NuVant is also working with BP and other industries, says Smotkin.

“This industry is going to have an impact. We hope to create jobs with this,” says Smotkin. Already, NuVant has acquired equipment that allows it to customize its own computer boards to better respond to customer needs.

“All that work of populating computer boards has been shipped to China or India,” says Smotkin. “We want to do it here. It enables us to customize every instrument we sell and fold in all the desires of the customer into a better product. This is one of the advantages of being small; you’re more agile.”

Euclid Diagnostics LLC
It was when Diha Frieje was at Washington University in St. Louis that she found her future. To that point, she had spent her entire career in academia, but, says Frieje, “I didn’t want to stay in academia but I didn’t know what I wanted to do.”

When researchers at Washington University mapped the human genome, Frieje realized there was a future in genomics. “That’s where my interest was,” she says.

With that, she began research into cancer genomics, looking for new ways to combat the disease. As a result, Euclid Diagnostics LLC was born. At first, she located in Chicago, but when she heard of the incentives and collaborative atmosphere that was sprouting at the Purdue Technology Center in Merrillville, Frieje made the move to Northwest Indiana.

But more than researching a cure for cancer, Frieje said her effort is personal. “A family friend has cancer. We’re a small company; we only have four people, but we’re committed to this fight.”

A native of Lebanon who came to the United States in 1981, Frieje hopes to take the research she’s done into cancer and open her own diagnostic laboratory. Later, she wants to move her discoveries to clinical trials.

Euclid is a cancer diagnostic company set up to detect nucleic acids in blood and/or urine that could indicate the presence of cancer. Euclid’s goal is to improve on existing methods of detection of prostate cancer, which today relies on the prostate specific antigen test. Ultimately, Euclid wants to develop the system so it can detect other forms of cancer.

“Our goal is to create a diagnostic test for cancer. The test would be at the molecular level. Right now, we’re doing the first of two studies looking at prostate cancer,” says Frieje. “Ultimately, it would result in personalized treatment. Being able to detect prostate cancer from a urine test could eliminate the need for a biopsy.”

Frieje says there were a lot of places she could have started her business, but said conducting business in Northwest Indiana is as easy as conducting business from anywhere else.

Vibra Healthcare
Anyone who has had a family member with a complex long-term acute care affliction knows they’re entering uncharted territory. Traditional hospitals aren’t set up to handle these kinds of demands, and neither are nursing homes.

What’s needed is a specialized hospital that focuses on improving the situation of patients who require additional or extended acute medical care. Thus was born the concept for Vibra Healthcare, says Mary Galguerro, a spokeswoman for Vibra’s Crown Point hospital.

Vibra – which stands for visionary, innovative, bold, relentless, ambitious – operates a 40-bed facility in Crown Point with a 5-to-1 nursing ratio and 24-hour physician coverage. It specializes in respiratory care, ventilator management, IV management, nutrition services, case management, social services and counseling.

The Crown Point hospital, says Galguerro, was acquired by Vibra in October 2010. The company, founded in 2004 and based in Mechanicsburg, Pa., operates 32 hospitals and has 1,300 beds.

“What we do is a process that involves next level care from short-term acute needs to rehabilitation,” says Galguerro, who adds that the average patient stay is 25 days. “A lot of our patients have need for extensive wound care and physical therapy. The difference between what we do and what nursing homes provide is that our doctors are specialists who are available every day, while in a nursing home, a doctor may visit once a week.

“We chose Crown Point and Northwest Indiana because we have patients from as far away as Indianapolis and the north side of Chicago and this was a central location for them,” she says. “In this economy, we see ourselves as another stepping stone to health care. We think that what we do promotes and stimulates opportunities for health care professionals.”

Another attraction for Vibra is the number of other hospitals in the area and the proximity to the Purdue Technology Center, where research is being done into cutting-edge treatments for some of the afflictions that bring patients to Vibra.

“Crown Point, Michigan City, Schererville are communities where they’re rebuilding themselves. They’re also places where health care professionals can earn a decent wage and live in the communities where they work,” says Galguerro.

Identifying Cancer
IVDiagnostics technology tests for circulating tumor cells.
by Rick A. Richards

Purdue University has brought a lot of attention to Northwest Indiana for its research center in Merrillville, but that's not the only place in the region where cutting-edge research is taking place.

The Entech Innovation Center in Valparaiso is home to a growing number of small high-tech companies. The 7,500-square-foot center is a not-for-profit organization headed by former Valparaiso economic-development director Charles McGill.

Entech is home to medical, life sciences, green technology and renewable resources startups. One of those companies is IVDiagnostics Inc., which develops, tests and markets diagnostic tools for rare circulating tumor cells. Known as CTCs, the cells spread through the circulatory system and represent unique diagnostic targets. CTCs are released from primary tumors into the bloodstream and lodge within distant organs, which is the major cause of mortality among cancer patients.

Frank Szczepanski, co-founder and CEO of IVDiagnostics, says the company started in West Lafayette but moved to Porter County because of the large number of hospitals in the area. “There has been a lot of hospital growth along the Indiana 49 corridor in Northwest Indiana and it gives us opportunities for patient recruitment,” says Szczepanski.

In addition, the region's proximity to Chicago was a factor in choosing to locate in Valparaiso. IVDiagnostics works closely with other laboratories, including a stem cell research center in Madison, Wis., pharmaceutical research facilities in Indianapolis and bio-medical research centers in St. Louis.

“We also have access to Alverno Clinical Labs in Northwest Indiana. They conduct 10 million lab procedures a year and that is important to what we do. There are only 26 labs like that in the country,” says Szczepanski. IVDiagnostics has 2,000 square feet of lab space set up for chemical, microbiology and fiber-optics testing systems.

“In my family, there are a number of people with cancer, including my wife,” says Szczepanski. “This is personal for me. Right now, oncologists can't tell patients if their cancer really is in remission because they're looking at indirect indicators. What we're doing could change that.”

As research continues, Szczepanski says the next phase for IVDiagnostics is to develop a device that can scan blood relatively quickly. IVDiagnostics recently received a $244,479 grant through the Qualifying Therapeutic Discovery Project from the U.S. Department of Health and Human Services, but Szczepanski says the company needs $5 million in order cover the cost of clinical trials and additional research and development.

“We've found that DNA is different in tumors and circulating tumor cells. What we want to create is a liquid biopsy without taking blood,” he says. Eventually, he adds, the work being done at IVDiagnostics could create a small, handheld device that cancer patients can use to test their blood, much like diabetics use a glucose meter.