The new company, FibeRio Technology Corporation, will be headed by chairman and Chief Executive Officer Ellery R. Buchanan, an accomplished, Austin-based entrepreneur with more than 25 years experience in strategic and executive management positions in high-tech companies.
|The University of Texas-Pan American announced at a press conference Nov. 16 the launch of FibeRio Technology Corporation, a new regional start-up company that will commercialize nanofiber production technology co-invented by Dr. Karen Lozano and Dr. Kamal Sarkar, faculty in the UTPA Department of Mechanical Engineering. Pictured left to right at the announcement are Dr. Charles A. Sorber, UTPA interim president; Dr. Wendy Lawrence-Fowler, UTPA vice provost for Research and Sponsored Projects; Drs. Lozano and Sarkar; Ellery Buchanan, president and CEO of FibeRio Technology Corporation; and Dr. Horacio Vasquez, UTPA mechanical engineering professor, who also participated in Lozano's and Sarkar's research.|
Using a new concept of ForceSpinning™ technology invented by UTPA mechanical engineering professors Drs. Karen Lozano and Kamal Sarkar, FibeRio will develop and manufacture machinery that employs centrifugal force – rather than the more costly, current electrospinning technology – to create space age nanofibers from a wider variety of materials than has never before been possible.
Jackie Michel, director of the UTPA Office of Innovation and Intellectual Property, said that by 2014 the new company plans to create about 110 jobs that pay in the range of $100,000, with even greater job creation possibilities into the future.
"UTPA faculty, students and staff have, throughout our history, contributed to the creation of a knowledge-based regional economy through the educational opportunities available to enable our graduates to become more productive citizens and to fill the work force needs of the region," said Charles A. Sorber, UTPA interim president. "The creation of FibeRio Technology Corporation is an important example of the significantly positive impact the University has on the economy as well as the educational, cultural and social life of the Rio Grande Valley." UTPA Provost and Vice President for Academic Affairs Dr. Paul Sale said the company’s launch symbolizes UTPA’s commitment to research that benefits not only students but the regional economy.
"Our University is well positioned to leverage our intellectual resources to advance manufacturing and materials technologies throughout the nation and, indeed, the world," Sale said.
"UTPA has a mission to move the results of our research into the marketplace. We share monetary returns with our faculty to encourage the disclosure of their inventions in order to maximize the benefits to the community, the University and the Board of Regents of The University Texas System," said Dr. Wendy Lawrence-Fowler, UTPA vice provost for Research and Sponsored Projects.
James Langabeer, UTPA vice president for Business Affairs, said the creation of FibeRio should "unleash the potential for the spin-off and development of other new companies and products" that will create even more well-paying jobs throughout the Valley in the future. At a time when universities across the country are facing increasingly difficult financial issues, the company may also prove to be a source of future revenue for UTPA, an equity holder in FibeRio.
Michel said there were two paths the University could have taken to commercialize Lozano’s and Sarkar’s ForceSpinning™ technology. It might have licensed the technology to an existing, outside company in exchange for immediate upfront cash and continuing royalties. The other path, which the University decided was the most valuable for all of the stakeholders, was to spin-off its own company, which allows it to retain equity, providing a potentially larger source of continuing income for UTPA.
The professors who developed the technology will also be able to profit from their invention, receiving an equity position and 50 percent of the royalties received, one of the highest returns shared by any university in the nation.
FibeRio Chairman and CEO Buchanan will receive shares in the company, "sweat equity," as his compensation, Michel said. Buchanan will put together a management team, find investors, create products from the technology and take it to market.
It is projected that between now and 2014 the new company will generate gross revenues of more than $234 million and net a total of nearly $84 million. Michel said that although the company will initially start off with small, lab scale devices developed by Lozano and Sarkar for their research, it will move quickly to develop industrial scale machines that can produce large quantities of nanofibers.
Numerous people, departments and agencies both inside and outside of the University have played key roles in the establishment of the new company. The seed money that professors Lozano and Sarkar needed to develop their ForceSpinning™ technology and produce a prototype of FibeRio’s nanofiber fabrication device was provided late last year through a $50,000 grant from The University of Texas System’s Texas Ignition Fund (TIF), a proof-of-concept grant program designed to stimulate commercialization activities at The UT System’s 15 institutions.
"UTPA’s successful launch of FibeRio Technology Corporation illustrates perfectly the TIF’s mission to help turn research discoveries into commercial products," said Cathy Swain, The University of Texas System’s assistant vice chancellor of Commercial Development. "The University’s two professors were able to use TIF funds to demonstrate product reliability and to complete a business plan including market entry strategies," she said.
At that point, Michel was able to step in and "sustain the momentum by attracting a management team that brings us to this moment. We are proud to support this effort," Swain said.
To help with the startup funding FibeRio needs, the company is competing for a grant of up to $1.5 million from the Texas Emerging Technology Fund (ETF) through its Rio Grande Regional Center for Innovation and Commercialization (RGRCIC), which reviews applications before sending the best to the state for possible funding. The Emerging Technology Fund was created by the state legislature in 2005 to provide money for the development and commercialization of new technologies and attracting and creating jobs in technology fields.
In addition, FibeRio is seeking venture investments to help capitalize its efforts.
John Schrock, UTPA Foundation Board member who is also an ETF board member, said FibeRio is a perfect example of what the ETF board considers for funding.
"One of our requirements at ETF is that there is a public university affiliation. Also, nanotechnology is the current buzz word. A combination of angel investors and the state of Texas could really put this on the map," Schrock said.
Although, the launching of FibeRio is just being announced, the company has technically already been about two years in the making, beginning with professors Lozano’s and Sarkar’s efforts to develop a better, safer, faster and more economical means of manufacturing nanofibers. The professors were assisted in the development of their new nanofiber manufacturing technology by a team of 20 UTPA undergraduate and graduate engineering students.
Lozano said her initial idea for a new way to produce nanofibers more economically and in a greater yield to conduct her research came from seeing cotton candy being made while at the circus with her children.
"The challenge was to bring it down to the nanoscale," she said.
"What they came up with is an elegantly simple solution to a complicated problem," Michel said, adding that "it seems like a very basic concept, but nobody had ever tried it for spinning nanofibers."
Nanofiber is a term used to describe fibers with diameters less than 0.5 microns that cannot be seen without visual amplification. They typically can be used in the manufacture of medical and filtration materials, wipes, personal care products, clothing materials, insulation, energy storage applications and even cosmetics.
Lozano said some of the medical applications of nanofibers are particularly significant to the local community, which has a high incidence of diabetes causing increased risks of complicated skin and foot wounds.
"I see something for wound healing that will be manufactured through our system," she said.
The current primary technology for creating nanofibers is a process called electrospinning, which requires an electrostatic charge to elongate and whip the solution being used in the ultrafine fiber.
"Utilizing an electrostatic charge becomes very complicated because the forces are not very well understood and, therefore, are very hard to control. It also limits the range of materials you can process," Buchanan said. Currently, the primary materials used to make nanofibers are polymers, most of which are common plastics.
"Some of the materials people really want to see in nanofibers are metals, particularly silver because of its antimicrobial properties that destroy small organisms and other metals and conductive polymers that can carry an electrical charge," Buchanan said. The problem with trying to employ electrospinning using these materials is that "you can’t hit them with an electrostatic charge because you know what happens when you put an electric charge on a metal – it electrocutes everybody," Buchanan said. That makes electrospinning a process of limited usefulness.
The ForceSpinning™ process invented by Lozano and Sarkar uses centrifugal force to push materials through minute openings to create nanofibers. Because there is no electrical charge employed in their technology, it can be used to produce nanofibers from both the materials that can and can’t be used in the electrospinning process.
Michel said as part of the initial process her office undertakes in regard to intellectual property, four applications were filed in the U.S. Patent and Trademark Office to protect their original ideas.
The technology is so cutting-edge and disruptive, Michel said, that it has been pre-selected as one of 10 "Early Pick" presenters for the 2010 World's Best Technologies (WBT) representing Texas. The WBT Showcase, which will be hld March 16-17, 2010 in Arlington, Texas, will offer the companies and research institutions selected to present their technologies to more than 100 seasoned venture insvestors and Fortune 500 liscensing scouts representing a variety of industries looking to invest in new technologies.
For his part, Buchanan is looking forward to what FibeRio could eventually mean to the Rio Grande Valley.
"There is no reason that the area couldn’t be a new technology center similar to the Silicon Valley in California or Research Triangle Park in North Carolina," he said.
Local economic development and Chamber of Commerce officials present at the announcement seemed equally optimistic.
This is a long time in coming. This really helps put us on that path toward applied technology and applied research that gets transferred into the workplace," said Steve Ahlenius, president and CEO of the McAllen (Texas) Chamber of Commerce.
Sorber said he sees this milestone as just the beginning.
"Many UTPA faculty members along with our graduate and undergraduate students are involved in research that is already impacting or will impact the quality of life for the residents of South Texas," he said. "That is what a university is all about."
For more information on FibeRio, a media press kit is available at http://ur.utpa.edu/services/presskit/be2a5b0b821c267b471.