State should support firms like NewNeural

July 5, 2004


Have you heard those pesky radio ads touting Michigan as a great place to locate a business? I hope Gov. Blagojevich and Speaker Madigan hear them. Our state needs to step up and support entrepreneurs like Madhusudan Peshwa, who recently moved here from Seattle. What Peshwa says is enlightening.

Peshwa is executive vice president of R&D for NewNeural, the Lisle-based developer of neural regeneration therapies. Peshwa and his colleagues are exploring experimental approaches to treating brain injuries.

"Regenerative medicine and stem-cell therapies are therapies of the future," says Peshwa, who joined from Seattle-based Dendreon Corp. "Ten years from now, we may see them matured to a stage where we see clinical benefit."

With NewNeural still in the very early stages of development, Peshwa hopes to someday take adult bone marrow cells and coax them to form new neurons in the brain. He also believes there might be a small molecule that can be isolated to stimulate the body's existing adult stem cells, increasing the brain's ability to regenerate itself. Benefits for stroke and brain injury victims could be significant.

The underlying technology behind NewNeural's work originated at the University of Illinois at Chicago in Dr. Kiminobu Sugaya's lab. The question is: Will local R&D spawn local companies, yielding benefits to the local economy? Peshwa thinks it can, but he sees obstacles.

Presenting to the Chicago Tech Forum, a local advocacy group, Peshwa pointed to six other emerging local biotech companies that have potential: Chromatin, Genix Therapeutics, Genomics U.S.A., NanoDisc, PharmaIn and Pyxis Genomics.

"These are examples of companies with really novel technologies," Peshwa says. "They are technologies that are yearning for support."

Peshwa sees a need for more early-stage high-risk venture capital to support our state's biotech start-ups, believes we need to attract more proven talent to our market, and urges the state could be more supportive. He also believes there could be more collaboration between local pharmaceutical companies -- e.g. Abbott and Baxter -- and new start-ups.

Midwest tops in research funds

Still, the news isn't all bad.

"We're beginning to make a real case for what's happening here," says Chicago Tech Forum organizer Robert Rosenberg of the University of Chicago. Rosenberg reports the Midwest receives $6.6 billion in research funding -- more than any other region -- from all sources, including government, foundations and private grants. Rosenberg analyzed research funding among the nation's top 100 universities and top 50 medical centers, which he says accounts for 90 percent of all research in the nation. "We're starting to see serial investors and people like Dr. Peshwa who are going to make biotech move in this area," Rosenberg says.

While R&D investment is here, venture money continues to be an issue. To date, NewNeural has raised $1.1 million, and managers are looking for an additional $10 million. I hope they find it here and not in Michigan.

Chess chat

Computer game pioneer Joel Berez is quietly working in Evanston, building an online community for chess players called

Berez is a local organizer of the MIT Enterprise Forum, and he's one of the creators of Zork, the first computer game to be ported from a mainframe to a personal computer. He also founded Infocom, one of the original PC game software companies.

Berez didn't set out to be an electronic game legend. By his own account, he was in a group at MIT doing serious research for the Navy.

"They had this enormous amount of electronic mail traffic and needed to sort out the wheat from the chaff. Zork came out of some work we were doing to interpret Morse code," Berez says. "In Zork we allowed you to converse in a natural way with the computer. The fun of the game depended upon the underlying technology to give you the illusion you were talking with someone who understood you."

The result was a computer fantasy game that set the stage for today's Nintendo, Sega and Xbox programs.

Bits & bytes

Monique Hinds joined United Airlines as managing director and chief of development in the technology group, reporting to Nirup Krishnamurthy, vice president of information services and CIO.

Michael Krauss is a Chicago tech writer and consultant.


 ©2004 Marion Consulting Partners