The Erie County Industrial Development Agency has taken a look at private sector partnerships designed for specific deals and decided it can do the same kind of thing.
The agency, through its Buffalo and Erie County Industrial Land Development Corp., is prepared to invest up to $250,000 and enter into a 50-50 joint venture with Niagara Falls-based Innovative Biotechnologies Inc.
Innovative Biotechnologies is headed by Richard A. Montagna, co-founder and former president of Cellular Products Inc.
The venture was given preliminary ILDC board approval pending completion of its legal documents. Its purpose will be two-fold:
Complete development of a silicon chip-based test for physicians' office medical tests.
Innovative Biotechnologies already has enlisted the aid of San Diego-based Quidel Corp. to develop the medical-test chip.
To develop a liposome technology for water quality tests. Liposomes are microscopic fat bubbles.
The liposome technology already has been awarded a $160,000 New York State Energy Research Development Agency grant. A portion of the ILDC investment will match the state grant.
The ILDC is putting hard cash into the joint venture. Innovative Biotechnologies is contributing the state grant and two licenses granted by Cornell University for the technologies.
Investors such as the ILDC are extremely important in moving new technologies and products for the "lab bench" at universities such as Cornell to full commercialization. The bottom line is: It takes money to go from the drawing board to the consumer.
The ECIDA was approached by Montagna's counsel to get involved with Innovative Biotechnologies' work and it made sense, according to Ronald W. Coan, the ECIDA's executive director.
"The joint venture is capturing cutting-edge technologies here, and any manufacturing will be done right here," Coan said.
As part of the joint venture agreement, the ILDC will have the option at the end of three years to require Innovative Biotechnologies and the joint venture to merge. At that time, the ILDC will convert its joint venture interest into voting stock in Innovative Biotechnologies.
The right to convert allows the ILDC to share in the profits from other products developed by Innovative Biotechnologies.