Research hotbed

Public, private entities work to turn South Dakota into a medical research hub

BY ROB SWENSON

South Dakota is making headway in its goal to become a national player in developing research. Advancements to encourage research have been particularly evident in recent years.

Two business parks devoted to housing research companies are being established in eastern South Dakota. Meanwhile, laboratory work on medical advancements and other research with commercial potential is being conducted on multiple public and private fronts.

Significant contributors include Sanford Health, Avera Health, South Dakota State University, University of South Dakota, South Dakota School of Mines and Technology and the Sanford Underground Research Facility. Institutions in Sioux Falls such as the Good Samaritan Society and businesses such as SAB Biotherapeutics and Alumend also contribute.

South Dakota’s emphasis on developing research unofficially began in October 2003, when then-Gov. Mike Rounds released his so-called 2010 Initiative. The plan contained five goals for boosting economic development in South Dakota, including making the state a leader in research and technology development.

Rounds — who now serves in the U.S. Senate — completed eight years as the state’s chief executive in January 2011. But state and community interest in research development continues. “We’ve obviously made progress,” says Mel Ustad, director of commercialization for the Governor’s Office of Economic Development.

Progress is most evident in areas in which medical research and agricultural technology come together, Ustad says. Agriculture and research are linked not only because animal and plant health are important in the heavily rural state but because animals and plants often are used in research for human products.

South Dakota’s generally low-cost business environment also is considered a plus for research development.

“South Dakota is well positioned for those opportunities because of its agricultural capabilities and also the medical aspect of that with research at Sanford and Avera. Having those capabilities in the state, with its business climate, makes the state an attractive place,” Ustad says.

“The long-term objective is to get products commercialized so that you’re creating high-skill jobs, but you’re also going to have continued research because they’re constantly developing the next application of future products.”

Research Institutions

Sanford Research, which is part of Dakotas-based Sanford Health, is one of the most prominent research institutions in South Dakota. Gifts totaling more than $600 million from billionaire philanthropist T. Denny Sanford have helped the health system that carries his name expand research in areas such as type 1 diabetes, breast cancer and genomics.

Research is largely based in a 300,000 square-foot office and workspace building in northeastern Sioux Falls that Sanford Health acquired in

2009. But research work also takes place at other Sanford locations in Sioux Falls and elsewhere in the system’s multistate network.

Sanford Research is a nonprofit entity headed by David Pearce, who was promoted to president of the division in January 2015. Sioux Falls is becoming a hub for research activities, Pearce says. “Nationally, we’re recognized for a number of our programs now,” he says.

Areas of special expertise include children’s and Native American health issues. In addition, Sanford has an ownership stake in SAB Biotherapeutics, a company working with cattle to produce human antibodies to treat diseases in people. The Sioux Falls Development Foundation is an equity investor in the company.

Pearce points out that Sanford Research received nearly $12.6 million in National Institutes of Health funding in fiscal year 2015. That’s more than the combined total received by several other research organizations and universities in the state. However, other federal sources of research funding also exist.

Research is also an emphasis at Avera Health, a competing regional system based in Sioux Falls. Human genetics is among the focal points of research at Avera. “Human genetics is the future of medicine. There’s no question about it,” says Ryan Hansen, executive director of the Avera Institute for Human Genetics and the Avera Research Institute. “There is a massive effort going on across the world.”

Since 2007, Avera has been collaborating with Vrije Universiteit, a university in Amsterdam in the Netherlands. Avera is assisting in the world’s largest study of twins. Studying the DNA of twins over their lifetimes can provide insights in the influence of genes and environmental factors to life.

Clinical research is another area of emphasis at Avera. In addition, Avera owns Alumend. The life science company has created a light-activated, chemical therapy that is being developed into clinical treatment to repair blood vessels in people who suffer peripheral arterial disease. Alumend’s Natural Vascular Scaffolding product is working its way through the lengthy, federal regulatory process for commercialization.

“This would be a significant breakthrough,” Hansen says.

Academic research in South Dakota takes place primarily at three of the state’s six public universities — USD in Vermillion, SDSU in Brookings and SDSMT in Rapid City.

Fifteen years ago, state schools received approximately $30 million from federal agencies for research projects. Now they receive roughly $100 million a year, says Paul Turman, vice president for academic affairs for the South Dakota Board of Regents.

Increasing research has been a critical component of the state university system for about a decade, Turman says. Investments in long-term research infrastructure, such as expanding doctoral programs at universities, are beginning to pay off with the creation of startup companies, he says.

Limited state resources have increased the need for universities to collaborate in academic offerings and research projects. The federal Experimental Program to Stimulate Competitive Research (EPSCoR) has helped South Dakota build collaboration and earn more federal grants, Turman says.

South Dakota EPSCoR’s mission is to increase research and education in science, technology, engineering and mathematics to drive science-based economic development. James Rice, a chemistry professor at SDSU, directs the state EPSCoR program. “What we try to do is build bridges between the universities and the private sector,” Rice says.

Rice also directs a statewide BioSNTR grant project in which researchers pursue advances in bioscience and biotechnology. BioSNTR stands for Biochemical Spatio-temporal Network Resources. Researchers are exploring, for example, how cells respond to foreign objects. The research could help design implants that the human body won’t reject.

About 25 team members are involved in the BioSNTR project. “These projects are collaborative because there’s so much you need to have,” Rice says. The prospects for job creation and economic development in South Dakota are exciting, he says. “I don’t think people realize how much is going on.”

Research Parks

Two research parks are taking shape in eastern South Dakota. They are affiliated with the state’s two largest universities.

Construction work on the first one, the Research Park at SDSU, began in Brookings in 2008. The park sits on 125 acres near the SDSU campus, U.S.

Highway 14 and Interstate 29. Three buildings have been constructed so far — an Innovation Center, Seed Tech Lab and a spec building for businesses.

The 44,000-square-foot Innovation Center was built in 2008 and expanded in 2012. It is a business incubator that also includes office space. Discovery Benefits, which expanded from Fargo to Brookings last year, occupies half of the spec building. The company provides employee-benefit services.

The Research Park at SDSU reflects a collaboration that began in 2004. Parties involved include the city, Brookings County, Brookings Economic Development Corporation, SDSU, SDSU Foundation and other state and private stakeholders.

“We’re trying to help connect industry and the university,” says Dwaine Chapel, executive director of the park. “We’re trying to bring different industries to SDSU, the community and the region.”

In recent years, Brookings has become home to several relatively young businesses that have spun out of research at SDSU. Prairie Aquatech, for example, converts soybean meal into high-quality feed for fish and other animals.

Fifty-five miles to the south, in Sioux Falls, a new research park is transitioning from concept to physical development. It’s been named the USD Discovery District.

Rich Naser, president of the South Dakota Technology Business Center in Sioux Falls, doubles as the president of the 80-acre Discovery District, which is next to the University Center campus. The Technology Business Center is a nearby incubator and training center that could help supply future tenants for the Discovery District.

Plans for the Discovery District were announced in 2015. The project reflects a collaboration that includes the SDBOR, USD, city of Sioux Falls, Forward Sioux Falls, Sioux Falls Area Chamber of Commerce and Sioux Falls Development Foundation.

Work on roads and utilities in the new park is expected to begin next spring. Planning for the first building in the park is also under way. How quickly the park develops will depend on financial support and the need for business space, Naser says.

The city has budgeted $150,000 to assist in park development next year. Forward Sioux Falls, which is a joint program of the Chamber and Development Foundation, also has earmarked a new $150,000 investment in the park.

Next

Meanwhile, the Board of Regents is requesting that Gov. Dennis Daugaard and the South Dakota Legislature provide $300,000 for the research park in Sioux Falls and the same amount for the research park in Brookings.

To date, funding for the Discovery District has come primarily from USD and Forward Sioux Falls, but the city also has contributed. In the future, land leases will become the main source of revenue, Naser says, but that’s going to take a significant amount of time to generate.

Naser expects the growth of health care services in Sioux Falls to be a good complement to the development of research-related businesses in the region.“We are a healthcare-driven community now,” Naser says. “That’s a big economic driver.”

The Royal C. Johnson Veterans Memorial Medical Center adds to the strong health care presence of Sioux Falls.

Other Research Fronts

Among significant health care forces in Sioux Falls, the state’s largest city, is the Good Samaritan Society. The organization is based in Sioux Falls but provides services in 25 states, making it more of a national than state business. Good Samaritan Society operations include more than 180 skilled nursing homes.

Good Samaritan’s Vivo Innovation Center employs seven people in Sioux Falls who focus on improving the lives of seniors by, for example, designing senior-friendly living environments, especially in homes. It’s a service-oriented, rather than product-centered, side of research. “We’re looking to transform the aging process by bringing people more services and support,” says Kelly Soyland, director of innovation and research at Vivo.

South Dakota’s overall emphasis on research corresponds closely with the development of the Sanford Underground Research Facility, which is located in the former Homestake Gold Mine in Lead in the Black Hills. The mine closed in 2003, and the company donated the mine to the state for use as a laboratory. T. Denny Sanford, the philanthropist, donated $70 million to assist with the project. The South Dakota Legislature also committed $40 million in state funding.

Now, the South Dakota Science and Technology Authority operates the lab under the terms of an agreement with the Lawrence Berkeley National Laboratory, which is a U.S. Department of Energy lab managed by the University of California.

Research entities at Sanford Underground Research are exploring challenging issues, such as the origin of matter, the nature of dark matter and the properties of neutrinos.

Rapid City is also home to increasing research activity. The Rapid City Economic Development Foundation owns and operates a business incubator on the SDSMT campus, and it’s full. The Black Hills Business Development Center is home to 21 businesses, 157 workers and 50 interns, says Terri Haverly, vice president of the Development Center. “It’s certainly been successful,” says Haverly, who doubles as a Republican state senator.

The center’s board recently voted to explore the viability of building a second incubator, but has not decided yet whether to build one. The state must invest its resources wisely, she says, but she is among the state and community leaders who want to continue supporting the development of cutting-edge research in the state.

“I’m very much a supporter of research leading to commercialization and working with industry,” she says. She’s not alone. PB

Rob Swenson Contributing writer RobSwensonMediaServices@gmail.com