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OKLAHOMA’S ADVANCED TECHNOLOGY MAGAZINE

WINTER 2012

Innovators & Entrepreneurs

SBIR Collaborative

seeks more federal dollars for state

ALTHEUS THERAPEUTICS Dr. Richard Harty develops unique drug combo for millions of pain sufferers.


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INSIDE i&E Profiles Associated Material Processing, LLC 4 FLX-Paint 6 The Clinical Hub 8 Up-and-Coming Innovators and Entrepreneurs 10 12 Cover Story Altheus Therapeutics advances drug combination to provide digestive relief for millions.

18 Formula for Success Oklahoma SBIR Collaborative designed to help state companies receive more federal grants.

20 Partners

innovators & Entrepreneurs is produced by i2E, Inc., manager of the Oklahoma Technology Commercialization Center. For more information on any content contained herein, please contact i2E at 800-337-6822. Š Copyright 2012 i2E, Inc. All rights reserved.

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INSIDE i&E Profiles Associated Material Processing, LLC 4 FLX-Paint 6 The Clinical Hub 8 Up-and-Coming Innovators and Entrepreneurs 10 12 Cover Story Altheus Therapeutics advances drug combination to provide digestive relief for millions.

18 Formula for Success Oklahoma SBIR Collaborative designed to help state companies receive more federal grants.

20 Partners

innovators & Entrepreneurs is produced by i2E, Inc., manager of the Oklahoma Technology Commercialization Center. For more information on any content contained herein, please contact i2E at 800-337-6822. Š Copyright 2012 i2E, Inc. All rights reserved.

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ABOUT i2E i2E’s award winning suite of venture advisory services, access to capital and entrepreneurial development programs are all designed to help us accomplish our mission: home grown economic development by nurturing high growth companies in Oklahoma. In the past year we have enhanced the services we provide by adding new employees to carry out our mission and tapping new sources of funding that will allow us to deepen our positive impact upon Oklahoma’s economy. With a $1 million grant from the Federal Economic Development Administration and matching funds from five local partners – the Greater Oklahoma City Chamber, the city of Oklahoma City, the Oklahoma Medical Research Foundation, the Oklahoma Business Roundtable, and Presbyterian Health Foundation – i2E offers expanded venture advisory services to even more Oklahoma entrepreneurs beginning at the earliest stage of their companies’ development. And we teamed with the Oklahoma Department of Commerce and the U.S. Department of Treasury to offer more than $13 million in investment capital to the state’s emerging high growth companies. Appropriated by the Treasury Department through the Oklahoma Commerce Department and managed by i2E, the Accelerate Oklahoma! initiative creates three separate funds that target companies at different stages along the business lifecycle. We recently refocused the Technology Business Finance Program to provide funding through the Manufacturing Innovation Fund for Oklahoma manufacturers who want to innovate or expand with production of a new product or improve an existing product. i2E now offers access to capital opportunities to Oklahoma’s high growth companies from six distinct investment funds, as well as the SeedStep Angels network of investors. The eighth annual Donald W. Reynolds Governor’s Cup is under way with new opportunities added this year for more teams to compete for cash prizes. We also expanded the number of i2E Fellows who gained valuable experience while contributing their skills to emerging Oklahoma companies. Our services are evolving, but the bottom line is we continue to help innovative, high growth companies succeed in Oklahoma.

i2E TEAM

BOARD OF DIRECTORS

The i2E management and staff is composed of professionals with extensive experience in technology commercialization, business development, venture investing, finance, organizational.

Roy Williams, Chairman Greater Oklahoma City Chamber Michael LaBrie, Secretary McAfee & Taft Jonathan Adamson Argonaut Private Equity

Howard Barnett, Jr. OSU-Tulsa and OSU-CHS Tom Walker Leslie Batchelor President and CEO The Center for Economic David Thomison Development Law Vice President, Investments C. James Bode Rex Smitherman Bank of Oklahoma, N.A. Vice President, Operations Bill W. Burgess Wayne Embree Vortex, Inc. Vice President, Entrepreneur Services Michael Carolina Sarah Seagraves OCAST Vice President, Marketing Bob Craine Tom Francis TSF Capital, LLC Director, Investment Funds Steve Cropper Josh O’Brien Philip Eller Director of Entrepreneurial Eller Detrich, P.C. Development Suzette Hatfield David Daviee Crawley Ventures Director, Finance Shintaro Kaido Venture Advisor

David Hogan Hogan Taylor, LLP

Mark Lauinger Venture Advisor

Philip Kurtz Benefit Informatics

Richard Rainey Venture Advisor

Hershel Lamirand III Oklahoma Health Center Foundation

Sonja Wilson CFO-In-Residence Casey Harness Business Analyst Kenneth Knoll Manager, Concept Funds

Merl Lindstrom ConocoPhillips, Inc. Dan Luton OCAST

Scott Meacham Crowe & Dunlevy Scott Thomas IT Manager Fred Morgan The State Chamber Grady Epperly Marketing Manager

Michael Neal Tulsa Metro Chamber Michael Kindrat-Pratt Coordinator, SeedStep Angels David Pitts Stillwater National Bank Jay Sheldon eMedia Specialist Mark Poole Summit Bank Jim Stafford Communications Specialist Stephen Prescott OMRF Katelynn Henderson Events Specialist Meg Salyer Accel Financial Staffing Cindy Williams Investment Assistant Darryl Schmidt Jennifer Buettner BancFirst Executive Assistant Sheri Stickley OKBio Apryl Gober Administrative Assistant Wes Stucky Ardmore Industrial Development Authority Richard Williamson TD Williamson, Inc.

www.i2E.org facebook.com/OKGOVCUP twitter.com/i2E_Inc

Duane Wilson LDW Services, LLC Don Wood Norman Economic Development Coalition

A Letter From the President I invite you to turn to page 12 in this edition of i&E magazine to read a fascinating account of how Dr. Richard Harty discovered the synergistic qualities of a new drug combination for treating a debilitating disease and then built a company to take the therapeutic to market. The odds are really stacked against a new therapeutic drug advancing down the development path to human clinical trials. Only about one in 1,000 new drugs developed in a pharmaceutical laboratory make it to a Phase 1 human study. So, the successful completion of Phase 1 trials for a new drug treatment for Inflammatory Bowel Disease developed by Altheus Therapeutics stands as a major milestone for the Oklahoma City-based company. The new therapeutic was developed by Dr. Harty, who has studied the human gastrointestinal system for 30 years as a physician, researcher and university professor, including 14 as Chief of Gastroenterology at the University of Oklahoma Health Sciences Center. More clinical trials await, but as the Altheus therapeutic heads toward a Phase 2 study, it brings a glimmer of hope to millions of sufferers around the world. Also in this edition, you will want to read about three i2E high growth clients that are working to take innovative products to market in widely diverse fields. Associated Materials Processing (page 4) is a Stillwater-based company that has developed a new process to remove poisonous arsenic from the waste streams of the silicon chip manufacturing process, removing a potential danger to the public and liability for the industry. There’s a bright future ahead for customers of Tulsa’s FLX-Paint (page 6), which makes a flexible paint wrap in colors with names like

Kandy Apple Red, Inferno Orange and Kandy Lowrider Green. In fact, FLX-Paint has created the innovative paint wraps in 40 colors and can be used to cover anything from automobiles to appliances, computers, phones and even fingernails. Oklahoma City-based Clinical Hub (page 8) solves a health care education problem that is known as a clinical bottleneck: too many medical students needing hands-on clinical experience and too few slots in hospitals to meet the demand. The Web-based software application solves the bottleneck by letting hospitals post their open slots online where schools and students can select the dates and clinical locations they need. In addition, we provide a brief glimpse into some of the exciting new “Up and Coming” Oklahoma startups that you will be hearing more about in the future (page 10). Finally, this month’s magazine looks at a unique statewide partnership to help Oklahoma small businesses win more funding from federal grant programs. The Oklahoma Center for the Advancement of Science and Technology (OCAST), i2E and six other partners have teamed to provide assistance with the application process through the Oklahoma SBIR/STTR Collaborative (page 17). As always, I hope you will spend some time with this issue of i&E magazine and get to know some of the state’s newest and most promising innovators.


ABOUT i2E i2E’s award winning suite of venture advisory services, access to capital and entrepreneurial development programs are all designed to help us accomplish our mission: home grown economic development by nurturing high growth companies in Oklahoma. In the past year we have enhanced the services we provide by adding new employees to carry out our mission and tapping new sources of funding that will allow us to deepen our positive impact upon Oklahoma’s economy. With a $1 million grant from the Federal Economic Development Administration and matching funds from five local partners – the Greater Oklahoma City Chamber, the city of Oklahoma City, the Oklahoma Medical Research Foundation, the Oklahoma Business Roundtable, and Presbyterian Health Foundation – i2E offers expanded venture advisory services to even more Oklahoma entrepreneurs beginning at the earliest stage of their companies’ development. And we teamed with the Oklahoma Department of Commerce and the U.S. Department of Treasury to offer more than $13 million in investment capital to the state’s emerging high growth companies. Appropriated by the Treasury Department through the Oklahoma Commerce Department and managed by i2E, the Accelerate Oklahoma! initiative creates three separate funds that target companies at different stages along the business lifecycle. We recently refocused the Technology Business Finance Program to provide funding through the Manufacturing Innovation Fund for Oklahoma manufacturers who want to innovate or expand with production of a new product or improve an existing product. i2E now offers access to capital opportunities to Oklahoma’s high growth companies from six distinct investment funds, as well as the SeedStep Angels network of investors. The eighth annual Donald W. Reynolds Governor’s Cup is under way with new opportunities added this year for more teams to compete for cash prizes. We also expanded the number of i2E Fellows who gained valuable experience while contributing their skills to emerging Oklahoma companies. Our services are evolving, but the bottom line is we continue to help innovative, high growth companies succeed in Oklahoma.

i2E TEAM

BOARD OF DIRECTORS

The i2E management and staff is composed of professionals with extensive experience in technology commercialization, business development, venture investing, finance, organizational.

Roy Williams, Chairman Greater Oklahoma City Chamber Michael LaBrie, Secretary McAfee & Taft Jonathan Adamson Argonaut Private Equity

Howard Barnett, Jr. OSU-Tulsa and OSU-CHS Tom Walker Leslie Batchelor President and CEO The Center for Economic David Thomison Development Law Vice President, Investments C. James Bode Rex Smitherman Bank of Oklahoma, N.A. Vice President, Operations Bill W. Burgess Wayne Embree Vortex, Inc. Vice President, Entrepreneur Services Michael Carolina Sarah Seagraves OCAST Vice President, Marketing Bob Craine Tom Francis TSF Capital, LLC Director, Investment Funds Steve Cropper Josh O’Brien Philip Eller Director of Entrepreneurial Eller Detrich, P.C. Development Suzette Hatfield David Daviee Crawley Ventures Director, Finance Shintaro Kaido Venture Advisor

David Hogan Hogan Taylor, LLP

Mark Lauinger Venture Advisor

Philip Kurtz Benefit Informatics

Richard Rainey Venture Advisor

Hershel Lamirand III Oklahoma Health Center Foundation

Sonja Wilson CFO-In-Residence Casey Harness Business Analyst Kenneth Knoll Manager, Concept Funds

Merl Lindstrom ConocoPhillips, Inc. Dan Luton OCAST

Scott Meacham Crowe & Dunlevy Scott Thomas IT Manager Fred Morgan The State Chamber Grady Epperly Marketing Manager

Michael Neal Tulsa Metro Chamber Michael Kindrat-Pratt Coordinator, SeedStep Angels David Pitts Stillwater National Bank Jay Sheldon eMedia Specialist Mark Poole Summit Bank Jim Stafford Communications Specialist Stephen Prescott OMRF Katelynn Henderson Events Specialist Meg Salyer Accel Financial Staffing Cindy Williams Investment Assistant Darryl Schmidt Jennifer Buettner BancFirst Executive Assistant Sheri Stickley OKBio Apryl Gober Administrative Assistant Wes Stucky Ardmore Industrial Development Authority Richard Williamson TD Williamson, Inc.

www.i2E.org facebook.com/OKGOVCUP twitter.com/i2E_Inc

Duane Wilson LDW Services, LLC Don Wood Norman Economic Development Coalition

A Letter From the President I invite you to turn to page 12 in this edition of i&E magazine to read a fascinating account of how Dr. Richard Harty discovered the synergistic qualities of a new drug combination for treating a debilitating disease and then built a company to take the therapeutic to market. The odds are really stacked against a new therapeutic drug advancing down the development path to human clinical trials. Only about one in 1,000 new drugs developed in a pharmaceutical laboratory make it to a Phase 1 human study. So, the successful completion of Phase 1 trials for a new drug treatment for Inflammatory Bowel Disease developed by Altheus Therapeutics stands as a major milestone for the Oklahoma City-based company. The new therapeutic was developed by Dr. Harty, who has studied the human gastrointestinal system for 30 years as a physician, researcher and university professor, including 14 as Chief of Gastroenterology at the University of Oklahoma Health Sciences Center. More clinical trials await, but as the Altheus therapeutic heads toward a Phase 2 study, it brings a glimmer of hope to millions of sufferers around the world. Also in this edition, you will want to read about three i2E high growth clients that are working to take innovative products to market in widely diverse fields. Associated Materials Processing (page 4) is a Stillwater-based company that has developed a new process to remove poisonous arsenic from the waste streams of the silicon chip manufacturing process, removing a potential danger to the public and liability for the industry. There’s a bright future ahead for customers of Tulsa’s FLX-Paint (page 6), which makes a flexible paint wrap in colors with names like

Kandy Apple Red, Inferno Orange and Kandy Lowrider Green. In fact, FLX-Paint has created the innovative paint wraps in 40 colors and can be used to cover anything from automobiles to appliances, computers, phones and even fingernails. Oklahoma City-based Clinical Hub (page 8) solves a health care education problem that is known as a clinical bottleneck: too many medical students needing hands-on clinical experience and too few slots in hospitals to meet the demand. The Web-based software application solves the bottleneck by letting hospitals post their open slots online where schools and students can select the dates and clinical locations they need. In addition, we provide a brief glimpse into some of the exciting new “Up and Coming” Oklahoma startups that you will be hearing more about in the future (page 10). Finally, this month’s magazine looks at a unique statewide partnership to help Oklahoma small businesses win more funding from federal grant programs. The Oklahoma Center for the Advancement of Science and Technology (OCAST), i2E and six other partners have teamed to provide assistance with the application process through the Oklahoma SBIR/STTR Collaborative (page 17). As always, I hope you will spend some time with this issue of i&E magazine and get to know some of the state’s newest and most promising innovators.


Profiles Associated Material Processing, LLC

“Semiconductor industry customers are very narrow, so if we have a breakthrough product we will have a very rapid market adoption. Gallium Arsenide is significant to the semiconductor space and will only entrench itself further as new chip uses are developed.”

Steve Wood CEO Year started: 2011 Location: Stillwater, OK Employees: 3

– Steve Wood

ARSENIC OPPORTUNITY

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mart phones, tablets and computers enrich modern life in countless ways, yet there are health and environmental risks associated with their manufacturing processes. That’s because producing certain components of many integrated chipbased electronics requires the use of massive quantities of a compound called gallium arsenide. These processes produce poisonous arsenic as a manufacturing byproduct. “Most of the gallium arsenide substrate is wasted during the manufacturing process, and that’s where arsenic is generated,” said Steve Wood, CEO of a new Stillwater-based early stage company that has created an answer to the problem of arsenic disposal. Associated Material Processing, LLC (AMP), is working to commercialize a technology created in an Oklahoma State University laboratory that filters arsenic and other toxins out of semiconductor manufacturing waste. Arsenic disposal is a costly process that puts semiconductor manufacturers at risk for liability from potential exposure and subsequent harm to the public. The substance is regulated under the federal Resource Conservation and Recovery Act and the Drinking Water Act. AMP’s advanced technology was developed by OSU chemistry professor Allen Apblett, Ph.D., who serves as the company’s Chief Technology Officer. Dr. Apblett owns numerous patents based on his chemical discoveries at OSU, including the technology behind a Stillwaterbased explosive detection company called XploSafe. “The uniqueness of this invention is the polymer that absorbs large quantities of arsenic and phosphate,” Wood said. “It absorbs about 150 milligrams of arsenic per gram of this sorbent material; six times more efficient than competitive products.”

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AMP will provide canisters filled with the sorbent material that will be integrated into the semiconductor manufacturing process to filter arsenic out of the waste stream. “The arsenic would be absorbed by the material in the canister and arsenic free water would come out of the process,” Wood said. “The canister would be shipped back to us to be filled with new sorbent material. We would recover the arsenic in the form of arsenic oxide and return it to them for sale or reprocessing.” While AMP has targeted the semiconductor manufacturing industry as its first market, the OSU technology also has the potential to purify drinking water and filter arsenic out of land water runoff. In 2012, the semiconductor market for gallium arsenide is forecast at $4.9 billion, with 145 tons of the compound imported into the United State every year. The top four device manufacturers make up more than 61 percent of the market. Semiconductor manufacturing activity results annually in millions of pounds of arsenic contaminated water production at each semiconductor plant. The AMP filtering process has been validated in a laboratory environment and a prototype has been developed and tested with simulated effluents. Wood also is CEO of Stillwater-based Cowboy Technologies, a startup company development and investment entity created by OSU to help commercialize university faculty technologies developed on campus. Wood, Apblett and company manager Jai Rajendran all wear interim titles with AMP, because Cowboy Technologies principals anticipate hiring a management team with specific industry expertise and contacts within the next year. The company has received $100,000 in proof-of-concept funding from Cowboy Technologies and has been approved for up to $125,000 from i2E’s Concept Fund to advance development of the technology. “Semiconductor industry customers are very narrow, so if we have a breakthrough product we will have a very rapid market adoption,” Wood said. “Gallium Arsenide is significant to the semiconductor space and will only entrench itself further as new chip uses are developed.” AMP also may form a strategic relationship with the Oklahoma-based arm of a semiconductor waste abatement service provider. The bottom line: if AMP’s arsenic filtering process is effective in large scale beta test in Utah this spring, demand could quickly grow as semiconductor manufacturers turn to a new Oklahoma-based answer to an old industry problem.

Product or Technology: A sorbent material for the removal of arsenic from industrial process effluent or drinking water. Market: Municipal or industrial water systems with water supplies that exceed federal arsenic content levels. Future plans: The company plans to establish its product in initial target markets and then expand into other markets in late 2013. Funding: Approved for up to $125,000 in financing for i2E’s Concept Fund and $100,000 Proof of Concept funding from Cowboy Technologies. Successes: As a result of a Technology Business Program Grant from Oklahoma State University’s Office of Intellectual Property Management, AMP has been able to conduct a lab scale demonstration of its sorbent material. It also has designed beta process equipment and expects delivery in early 2012.

Winter 2012 i&E

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Profiles Associated Material Processing, LLC

“Semiconductor industry customers are very narrow, so if we have a breakthrough product we will have a very rapid market adoption. Gallium Arsenide is significant to the semiconductor space and will only entrench itself further as new chip uses are developed.”

Steve Wood CEO Year started: 2011 Location: Stillwater, OK Employees: 3

– Steve Wood

ARSENIC OPPORTUNITY

S

mart phones, tablets and computers enrich modern life in countless ways, yet there are health and environmental risks associated with their manufacturing processes. That’s because producing certain components of many integrated chipbased electronics requires the use of massive quantities of a compound called gallium arsenide. These processes produce poisonous arsenic as a manufacturing byproduct. “Most of the gallium arsenide substrate is wasted during the manufacturing process, and that’s where arsenic is generated,” said Steve Wood, CEO of a new Stillwater-based early stage company that has created an answer to the problem of arsenic disposal. Associated Material Processing, LLC (AMP), is working to commercialize a technology created in an Oklahoma State University laboratory that filters arsenic and other toxins out of semiconductor manufacturing waste. Arsenic disposal is a costly process that puts semiconductor manufacturers at risk for liability from potential exposure and subsequent harm to the public. The substance is regulated under the federal Resource Conservation and Recovery Act and the Drinking Water Act. AMP’s advanced technology was developed by OSU chemistry professor Allen Apblett, Ph.D., who serves as the company’s Chief Technology Officer. Dr. Apblett owns numerous patents based on his chemical discoveries at OSU, including the technology behind a Stillwaterbased explosive detection company called XploSafe. “The uniqueness of this invention is the polymer that absorbs large quantities of arsenic and phosphate,” Wood said. “It absorbs about 150 milligrams of arsenic per gram of this sorbent material; six times more efficient than competitive products.”

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AMP will provide canisters filled with the sorbent material that will be integrated into the semiconductor manufacturing process to filter arsenic out of the waste stream. “The arsenic would be absorbed by the material in the canister and arsenic free water would come out of the process,” Wood said. “The canister would be shipped back to us to be filled with new sorbent material. We would recover the arsenic in the form of arsenic oxide and return it to them for sale or reprocessing.” While AMP has targeted the semiconductor manufacturing industry as its first market, the OSU technology also has the potential to purify drinking water and filter arsenic out of land water runoff. In 2012, the semiconductor market for gallium arsenide is forecast at $4.9 billion, with 145 tons of the compound imported into the United State every year. The top four device manufacturers make up more than 61 percent of the market. Semiconductor manufacturing activity results annually in millions of pounds of arsenic contaminated water production at each semiconductor plant. The AMP filtering process has been validated in a laboratory environment and a prototype has been developed and tested with simulated effluents. Wood also is CEO of Stillwater-based Cowboy Technologies, a startup company development and investment entity created by OSU to help commercialize university faculty technologies developed on campus. Wood, Apblett and company manager Jai Rajendran all wear interim titles with AMP, because Cowboy Technologies principals anticipate hiring a management team with specific industry expertise and contacts within the next year. The company has received $100,000 in proof-of-concept funding from Cowboy Technologies and has been approved for up to $125,000 from i2E’s Concept Fund to advance development of the technology. “Semiconductor industry customers are very narrow, so if we have a breakthrough product we will have a very rapid market adoption,” Wood said. “Gallium Arsenide is significant to the semiconductor space and will only entrench itself further as new chip uses are developed.” AMP also may form a strategic relationship with the Oklahoma-based arm of a semiconductor waste abatement service provider. The bottom line: if AMP’s arsenic filtering process is effective in large scale beta test in Utah this spring, demand could quickly grow as semiconductor manufacturers turn to a new Oklahoma-based answer to an old industry problem.

Product or Technology: A sorbent material for the removal of arsenic from industrial process effluent or drinking water. Market: Municipal or industrial water systems with water supplies that exceed federal arsenic content levels. Future plans: The company plans to establish its product in initial target markets and then expand into other markets in late 2013. Funding: Approved for up to $125,000 in financing for i2E’s Concept Fund and $100,000 Proof of Concept funding from Cowboy Technologies. Successes: As a result of a Technology Business Program Grant from Oklahoma State University’s Office of Intellectual Property Management, AMP has been able to conduct a lab scale demonstration of its sorbent material. It also has designed beta process equipment and expects delivery in early 2012.

Winter 2012 i&E

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Profiles FLX-Paint

“One key advantage of working with i2E is helping us avoid making expensive mistakes, all start-ups make mistakes; it’s part of the learning curve. But anytime you can avoid the company-ending and expensive mistakes, that is worth a fortune.” – Chris Harren

FLX-Paint founder Chris Harren stood in front of a display booth adorned by stunning swatches of color with names that were equally as vivid. Kandy Apple Red. Ultra Matte White Pearl. Kandy Lowrider Green. Inferno Orange. Matte Black. Ultra Matte Matador Red Pearl. The color swatches are pieces of stretchable film that Claremore-based FLX-Paint produces that are used to wrap automobiles and a variety of other consumer items. FLX-Paint can wrap an automobile in 40 standard colors and has the ability to match any automotive finish. “Every time we take this booth to the trade shows, people come up and want to touch those colors,” Harren said. “It’s really fascinating to watch. When people see a color like Kandy Apple Red they want that color. It is an emotional draw.” Founded in 2007, FLX-Paint was created to provide its stretchable film as an alternative to painting automobiles, particularly high value-automobiles. It will both protect the original finish and can be removed without damaging it. It is “paint on a roll,” Harren said. “Our end customer is the ‘car enthusiast,’ the individual who wants to get a paint job on their car but is discouraged by

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the expense, down time and permanency of a traditional paint job,” he said. “We sell FLX-Paint to the professional vinyl wrap, window tint or paint protection film installer who in turn installs it for the customer.” The key is that the FLX-Paint wrap not only protects a car’s original finish but can be removed without damaging the original finish. “The removability is a key feature for the high-end car owners, because high-end cars are registered,” Harren said. “If the car’s original color is changed, the car is devalued because it’s not the original factory color.” FLX-Paint has already established a base of professional vinyl wrap and clear “bra” installers in the Tulsa and limited areas across the United States, as well as installers in Canada, Europe, China and Australia. Nationwide, there is a huge potential of about 5,150 shops that have the ability to install FLX-Paint. “We’ve established the market, we know that people can make money using FLX-Paint,” Harren said. “What we want to do next is provide more colors, newer films into these shops that we have certified that can install FLX Paint and take that to a much bigger scale.”

Already, some high profile customers are driving vehicles wrapped with bright FLX-Paint wrap. Harren cited a Hollywood film executive who drives a BMX M5 with a FLX-Paint wrap, and a well known actor in his Audi A5. “FLX-Paint is widely used on high-end vehicles like Lamborghini and Ferrari because of its unique ability to be cleanly removed while preserving the factory paint,” Harren said. Harren connected with i2E as he began to prepare the company to move beyond the start-up phase and expand its marketing and production. “One key advantage of working with i2E is helping us avoid making expensive mistakes,” Harren said. “All start-ups make mistakes; it’s part of the learning curve. But anytime you can avoid the company-ending and expensive mistakes, that is worth a fortune.” Harren peers into the future and sees not only automobiles flying FLX-Paint colors, but many other items such as pick-up bed covers, high-end tool boxes, table tops, retail counters, cell phones, fingernails and even caskets. There’s a brighter future ahead and it is highlighted by Kandy Apple Red, Inferno Orange. Kandy Lowrider Green and a rainbow of FLX-Paint colors that stretches to the horizon.

Chris Harren President and CEO Year started: 2007 Location: Claremore, OK Employees: 4

Product or Technology: Paint Film, preapplied paint and other coatings for numerous markets, replacing coatings that are traditionally sprayed onto a surface. Market: The restyling segment of the automotive aftermarket. Future Plans: Founder Chris Harren sees the continued development of FLX-Paint and other paint films for the automotive, consumer electronic and other markets, such as counter tops, cell phones and even fingernails. Funding: FLX-Paint has been 100 percent selffunded to this point. Harren anticipates closing a funding package soon to scale the company using its established business model. Successes: FLX-Paint is a fully functioning company with sales in the U.S, Canada, Europe, China and Australia. More importantly, it has customers making money with FLX-Paint; the sales model is proven. The challenge now is to scale the model. It has a major car company prototyping FLX-Paint as a dealer installed option for its cars. www.flxpaint.com

Winter 2012 i&E

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Profiles FLX-Paint

“One key advantage of working with i2E is helping us avoid making expensive mistakes, all start-ups make mistakes; it’s part of the learning curve. But anytime you can avoid the company-ending and expensive mistakes, that is worth a fortune.” – Chris Harren

FLX-Paint founder Chris Harren stood in front of a display booth adorned by stunning swatches of color with names that were equally as vivid. Kandy Apple Red. Ultra Matte White Pearl. Kandy Lowrider Green. Inferno Orange. Matte Black. Ultra Matte Matador Red Pearl. The color swatches are pieces of stretchable film that Claremore-based FLX-Paint produces that are used to wrap automobiles and a variety of other consumer items. FLX-Paint can wrap an automobile in 40 standard colors and has the ability to match any automotive finish. “Every time we take this booth to the trade shows, people come up and want to touch those colors,” Harren said. “It’s really fascinating to watch. When people see a color like Kandy Apple Red they want that color. It is an emotional draw.” Founded in 2007, FLX-Paint was created to provide its stretchable film as an alternative to painting automobiles, particularly high value-automobiles. It will both protect the original finish and can be removed without damaging it. It is “paint on a roll,” Harren said. “Our end customer is the ‘car enthusiast,’ the individual who wants to get a paint job on their car but is discouraged by

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the expense, down time and permanency of a traditional paint job,” he said. “We sell FLX-Paint to the professional vinyl wrap, window tint or paint protection film installer who in turn installs it for the customer.” The key is that the FLX-Paint wrap not only protects a car’s original finish but can be removed without damaging the original finish. “The removability is a key feature for the high-end car owners, because high-end cars are registered,” Harren said. “If the car’s original color is changed, the car is devalued because it’s not the original factory color.” FLX-Paint has already established a base of professional vinyl wrap and clear “bra” installers in the Tulsa and limited areas across the United States, as well as installers in Canada, Europe, China and Australia. Nationwide, there is a huge potential of about 5,150 shops that have the ability to install FLX-Paint. “We’ve established the market, we know that people can make money using FLX-Paint,” Harren said. “What we want to do next is provide more colors, newer films into these shops that we have certified that can install FLX Paint and take that to a much bigger scale.”

Already, some high profile customers are driving vehicles wrapped with bright FLX-Paint wrap. Harren cited a Hollywood film executive who drives a BMX M5 with a FLX-Paint wrap, and a well known actor in his Audi A5. “FLX-Paint is widely used on high-end vehicles like Lamborghini and Ferrari because of its unique ability to be cleanly removed while preserving the factory paint,” Harren said. Harren connected with i2E as he began to prepare the company to move beyond the start-up phase and expand its marketing and production. “One key advantage of working with i2E is helping us avoid making expensive mistakes,” Harren said. “All start-ups make mistakes; it’s part of the learning curve. But anytime you can avoid the company-ending and expensive mistakes, that is worth a fortune.” Harren peers into the future and sees not only automobiles flying FLX-Paint colors, but many other items such as pick-up bed covers, high-end tool boxes, table tops, retail counters, cell phones, fingernails and even caskets. There’s a brighter future ahead and it is highlighted by Kandy Apple Red, Inferno Orange. Kandy Lowrider Green and a rainbow of FLX-Paint colors that stretches to the horizon.

Chris Harren President and CEO Year started: 2007 Location: Claremore, OK Employees: 4

Product or Technology: Paint Film, preapplied paint and other coatings for numerous markets, replacing coatings that are traditionally sprayed onto a surface. Market: The restyling segment of the automotive aftermarket. Future Plans: Founder Chris Harren sees the continued development of FLX-Paint and other paint films for the automotive, consumer electronic and other markets, such as counter tops, cell phones and even fingernails. Funding: FLX-Paint has been 100 percent selffunded to this point. Harren anticipates closing a funding package soon to scale the company using its established business model. Successes: FLX-Paint is a fully functioning company with sales in the U.S, Canada, Europe, China and Australia. More importantly, it has customers making money with FLX-Paint; the sales model is proven. The challenge now is to scale the model. It has a major car company prototyping FLX-Paint as a dealer installed option for its cars. www.flxpaint.com

Winter 2012 i&E

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Profiles The Clinical Hub

CURE FOR THE CLINICAL BOTTLENECK

I

magine a six-lane highway built for high capacity traffic that suddenly narrows to four lanes. If the traffic is heavy, vehicles can back up for miles as drivers are funneled into the narrower roadway. That’s known as a bottleneck. Traffic slows to a crawl and drivers are frustrated. A similar bottleneck exists within the nation’s health care education system for nurses, emergency medical technicians and other medical specialties. Classrooms can have upwards of a 20:1 student-to-teacher ratio, but when students need to gain their hands-on clinical experiences that ratio drops to around 8:1 as the need for more individualized attention and limitations of the work environment come into play. In addition, schools cannot increase their enrollment unless they can secure additional clinical slots for the additional students. Clinical slots are therefore a precious commodity. “That is what we call the clinical bottleneck,” said Jim Durbin, Executive Director of the Oklahoma Health Care Workforce Center. “There is a natural constriction of how many students can be moved through the system along with an increasing demand for a finite resource. Conflicts arise between schools on how to sort out the bottleneck.”

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What makes The Clinical Hub different is that schools are able to view openings in real time and select only the individual dates/times they need instead of blocks of days. – Jim Durbin In Oklahoma City, 13 hospitals provide clinical experience for almost 3,000 nursing and EMT students from 30 educational programs representing 27 schools, Durbin said. “Unfortunately, the paper-based system used to manage the clinical placement process lacked efficiency and made it hard to identify more available slots,” he said. This fall, a new Web-based software application called The Clinical Hub debuted in Oklahoma City to help alleviate the clinical bottleneck. Created by the Oklahoma Health Care Workforce Center, and developed under contract by Edmond-based Pixel Mongers, The Clinical Hub allows hospitals to publish their available clinical slots and schools to go online to request them. “What makes The Clinical Hub different is that schools are able to view openings in real time and select only the individual dates/times they need instead of blocks of days,” Durbin said. There is a fee structure for each type of user of the system. Hospitals pay an annual per bed fee. The schools have an annual per student fee and there is a fee for each student as well. “This way, all three groups with an interest in the success and availability of clinicals are vested in the system,” states Durbin. One way The Clinical Hub distinguishes itself from competing scheduling applications is how it handles the concept of what Durbin calls “communities,” which can be a single hospital or a group of collaborating hospitals like those in Oklahoma City. “We know that some schools, especially in the rural areas, have to belong to more than one community,” Durbin said. “They might not be able to get all their clinicals done at their local hospital. There are specialties for which they have to go to a large metropolitan area.”“So, we allow schools to belong to multiple communities at no additional cost.” Durbin expects the Clinical Hub to roll out in the Tulsa area for the fall 2012 semester with other markets to follow, such as the I-44 corridor into Missouri and I-40 into Arkansas. i2E became involved with The Clinical Hub to help Durbin develop a business model that will allow for expansion beyond Oklahoma. “First, however, we need to attack the clinical bottleneck in Oklahoma,” Durbin said. “We would like to see all the schools and all the hospitals participate so that we can create a statewide picture of what they have in terms of clinical capacity.” Then perhaps that clinical bottleneck can be widened into a highcapacity clinical superhighway that will provide expanded health care industry opportunities to more Oklahomans.

Jim Durbin Executive Director, Oklahoma Health Care Workforce Center Year Started: 2009 Location: Oklahoma City, OK Employees: 5

Product or Technology: Web-based software that provides a transparent, information-rich system for managing the clinical student scheduling process between schools and health care facilities to maximize the allocation and use of clinical slots. Market: Hospitals and health care education programs that collaborate to provide clinical experiences for health care students. Currently, The Clinical Hub is in use in the Oklahoma City metropolitan area. Future plans: The plan is to expand use of the system statewide in Oklahoma throughout 2012 with a broader expansion to follow. The system will also be expanded to include students of other health care professions besides nursing and emergency medical technicians. Funding: The development and implementation of The Clinical Hub has been internally funded by the Oklahoma Healthcare Workforce Center. Successes: The Clinical Hub was launched in August 2011 in Oklahoma City serving 13 hospitals, 30 education programs, and more than 2,800 students. www.theclinicalhub.net

Winter 2012 i&E

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Profiles The Clinical Hub

CURE FOR THE CLINICAL BOTTLENECK

I

magine a six-lane highway built for high capacity traffic that suddenly narrows to four lanes. If the traffic is heavy, vehicles can back up for miles as drivers are funneled into the narrower roadway. That’s known as a bottleneck. Traffic slows to a crawl and drivers are frustrated. A similar bottleneck exists within the nation’s health care education system for nurses, emergency medical technicians and other medical specialties. Classrooms can have upwards of a 20:1 student-to-teacher ratio, but when students need to gain their hands-on clinical experiences that ratio drops to around 8:1 as the need for more individualized attention and limitations of the work environment come into play. In addition, schools cannot increase their enrollment unless they can secure additional clinical slots for the additional students. Clinical slots are therefore a precious commodity. “That is what we call the clinical bottleneck,” said Jim Durbin, Executive Director of the Oklahoma Health Care Workforce Center. “There is a natural constriction of how many students can be moved through the system along with an increasing demand for a finite resource. Conflicts arise between schools on how to sort out the bottleneck.”

8

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Winter 2012

What makes The Clinical Hub different is that schools are able to view openings in real time and select only the individual dates/times they need instead of blocks of days. – Jim Durbin In Oklahoma City, 13 hospitals provide clinical experience for almost 3,000 nursing and EMT students from 30 educational programs representing 27 schools, Durbin said. “Unfortunately, the paper-based system used to manage the clinical placement process lacked efficiency and made it hard to identify more available slots,” he said. This fall, a new Web-based software application called The Clinical Hub debuted in Oklahoma City to help alleviate the clinical bottleneck. Created by the Oklahoma Health Care Workforce Center, and developed under contract by Edmond-based Pixel Mongers, The Clinical Hub allows hospitals to publish their available clinical slots and schools to go online to request them. “What makes The Clinical Hub different is that schools are able to view openings in real time and select only the individual dates/times they need instead of blocks of days,” Durbin said. There is a fee structure for each type of user of the system. Hospitals pay an annual per bed fee. The schools have an annual per student fee and there is a fee for each student as well. “This way, all three groups with an interest in the success and availability of clinicals are vested in the system,” states Durbin. One way The Clinical Hub distinguishes itself from competing scheduling applications is how it handles the concept of what Durbin calls “communities,” which can be a single hospital or a group of collaborating hospitals like those in Oklahoma City. “We know that some schools, especially in the rural areas, have to belong to more than one community,” Durbin said. “They might not be able to get all their clinicals done at their local hospital. There are specialties for which they have to go to a large metropolitan area.”“So, we allow schools to belong to multiple communities at no additional cost.” Durbin expects the Clinical Hub to roll out in the Tulsa area for the fall 2012 semester with other markets to follow, such as the I-44 corridor into Missouri and I-40 into Arkansas. i2E became involved with The Clinical Hub to help Durbin develop a business model that will allow for expansion beyond Oklahoma. “First, however, we need to attack the clinical bottleneck in Oklahoma,” Durbin said. “We would like to see all the schools and all the hospitals participate so that we can create a statewide picture of what they have in terms of clinical capacity.” Then perhaps that clinical bottleneck can be widened into a highcapacity clinical superhighway that will provide expanded health care industry opportunities to more Oklahomans.

Jim Durbin Executive Director, Oklahoma Health Care Workforce Center Year Started: 2009 Location: Oklahoma City, OK Employees: 5

Product or Technology: Web-based software that provides a transparent, information-rich system for managing the clinical student scheduling process between schools and health care facilities to maximize the allocation and use of clinical slots. Market: Hospitals and health care education programs that collaborate to provide clinical experiences for health care students. Currently, The Clinical Hub is in use in the Oklahoma City metropolitan area. Future plans: The plan is to expand use of the system statewide in Oklahoma throughout 2012 with a broader expansion to follow. The system will also be expanded to include students of other health care professions besides nursing and emergency medical technicians. Funding: The development and implementation of The Clinical Hub has been internally funded by the Oklahoma Healthcare Workforce Center. Successes: The Clinical Hub was launched in August 2011 in Oklahoma City serving 13 hospitals, 30 education programs, and more than 2,800 students. www.theclinicalhub.net

Winter 2012 i&E

9


Up and Coming

NATURAL GAS CHEMISTRIES CORPORATION Location: Ardmore, OK Industry: Energy Market: The company provides plunger conveyed chemical systems to prevent corrosion in natural gas wells. Natural Gas Chemistries Corp., has created a patented technology that delivers a corrosion inhibitor and other chemicals down gas wells’ tubing of any depth. The company’s technology provides a less expensive alternative to current technology and requires less manpower with no loss of productivity during well treatment. Founder and CEO Sam Farris has more than 40 years of experience in oil and gas operations. www.natgaschem.com

MOLECULERA LABS, INC. Location: Oklahoma City, OK Industry: Bio Pharma Market: Moleculera Labs is advancing technology to benefit millions of individuals suffering from Autism Spectrum Disorders. Every child becomes infected with a strep infection sometime in their life. Certain children develop antibodies against the strep bacteria that unfortunately, also cross-react with neurologic receptors in their brain. These autoimmune antibodies lead to debilitating autistic neurologic behaviors now known as PANDAS. Moleculera Labs has licensed from OU and Dr. Madeleine Cunningham, a proprietary panel of tests for PANDAS and other related neurologic conditions. This test panel was developed by Dr. Cunningham, company co-founder and Chief Scientific Officer, who also is a George Lynn Cross Research Professor and PHF Presidential Professor, and Microbiology and Immunology Director, Immunology Training Program at the University of Oklahoma Health Sciences Center. Serial entrepreneur and scientist Dr. Craig Shimasaki, is co-founder and CEO.

NGV FLEET PARTNERS Location: Guthrie, OK Industry: Energy Market: Companies or government agencies that plan to capture cost savings and environmental benefits by converting to compressed natural gas to fuel their fleet of vehicles. As a financial services company focusing on helping clients convert their fleets to compressed natural gas, NGV Fleet provides a variety of services, such as assisting clients cut the cost of conversion through a specialized leasing program or with use of federal tax credits. It also helps companies and municipalities analyze their fleets and determine if switching to CNG would be practical and cost-effective. NGV Fleet also provides consulting and expertise in financing and installing CNG fueling stations.

VISI-HEALTH SOFTWARE, LLC Location: Edmond, OK Industry: Healthcare software Market: Home healthcare contract therapy service providers. Visi-Health Software is the developer of Home Healthcare Assistant © -a software package built on a SAAS model. Home Healthcare Assistant © is written specifically for the contract therapy market. The software solves the largest obstacles facing contract therapy companies: getting patient notes in a timely manner, invoicing, payroll, visits performed out of frequency, and profitability reporting. www.visi-health.com

SEAM AERO Location: Norman, OK Industry: Defense and Aerospace Market: SEAM Aero provides digitally enabled, cutting-edge technologies for use in the maintenance, repair and overhaul of civilian and military aircraft. Founded in 2009, SEAM Aero provides laser scanning, 3D modeling and computer aided design services to the aerospace industry, as well as reverse engineering, large scale 3D scanning, metrology and inspection, rapid prototyping and product development services. It received $3 million in funding from the EDGE (Economic Development Generating Excellence) Policy Board. Shivakumar Raman, Ph.D., a David Ross Boyd professor at the University of Oklahoma, is Manager and Executive Director.

www.ngvfleet.com www.seamaero.com

OKLAHOMA MEDICAL RESEARCH FOUNDATION – GLIOBLASTOMA PROJECT Location: Oklahoma City, OK Industry: Bio Pharma Market: The Glioblastoma Project was developed to provide treatment for the more than 176,000 people who develop these brain tumors annually.

WORD INDUSTRIES FABRICATION, LLC Location: Tulsa, OK Industry: Manufacturing Market: Word Industries provides fabricated piping systems and metering equipment for use in the natural gas, oil and liquids industries.

OMRF, one of the nation’s leading independent biomedical research institutes, has discovered that a compound derived from work in its laboratories is highly effective in preventing the growth of certain deadly brain tumors in laboratory rodents. The compound, known as OKN007, has already been found to be safe in humans. With the support of i2E, OMRF is working with the Food and Drug Administration to begin testing the compound in patients suffering from glioblastomas, a condition for which there currently is no effective treatment.

Word Industries operates a 45,000 square foot shop in Tulsa where it fabricates skidded gas compressor equipment, gas metering tubes and skids, liquid transfer equipment and prefabricated piping components for use in the petrochemical, refining and power industries. It owns an innovative, patent pending design for pipe flanges, called the Talon Flange that are used to reduce vibration in oil field equipment. The company also has a patented safety skid and gripping attachment to handle and transport oil and gas fabricated equipment in a lowcost and safe method.

www.omrf.org

www.wordind.com

VADOVATIONS, INC. Location: Oklahoma City, OK Industry: Biotechnology Market: The company is developing devices to treat moderate to severe congestive heart failure, a condition that afflicts about 100,000 people in the U.S. and up to 200,000 more worldwide. VADovations is creating the world’s smallest implantable blood pump to treat heart failure. The VADovations device is small enough to be implanted using minimally invasive techniques, eliminating the need for open heart surgery required with present technology, and integrates biocompatibility into the design to substantially reduce complications. The company goal is to re-make blood pump technology to be as safe and forgettable to heart failure patients as a pacemaker.

Website coming soon

10

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Winter 2012

Winter 2012 i&E

11


Up and Coming

NATURAL GAS CHEMISTRIES CORPORATION Location: Ardmore, OK Industry: Energy Market: The company provides plunger conveyed chemical systems to prevent corrosion in natural gas wells. Natural Gas Chemistries Corp., has created a patented technology that delivers a corrosion inhibitor and other chemicals down gas wells’ tubing of any depth. The company’s technology provides a less expensive alternative to current technology and requires less manpower with no loss of productivity during well treatment. Founder and CEO Sam Farris has more than 40 years of experience in oil and gas operations. www.natgaschem.com

MOLECULERA LABS, INC. Location: Oklahoma City, OK Industry: Bio Pharma Market: Moleculera Labs is advancing technology to benefit millions of individuals suffering from Autism Spectrum Disorders. Every child becomes infected with a strep infection sometime in their life. Certain children develop antibodies against the strep bacteria that unfortunately, also cross-react with neurologic receptors in their brain. These autoimmune antibodies lead to debilitating autistic neurologic behaviors now known as PANDAS. Moleculera Labs has licensed from OU and Dr. Madeleine Cunningham, a proprietary panel of tests for PANDAS and other related neurologic conditions. This test panel was developed by Dr. Cunningham, company co-founder and Chief Scientific Officer, who also is a George Lynn Cross Research Professor and PHF Presidential Professor, and Microbiology and Immunology Director, Immunology Training Program at the University of Oklahoma Health Sciences Center. Serial entrepreneur and scientist Dr. Craig Shimasaki, is co-founder and CEO.

NGV FLEET PARTNERS Location: Guthrie, OK Industry: Energy Market: Companies or government agencies that plan to capture cost savings and environmental benefits by converting to compressed natural gas to fuel their fleet of vehicles. As a financial services company focusing on helping clients convert their fleets to compressed natural gas, NGV Fleet provides a variety of services, such as assisting clients cut the cost of conversion through a specialized leasing program or with use of federal tax credits. It also helps companies and municipalities analyze their fleets and determine if switching to CNG would be practical and cost-effective. NGV Fleet also provides consulting and expertise in financing and installing CNG fueling stations.

VISI-HEALTH SOFTWARE, LLC Location: Edmond, OK Industry: Healthcare software Market: Home healthcare contract therapy service providers. Visi-Health Software is the developer of Home Healthcare Assistant © -a software package built on a SAAS model. Home Healthcare Assistant © is written specifically for the contract therapy market. The software solves the largest obstacles facing contract therapy companies: getting patient notes in a timely manner, invoicing, payroll, visits performed out of frequency, and profitability reporting. www.visi-health.com

SEAM AERO Location: Norman, OK Industry: Defense and Aerospace Market: SEAM Aero provides digitally enabled, cutting-edge technologies for use in the maintenance, repair and overhaul of civilian and military aircraft. Founded in 2009, SEAM Aero provides laser scanning, 3D modeling and computer aided design services to the aerospace industry, as well as reverse engineering, large scale 3D scanning, metrology and inspection, rapid prototyping and product development services. It received $3 million in funding from the EDGE (Economic Development Generating Excellence) Policy Board. Shivakumar Raman, Ph.D., a David Ross Boyd professor at the University of Oklahoma, is Manager and Executive Director.

www.ngvfleet.com www.seamaero.com

OKLAHOMA MEDICAL RESEARCH FOUNDATION – GLIOBLASTOMA PROJECT Location: Oklahoma City, OK Industry: Bio Pharma Market: The Glioblastoma Project was developed to provide treatment for the more than 176,000 people who develop these brain tumors annually.

WORD INDUSTRIES FABRICATION, LLC Location: Tulsa, OK Industry: Manufacturing Market: Word Industries provides fabricated piping systems and metering equipment for use in the natural gas, oil and liquids industries.

OMRF, one of the nation’s leading independent biomedical research institutes, has discovered that a compound derived from work in its laboratories is highly effective in preventing the growth of certain deadly brain tumors in laboratory rodents. The compound, known as OKN007, has already been found to be safe in humans. With the support of i2E, OMRF is working with the Food and Drug Administration to begin testing the compound in patients suffering from glioblastomas, a condition for which there currently is no effective treatment.

Word Industries operates a 45,000 square foot shop in Tulsa where it fabricates skidded gas compressor equipment, gas metering tubes and skids, liquid transfer equipment and prefabricated piping components for use in the petrochemical, refining and power industries. It owns an innovative, patent pending design for pipe flanges, called the Talon Flange that are used to reduce vibration in oil field equipment. The company also has a patented safety skid and gripping attachment to handle and transport oil and gas fabricated equipment in a lowcost and safe method.

www.omrf.org

www.wordind.com

VADOVATIONS, INC. Location: Oklahoma City, OK Industry: Biotechnology Market: The company is developing devices to treat moderate to severe congestive heart failure, a condition that afflicts about 100,000 people in the U.S. and up to 200,000 more worldwide. VADovations is creating the world’s smallest implantable blood pump to treat heart failure. The VADovations device is small enough to be implanted using minimally invasive techniques, eliminating the need for open heart surgery required with present technology, and integrates biocompatibility into the design to substantially reduce complications. The company goal is to re-make blood pump technology to be as safe and forgettable to heart failure patients as a pacemaker.

Website coming soon

10

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Winter 2012

Winter 2012 i&E

11


D

r. Richard Harty explored the mysteries of the human gastrointestinal system as physician, researcher and university

professor for more than three decades, including

Digestive Relief

14 years as Chief of Gastroenterology at the University of Oklahoma Health Sciences Center.

Altheus Therapeutics advances unique drug combination to treat Inflammatory Bowel Disease

Along the way he researched a debilitating and painful condition known as Inflammatory Bowel Disease, which led him to a new career as an entrepreneur who is building an Oklahoma-based life sciences company called Therapeutics, Inc.

More than 1.3 million Americans suffer chronic intestinal

inflammation, ulcers, bleeding, and digestive disruptions from two forms of Inflammatory Bowel Disease known as ulcerative colitis and Crohn’s disease. The condition surfaces primarily in the young adult years, but it is a life-long affliction with little relief.

“We don’t know what causes the diseases, but we

do know that the immune regulatory systems within the intestine are disturbed; they are overactive,” Dr. Harty said. “The first line therapy for ulcerative colitis is an aspirin-like drug called mesalamine. If a patient fails that treatment, then they go on to more aggressive forms of therapy all the way up to biologic therapy and, ultimately, surgery, which have some down sides in terms of risk and expense.” A glimmer of hope for sufferers of Inflammatory Bowel Disease began to emerge in the mid-2000s from Dr. Harty’s laboratory at OU. He developed a therapy that combines two drugs already approved by the Food and Drug Administration; one is an antioxidant called N-acetylycysteine (NAC), and the other is mesalamine.

12

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Winter 2012

Fall 2011

i&E

13


D

r. Richard Harty explored the mysteries of the human gastrointestinal system as physician, researcher and university

professor for more than three decades, including

Digestive Relief

14 years as Chief of Gastroenterology at the University of Oklahoma Health Sciences Center.

Altheus Therapeutics advances unique drug combination to treat Inflammatory Bowel Disease

Along the way he researched a debilitating and painful condition known as Inflammatory Bowel Disease, which led him to a new career as an entrepreneur who is building an Oklahoma-based life sciences company called Therapeutics, Inc.

More than 1.3 million Americans suffer chronic intestinal

inflammation, ulcers, bleeding, and digestive disruptions from two forms of Inflammatory Bowel Disease known as ulcerative colitis and Crohn’s disease. The condition surfaces primarily in the young adult years, but it is a life-long affliction with little relief.

“We don’t know what causes the diseases, but we

do know that the immune regulatory systems within the intestine are disturbed; they are overactive,” Dr. Harty said. “The first line therapy for ulcerative colitis is an aspirin-like drug called mesalamine. If a patient fails that treatment, then they go on to more aggressive forms of therapy all the way up to biologic therapy and, ultimately, surgery, which have some down sides in terms of risk and expense.” A glimmer of hope for sufferers of Inflammatory Bowel Disease began to emerge in the mid-2000s from Dr. Harty’s laboratory at OU. He developed a therapy that combines two drugs already approved by the Food and Drug Administration; one is an antioxidant called N-acetylycysteine (NAC), and the other is mesalamine.

12

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Fall 2011

i&E

13


Dr. Harty proposed that the combined drugs would be more effective as a therapy for inflammatory bowel disease than if administered individually. Then he tested the combination on laboratory animals with positive results. “We showed that the combination was better than the mesalamine alone and also better than the other drug alone, and that this benefit was what we call synergistic,” he said. “It was more than two plus two equals four; it was like two plus two equals six or seven or eight.” Within a short time, Dr. Harty talked to the OU Office of Technology Development, contacted i2E for assistance in starting a new company and licensed the technology. In 2007, he founded Altheus Therapeutics. The potential for success promised by a shorter route to FDA approval for drugs already proven to be safe created a lot of immediate interest from investors. Early on, Altheus attracted $3.6 million in early venture capital from i2E’s Oklahoma Seed Capital Fund and co-investors that included the Oklahoma Life Sciences Fund, Oklahoma Equity Partners and St. Louis, Mo.-based ProLog Ventures. “The hurdles we have to cross to receive FDA approval for our therapy are not quite as high compared to a new chemical entity, since both of the drugs we use have been around for years,” Dr. Harty said. “Now, they have not been used together; we are the first to do that. But we anticipate a shorter timeline to approval. A new drug usually takes 10 years to receive FDA approval.” In 2010, Dennis Schafer was named CEO to manage the com-

Dr. Dennis Hair, a scientist with Altheus Therapeutics, works on a formulation for the company’s new drug combination for treatment of Inflammatory Bowel Disease.

pany’s business operations, while Dr. Harty directs drug development as Chief Scientific Officer. Altheus is simultaneously developing both enema and oral therapeutics for Inflammatory Bowel Disease. “The drug combination is primarily intended for the induction of remission and control of the disease when it flares,” Dr. Harty said. “So, when a patient starts experiencing symptoms and it is a flareup of their disease and it’s in the left side of the colon, the enema is probably the first drug to go to. Dr. Harty envisions both Altheus drug therapies to be used in inflammatory bowel disease; the enema product will be used for remission of left-sided ulcerative colitis and oral therapy will be used to induce remission of flares and to maintain remission. “The enema would be used on a relatively short-term basis for acute flare of the disease, a matter of weeks, while the oral therapy would be used to maintain that remission,” he said. “It would be an extended therapy.” Altheus took a major step down the drug development path in a Phase I study completed in the fall of 2011 that proved its drug therapy was safe for use in humans. “It was successful in that we identified no negative safety or drug tolerance issues,” Dr. Harty said. The next step toward commercialization is a more comprehensive Phase II trial scheduled to start in 2012, which will expand the number of patients who use the Altheus therapy to about 120. With safety of the drug established by the Phase I study, the Phase II trials will establish its effectiveness, Dr. Harty said.

Before he accepted the position of CEO with Altheus Therapeutics, Dennis Schafer had served in similar roles as a serial entrepreneur with such companies as Coley Pharmaceuticals, Biocryst, Megan Health and Aderis Pharmeceuticals. His former companies have a long history of successful acquisitions, initial public offerings and industry partnerships. Schafer, who lives in Richmond, Virginia, and commutes to Oklahoma City approximately every two weeks, recently discussed his role with Altheus and the potential of the company. Below are excerpts of that conversation.

Q: How does Altheus compare with

Q: What’s the next step for

Q: What have you learned about

other life science companies you

Altheus if the Phase II trials are

the company and team since you

have worked with?

successful?

became CEO?

A: My role in life is to help organize

A: We have talked with some of the

A: I can’t overstate how purposeful

biotech companies, so I’ve worked

major companies in this field, and

and dedicated the team here in

with a lot of very early stage

we’ve learned, first, that they will

Oklahoma is. We’re going through

companies. What I like about Altheus

view it as an exciting opportunity,

the really tough stages of early clinical

is that the drug is potentially very

and, second, we need to have that

development, big transitions for the

important, and the development path

Phase II data before we can form a

company, and it’s just been a really

is clear cut, and the science behind

partnership. We are in discussions

great group of people.

it is very strong. That’s a powerful

with one company for a partnership

combination. So, from my perspective,

around the enema product. But the

as someone who has worked on quite

real commercial opportunity is the oral

a number of startups, this is one that I

product, and when we have our Phase

really like a lot.

II data from the study, then we’ll seek a partnership on the oral product.

Q: How did you connect with Dr. Richard Harty and Altheus?

Q: Will Altheus remain an Oklahoma

A: I came to Altheus through Brian

company if you are acquired or

Clevinger, who is Managing Director

merged into a partnership?

of Prolog Ventures in St. Louis and

A: We have no plans to move it. If it

was chairman of the board of Altheus

were bought out by a partner, there

and an investor in the company from

is every possibility that they would

Prolog. He’s an old friend. We started

continue to have a presence here. This

a company together many years ago.

is not just an issue with Oklahoma,

Brian was the chairman and I was on

but this is the nature of the biotech

the board of directors of that company

industry. We’re a feeder for the

back in the late 1980s and early ‘90s.

pharmaceutical industry. The big drug companies are going to eventually sell these products and none of them are headquartered in Oklahoma.

Winter 2012 i&E

15


Dr. Harty proposed that the combined drugs would be more effective as a therapy for inflammatory bowel disease than if administered individually. Then he tested the combination on laboratory animals with positive results. “We showed that the combination was better than the mesalamine alone and also better than the other drug alone, and that this benefit was what we call synergistic,” he said. “It was more than two plus two equals four; it was like two plus two equals six or seven or eight.” Within a short time, Dr. Harty talked to the OU Office of Technology Development, contacted i2E for assistance in starting a new company and licensed the technology. In 2007, he founded Altheus Therapeutics. The potential for success promised by a shorter route to FDA approval for drugs already proven to be safe created a lot of immediate interest from investors. Early on, Altheus attracted $3.6 million in early venture capital from i2E’s Oklahoma Seed Capital Fund and co-investors that included the Oklahoma Life Sciences Fund, Oklahoma Equity Partners and St. Louis, Mo.-based ProLog Ventures. “The hurdles we have to cross to receive FDA approval for our therapy are not quite as high compared to a new chemical entity, since both of the drugs we use have been around for years,” Dr. Harty said. “Now, they have not been used together; we are the first to do that. But we anticipate a shorter timeline to approval. A new drug usually takes 10 years to receive FDA approval.” In 2010, Dennis Schafer was named CEO to manage the com-

Dr. Dennis Hair, a scientist with Altheus Therapeutics, works on a formulation for the company’s new drug combination for treatment of Inflammatory Bowel Disease.

pany’s business operations, while Dr. Harty directs drug development as Chief Scientific Officer. Altheus is simultaneously developing both enema and oral therapeutics for Inflammatory Bowel Disease. “The drug combination is primarily intended for the induction of remission and control of the disease when it flares,” Dr. Harty said. “So, when a patient starts experiencing symptoms and it is a flareup of their disease and it’s in the left side of the colon, the enema is probably the first drug to go to. Dr. Harty envisions both Altheus drug therapies to be used in inflammatory bowel disease; the enema product will be used for remission of left-sided ulcerative colitis and oral therapy will be used to induce remission of flares and to maintain remission. “The enema would be used on a relatively short-term basis for acute flare of the disease, a matter of weeks, while the oral therapy would be used to maintain that remission,” he said. “It would be an extended therapy.” Altheus took a major step down the drug development path in a Phase I study completed in the fall of 2011 that proved its drug therapy was safe for use in humans. “It was successful in that we identified no negative safety or drug tolerance issues,” Dr. Harty said. The next step toward commercialization is a more comprehensive Phase II trial scheduled to start in 2012, which will expand the number of patients who use the Altheus therapy to about 120. With safety of the drug established by the Phase I study, the Phase II trials will establish its effectiveness, Dr. Harty said.

Before he accepted the position of CEO with Altheus Therapeutics, Dennis Schafer had served in similar roles as a serial entrepreneur with such companies as Coley Pharmaceuticals, Biocryst, Megan Health and Aderis Pharmeceuticals. His former companies have a long history of successful acquisitions, initial public offerings and industry partnerships. Schafer, who lives in Richmond, Virginia, and commutes to Oklahoma City approximately every two weeks, recently discussed his role with Altheus and the potential of the company. Below are excerpts of that conversation.

Q: How does Altheus compare with

Q: What’s the next step for

Q: What have you learned about

other life science companies you

Altheus if the Phase II trials are

the company and team since you

have worked with?

successful?

became CEO?

A: My role in life is to help organize

A: We have talked with some of the

A: I can’t overstate how purposeful

biotech companies, so I’ve worked

major companies in this field, and

and dedicated the team here in

with a lot of very early stage

we’ve learned, first, that they will

Oklahoma is. We’re going through

companies. What I like about Altheus

view it as an exciting opportunity,

the really tough stages of early clinical

is that the drug is potentially very

and, second, we need to have that

development, big transitions for the

important, and the development path

Phase II data before we can form a

company, and it’s just been a really

is clear cut, and the science behind

partnership. We are in discussions

great group of people.

it is very strong. That’s a powerful

with one company for a partnership

combination. So, from my perspective,

around the enema product. But the

as someone who has worked on quite

real commercial opportunity is the oral

a number of startups, this is one that I

product, and when we have our Phase

really like a lot.

II data from the study, then we’ll seek a partnership on the oral product.

Q: How did you connect with Dr. Richard Harty and Altheus?

Q: Will Altheus remain an Oklahoma

A: I came to Altheus through Brian

company if you are acquired or

Clevinger, who is Managing Director

merged into a partnership?

of Prolog Ventures in St. Louis and

A: We have no plans to move it. If it

was chairman of the board of Altheus

were bought out by a partner, there

and an investor in the company from

is every possibility that they would

Prolog. He’s an old friend. We started

continue to have a presence here. This

a company together many years ago.

is not just an issue with Oklahoma,

Brian was the chairman and I was on

but this is the nature of the biotech

the board of directors of that company

industry. We’re a feeder for the

back in the late 1980s and early ‘90s.

pharmaceutical industry. The big drug companies are going to eventually sell these products and none of them are headquartered in Oklahoma.

Winter 2012 i&E

15


The larger Phase II trial will be more costly than the initial human clinical study, which means that Altheus is raising $5 million to $7 million to fund the round. It recently was awarded a $1.6 million grant from the state’s EDGE (Economic Development Generating Excellence) Policy Board that will support the Phase II study. “The EDGE grant will fund Oklahoma-based activities involved in the clinical study,” Schafer said. “It will be a national study, but the lead site will be here in Oklahoma City.” Altheus has also discussed follow-on investment from the Oklahoma Seed Capital Fund, as well as possible investment from the Angel Sidecar Fund, which also is managed by i2E. If the Phase II trial proves that the Altheus drug therapy is effective, the company will become a prime target for partnership or acquisition from bigger drug companies. “The Phase II study is going to tell us a lot,” Schafer said. “If the results of that study are successful, it will open the floodgates to partnering opportunities, fundraising opportunities and development of oral products, which is potentially a lot bigger market opportunity. This is really an important study, a critical study.” i2E’s role with investment and business advice has been critical for the company as it positioned its drug combination for the rounds of human clinical studies, Dr. Harty said. “I think i2E has been a valuable supporter and resource,” he said. “I view them as skilled and mature people who are savvy in the biotech field and are sensitive and helpful to people who have ideas.” In fact, Dr. Harty attributed much of the company’s success to Oklahoma’s network of supporting agencies and programs. In addition to the grant awarded to it by the state’s EDGE Policy Board, it also has received state funding through the Oklahoma Applied Research Support program managed by Oklahoma Center for the Advancement of Science and Technology (OCAST). Organizations like the OK Bioscience Association and the Presbyterian Health Foundation also have played a role. “I think that despite the disadvantage that we don’t have Boston on one side of the river and San Francisco on the other side, this state has been very forward thinking and helpful in assisting startup companies like us to move forward,” he said. “That support, along with our cohort of investors, has at least given us a glimmer of hope.” The glimmer that Dr. Richard Harty sees for Altheus is shared by more than 2.3 million people worldwide who suffer from Inflammatory Bowel Disease. It is the hope that a new drug combination that emerged from Dr. Harty’s OU laboratory will soon provide them relief from a life of suffering.

i2E + OCAST + OMRF + OKC Chamber + OK Alliance + NPDC + OK EPSCoR About the Altheus Therapeutics drug therapies

Altheus Therapeutics, Inc., has developed two novel therapies for the treatment of Inflammatory Bowel Disease. The technology for these enema and oral drug therapies takes advantage of synergistic actions of combining two existing medicines in unique formulations to reduce bowel inflammation associated with ulcerative colitis and Crohn’s Disease. Preclinical studies in experimental animals with colitis have shown that combining the antioxidant N-acetylcysteine with mesalamine as a topical enema therapy showed superior efficacy and significantly enhanced reduction in colonic inflammation and inhibition of cytokine gene expression and biomarkers of inflammation when compared to either therapy administered separately. Subsequent work on the enema formulation resulted in a stable enema product that was successfully tested in an FDA-approved Phase 1 study. In addition, an oral product prototype has been developed that allows for delivery of the active pharmaceutical ingredients to targeted sites of inflammation in the distal small intestine and the colon for topical action. The company has exclusively licensed the intellectual property used in the therapies from the University of Oklahoma.

About Inflammatory Bowel Disease

Inflammatory Bowel Disease is a chronic inflammatory disease consisting of two main types – Ulcerative Colitis and Crohn’s Disease. Both diseases are characterized by an inflammatory process that evolves into ulcerations in the intestine. Ulcerative Colitis differs from Crohn’s Disease in two characteristics. First, Ulcerative Colitis is confined to the large intestine (colon) while Crohn’s Disease can involve multiple locations anywhere in the digestive tract, but most commonly in the small and/or large intestine. Second, Ulcerative Colitis ulcerations typically involve the mucosal layer of the intestine while Crohn’s Disease ulcerations can penetrate through the bowell wall causing fistula, abscess and significant fibrous strictures of the bowel.

Crohn's disease histology. Inflammation in the wall is composed of lymphoid cells, macrophages and plasma cells.

16

i&E

Winter 2012

+ OKBio = OSCR

OSCR x (n = SBIR + STTR)

n x Phase 1 x Phase 2 =

$$$

SBIR: A FORMULA FOR FUNDING SUCCESS Pilot project launched to improve results with federal grant applications for Oklahoma companies Oklahoma entrepreneurs are well versed in the formula for creating a product that generates a high level of customer demand: identify a market problem and develop a solution to that problem. i2E, the Oklahoma Center for the Advancement of Science and Technology (OCAST) and several partners have embraced that formula in a pilot project to help Oklahoma entrepreneurs obtain a bigger share of federal technology and product development funding. The Small Business Innovative Research (SBIR) program and its companion Small Business Technology Transfer (STTR) were created by Congress in 1982, requiring federal agencies to set aside 3.2% of their R&D budget for small businesses through a competitive grant and contract program. Legislation passed by Congress and signed by the President in late December reauthorized the program for six more years. In FY2011, SBIR/STTR funding amounted to $2.5 billion. The money is used to fund research development for new technologies to improve health care, national defense, homeland security and other critical areas of national concern. Here’s the market problem that the Oklahoma SBIR/STTR Collaborative Project was created to solve: Oklahoma companies lag behind their peers nationally in obtaining SBIR funding. The pilot project, which debuted in July 2011, assists participating entrepreneurs in preparing and submitting competitive SBIR applications. Collaborating organizations include OCAST, the Oklahoma Bioscience Association, the Greater Oklahoma City Chamber, the Oklahoma Medical Research Foundation, the Oklahoma Manufacturing Alliance, OSU’s New Product Development Center, the Oklahoma EPSCoR and i2E.

SBIR/STTR Phase 1 grants are capped at $225,000, while Phase II grants are capped at $1.5 million. “This program is all about bringing more dollars into Oklahoma,” said Rick Rainey, i2E Venture Advisor and Oklahoma SBIR/STTR Collaborative Director. “Oklahoma ranks very low in Phase I to Phase II conversions. We do well in smaller Phase I SBIR grants, but don’t convert well to larger Phase II funding.” The Collaborative operates under the acronym OSCR, which stands for Oklahoma SBIR Collaborative Resource. “The Collaborative takes a new approach to an old problem of unsuccessful applications and helps companies bridge the financial gap between Phase I and Phase II conversions,” said Steven Martinez, OSCR Program Manager for OCAST. “We are very pleased to be able to contribute state funds to support this pilot effort.” Oklahoma SBIR/STTR Collaborative Resources

• SBIR/STTR proposal preparation services • Expert coaching/mentoring. • Help identifying SBIR/STTR funding opportunities • External proposal reviewers • SBIR workshops and mentorship networks • Technology Showcase and funding support

Winter 2012 i&E

17


The larger Phase II trial will be more costly than the initial human clinical study, which means that Altheus is raising $5 million to $7 million to fund the round. It recently was awarded a $1.6 million grant from the state’s EDGE (Economic Development Generating Excellence) Policy Board that will support the Phase II study. “The EDGE grant will fund Oklahoma-based activities involved in the clinical study,” Schafer said. “It will be a national study, but the lead site will be here in Oklahoma City.” Altheus has also discussed follow-on investment from the Oklahoma Seed Capital Fund, as well as possible investment from the Angel Sidecar Fund, which also is managed by i2E. If the Phase II trial proves that the Altheus drug therapy is effective, the company will become a prime target for partnership or acquisition from bigger drug companies. “The Phase II study is going to tell us a lot,” Schafer said. “If the results of that study are successful, it will open the floodgates to partnering opportunities, fundraising opportunities and development of oral products, which is potentially a lot bigger market opportunity. This is really an important study, a critical study.” i2E’s role with investment and business advice has been critical for the company as it positioned its drug combination for the rounds of human clinical studies, Dr. Harty said. “I think i2E has been a valuable supporter and resource,” he said. “I view them as skilled and mature people who are savvy in the biotech field and are sensitive and helpful to people who have ideas.” In fact, Dr. Harty attributed much of the company’s success to Oklahoma’s network of supporting agencies and programs. In addition to the grant awarded to it by the state’s EDGE Policy Board, it also has received state funding through the Oklahoma Applied Research Support program managed by Oklahoma Center for the Advancement of Science and Technology (OCAST). Organizations like the OK Bioscience Association and the Presbyterian Health Foundation also have played a role. “I think that despite the disadvantage that we don’t have Boston on one side of the river and San Francisco on the other side, this state has been very forward thinking and helpful in assisting startup companies like us to move forward,” he said. “That support, along with our cohort of investors, has at least given us a glimmer of hope.” The glimmer that Dr. Richard Harty sees for Altheus is shared by more than 2.3 million people worldwide who suffer from Inflammatory Bowel Disease. It is the hope that a new drug combination that emerged from Dr. Harty’s OU laboratory will soon provide them relief from a life of suffering.

i2E + OCAST + OMRF + OKC Chamber + OK Alliance + NPDC + OK EPSCoR About the Altheus Therapeutics drug therapies

Altheus Therapeutics, Inc., has developed two novel therapies for the treatment of Inflammatory Bowel Disease. The technology for these enema and oral drug therapies takes advantage of synergistic actions of combining two existing medicines in unique formulations to reduce bowel inflammation associated with ulcerative colitis and Crohn’s Disease. Preclinical studies in experimental animals with colitis have shown that combining the antioxidant N-acetylcysteine with mesalamine as a topical enema therapy showed superior efficacy and significantly enhanced reduction in colonic inflammation and inhibition of cytokine gene expression and biomarkers of inflammation when compared to either therapy administered separately. Subsequent work on the enema formulation resulted in a stable enema product that was successfully tested in an FDA-approved Phase 1 study. In addition, an oral product prototype has been developed that allows for delivery of the active pharmaceutical ingredients to targeted sites of inflammation in the distal small intestine and the colon for topical action. The company has exclusively licensed the intellectual property used in the therapies from the University of Oklahoma.

About Inflammatory Bowel Disease

Inflammatory Bowel Disease is a chronic inflammatory disease consisting of two main types – Ulcerative Colitis and Crohn’s Disease. Both diseases are characterized by an inflammatory process that evolves into ulcerations in the intestine. Ulcerative Colitis differs from Crohn’s Disease in two characteristics. First, Ulcerative Colitis is confined to the large intestine (colon) while Crohn’s Disease can involve multiple locations anywhere in the digestive tract, but most commonly in the small and/or large intestine. Second, Ulcerative Colitis ulcerations typically involve the mucosal layer of the intestine while Crohn’s Disease ulcerations can penetrate through the bowell wall causing fistula, abscess and significant fibrous strictures of the bowel.

Crohn's disease histology. Inflammation in the wall is composed of lymphoid cells, macrophages and plasma cells.

16

i&E

Winter 2012

+ OKBio = OSCR

OSCR x (n = SBIR + STTR)

n x Phase 1 x Phase 2 =

$$$

SBIR: A FORMULA FOR FUNDING SUCCESS Pilot project launched to improve results with federal grant applications for Oklahoma companies Oklahoma entrepreneurs are well versed in the formula for creating a product that generates a high level of customer demand: identify a market problem and develop a solution to that problem. i2E, the Oklahoma Center for the Advancement of Science and Technology (OCAST) and several partners have embraced that formula in a pilot project to help Oklahoma entrepreneurs obtain a bigger share of federal technology and product development funding. The Small Business Innovative Research (SBIR) program and its companion Small Business Technology Transfer (STTR) were created by Congress in 1982, requiring federal agencies to set aside 3.2% of their R&D budget for small businesses through a competitive grant and contract program. Legislation passed by Congress and signed by the President in late December reauthorized the program for six more years. In FY2011, SBIR/STTR funding amounted to $2.5 billion. The money is used to fund research development for new technologies to improve health care, national defense, homeland security and other critical areas of national concern. Here’s the market problem that the Oklahoma SBIR/STTR Collaborative Project was created to solve: Oklahoma companies lag behind their peers nationally in obtaining SBIR funding. The pilot project, which debuted in July 2011, assists participating entrepreneurs in preparing and submitting competitive SBIR applications. Collaborating organizations include OCAST, the Oklahoma Bioscience Association, the Greater Oklahoma City Chamber, the Oklahoma Medical Research Foundation, the Oklahoma Manufacturing Alliance, OSU’s New Product Development Center, the Oklahoma EPSCoR and i2E.

SBIR/STTR Phase 1 grants are capped at $225,000, while Phase II grants are capped at $1.5 million. “This program is all about bringing more dollars into Oklahoma,” said Rick Rainey, i2E Venture Advisor and Oklahoma SBIR/STTR Collaborative Director. “Oklahoma ranks very low in Phase I to Phase II conversions. We do well in smaller Phase I SBIR grants, but don’t convert well to larger Phase II funding.” The Collaborative operates under the acronym OSCR, which stands for Oklahoma SBIR Collaborative Resource. “The Collaborative takes a new approach to an old problem of unsuccessful applications and helps companies bridge the financial gap between Phase I and Phase II conversions,” said Steven Martinez, OSCR Program Manager for OCAST. “We are very pleased to be able to contribute state funds to support this pilot effort.” Oklahoma SBIR/STTR Collaborative Resources

• SBIR/STTR proposal preparation services • Expert coaching/mentoring. • Help identifying SBIR/STTR funding opportunities • External proposal reviewers • SBIR workshops and mentorship networks • Technology Showcase and funding support

Winter 2012 i&E

17


The SBIR.gov website reported that for FY2010, 11 Oklahoma companies won SBIR/STTR awards totaling $6.3 million. Oklahoma City-based Selexys Pharmaceuticals claimed nearly half of that with one NIH Fast Track SBIR award worth $3.1 million. By comparison, California companies were awarded $449 million in SBIR/ STTR contracts in FY2010, while Massachusetts claimed $292 million and New York $106 million. “Those states traditionally have done very well, and Oklahoma would like to improve its presence in the program,” Rainey said. “We feel that we should be able to accomplish that through the Oklahoma SBIR Collaborative.” i2E contracted with well respected SBIR consulting firm Grow Emerging Companies to provide peer review services for Oklahoma companies. Grow CEO Mark Henry is a veteran of the SBIR process who has achieved a phenomenal success rate, Rainey said. “Mark Henry has been through more than a thousand of these SBIR proposals, so he’s very experienced and very informed about the process,” Rainey said. OSCR’s proposal preparation service with Grow can mean the difference between outright rejection of a proposal or seeing it receive serious review. OSCR’s new External Proposal Reviewer’s service reviews a company’s proposal before it is sent off for official review. The External Proposal Reviewers will read the proposal and provide written feedback. “Different agencies have different expectations with which they like to receive these proposals,” Rainey said. “If a company doesn’t follow the expectations and guidelines, the agencies are at liberty to dispose of those applications right off the top. They don’t even have to review them.” The collaborative was created to ensure that doesn’t happen. “What all of us are doing with this project is making sure that a company has everything it needs in place before it goes into the SBIR program,” OCAST’s Martinez said. “OSCR helps companies submit a very competitive SBIR/STTR proposal.” Pilot program collaborators set a goal of working with 10 Oklahoma companies seeking either SBIR or STTR funding in the first year of the SBIR initiative. Eight companies signed contracts to participate in the first six months and eight potential applicants are in the pipeline, Rainey said. Two have already submitted funding proposals. “Many of the companies in our pipeline have a well rounded education in the SBIR program and understand exactly how those grants can impact their business,” Rainey said. “Those are the companies we have targeted in our pilot phase while we are educating other companies about the potential of SBIR funding.” It’s a simple formula that the collaboration has followed. Identify the market problem and provide a solution. Success will be measured not merely by dollars that flow into Oklahoma, but new technologies that are developed here and become revenue streams for state-based companies. That’s creating jobs and wealth for Oklahoma.

SBIR/STTR PARTICIPATING AGENCIES: Since 1989, OCAST's Small Business Research Assistance Program (SBRA) has motivated and assisted nearly 700 Oklahoma firms to compete

PAST OKLAHOMA SBIR SUCCESS STORIES INCLUDE:

• Department of Agriculture • Department of Commerce (National Institute of Standards and Technology and National

for research funding under the federal Small

Oceanic and Atmospheric Administration)

Business Innovation Research (SBIR) Program.

• Department of Defense Through the SBRA program, the Oklahoma

• Department of Education

Center for the Advancement of Science and

• Department of Energy

Technology (OCAST) has helped defray a

• Department of Health and Human Services

portion of proposal preparation costs, provided

(National Institutes of Health)

critical “bridge” funding between the Phase I

• Department of Homeland Security

and Phase II of their federal research projects,

• Department of Transportation

and provided program services that include

• Environmental Protection Agency

critical outreach and technical assistance. The

• National Aeronautics and Space Administration

SBRA program has resulted in a return of more

• National Science Foundation

than $200 million to the state over the program’s 22 year history. In recent years however, Oklahoma has seen a decline in SBIR success, requiring OCAST to evaluate the manner in which it was supporting its

clients

pursuing

this

federal

funding

opportunity. Last year, OCAST turned to its partner organizations, particularly i2E, to help craft a more effective program to support these clients. The result of this collaboration is the Oklahoma SBIR Collaborative Resource (OSCR), which is once again helping move Oklahoma into a lead position in the federal SBIR program. “OSCR

helps

companies

submit

a

very

competitive SBIR/STTR proposal.” said Dan Luton, Director of Programs for OCAST. “Through this project we now offer a one-stopshop of all resources available to assist those seeking SBIR/STTR funding.”

Martin Bionics technology: A greatly improved prosthetic ankle that very closely mimics the human ankle. Martin Bionics is now a part of Orthocare Innovations LLC. Perching micro air weapon from Design Intelligence Inc.: A small unmanned aerial vehicle designed to look and act like a bird. Designed and built under contract with the U.S. Air Force.

How SBIR/STTR funding process works: Federal agencies select topics for which they are seeking solutions, publish them on their Web sites, and provide guidelines for proposal content and submission. Small businesses search topics for a match with their capabilities and prepare proposals for solving the agencies’ problems with innovative applications of their technology. Proposals are submitted to the agency that publishes the topic. The agencies review the proposals, and rate them according to several criteria. About one of every seven proposals are funded. Companies receive funding awards in the form of a grant or contract. The SBIR/STTR program is structured in three Phases. Phase 1 is feasibility and commercial potential. Phase 2 continues R&D efforts begun with Phase 1 funding, while Phase 3 is commercialization for which there is no program funding. SBIR/STTR Program Eligibility: Only small businesses are eligible to participate in the SBIR program. Business must meet all of the following criteria at the time of Phase I and II awards: • Organized for profit, with a place of business located in the United States; • At least 51 percent owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States, or

“Those states traditionally have done very well, and Oklahoma would like to improve its presence in the program. We feel that we should be able to accomplish that through the Oklahoma SBIR Collaborative.” 18

• At least 51 percent owned and controlled by another for-profit business concern that is at least 51% owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States; and; • No more than 500 employees, including affiliates. Source: www.sbir.gov

i&E

Winter 2012

Winter 2012 i&E

19


The SBIR.gov website reported that for FY2010, 11 Oklahoma companies won SBIR/STTR awards totaling $6.3 million. Oklahoma City-based Selexys Pharmaceuticals claimed nearly half of that with one NIH Fast Track SBIR award worth $3.1 million. By comparison, California companies were awarded $449 million in SBIR/ STTR contracts in FY2010, while Massachusetts claimed $292 million and New York $106 million. “Those states traditionally have done very well, and Oklahoma would like to improve its presence in the program,” Rainey said. “We feel that we should be able to accomplish that through the Oklahoma SBIR Collaborative.” i2E contracted with well respected SBIR consulting firm Grow Emerging Companies to provide peer review services for Oklahoma companies. Grow CEO Mark Henry is a veteran of the SBIR process who has achieved a phenomenal success rate, Rainey said. “Mark Henry has been through more than a thousand of these SBIR proposals, so he’s very experienced and very informed about the process,” Rainey said. OSCR’s proposal preparation service with Grow can mean the difference between outright rejection of a proposal or seeing it receive serious review. OSCR’s new External Proposal Reviewer’s service reviews a company’s proposal before it is sent off for official review. The External Proposal Reviewers will read the proposal and provide written feedback. “Different agencies have different expectations with which they like to receive these proposals,” Rainey said. “If a company doesn’t follow the expectations and guidelines, the agencies are at liberty to dispose of those applications right off the top. They don’t even have to review them.” The collaborative was created to ensure that doesn’t happen. “What all of us are doing with this project is making sure that a company has everything it needs in place before it goes into the SBIR program,” OCAST’s Martinez said. “OSCR helps companies submit a very competitive SBIR/STTR proposal.” Pilot program collaborators set a goal of working with 10 Oklahoma companies seeking either SBIR or STTR funding in the first year of the SBIR initiative. Eight companies signed contracts to participate in the first six months and eight potential applicants are in the pipeline, Rainey said. Two have already submitted funding proposals. “Many of the companies in our pipeline have a well rounded education in the SBIR program and understand exactly how those grants can impact their business,” Rainey said. “Those are the companies we have targeted in our pilot phase while we are educating other companies about the potential of SBIR funding.” It’s a simple formula that the collaboration has followed. Identify the market problem and provide a solution. Success will be measured not merely by dollars that flow into Oklahoma, but new technologies that are developed here and become revenue streams for state-based companies. That’s creating jobs and wealth for Oklahoma.

SBIR/STTR PARTICIPATING AGENCIES: Since 1989, OCAST's Small Business Research Assistance Program (SBRA) has motivated and assisted nearly 700 Oklahoma firms to compete

PAST OKLAHOMA SBIR SUCCESS STORIES INCLUDE:

• Department of Agriculture • Department of Commerce (National Institute of Standards and Technology and National

for research funding under the federal Small

Oceanic and Atmospheric Administration)

Business Innovation Research (SBIR) Program.

• Department of Defense Through the SBRA program, the Oklahoma

• Department of Education

Center for the Advancement of Science and

• Department of Energy

Technology (OCAST) has helped defray a

• Department of Health and Human Services

portion of proposal preparation costs, provided

(National Institutes of Health)

critical “bridge” funding between the Phase I

• Department of Homeland Security

and Phase II of their federal research projects,

• Department of Transportation

and provided program services that include

• Environmental Protection Agency

critical outreach and technical assistance. The

• National Aeronautics and Space Administration

SBRA program has resulted in a return of more

• National Science Foundation

than $200 million to the state over the program’s 22 year history. In recent years however, Oklahoma has seen a decline in SBIR success, requiring OCAST to evaluate the manner in which it was supporting its

clients

pursuing

this

federal

funding

opportunity. Last year, OCAST turned to its partner organizations, particularly i2E, to help craft a more effective program to support these clients. The result of this collaboration is the Oklahoma SBIR Collaborative Resource (OSCR), which is once again helping move Oklahoma into a lead position in the federal SBIR program. “OSCR

helps

companies

submit

a

very

competitive SBIR/STTR proposal.” said Dan Luton, Director of Programs for OCAST. “Through this project we now offer a one-stopshop of all resources available to assist those seeking SBIR/STTR funding.”

Martin Bionics technology: A greatly improved prosthetic ankle that very closely mimics the human ankle. Martin Bionics is now a part of Orthocare Innovations LLC. Perching micro air weapon from Design Intelligence Inc.: A small unmanned aerial vehicle designed to look and act like a bird. Designed and built under contract with the U.S. Air Force.

How SBIR/STTR funding process works: Federal agencies select topics for which they are seeking solutions, publish them on their Web sites, and provide guidelines for proposal content and submission. Small businesses search topics for a match with their capabilities and prepare proposals for solving the agencies’ problems with innovative applications of their technology. Proposals are submitted to the agency that publishes the topic. The agencies review the proposals, and rate them according to several criteria. About one of every seven proposals are funded. Companies receive funding awards in the form of a grant or contract. The SBIR/STTR program is structured in three Phases. Phase 1 is feasibility and commercial potential. Phase 2 continues R&D efforts begun with Phase 1 funding, while Phase 3 is commercialization for which there is no program funding. SBIR/STTR Program Eligibility: Only small businesses are eligible to participate in the SBIR program. Business must meet all of the following criteria at the time of Phase I and II awards: • Organized for profit, with a place of business located in the United States; • At least 51 percent owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States, or

“Those states traditionally have done very well, and Oklahoma would like to improve its presence in the program. We feel that we should be able to accomplish that through the Oklahoma SBIR Collaborative.” 18

• At least 51 percent owned and controlled by another for-profit business concern that is at least 51% owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States; and; • No more than 500 employees, including affiliates. Source: www.sbir.gov

i&E

Winter 2012

Winter 2012 i&E

19


PARTNERS

i2E, Inc. www.i2E.org i2E has been a primary source of concept, seed stage and start-up capital for Oklahoma’s high growth companies for more than a decade. The rigorous approach of our services has built a reputation for producing companies that are well positioned for investment capital. i2E and its partners have developed a series of investment funds that target companies at particular stages of the business lifecycle and also complement Oklahoma angel investors and venture capitalists. We also provide venture advisory and entrepreneurial development services. The results speak for themselves: Clients enjoy job, revenue and capital growth significantly higher than the state average. The state benefits from new globally competitive businesses, high quality jobs and an enhanced quality of life.

OCAST Oklahoma Center for the Advancement of Science and Technology www.ocast.staste.ok.us As the state’s only agency whose sole focus is technology, OCAST is a small, high-impact agency funded by state appropriations and governed by a board of directors with members from both the private and public sector. OCAST works in partnership with the private sector, higher education, CareerTech and the Oklahoma Department of Commerce.

Greater Oklahoma City Chamber www.okcchamber.com The Greater Oklahoma City Chamber works to create valueadded membership opportunities and a business climate that attracts new businesses and enhances growth and expansion opportunities for existing business.

20

i&E

Winter 2012

The Presbyterian Health Foundation is a major contributor to medical research and education in Oklahoma. In 1996, it began the PHF Research Park, believing that a science-based company with patented products discovered in the medical research laboratory of the University of Oklahoma ought to be launched here Oklahoma.

Oklahoma Department of Commerce www.okcommerce.gov The Oklahoma Department of Commerce is the primary economic development entity in the state. Its mission is to increase the quantity and the quality of jobs in Oklahoma. It accomplishes that mission that through the following means: · Business Attraction, Creation and Retention · Community Development · Knowledge-Based Industry Development · Workforce Development, Recruitment and Retention

City of Oklahoma City www.okc.gov The City of Oklahoma City’s mission is to provide leadership, commitment and resources to achieve its vision by offering a clean, safe and affordable City; providing well managed and maintained infrastructure; excellent stewardship of public assets and a variety of cultural, recreational and entertainment opportunities, as well as creating and maintaining effective partnerships to promote employment opportunities and individual and business success.

Oklahoma Manufacturing Alliance www.okalliance.com

Oklahoma Business Roundtable www.okbusinessroundtable.com

The Donald W. Reynolds Foundation www.dwreynolds.org

The Oklahoma Business Roundtable, formed in 1991, is a 501(c)(6) nonprofit corporation. The Roundtable’s mission is to encourage and promote Oklahoma’s economic development. The Roundtable accomplishes this by providing critical private funding in support of the economic development efforts of the Governor and Oklahoma Department of Commerce by encouraging business investment and jobs in Oklahoma.

The Foundation is a national philanthropic organization founded in 1954 by the late media entrepreneur for whom it is named. Headquartered in Las Vegas, Nevada, it is one of the 50 largest private foundations in the United States.

State Small Business Credit Initiative www.treasury.gov/resource-center

OKLAHOMA EPSCoR The Oklahoma Experimental Program to Stimulate Competitive Research www.okepscor.org

The Small Business Jobs Act of 2010 created the State Small Business Credit Initiative, which was funded with $1.5 billion to strengthen state programs that support lending to small businesses and small manufacturers. The State Small Business Credit Initiative is expected to help spur up to $15 billion in lending to small businesses. Under the State Small Business Credit Initiative, participating states will use the federal funds for programs that leverage private lending to help finance small businesses and manufacturers that are creditworthy, but are not getting the loans they need to expand and create jobs.

U.S. Economic Development Administration www.eda.gov This year, the U.S. Economic Development Administration (EDA) marks 45 years of public service, with a mission of leading the federal economic development agenda by promoting competitiveness and preparing American regions for growth and success in the worldwide economy. EDA is an agency within the U.S. Department of Commerce that partners with distressed communities throughout the United States to foster job creation, collaboration and innovation.

Presbyterian Health Foundation www.phf.com

Oklahoma Medical Research Foundation www.omrf.org Founded in 1946, the Oklahoma Medical Research Foundation is one of the nation’s oldest and most respected nonprofit biomedical research institutes. Located in Oklahoma City, OMRF fosters a worldwide reputation for excellence by following an innovative cross-disciplinary approach to medical research.

The Alliance is a not-for-profit organization providing a variety of support to Oklahoma industry. Through a network of Manufacturing Extension Agents and Applications Engineers, the Alliance provides hands-on resources for improving productivity, increasing sales and reducing costs.

Oklahoma EPSCoR’s central goal is to increase the state’s research competitiveness through strategic support of research instruments and facilities, research collaborations and integrated education and research programs. They are funded through a three-year (FY2005-2008) $6 million Science Foundation Research Infra-Structure Improvement Grant matched by an additional $3 million from the Oklahoma State Regents for Higher Education.

U.S. Department of Treasury www.treasury.gov The Treasury Department is the executive agency responsible for promoting economic prosperity and ensuring the financial security of the United States. The Department is responsible for a wide range of activities such as advising the President on economic and financial issues, encouraging sustainable economic growth, and fostering improved governance in financial institutions.

Winter 2012 i&E

21


PARTNERS

i2E, Inc. www.i2E.org i2E has been a primary source of concept, seed stage and start-up capital for Oklahoma’s high growth companies for more than a decade. The rigorous approach of our services has built a reputation for producing companies that are well positioned for investment capital. i2E and its partners have developed a series of investment funds that target companies at particular stages of the business lifecycle and also complement Oklahoma angel investors and venture capitalists. We also provide venture advisory and entrepreneurial development services. The results speak for themselves: Clients enjoy job, revenue and capital growth significantly higher than the state average. The state benefits from new globally competitive businesses, high quality jobs and an enhanced quality of life.

OCAST Oklahoma Center for the Advancement of Science and Technology www.ocast.staste.ok.us As the state’s only agency whose sole focus is technology, OCAST is a small, high-impact agency funded by state appropriations and governed by a board of directors with members from both the private and public sector. OCAST works in partnership with the private sector, higher education, CareerTech and the Oklahoma Department of Commerce.

Greater Oklahoma City Chamber www.okcchamber.com The Greater Oklahoma City Chamber works to create valueadded membership opportunities and a business climate that attracts new businesses and enhances growth and expansion opportunities for existing business.

20

i&E

Winter 2012

The Presbyterian Health Foundation is a major contributor to medical research and education in Oklahoma. In 1996, it began the PHF Research Park, believing that a science-based company with patented products discovered in the medical research laboratory of the University of Oklahoma ought to be launched here Oklahoma.

Oklahoma Department of Commerce www.okcommerce.gov The Oklahoma Department of Commerce is the primary economic development entity in the state. Its mission is to increase the quantity and the quality of jobs in Oklahoma. It accomplishes that mission that through the following means: · Business Attraction, Creation and Retention · Community Development · Knowledge-Based Industry Development · Workforce Development, Recruitment and Retention

City of Oklahoma City www.okc.gov The City of Oklahoma City’s mission is to provide leadership, commitment and resources to achieve its vision by offering a clean, safe and affordable City; providing well managed and maintained infrastructure; excellent stewardship of public assets and a variety of cultural, recreational and entertainment opportunities, as well as creating and maintaining effective partnerships to promote employment opportunities and individual and business success.

Oklahoma Manufacturing Alliance www.okalliance.com

Oklahoma Business Roundtable www.okbusinessroundtable.com

The Donald W. Reynolds Foundation www.dwreynolds.org

The Oklahoma Business Roundtable, formed in 1991, is a 501(c)(6) nonprofit corporation. The Roundtable’s mission is to encourage and promote Oklahoma’s economic development. The Roundtable accomplishes this by providing critical private funding in support of the economic development efforts of the Governor and Oklahoma Department of Commerce by encouraging business investment and jobs in Oklahoma.

The Foundation is a national philanthropic organization founded in 1954 by the late media entrepreneur for whom it is named. Headquartered in Las Vegas, Nevada, it is one of the 50 largest private foundations in the United States.

State Small Business Credit Initiative www.treasury.gov/resource-center

OKLAHOMA EPSCoR The Oklahoma Experimental Program to Stimulate Competitive Research www.okepscor.org

The Small Business Jobs Act of 2010 created the State Small Business Credit Initiative, which was funded with $1.5 billion to strengthen state programs that support lending to small businesses and small manufacturers. The State Small Business Credit Initiative is expected to help spur up to $15 billion in lending to small businesses. Under the State Small Business Credit Initiative, participating states will use the federal funds for programs that leverage private lending to help finance small businesses and manufacturers that are creditworthy, but are not getting the loans they need to expand and create jobs.

U.S. Economic Development Administration www.eda.gov This year, the U.S. Economic Development Administration (EDA) marks 45 years of public service, with a mission of leading the federal economic development agenda by promoting competitiveness and preparing American regions for growth and success in the worldwide economy. EDA is an agency within the U.S. Department of Commerce that partners with distressed communities throughout the United States to foster job creation, collaboration and innovation.

Presbyterian Health Foundation www.phf.com

Oklahoma Medical Research Foundation www.omrf.org Founded in 1946, the Oklahoma Medical Research Foundation is one of the nation’s oldest and most respected nonprofit biomedical research institutes. Located in Oklahoma City, OMRF fosters a worldwide reputation for excellence by following an innovative cross-disciplinary approach to medical research.

The Alliance is a not-for-profit organization providing a variety of support to Oklahoma industry. Through a network of Manufacturing Extension Agents and Applications Engineers, the Alliance provides hands-on resources for improving productivity, increasing sales and reducing costs.

Oklahoma EPSCoR’s central goal is to increase the state’s research competitiveness through strategic support of research instruments and facilities, research collaborations and integrated education and research programs. They are funded through a three-year (FY2005-2008) $6 million Science Foundation Research Infra-Structure Improvement Grant matched by an additional $3 million from the Oklahoma State Regents for Higher Education.

U.S. Department of Treasury www.treasury.gov The Treasury Department is the executive agency responsible for promoting economic prosperity and ensuring the financial security of the United States. The Department is responsible for a wide range of activities such as advising the President on economic and financial issues, encouraging sustainable economic growth, and fostering improved governance in financial institutions.

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OASIS OF SUCCESS: OKC

A POWERFUL COMBINATION:

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spectacular affordability?

Having some of the

lowest business costs in the nation is just the first ingredient of OKC’s recipe for success. Add our gold-standard Quality Jobs incentives program plus OKC’s own sweet incentives and this city’s the place where your profits can rise.

For mobile users

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Winter 2012

Explore OKC’s new digital magazine and channel at GreaterOKC.tv


Winter 2012 i&E