Business Profile: Rewarding Research

For its goal of knowledge-based economic development, Columbia is counting on the University of Missouri to turn research advances into marketable products and jobs. MU’s Research Animal Diagnostic Laboratory, a company that mixes private enterprise with public research, is a poster child for this effort.

John Gardner, vice president for research and economic development at MU, calls RADIL “an unusually profitable fee-for-service laboratory.”

RADIL tests for the presence of pathogens in pigs, mice and other lab animals that could spoil research results, and it is now expanding and moving into the Discovery Ridge research park.

What made the laboratory mouse sick? Was it an inflammatory bowel disease similar to the illness found in humans, or was the inflammation caused by a pathogen called heliobacter that was poisoning both the mouse and the research?

That is the type of question technicians try to answer at the Research Animal Diagnostic Laboratory, or RADIL, at the University of Missouri.
RADIL is also testing a profit-sharing model and Columbia’s contention that research done at the university will bring increasing numbers of well-paid jobs to the community.

So far, the experiment is paying off. RADIL produced $3.1 million in profit in 2005, $2.2 million in 2004 and $2.2 million in 2003, with the proceeds split between staff incentive payments and the operating budgets of MU and the College of Veterinary Medicine.

RADIL has grown to become the second-largest lab animal diagnostic and pathology laboratory in the world, employing 45 full-time staff members and 17 part-time staff members. The eight faculty members are teaching about 22 graduate and post-doctoral students.

RADIL also has outgrown its home at the Veterinary Medicine Building and will move to MU’s Discovery Ridge on U.S. 63 near Gans Creek. The $15.5 million building is expected to be opened in summer 2008. RADIL and ABC Laboratories, one of the largest privately owned companies based in Columbia, will be the first two tenants in the research park.

“The increased space in the new building will permit us to develop new products and increase the volume of our current fee for services,” RADIL Director Lela Riley said. “The mix of entrepreneurial and academic environment will be a really nice fit for what we do.”

John Gardner, vice president for research and economic development for the MU System, said RADIL is “an unusually profitable-fee-for-service laboratory. I mean, they are paying for their new facilities themselves and expanding the campus footprint without spending university funds.”
Joseph E. Wagner started the lab in 1968 as part of Department of Veterinary Pathology at MU.

“His research passion was lab animals and their welfare,” said Cecil Moore, interim dean of the College of Veterinary Medicine. “And there was a need to provide diagnostic services to research labs statewide and nationwide that grew out of that.”

In the current and previous five-year cycles for research grants, faculty members connected to RADIL have received more than $30 million in grants from the National Institutes of Health (NIH) to maintain
national resource centers for mouse, rat and swine animal models.

“The NIH grant system is very entrepreneurial,” said William Rall, program official at NIH’s Center for Research Resources. “It is remarkable that one institution is awarded grants for three national centers.”

The services provided by RADIL can be broken down into three categories: diagnosis and genetic testing of diseases in lab animals; reproduction and cryo-preservation of animal models for future use; and the creation of animal models with specific traits.

“Animal models can mimic disease and neurobiological disorders in humans,” Rall said. “It is a major problem that pathogens are present in a lab population because it might interfere with the quality of the research.”
Several bacteria and viruses that can affect lab animals have been discovered and genetically mapped at RADIL. The laboratory developed a method of detecting pathogen DNA in samples from animal models, and amplifying the DNA so it could be used for diagnostics.

“”This method has become an industry standard internationally,” said Lela Riley, director of RADIL.

RADIL competes with private and publicly traded corporations that report annual revenues in the billions. Some of their main competitors include Invitrogen, Charles River Laboratories, Taconic Farms and Harlan Sprague Dawley.

“The commercial providers of animal labs focus on a few animal models with very high sales volumes,” said Rall. “The resource centers provide access to hundreds of models that would not otherwise be available.”

Because RADIL provides services in such a competitive market, the faculty members have more obligations than what may be customary for MU faculty. If the diagnostic caseload stacks up, they might have to put in extra time in getting the jobs processed on time. Their additional effort is rewarded by a profit-sharing program that was initiated in 2001.

“My understanding is that the program was initiated by the MU administration to retain and recruit faculty members at a time when other institutions were trying to recruit them away from campus,” Moore, the interim veterinary medicine dean, said. “The RADIL faculty carry a significant research load on top of teaching and providing diagnostic services.”

In 2003, the seven faculty members received $1.1 million to split among them, and the other $1.1 million was spent on the general operating budget of MU and the College of Veterinary Medicine. The regular staff has a separate profit-sharing program.

Discovery Ridge is a key element in MU’s strategy to tie research and entrepreneurship together to aid economic growth in the area. Gardner said the most recent trend in product development in life sciences is that the ideas originate on the coasts, but the actual research and development happen other places, where the cost is lower.

Gardner said he is excited that both ABC Labs and RADIL have chosen to relocate because both companies provide product development support to many of the same companies.

Gardner also said RADIL’s new facilities will permit the lab to look into spin-off companies based on current research and that several possibilities are under discussion.