UM Regents Vote on Pharma Manufacturing

The University of Michigan board of regents authorized 11 items that required disclosure under the state’s conflict-of-interest statute, in votes taken at the board’s July 19, 2012 meeting. The law requires that regents vote on potential conflict-of-interest disclosures related to university staff, faculty or students.

Among them was an item related to consulting in support of a pharmaceutical manufacturing facility at the North Campus Research Complex (NCRC). That project is the Michigan Advanced Development and Manufacturing Center – an entity created by UM to seek a U.S. Dept. of Defense contract to develop pharmaceutical manufacturing at the former Pfizer site. At this point, the conflict-of-interest item is a retroactive disclosure of consulting services with NanoBio Corp. from Feb. 10, 2012, through June 30, 2012, with a value not to exceed $54,000. The firm’s owner, James Baker, is a UM medical professor and director of the Michigan Nanotechnology Institute for Medicine and Biological Sciences.

The item had originally appeared on the regents’ May 17, 2012 agenda. A staff memo accompanying that May 17 item noted that Baker is providing “technical expertise in vaccine development, regulatory and clinical study planning in support of MADMC’s proposal to the federal government.” It had been pulled from the agenda after regent Larry Deitch recused himself from the vote on that item, and there were not enough remaining regents to vote on it.

On July 19, Deitch, the board’s chair, again recused himself from the vote on this and one other conflict-of-interest item related to NanoBio, but did not offer a reason during the meeting for his recusal. He is an attorney and a partner in the law firm of Bodman LLP of Detroit. According to his bio on the law firm’s website, Deitch “focuses his practice in corporate law, real estate law, and government relations. He has substantial experience in corporate governance matters, mergers and acquisitions, and structuring joint venture relationships, with a particular focus on the automotive and general industrial sectors. He also advises clients on all of the legal issues arising out of real estate development, leasing, and finance.”

Six votes are required to approve conflict-of-interest items. Despite Deitch’s recusal, and the fact that Martin Taylor was absent from the July 19 meeting, the supporting votes of the remaining six regents were sufficient to pass the conflict-of-interest items.

The university has not yet publicized its efforts to create the Michigan Advanced Development and Manufacturing Center, and the July 19 version of the staff memo does not explicitly cite the project’s name. But this is the second recent regental approval related to that effort. At its June 21, 2012 meeting, regents approved the Michigan Health Corp. annual business plan, which included a brief mention of the MADMC. The plan referred to the MADMC and its parent organization, the Michigan Health Ventures Limited Partnership, as new ventures to apply for a potential contract with the U.S. Dept. of Defense.

A budget provided in the plan shows a projected $3.028 million loss for the project in fiscal year 2012, with another projected loss of $120,000 in FY 2013. A note accompanying the budget item states: “The FY13 MADMC Budget reflects the cost of closing MADMC because no DoD contract has been awarded at this time. If the contract is awarded to MADMC, MADMC could generate a favorable margin of $250,000 per month.” The plan also states that there are preliminary signs indicating the DOD contract will not be awarded to the MADMC. The plan indicates that “a separate business plan for MADMC will be presented to the regents when more definitive information regarding the DoD contract is available.”

NanoBio was also part of another conflict-of-interest disclosure approved by regents on July 19. NanoBio and three other firms – Atterocor Inc., CytoPherx Inc., and Tissue Regeneration Systems Inc. – will be each receiving up to $2.5 million in investments through the Michigan Investment in New Technology Startups (MINTS) program. Regents had approved the MINTS program in December 2011.

Other conflict-of-interest items involved technology licensing agreements, leases and other authorizations. In addition to NanoBio and the MINTS firms, this month the items related to the following businesses: ePack (research agreement), Ambiq Micro Inc. (research agreement), AlertWatch LLC (license agreement and lease/relationship agreement for the North Campus Research Complex accelerator) , Michigan Precision Instruments LLC (authorization to transact), Possibilities for Change LLC (authorization to contract), Arbor Research Collaborative for Health (authorization to transact), and Valley View Farms (authorization to enter into agreement to house sheep for research purposes).

This report was filed from the Michigan Union’s Rogel ballroom, where the board held its July meeting.