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August 1, 2010
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‘Louisville is Now a Major Entrepreneurial Center’

Nucleus CEO Vickie Yates Brown discusses how UofL is helping drive economic development for Louisville and Kentucky

By Ed Lane

Vickie Yates Brown is president and CEO of Nucleus: Kentucky’s Life Science and Innovation Center, an entity formed by the University of Louisville to provide business management and consulting services to entrepreneurs engaged in life sciences. An attorney with extensive experience in healthcare law and finance, Brown brings a significant amount of expertise to her role at Nucleus. In addition to heading Nucleus, she is chair of the Health and Life Sciences Practice group for the law firm of Frost Brown Todd, chairwoman of the Health Law Section of the American Bar Association and vice chair of the Health Enterprises Network. She also sits on the editorial board of the BNA Health Law Reporter and has served on the Advisory Council for the Human Genome Project and National Institute of Diabetes, Digestion and Kidney Disease as part of the National Institutes of Health. She has delivered numerous national and international presentations and co-authored three publications on healthcare law and government regulation.

Ed Lane: In 2006, you were recruited by University of Louisville President James Ramsey to assist in restructuring UofL’s relationship with entities in healthcare and life sciences. In 2008, you were tapped to head UofL Nucleus: Kentucky’s Life Science and Innovation Center. What is Nucleus’ primary mission?

Vickie Yates Brown: UofL Nucleus’ mission is to integrate the assets of the University of Louisville with those of the region, and to leverage these strengths to assist start-up companies on UofL Nucleus properties to succeed. Nucleus is a significant economic-development arm of the University of Louisville.

Examples of UofL’s assets include the James Graham Brown Cancer Center, the Cardiovascular Innovation Institute and the Conn Center, just to name a few.
Nucleus was established by Dr. James Ramsey, president of the University of Louisville, to assist researchers at UofL in “taking their inventions from the mind to the marketplace.” To do this, Nucleus has developed a unique infrastructure composed of three components to assist start-up companies: 1) a physical 2) virtual and 3) personnel infrastructure to help entrepreneurial inventors.

EL: Are you saying Nucleus is more than just a research and development center?

VYB: It is more than a research and development center for life science and technology. It is the place where discoveries in science and new innovations in technology can be developed by start-up companies. To do that, there is a need for special infrastructure not available anywhere else in the city. The physical infrastructure is a cluster of UofL Nucleus research park campuses devoted to supporting start-up entrepreneurs and their companies. The buildings contain wet and dry lab space, state-of-the-art IT services and office space uniquely designed to support start-up companies.

The first building on the Nucleus Downtown Research Park (on property where the Haymarket once existed and where start-up companies are now located) is fully leased and will be expanded. In addition, Nucleus will soon announce the construction manager for the second office building and garage to be built on the downtown research park property. UofL Nucleus works with each start-up to design its lease to optimize the company’s chances for success.

The virtual infrastructure of UofL Nucleus Downtown Research Park is its IT assets and unique methods of Internet access. This site is one of the community’s (Internet backbone) data nodes, which allows Nucleus to provide state-of-the-art IT support services that can meet each tenant’s capacity needs in a private and secure environment.

UofL Nucleus provides specialized personnel and infrastructure to assist start-up life science and technology companies. For instance, UofL Nucleus has two business analysts on staff with doctorate and graduate business degrees to provide commercialization start-up services. These individuals have a background in university technology transfer, science and business. They assess the “science” as well as the market for the “science” or invention and assist the inventor in making business decisions about the commercialization of the invention.

UofL Nucleus has established a methodology to assist in the establishment of the necessary corporate legal structure, tax implications, business plan development and assistance needed to optimize potential funding opportunities through entities with which Nucleus has developed relationships.

UofL Nucleus has also developed relationships with a number of entities to provide services needed by start-up companies. For instance, UofL Nucleus has entered into a contract with a professional employer organization (PEO) that can provide the full compendium of benefits to a start-up company, including healthcare benefits, as if the small company was a large employer. The PEO also offers back-of-the-office type services such as employment manuals and legal services.

EL: What skill set was Dr. Ramsey looking for when he asked you to serve as the president and CEO of Nucleus?

VYB: The job as the president and CEO of UofL Nucleus fits well with my background. This position requires someone to possess a unique skill set and level of knowledge in four areas: 1) law 2) life sciences 3) technology and 4) nationally appropriate relationships. My background as a health lawyer has been essential.

EL: I know you are a nationally recognized healthcare attorney, but what else in your background caused Dr. Ramsey to choose you for this job?

VYB: I began my career in law as a law clerk for the Kentucky Supreme Court and went on to concentrate my law practice in the area of health law, with a particular emphasis on healthcare technology. I have served as the chair of the health law practice group for a large regional law firm and am a member of the health law enterprise practice group at the law firm of Frost Brown Todd LLC. I am also the immediate past chair of the American Bar Association’s Health Law Section.

The years of practicing law in the area of healthcare led to gaining an expertise in understanding the area of life sciences. I have served three terms on institutes at the National Institutes of Health as an appointee on the Advisory Councils of the Human Genome Institute, and the National Institute of Diabetes, Digestive and Kidney Diseases. Because my current position involves life sciences and not just health sciences, my years as an appointee by Gov. Paul Patton and Gov. Ernie Fletcher to the Governor’s Agriculture Policy Development Board, which addressed issues of sustainability, energy and research, has been valuable experience also.

In practicing law and representing life science companies, it also became necessary to have a thorough understanding of the rules surrounding the use of technology. Although I do not have a Ph.D. in computer science, my healthcare legal practice concentrates in the area of technology.

My relationships have centered on the confluence of the three areas of my career: law, life sciences and technology. One of the benefits for start-ups being in one of our research parks is the connections, introductions and collaborations with others that Nucleus provides. We work closely with Joe Reagan at GLI and Mark Crane and Vik Chadha from GLI’s EnterpriseCorp. UofL Nucleus, EnterpriseCorp, and Louisville’s ICC have formalized their relationship and have entered into a memorandum of understanding enumerating defined ways we will work together.

Nucleus also works closely with Bruce Traughber from Mayor Jerry Abramson’s Office of Economic Development as well as individuals from Secretary Larry Hayes’ Cabinet for Economic Development, particularly Commissioner Deborah Clayton of the Department of Commercialization and Innovation. My recent appointment by the American Bar Association’s President Stephen Zack to the ABA’s Standing Committee on Governmental Affairs is also beneficial to Nucleus. Members of this committee will interface with the secretaries of federal agencies, including the secretary of Commerce and the secretary of Health and Human Services. The insights developed through these relationships will be helpful in my role at UofL Nucleus as well as for the companies that may have federal issues.

EL: Will the commonwealth as a whole potentially be able to benefit from what UofL Nucleus is accomplishing?

VYB: UofL Nucleus is reaching out into the commonwealth to forge partnerships and relationships with other communities. UofL Nucleus wants to share its assets such as access to our commercialization services or PEO, which other communities in our state may find helpful.
Likewise, UofL Nucleus finds great benefit in collaborations with other communities. Nucleus also wants to provide support services to the UofL operations that serve the rural areas of our state.

EL: Please provide a few examples of some of UofL Nucleus’ programs that have been of particular benefit to its tenants.

VYB: Nucleus has developed a number of programs to support its tenants and the UofL research community. Our Breakfast with Researchers series is very popular. At our most recent breakfast, the Governor’s Office of Agricultural Policy met with interested UofL researchers and start-ups looking for potential funding sources.

Another popular program is the IDEA Social Hour. Once a month, Nucleus hosts a social hour and invites researchers to identify and discuss potential collaborations based on certain cutting-edge ideas. The program initially focused on one particular idea, but spin-off groups now discuss and explore new opportunities.

UofL Nucleus is also preparing to host the United States Commerce Cabinet’s 2011 National Export Initiative (NEI) meeting next year. Nucleus assisted Dr. Ramsey in arranging meetings with appropriate representatives from the Commerce Cabinet during the BIO Conference in Chicago in May. As you may know, President Obama established the NEI in February to help small- to medium-sized businesses double U.S. exports within five years.

UPS, one of Louisville’s important corporate citizens, is one of the NEI partners. This initiative, which encourages U.S. companies to think of their customers as being outside of America’s borders, is exactly the type of collaboration that will provide benefits to tenants at Nucleus Research Parks.

This initiative is new and the only previous NEI meeting was held this year in Minneapolis with support from MedTronic. The 2010 meeting is focused on export issues in the area of medical devices. Nucleus is working closely with others, including Mayor Jerry Abramson’s office, to prepare for this exciting opportunity for our community.

EL: What types of companies is UofL Nucleus interested in recruiting to Louisville and what kind of assistance can it provide to companies relocating to or expanding in Louisville?

VYB: Signature HealthCARE is a good example of UofL Nucleus’s role in assisting our partners to recruit a major company to Louisville. GLI has been able to quantify that Louisville has the greatest concentration of long-term care companies of any city in the nation.

Nucleus is working with GLI to develop this unique economic development opportunity called the “aging care” initiative into a Center on Aging Care. This center is located on the Nucleus Downtown Research Park. As part of this initiative, Nucleus is working with GLI to recruit companies in the area of aging care to Louisville.

Signature HealthCARE is a company that finds significant value in being located near and collaborating with a university. In fact, these are two of the company’s top relocation criteria.

Joe Steier, Signature HealthCARE’s CEO, validated the UofL Nucleus model as envisioned by Dr. Ramsey when he noted on a number of occasions that Nucleus was the entity that made the difference in his company’s selection of Louisville over other cities. Through a financial commitment by Signature HealthCARE, Nucleus and others, the International Long-Term Care Innovation Center has been formed to provide specialized incubator, accelerator and simulator services for university researchers and our community’s burgeoning long-term care companies. The Long-Term Care Innovation Center is located in space adjacent to Nucleus in order to encourage collaboration between our two organizations. Nucleus looks forward to working with John Reinhart, who will serve as its CEO. LTCIC has also made a commitment to be the anchor tenant in the new building currently under development in the UofL Nucleus Downtown Research Park. Signature HealthCARE’s commitment was enormously helpful in making the new building a reality.

The partnership with Signature HealthCARE has provided other benefits, which include the initial formation of an investment fund. Nucleus and its partners are asking other interested stakeholders to become a part of this fund, which will provide funding to start-up companies in long-term care.

In addition, the partnership with Signature HealthCARE has resulted in the development of a think tank where long-term care companies located in Louisville can come together to identify potential areas of collaboration, publish white papers, and host workshops and symposiums. Nucleus also has a seat on the board of the think tank, and our most recent discussions have been to explore opportunities for collaborations, demonstration grants, pilot projects and other grant opportunities found in the new healthcare reform bill.

While studying the new healthcare reform bill and preparing for a continuing legal education presentation to the Kentucky Legislative Research Commission, I compiled a lengthy list of potential funding opportunities in the area of aging care set out in the healthcare reform bill. This list is serving as our guide to identify possible collaborations among our long-term care companies.

EL: When will UofL Nucleus start development of the new office/research building?

VYB: An RFP for a construction manager is pending. UofL Nucleus is finalizing negotiations and plans to make an announcement within a few weeks. We are ready to move forward on the new building. It will be between 100,000 to 150,000 s.f., and there will be a parking garage.

EL: How are you going to finance new buildings?

VYB: Nucleus has letters of intent or commitments from potential tenants. The building is about 75 percent pre-leased. We will also be assessing potential financing opportunities through tax increment financing (TIF) for the UofL Nucleus Downtown Research Park as well as other financing options.

EL: What is UofL Nucleus’ goal for new jobs creation over the next decade?

VYB: Our goals are based on the research compiled for Nucleus’ TIF application. UofL Nucleus is projected over 30 years to create 8,700 new high-paying jobs and attract $2.3 billion in capital investment within the downtown TIF district.

EL: The University of Kentucky has one of the leading NIH centers for aging research. Do you see a relationship with UK?

VYB: Absolutely. We are actually reaching out to the UK Sanders-Brown Center on Aging. We want to collaborate. I think it’s imperative.

EL: Why is ‘entrepreneurial vitality’ important for the growth of a region?

VYB: Louisville is now a major entrepreneurial center, and the region needs to vigorously support new ideas and new businesses on an ongoing basis. Many of the new start-up companies will create wealth for investors (and our state’s economy) and good-paying jobs for our citizens.

EL: A 2010 EnterpriseCorp Report suggests a more timely and efficient process for bringing the fruits of UofL research to market is needed.

VYB: Attorney Ed Glasscock of Frost Brown Todd was recruited by President Ramsey as a special assistant to work with the UofL Office of Technology Transfer to help accelerate the commercialization process. We will see the benefits of this initiative in the next few years.

I am working closely with Ed Glasscock to address these issues and create a more seamless and efficient approach to the commercialization process.

EL: A new tech segment target is the ‘clean tech’ sector – saving energy and reducing waste products.

VYB: Energy and sustainability will be one area of focus at the research park to be established at the old Kentucky Trailer property adjacent to the UofL Belknap Campus. The Conn Center, funded by philanthropists Henry and Rebecca Conn, will be located in this research park. In addition, the university is moving forward on the development of an office and research park at the UofL Shelby Campus property located on Hurstbourne Lane and Shelbyville Road named ShelbyHurst Office and Research Park. A groundbreaking was recently held at this property for the initial building – an iconic office building that will set the tone for the development. UofL’s Bio Safety Lab 3 is also located on this property. Nucleus is assisting appropriate individuals, including Kathleen Smith from the UofL Office of the President, to develop these properties.

EL: You give advice to state government on the healthcare law recently enacted by the U.S. Congress. Can you give a brief overview of the new 2,500-plus page law and what to anticipate in the future?

VYB: A lot of folks say, “We passed healthcare reform, but I haven’t seen much happen. How is the new legislation really going to affect me?” First of all, you are not yet seeing many of the effects, but the effects will be enormous. There will be a completely different payment and delivery system. I predict that the reliance on employers to pay for health insurance will eventually significantly diminish if not end.

Healthcare insurance will eventually be delivered through organizations called exchanges. These exchanges will primarily be regulated at the federal level instead of at the state level as it has been in the past. It appears that the role of the states will be to provide federal oversight of the payment for and delivery of healthcare.

EL: Do you see the possibility of national health service fees being taken out of payroll checks and benefit payments?

VYB: The provisions of the new healthcare law are expansive but are primarily going to be implemented through regulations. Because most of the implementation is going to be done through regulations, it is not possible at this time to determine the complete extent of the federalization of healthcare.

It is clear that there will be a new healthcare delivery model. It will require clinical and financial integration of the full compendium of providers needed for a person’s care.

The increased costs and new regulations on healthcare will not be in place until at least 2013. People will not begin to experience or understand the ramifications of the new healthcare law until several years from now.

EL: How was the mission for UofL Nucleus conceived?

VYB: UofL Nucleus was created by Dr. Ramsey. It was his vision to develop an economic development arm of the University of Louisville and to use the university’s assets to drive innovation and economic development for Louisville and Kentucky.

Bringing together research, innovation, commercialization, services to start-up companies, recruitment of companies, the development of specialized space and services for inventors, and the use of tax increment financing for UofL Research Parks are all his vision. Dr. Ramsey sees the benefit of capitalizing the university’s assets to drive innovation and economic development. The results will be new, high paying jobs for Kentuckians.

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