UMass Amherst Spinoff Qteros is Revived by Founders with a New Business Plan
December 20, 2012
Contact: Janet Lathrop 413/545-0444
AMHERST, Mass. – Qteros, the biofuel company that grew from discovery of the Q Microbe by researchers at the University of Massachusetts Amherst, has been revived by three of the company’s original founders and is primed for success with a new, less capital-intensive business model, says CEO Stephan Rogers of Amherst.
Rogers, a founder in 2007 of SunEthanol, Qteros’s precursor, served as chief operating officer, managed business development, finance, personnel and assisted in raising $35 million for that earlier startup. Now he and two other founders have acquired Qteros, including control of its intellectual property assets, microbial strains developed over the past five years and research data related to them.
Rogers says, “Having examined all the research, we now see an immediate pathway to commercialization with the current technology. The company is going to pursue a new and different, less capital-intensive business model. Part of our strategy to quickly get to market is to partner with others who have deep experience in microbial research to help us jump-start the process.” Qteros had closed its doors earlier this year because of adverse market conditions, he notes.
Working with Rogers at the revived Qteros will be chemical engineer Judy Giordan of Pelham as the chief technology officer. She formerly served Henkel Chemical U.S., International Flavors and Fragrances and PepsiCo in that capacity. The company also has brought on John Steedman, formerly of BP alternative energy ventures, as a business advisor. Rogers says, “In his role at BP, John had the opportunity to survey all the up-and-coming alternative energy platforms coming along and he chose to align himself with Qteros, which is very exciting. It’s great to have him on board.”
The new owners hope to partner again with UMass Amherst, Rogers adds. UMass Amherst microbiologist Susan Leschine, who discovered the Q Microbe and will continue to serve on Qteros’s scientific advisory panel, says she is delighted that the ethanol-producing organism will be developed to its full potential. “This is an extremely valuable technology and I’m very glad it’s not going away. The Q Microbe is an excellent source of ethanol, which remains a very viable transportation fuel and will continue to be so going forward. We can’t afford to waste this opportunity and I’m glad others agree.”
Rogers confirms her view. He says even if other energy sources such as natural gas and oil shale continue to be discovered and developed, neither is a good source of transportation fuels, which are in such high demand.
He points out, “Qteros’ technology was rated as one of the top 20 biofuels technologies in 2010, and as a fermentation-to-ethanol platform it is still one of the world-class technologies that exist today. The Q Microbe is unique in nature because it can break down biomass and ferment the sugars to ethanol. Other microbes have a great deal of difficulty with that process.”
The CEO reports that Qteros finalized its licensing agreement with the university for all products produced by the Q Microbe, including chemicals, in November. “It was a pleasure working with the university on the re-licensing,” says Rogers. “We feel like we have a strong partner and support system in the university. We are very hopeful that UMass will continue to provide a support role in research with the Q Microbe. Some of the best understanding of the workings of this microbe exists in the labs at UMass Amherst.”
William Rosenberg, executive director of the UMass Commercial Ventures and Intellectual Property (CVIP) office, which coordinates the university’s technology licensing programs across the five campuses, commented on the challenges of early stage high-technology startups: “Although you can develop a business plan as Qteros did several years ago, there are many unforeseen twists and turns on the way to commercial success due the technical and business risks. A Qteros restart, especially one that involves members of the original team and uses key retained assets, is positive for the biochemical sector, the university and the environment.”
In the meantime, Rogers says Qteros will work with partners on research so there is no immediate need for laboratory or office facilities. But by mid-2013 the company expects to start up a small lab. No decision has been made yet about staying in western Massachusetts, he notes. “It will depend on what’s best for the business, how partnerships develop and how the funding develops.”
According to CVIP, income from the commercialization of academic research at UMass surged to $53.9 million for the fiscal year ending June 30, marking the second best earnings year in its history. It was also the fourth best year for faculty members disclosing new discoveries with 172, second best year for the number of patents issued with 49, and best ever in terms of companies started, three. UMass has consistently ranked among the top 15 universities in licensing income in the United States and has executed over 200 licenses with companies over a broad range of technologies in the past 10 years.