Lucigen Spins Off Biofuels Company

From the Wisconsin State Journal Business Section link
Tuesday, August 15, 2006

A Middleton company that mines the hot springs of Yellowstone National Park for hardy microorganisms is spinning off part of its business.

Lucigen is creating C5•6 Technologies, a company that will devote its efforts to developing enzymes for biofuels.

John Biondi, who has been Lucigen’s chief operating officer, will become president of C5•6 and Phillip Brumm, Lucigen’s senior scientist, will be the new company’s chief scientific officer.

Lucigen, established in 1998, is a small operation with about 20 employees; creating C5•6 will turn it into two small companies.

“Lucigen is very focused on the life sciences and those customers and markets,” Biondi said. “C5•6 is very industrial. Biofuels has a very different customer base. The dynamics of it are completely different; also, the scale of it is very different.”

Lucigen has developed tools to clone genetic material. The company sells that technology, developed by its founder, David Mead, as well as E. coli cells used for drug research.

Lucigen will also proceed with research into enzymes that can be used for medical diagnostic purposes, discovered in Yellowstone’s waters.

C5•6 — named for the sugar molecules released by the company’s enzymes — will receive the exclusive licenses for those enzymes, which are expected to increase ethanol production.

The microorganisms can function in the high temperatures used to create the fuel from processed corn. They also are believed to break down more of the corn’s starches.

“We believe that we can improve the productivity of the current corn ethanol process by approximately 10 percent,” Brunn said, adding that no additional equipment is needed by corn processors.

For now, C5•6 will be housed at Lucigen’s offices and labs, 2120 Greenview Drive, Middleton. The new company already has received a $50,000 low-interest loan from the state Department of Commerce and a $45,000 grant from the Department of Agriculture, Trade and Consumer Protection.

Biondi said he hopes to raise $5 million from investors to continue tests on the enzymes and bring the first products to market during the second half of 2007.

Nationwide, more than 100 ethanol plants are operating and 60 more are being developed, Biondi said.

Creating the biofuels-related company comes at a time when gasoline prices are at near-record levels, well over $3 a gallon. But Biondi said that’s not the impetus for creating C5•6. Lucigen has been involved in the research for two years, he said.

“We are certainly aware that time is of the essence,” said Biondi. But, he added, the company didn’t hurry up the process “just to catch the ethanol wave.”

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