University fired Doris Taylor from the board of the promising spinoff firm that she founded.
In glossy magazines, TV ads and special appearances, the University of Minnesota has promoted Doris Taylor as a brilliant star.
Her groundbreaking research that led to the reanimation of an animal heart has been saluted by Hillary Clinton and Barbra Streisand, and hailed by the university as one of its most promising discoveries.
But just five months after publicly vaulting Taylor into business to commercialize her technology, the university quietly fired her from the board of the company she founded. Now the taxpayer-supported firm on which the U has pinned big hopes is trying to survive its start-up phase without its star scientist.
The U gets business royalties worth about $83 million a year now, but 90 percent of that money flows from patents on the anti-HIV drug Ziagen that will expire in 2013. Unless Miromatrix Medical Inc. and other spinoffs thrive, those royalties will dry up at the same time the U is dealing with state aid cuts.
While Taylor remains engaged in research, she is otherwise no longer involved with the company.
"I have no firsthand idea what the company is doing or what its goals and directions are,'' she said.
The change was never announced by the U or the Department of Employment and Economic Development (DEED) despite Miromatrix's heavy reliance on public funds.
Stuart Mason, the U's chief investment officer, declined to elaborate on Taylor's ouster except to say "all was not going completely smoothly" at the company.
Turmoil began early
The turmoil inside Miromatrix, detailed in interviews and documents, began as soon as it was launched.
One of the first emerging high-tech firms to receive development money from the state-funded Agricultural Board, Miromatrix was loaned $500,000 as part of state efforts to commercialize home-grown innovation.
Guided by the U's Office for Technology Commercialization, Taylor founded Miromatrix in 2009, naming it after her favorite artist, Spanish painter Joan Miro. The U paired her with Rob Cohen as CEO. She was to be the scientific brains. Cohen, a manager with 29 years of experience in drug and medical device markets, was to be the driver of operations.
When the spinoff was announced in February 2010, Tim Mulcahy, the U's vice president for research, said that Taylor's research "holds the potential to launch an entirely new industry'' on the scale of the $95 billion medical device industry.
Taylor, Cohen and the U stand to profit -- but not equally -- if the business prospers. The U got 28.6 percent of the founding stock and the prospect of royalties. Cohen got a founding stake of at least 24 percent and as much as 35.7 percent along with a salary of $87,000. Taylor received no salary and the fewest shares, with the potential of up to 35.7 percent of the founding common stock.
Taylor was thrilled by the prospect of bringing the technology to market and saving lives. Cohen said her close involvement would be "tremendously beneficial.''
But tension developed quickly between them.
Raised in rural Mississippi, Taylor earned her doctorate in pharmacology. She came to the U in 2003 from Duke University Medical Center, where she pioneered the use of cells to repair heart muscle.
Her astonishing breakthrough, accomplished in 2008 with then-trainee Harald Ott, was to strip a dead rat heart of its cells and reseed it with living cells from newborn rats. Within a week, the heart began to beat. For 40 days, it kept beating with the help of electrical signals.
Her discoveries also apply to the lungs, liver and possibly other organs.
Starting in 2007, Taylor was featured prominently by the U as a symbol of bold ingenuity. In a 2010 video, she mused about building bio-artificial organs for transplants. "Imagine ... you could be your own donor," she said.
Known for a playful streak and the sign in her lab that says, "Trust Your Crazy Ideas,'' Taylor also is a fighter.
She told an auditorium forum attended by President Bob Bruininks that she prefers to work with people who want to change the world. "I'm not as good at working with people if they just want to take an incremental step forward," she said.
In Cohen she encountered a career executive who said in an interview that his business approach is to "run silent, run deep'' and never reveal anything that could benefit competitors.
A veteran of management positions at Pfizer, St. Jude Medical and early-stage companies, before Miromatrix Cohen spent five years running a drug patch company called Travanti Pharma, selling it in 2009 to a larger firm.
Cohen brought Travanti Pharma's chairman, Walt Sembrowich, along to Miromatrix as its board chairman.
Taylor said she and Cohen clashed immediately over her role, which she perceived was weakened by him. The tension mounted when the company initially failed to replicate Taylor's technology -- a feat many other labs had accomplished.
"I think that Rob and, I mean, the team didn't feel that her input was helping at that point,'' said Ott, the co-inventor and a Miromatrix board member.
Meanwhile, Taylor felt her questions about the company's finances and direction were being stonewalled.
"Because I'm a scientist and because I'm curious, I asked a lot of questions, and that wasn't particularly well received," she said.
Taylor put her questions, including how the company was spending its limited cash, into writing for a July board meeting.
"We all had what I thought was an open, honest conversation, and I left,'' she said.
Hours later, Taylor's phone rang as she prepared to go to Berlin for a Frontiers in Cardiovascular Biology meeting. It was Sembrowich with "unfortunate news." She'd been voted off the board by the U and Cohen, which between them controlled a majority of the stock.
"I had a lump in my throat because it's hard when the people you value don't value you in return,'' Taylor said.
'We're her biggest fans'
Cohen said he didn't know who voted the U's 560,000 shares against Taylor. Her departure was part of a "normal reconstitution," he said.
"We're her biggest fans,'' he said.
Mason said he spent several days evaluating how he should vote the U's shares. He spoke with Cohen and other board members, but not with Taylor. "I'm not sure that a discussion with Doris would have changed my mind,'' he said.
Mason said he consulted at least three university officials, including Jay Shrankler, executive director of the Office for Technology Commercialization.
Shrankler denied talking to Mason about the vote. Her removal was purely a company matter, he said.
Taylor's dismissal occurred during a period of financial instability, according to Peter Bianco, DEED's paid observer of Miromatrix. He wrote last September that the business was on the verge of collapse unless new money could be raised.
In response, DEED provided a second $250,000 loan to attract a matching amount of private money. The cash bought the company time to work on two key unfinished initiatives: introducing its first product, which Cohen wouldn't identify, and raising more money.
Bob Isaacson, who manages business subsidies for DEED, said the level of Taylor's involvement doesn't matter as long as the company has her technology and is moving forward. But experts say that university spinoffs are far more likely to flourish when the founding scientist stays on during the early years.
"If there is a star scientist deeply involved, the probability of that firm being successful is much higher, on the order of 100 times higher,'' said UCLA Professor Michael Darby.
The Kauffman Foundation's Lesa Mitchell, who studies how universities commercialize technology, said it's normal for founders of spinoffs to exit -- but only after several years.
Taylor's quick dismissal could backfire on the university, since "their retention of faculty and how they treat faculty is everything,'' Mitchell said.
Taylor said she remains committed to translating the technology into health-care solutions.
"We've developed something that can save lives. People deserve to have access to it," she said.
Tony Kennedy • 612-673-4213