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S.A company moving fast on anti-terror devices

www.express-news.com

San Antonio Express-News (07/28/2004)

By David Hendricks

SAN MARCOS — Giving a speech in San Antonio in January 2000, Hans Mark, then the Defense Department's director of defense research and engineering, declared that the future of war had changed.

Instead of the clashing of conventional armies, the new style of war was terrorism, said Mark, who previously had been a University of Texas System chancellor. The Defense Department needed handheld devices to detect chemical and biological agents used in terrorism attacks.

"In four or five years, there will be a market for these things. It would be a large industrial opportunity," Mark prophetically said during the Economic Outlook Conference.

This, of course, occurred before Sept. 11, 2001, and the anthrax deaths that autumn. Demand for these devices was instantaneous.

More than four years after Mark's speech, a San Antonio company, Operational Technologies Corp., is racing against competitors to produce exactly what Mark described.

OpTech has received the largest batch of government grants in its history to research and develop handheld detection devices that could be used by police and firefighters, the military and Homeland Security Department personnel.

OpTech has received six Small Business Innovative Research grants and one Small Business Technology Transfer grant in a partnership with Texas State University-San Marcos and its Institute for Environmental and Industrial Science.

The research grants, dating to the 1980s, are awarded by federal agencies to businesses with fewer than 500 employees to perform basic research on subjects that interest the federal government.

The grants come in two phases. The first phase, in sums of $70,000 to $100,000 each, develops the concepts within six months. The second phase, in larger amounts up to about $750,000 each, is meant to develop prototypes within two years.
Only about 40 percent of companies receiving first-phase Small Business Innovative Research grants manage to garner second-phase contracts.

From there, companies receiving the grants can seek investments to commercialize the developed technologies because they own the patents, although the government will have licenses to use the technologies for its own purposes.

The six research grants awarded to OpTech are from the Defense Department, the National Institutes of Health National Institute of Allergy and Infectious Diseases (two awards), the National Science Foundation, the Environmental Protection Agency and the Homeland Security Department's Advanced Research Projects agency.

The Small Business Technology Transfer award came from the Defense Department. OpTech scientists will work with those at Texas State University, which has developed a research specialty in nanoscience.

Two of the top OpTech scientists heading research under these grants are John Bruno and Judson Miner, whose past experience and specialties are in anthrax detection and Agent Orange, respectively.

The devices being developed will identify powders, materials, microbes and spores as well as poisons in blood and saliva, Miner said. This will happen quickly in the field, instead of samples being taken back to laboratories for identification.

"The need for this grows out of the military," Bruno added. "I recognized after the (first) Gulf War that this would be a problem. There are scary scenarios out there from what is on the black market."

The devices also will save money, especially in verifying whether sites have been cleaned sufficiently after contaminations, Bruno said.

If OpTech achieves its goal of making prototypes worthy of patent protections, will there be local venture capital and angels ready to provide the necessary investments to commercialize production of the devices? Too often, distant companies snap up invention licenses. The resulting wealth that is created does not occur where the products were born.

"We think they (venture capitalists and angels) are there," said Bill Henderson, OpTech's chief financial officer. "This is a really exciting area, a critical area. With good intellectual property, it can lead to commercialization. We'll be able to find (financial backing) if needed."

OpTech itself is investing with construction now of an 800-square-foot lab in its office building at Loop 410 and Babcock Road.

OpTech also knows the local organization that can help keep the profits created from its inventions in San Antonio instead of leaving.

"I want to give a plug to SATAI (San Antonio Technology Accelerator Initiative)," said Elizabeth Hewins, OpTech vice president for environmental and life sciences. "It is critical that SATAI be well funded. I want to see that organization successful".