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New Technology Developed at SD Mines Could Lower Drug Costs

The technology at the heart of Nanopareil revolves around nanofibers a thousand times smaller than a human hair, but its potential impact on the pharmaceutical industry could be massive.

“The pharmaceutical industry really needs this technology,” says Todd Menkhaus, Ph.D., a professor of biological and chemical engineering at South Dakota School of Mines & Technology and one of the researchers to develop the Nanopareil technology. “We developed this technology specifically to lower the costs of purifying lifesaving vaccines and medications so that they would be more accessible and more economical around the globe.”

Nanopareil LLC got its start on the SD Mines campus in 2008 when Menkhaus and Hao Fong, Ph.D., a professor in chemistry, biology, and health sciences, began collaborating on research into nanofibers and separations. They quickly found some pretty exciting results. By spraying or “electro spinning” polymer nanofibers into multiple layers, Fong and Menkhaus created sheets of a filter or sponge-like material. In its initial state, the material feels almost spongy to the touch. After final preparation, however, the sheet material feels and looks much like simple white paper.

Fong and Menkhaus discovered that when the material is used as a filter, it works as a sponge and collects or traps the targeted materials while allowing the inactive ingredients to flow through. Used in a pharmaceutical setting, where purification of drugs is critical, the spongy material can trap the “targeted, high-value product” and separate out the unwanted impurities or by-products, creating safe medications, says Craig Arnold, president and CEO of Nanopareil.

From their early data, Menkhaus and Fong realized the potential of their research and through a series of grants from the National Science Foundation, including the Small Business Innovation Research Phases I/II/IIB Grants, and investments from Black Hills Angel Fund and individuals and angel funds from around the state, were able to establish Nanopareil LLC. More recently, the company has gained support from the investment fund South Dakota Equity Partners.

In 2014, the company won the South Dakota Governor’s Giant Vision Business Plan Competition and in 2017 Nanopareil was named the Buzz of BIO at the BIO International Convention and took first place in the Technologies of Tomorrow competition.

The company’s first home base was in a small lab on the campus of SD Mines. Recently, it moved into the Ascent Innovation building, located on the northeast side of the SD Mines campus. Ascent, Rapid City’s business incubation center, is enabling the company to grow in research capabilities while also providing an ideal location for hosting potential customers and partners that have come from around the world to meet with Nanopareil and evaluate its new purification technologies. Nanopareil now has a second lab in Sioux Falls which is enabling it to do specialty projects for customers and collaborators alike.

Menkhaus says interest in the technology has been most significant from pharmaceutical companies. Currently, the purification process for therapeutic drugs is expensive, time-consuming, and requires large infrastructure. With more companies losing exclusive patents on brand name medicines, the door has opened for other companies to make cheaper generic brands, and companies are looking for ways to cut costs while maintaining safe, effective medications. Nanopareil’s technology will make this possible, giving pharmaceutical companies the capability to meet the requirements of the Food and Drug Administration for safety and purity without incurring massive costs.

Using Nanopareil’s nanoscale purification devices is from 100 to 1,000 times faster than the current processes. A purification cycle that currently takes 100 hours now could be reduced to less than one hour with Nanopareil technology.

The technology also allows for much smaller, much cheaper and portable purification equipment, says Menkhaus. Nanopareil can reduce purification costs for pharmaceutical companies by more than 80 percent.

“Generics or “Biosimilars” are making it important for them to be more cost competitive,” Menkhaus says. “This is a better way of purifying therapeutic drugs.” And as the pharmaceutical industry moves toward personalized and gene-based medicines, companies will need cheaper, more efficient alternatives as medication batches become smaller and economies of scale will be reduced.

In the area of vaccines, needed throughout the world, Menkhaus says the technology could reduce costs from $20 a dose to less than 20 cents a dose. “We want to focus on doing good while doing well,” says Menkhaus, who points out that the technology could help bring economical vaccines to the developing world.
While pharmaceuticals are the primary focus of the technology, Arnold and Menkhaus expect it will also find customers in other industries over time, including water purification, renewable energy, and biomedical devices.

Having made first sales, the company is making inroads in commercialization of the technology, but large-scale expansion into the pharmaceutical industry is still ongoing. “When it comes to commercialization of bioprocessing technology, it takes significant time and resources to gain acceptance by the marketplace,” Arnold says.

Arnold says the company is actively engaged with multiple “market-leading” companies already servicing the pharmaceutical industry. Our goal is to introduce our technology to market in the fastest and most effective way. “We believe that we could achieve our market adoption goal faster with the right partner,” Arnold says.
The company continues to develop and grow in its new lab at Ascent Innovation. SD Mines students are hired to work in the lab, giving Nanopareil a much-needed workforce and giving students hard-to-beat experience with a cutting-edge start-up in a cutting-edge lab. It's a win-win situation for the company and the students, and another example of how trailblazing technology often gets its start at SD Mines before reaching the state and the world.

“We feel fortunate that we’ve been able to locally source our employees,” says Arnold. “And we’re excited to witness how this SD Mines-developed technology will make a positive impact in the world.”

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