After closely studying a specific group of bacteria for more than 30 years, University of Wisconsin food science professor James Steele never thought he’d be doing anything other than scientific research.

But now, less than a year away from retirement, he’s playing a new role as a business owner with a new research patent from Wisconsin Alumni Research Foundation that was developed from his studies.

Alongside his business partner Jeff Broadbent, Steele is co-founder and CEO of Lactic Solutions, LLC, which was acquired by Lallemand Biofuels & Distilled Spirits this year. Their work with the lactic acid bacterium has innovated the ethanol production process by genetically editing it to kill other competing bacteria and produce even more ethanol from unused sugars in the pathway.

Steele said this idea can be traced back to a single “eureka moment” in a bar while he and Broadbent were chatting with friends about their work. As soon as they learned about the problems with lactic acid contamination in ethanol, they had an idea for a solution.

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Steele began his partnership with the Great Lakes Bioenergy Research Center in 2010, turning his interests towards the ethanol production pathway.

Steele learned a majority of ethanol producers used antibiotics to reduce the formation of lactic acid, a by-product which contaminates the desired ethanol yield. But Steele believed he could rework the genetics of the bacteria to make the product he wanted while increasing efficiency and reducing costs.

With Steele’s new transgenic bacterial strain, not only was lactic acid production ceased, it now produced ethanol, working together with the yeast bacteria.

“The problem with the contaminant is that it’s stealing sugar from the yeast and making lactic acid instead of ethanol,” Steele said. “We’ve simply taken the contaminant, re-engineering [and] redirecting its metabolism to make ethanol instead of lactic acid,” Steele said.

Timothy Donohue, UW professor of bacteriology and director of GLBRC, said he was glad GLBRC was the first to fund Steele’s research.

For 10 years, GLBRC has produced more than one patent per month, Donohue said, funding projects like Steele’s bacteria research. Now GLBRC has been renewed for an additional five years of funding with the U.S. Department of Energy to continue their work and produce even more biofuel efficiency research innovations.

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Donohue said federal grants to support GLBRC research are important, especially for Wisconsin where so many people rely on the fermentation process for the local economy. He said Steele’s work was a classic example of the Wisconsin Idea, identifying a local issue and conducting research to find real-world solutions.

“The stuff that started in GLBRC with [Steele’s] creativity has the potential to have a major positive impact on industries and the people in the state of Wisconsin,” Donohue said.

Now, just about a year after creating Lactic Solutions, LLC, Steele is already enjoying the success of his work after receiving an offer from an international business corporation.

But Steele admits he had a lot of help along the way, acknowledging the impact of UW organizations, like WARF’s Accelerator Program, which helped make his dream possible.

Steele approached WARF after he created the new transgenic bacterial strain, hoping to patent the process for his business idea.

Jeanan Yasiri Moe, director of strategic communications at WARF, said UW researchers are required by law to disclose their discoveries to WARF. From that point, WARF works with the researcher to determine whether a patent is appropriate, she said.

Beth Werner, Senior Intellectual Property Manager at WARF, said UW is unique in that researchers aren’t required in their employment contracts to turn their intellectual property over to the university. Instead, funding of the research determines who has rights to the invention.

Faculty can then license their discoveries back from WARF and work towards starting a company, Werner said, which is exactly what Steele did.

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Steele was selected for the Accelerator Program, a program meant to connect research product developers with additional funding and business mentors known as “catalysts” to help them take their product to the marketplace.  

Werner said it is competitive to gain access to the program, but Steele had quality research and the drive to learn the business skills necessary for success.

“[Steele] has a natural curiosity for a lot of different things. It’s not necessarily just his specific area of scientific research, but he was always someone who would ask a lot of questions about the process,” Werner said. “I thought I could see him asking the right questions and [learning] what he needs to learn in order to do this.”

Seven years in the making, Steele’s dream is finally complete, as he transitions from university researcher to business entrepreneur.

Werner hopes other researchers can follow Steele’s business example by using resources like WARF and other UW affiliated programs meant to turn new research ideas into prospective businesses. Her goal is to show the UW research community how WARF can be the “catalyst for success.”

“It’s a message [WARF] is trying to get out more, this idea that entrepreneurship does not happen in a bubble,” Werner said. “That’s the important thing. You’re thinking about a start up. You’ll need some help. Ask for it. The resources are there.”