Innovation: Tech Pioneers

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At Arryx, Grier and Dufresne's 16-trap breakthrough was so exciting that the University of Chicago, where they were based, showcased their work to Lewis Gruber, a biotech entrepreneur and patent lawyer. Within months, he had invested in the technology, and Arryx was born, with Gruber as chief executive. Grier, who is now a professor at New York University, is the company's chief scientific adviser. Grier and company have long since replaced the plastic with a liquid-crystal device, which they build into a small, box-shaped machine that you could call a cell catcher. The technology is used today for tasks that include analyzing blood and separating sperm cells in bull semen that produce bulls from those that make cows (which might not seem important unless you're a dairy farmer who needs a supply of milk-producing females).

In late October, blood-equipment maker Haemonetics Corp., of Braintree, Mass., invested $5 million in Arryx to help develop a machine that would remove a blood donor's platelets, used for clotting. Under the deal, Haemonetics has agreed to make payments of $7.3 million and $5 million when Arryx hits predetermined development breakthroughs.

As entrepreneurial as some of these tech pioneers are, and as brilliant as their breakthroughs are, the R.-and-D.-reliant business of biotech is still very difficult. While the companies are developing processes and drugs, they survive on venture financing and funding from larger partners, often provided when they hit milestones. Payments from AstraZeneca and other partners have boosted Astex's revenues 170% annually since 2000, and Astex has raised $100 million in venture financing. Raven has raised $66 million and hopes to land another $35 million soon. It also receives milestone payments from Abbott Laboratories and others.

The big payout doesn't kick in until regulators approve the drugs for commercial use and the developers start receiving royalties, which can take years. "There are a lot easier ways to [make money] than to put your life into a high-risk adventure," says Dahiyat. Fortunately, the occasional chance to shout "Eureka!"--or at least, "We've got structure!"--also keeps their innovators going.