FRI AM News: WisBusiness: the Podcast with Prof. Jim Cook, Milwaukee Institute for Drug Discovery; Startup advocates calling for adjustments to investment incentive program

March 7, 2025

— This week’s episode of “WisBusiness: the Podcast” is with Prof. Jim Cook, co-founder of the Milwaukee Institute for Drug Discovery at UW-Milwaukee.

The podcast is focused on a drug that Cook helped discover, which is now being developed by a Canadian business called Damona Pharmaceuticals. The company is exploring its applications for treating depression and Alzheimer’s disease, though Cook notes it could have potential for patients with schizophrenia as well.

“In that model, every aspect of schizophrenia was inhibited — not just half of them, every one,” Cook said. “That was really exciting, so we started looking for colleagues to look at schizophrenia.”

After connecting with Etienne Sibille, the deputy director and senior scientist in the Campbell Family Mental Health Research Institute at the University of Toronto, Cook’s team developed the compound further. Sibille is also chief scientific officer and co-founder of Damona Pharmaceuticals, and was most interested in its applications for treating depression.

“Because depression and schizophrenia are really closely linked,” Cook said. “They are linked genetically, and not only that, sometimes a doctor can’t tell you whether you have schizophrenia or you have bipolar depression.”

Researchers found the compound reduced anxiety and depression in a mouse model, targeting specific neurons that Sibille had been studying, Cook explained. After gathering data on safety, Sibille got approval from the FDA to begin initial trials.

“Depression, right now, biologically and in terms of models, looks like the best target,” Cook said, adding “if you can get a drug in the clinic for depression, then you can take some of the profits and reinvest it and study schizophrenia. And that’s really what we’d like to do.”

Cook discusses the path ahead for the drug’s development, adding he’s excited to see his work advance to potential real-world application.

“As a medicinal chemist, any time that you get one that’s okayed for phase one, you’re really happy,” he said.

Listen to the podcast and see the full list of WisBusiness.com podcasts.

— Advocates for Wisconsin’s startups are calling for loosening some restrictions under the state’s Qualified New Business Venture program, to give participating entrepreneurs more flexibility.

The QNBV program provides a state income tax credit for investors that back certified Wisconsin startup companies, with a goal of attracting more in-state and out-of-state funding while reducing risk for the investors. The credit is equal to 25% of the amount of the equity investment, according to an overview from WEDC.

Speaking yesterday to the Assembly Committee on Small Business Development, Wisconsin Startup Coalition Executive Director Peter Welch urged lawmakers to remove a requirement that 51% of the employees of QNBV startups are located within Wisconsin.

“This can be a contentious issue, I know we want to make sure that we’re growing companies to support Wisconsin jobs, but we need to take a different view, I would argue, about how our startups grow,” he said. “These aren’t 50-person manufacturing companies. These are often five-person companies looking for their first round of investment.”

Welch said the current restriction can lead to companies being “cut off at the knees” when they’re poised for growth, as investors in startups pushed out of the program due to exceeding the out-of-state employment limit will no longer be eligible for the credit.

“This is a forced error on our part, I would say, and we need to do more work … educating legislators on how these companies grow, and how that can benefit Wisconsin even without that 51% requirement,” he said.

Tom Still, president of the Wisconsin Technology Council, agreed the restriction should be “updated” to reflect the modern economy. He noted “there was no such thing as remote workers” two decades ago when the QNBV program first began.

Welch argued the current limit can force companies into the wrong decision at the critical growth, rather than hiring the best person for the job, “because that could be the next Fetch, that could be the next Epic, that could be, you know, a company that’s going to employ a lot of people for a long time.”

Still said the program could be amended so QNBV-certified companies just need to be headquartered in Wisconsin. He also argued the tax credit percentage could be raised to 35% for the lead investor in a given funding deal.

“Because they’re the group that might be taking a bigger risk and shouldering a bigger burden there,” he said.

Yesterday’s committee hearing also included an update on the Wisconsin Investment Fund program from the Wisconsin Economic Development Corp., which seeded the effort with $50 million in federal funding from the State Small Business Credit Initiative. Shayna Hetzel, vice president of entrepreneurship and innovation for WEDC, noted that amount is being matched one-to-one with private dollars for a $100 million total impact.

“The Wisconsin Investment Fund has the potential to be self-sustaining,” she said. “As those meaningful exits come in, the capital is recycled back into the fund. As the businesses that received those investments grow, the value of the fund grows with them, because we’re taking an equity stake and betting on the upside of their risk.”

Over the first nine months of the fund, venture partners with the fund have invested more than $8 million in Wisconsin startups of the SSBCI total, alongside $16 million in outside funding. Those companies have now grown in their valuation to be more than $152 million, she said.

“We’re cheering for them, and we’re looking forward to taking more bets,” she said. “It will take time and strategic investments for us to realize that potential.”

Hetzel expects it will take five to seven years to see “those big, meaningful, helpful back-to-the-fund exits” start to occur, while the timeframe for positive return on investment for the fund could be about 10 years.

Watch the video at WisconsinEye.

— Universities of Wisconsin System president Jay Rothman said federal funding cuts to research have “real implications for families and communities counting on us for solutions.”

Speaking at a press conference yesterday at the UW-Madison Health Sciences Learning Center, Rothman emphasized the “critical” importance of UW’s Alzheimer’s research in seeking cures and treatments.

This comes as the National Institutes of Health under President Donald Trump’s administration had declared sweeping funding cuts to university health research last month, specifically cutting to a 15% across the board rate for “indirect costs,” which the memo described as “facilities” and “administration.” According to a February Department of Justice release, this would result in a loss of $65 million in funding for the current year for UW-Madison.

A federal judge had temporarily blocked the cuts last month, and yesterday issued an injunction that would further delay the cuts from taking effect.

Despite the judge’s order, Rothman said he is concerned about the budget Congress is discussing and more permanent potential cuts in the future.

The Universities of Wisconsin, along with BioForward Wisconsin, Marshfield Clinic Health System, the Morgridge Center for Research and over 30 other health and research institutions sent a letter to the members of Wisconsin’s congressional delegation.

The letter expressed the need for NIH funding for research in Wisconsin, and asked lawmakers to prioritize continued funding.

“We urge you to maintain robust NIH funding and oppose any significant cuts that will jeopardize these critical benefits,” the letter read. “NIH funding is essential to research that leads to new treatments and therapies for Wisconsin residents.”

In response to the letter, U.S. Rep. Tony Wied, R-De Pere, said he plans to work with the universities.

“I was glad to meet with UW Madison Vice Chancellor Craig Thompson yesterday and other members of UW leadership in recent weeks to discuss this proposal and other important issues facing the University of Wisconsin and their partner organizations,” Wied said in a statement to WisPolitics. “I will continue to monitor this situation and work with our state’s universities to ensure they have the appropriate resources they need to be successful.”

Rothman said UW is taking several steps to deal with funding cuts, including a hiring freeze and limiting travel. He added UW is also looking at other contingency plans.

And Chancellor Jennifer Mnookin said there’s a lot of “uncertainty” about funding and UW–Madison is being “cautious” about spending money. She said the university is considering a variety of steps for multiple scenarios.

“We’re also trying to stay focused on our core missions of research, teaching and service, and what we can do to protect those parts of what we need to keep doing for our students for the state of Wisconsin,” Mnookin said.

She also pushed back on criticism that indirect costs aren’t necessary: “indirect costs are real costs.” Mnookin said, for example, medical equipment is necessary for Alzheimer’s research, and there’s more technology infrastructure that is necessary for research.

Also at the press conference today, Sterling Johnson, a UW professor and leader for the Wisconsin Registry of Alzheimer’s Prevention Study, said UW–Madison research has been key to worldwide understanding of Alzheimer’s prevention methods and treatments. Johnson also said UW has worked with NIH-funded institutions around the nation to address Alzheimer’s disease.

He highlighted one of their discoveries working with other research centers: that people with Down syndrome who live long enough almost always develop Alzheimer’s later in life. Johnson also introduced a longtime WRAP study participant and Madison resident: Sigrid Knuti, who emphasized the importance of the university’s research.

“I want this generation to end Alzheimer’s,” Knuti said. “And for that, I’m counting on Sterling and University of Wisconsin to get it done. I’m very proud of my university. I’m very proud of what’s happening.”

Top headlines from the Health Care Report…

— The latest Marquette University Law School poll illustrates the ongoing partisan divide over abortion in Wisconsin.

For more of the most relevant health care news, reports on groundbreaking research in Wisconsin, links to top stories and more, sign up today for the free daily Health Care Report from WisPolitics and WisBusiness.com.

Sign up here.

— We Energies’ Darien Solar Energy Center went into service this week in Walworth and Rock counties, the utility company announced.

The 250-megawatt project has more than 600,000 double-sided solar panels that can move to track the sun, which collectively produce enough energy to power 75,000 homes.

The Darien Solar Energy Center is We Energies’ second large-scale solar project to recently come online, after the Paris Solar Energy Center started up in Kenosha in late 2024.

“These new solar projects, along with our planned investments in low-carbon natural gas power plants and more renewable energy, will continue to support reliability and economic growth across the state,” We Energies President Mike Hooper said in a statement.

See the release.

UW-Madison leaders prepare for expected federal funding cuts

Milwaukee’s largest business group delays next phase of diversity program, broadens parameters

TOPICS

AGRIBUSINESS

– A repeat by a razor-thin margin at the U.S. Championship Cheese Contest

– Wisconsin DATCP to reveal 78th Alice in Dairyland Finalists

BANKING

– Prominent Milwaukee-area bank CEO dies at age 81

CONSTRUCTION

– ‘Milwaukee’s second downtown’: 2K apartments planned for Wauwatosa

EDUCATION