Montana State University

MSU graduate launches biofuels start-up, partners with university

February 15, 2013 -- Sepp Jannotta, MSU News Service

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BOZEMAN - A Bozeman biofuels start-up is partnering with Montana State University in an effort to turn a fungus discovered in the highly acidic hot springs of Yellowstone National Park into sustainable energy.

The discovery - a fungus pulled from a geyser basin in 2009 and now dubbed MK7 - came from research allowed under a permit MSU has on file with the National Park Service. MSU filed a patent on MK7.

Funded by a Small Business Innovation and Research grant from the National Science Foundation, Mark Kozubal and his start-up company, Sustainable Bioproducts, will conduct further research, as well as enlist the consulting needed to study the product's fit within the marketplace. Kozubal earned a doctorate in microbiology from MSU in 2010 and also completed a year of post-doctoral research at the university.

MK7 is the product of research done by Kozubal and co-inventors William Inskeep, professor in the Department of Land Resources and Environmental Sciences, and Richard Macur, assistant research professor with LRES. They discovered that MK7 not only thrives in the extreme environs of Yellowstone's hot springs, it eats algae and, when dried, oozes oil.

The lipids that are the byproduct are also high in the kind of enzymes that industry often covets for the production of a range of goods.

"The most important part of our research now is to test the technology further and investigate the feasibility of using this organism to produce biofuels and other products," Kozubal said.

The grant - an SBIR Phase I award for $150,000 - will help Sustainable Bioproducts conduct independent research at its facility on the MSU Innovation Campus, as well as sponsor a $50,000 research grant for work in MSU labs. Sustainable Bioproducts has licensed the technology for commercial enterprise.

While receiving six months of Phase I funding was clearly a vote of confidence in MK7, Kozubal said the goal is to have the technology showing enough promise to warrant a $750,000 Phase II grant, for an additional six -month research-and-development window.

That would put MK7 in an excellent position for either sub-licensing the technology to a corporation or garnering the private equity investment needed to launch MK7-based products on its own.

MK7's discovery came as Kozubal was on a field trip to Yellowstone to teach Bozeman middle school students about microbial life in harsh environments. The trip was part of the educational outreach required of Kozubal as an NSF-funded doctoral student in the Department of Land Resources and Environmental Sciences.

Kozubal, who is the sole employee of Sustainable Bioproducts, said he is confident that something good will come as he and his MSU partners continue their work on MK7.

Rebecca Mahurin, director of the MSU Office of Technology Transfer, said MSU remains committed to the goal of putting the science and technology from campus research labs into the hands of Montana citizens.

"We're excited to see Sustainable Bioproducts moving forward with this technology," Mahurin said. "It's especially nice to see the license for a technology like MK7, which has major implications for biofuels production, go to a local company."

Mark Kozubal, or (406) 579-8383