Startup focuses on pancreatic cells to help cure diabetes

After Tony Kolton sold his software company — Logical Information Machines – in 2009, he sailed in the Caribbean and enjoyed other recreational pursuits.

But it didn’t take the 59-year-old Kolton long to grow bored.

With an interest in biotechnology, he turned his attention to the potential of stem cell therapies and founded Regenerative Medical Solutions in January of 2012. The startup, based at University Research Park in Madison, is working to help cure diabetes.

“After a career in software, biotech seemed to me to be the next great frontier,” Kolton said. “With the aging population and the importance of maintaining health, biotech seemed the way to go if I wanted to be on the cutting edge of something big.”

Kolton said RMS uses a media formula created by Dr. Jon Odorico, a UW-Madison researcher, to grow pancreatic stem cells.

“Dr. Odorico has been at this for more than a decade,” explained Kolton, who said the company is now selling the media, dubbed ProgenMix, to two large pharmaceutical companies. He declined to name them for proprietary reasons.

According to the company’s website, “in the future, pancreatic stem cells will be capable of making insulin-producing tissue for transplant purposes. These will be ‘custom grown’ using the patient’s own cells, reducing rejection risk to almost nil.”

“When Dr. Odorico started out, he found there was nothing he could buy to grow these stem cells, so he was left to his own designs,” Kolton said. “By trying thousands and thousands of combinations of chemicals, human growth factors and proteins, he came up with a cocktail of about a dozen ingredients. When you sprinkle them over stem cells in a petri dish they grow very robustly and in a very healthy (manner).

“In layman’s terms, I say what he’s come up with is ‘Miracle Gro’ for fostering pancreatic stem cells,” he said.

He said what RMS is doing is similar to what the Madison company Cellular Dynamics International – founded by stem cell pioneer Jamie Thomson – has done for heart cells. Thomson’s company recently went public and raised $43 million to expand the firm.

At RMS, Kolton has invested $1 million of his own savings, while partner Guy Tagliavia and a member of Tagliavia’s family plunked down more than $850,000, for nearly $2 million in initial seed money. To date, the company has six employees. Tagliavia, who also started and sold a software firm, is the RMS chief operating officer.

Kolton said the company is now in the process of trying to raise another $3 million. He said Wisconsin investors who back RMS can qualify for a 25 percent tax credit through the Wisconsin Economic Development Corp.

Tagliavia, 53, said the goal for RMS this year is to improve the formulation for growing a certain type of pancreatic cell.

“From there, Tony and I have talked about expanding the business and focusing on other stem cell lines and other organs of the body,” he said.

Tagliavia is also a software veteran. He sold his company, InfoDyne, to IBM in 2008 and stayed on to run it for several years. He said he and Kolton had a mutual interest in biotechnology and stem cells.

“When Tony told me he’d started RMS, I was intrigued,” Tagliavia said. “One thing led to another and I jumped on board.

Kolton called UW-Madison “ground zero” for groundbreaking research on stem cell therapies.

“This is where stem cells were first isolated by Jamie Thomson,” he said. “Dr. Odorico worked with him and did some of the initial lab work in the ’90s. There is certainly a good labor pool of biotech talent here. I think what Silicon Valley is to semiconductors, Madison is to stem cells.”

Kolton said he is confident he and Tagliavia can raise the funds to expand their company.

“Nothing is easy, let me tell you,” he said. “But we have a good story and a great team, a reasonable valuation and tax credits for our investors. So I think things are stacked in our favor.”

Tagliavia called the company’s progress “real and demonstrable.”

“We started out with a ProgenMix1 and we’ve improved on that 12 months later with ProgenMix2, which has a shorter growth cycle and better yield in terms of the quality of the cells and their functionality. We are now focusing on the next generation of formulation. …

“Making these improvements and doing them rapidly is what certainly what investors are keen on and what will be key to our success going forward.”

Tagliavia said it is also important to note that RMS has focused on growing pancreatic stem cells in the “in vitro environment” of a culture dish and not in a living organism.

“If these cells can be grown in the right quality and right functionality in vitro in a petri dish, you won’t have the complications of using animals … that perhaps would make it difficult to harvest and reuse the cells,” he said.

For more information on RMS, visit

— By Brian E. Clark For