COLUMBIA — MU's Research Animal Diagnostic Laboratory, or RADIL, grew so much over the past 10 years, it finally reached its limits at the university, some faculty members said.
"RADIL required something bigger than the University of Missouri could provide, a bigger infrastructure," said Leona Rubin, a professor in veterinary biomedical sciences. "The university is great for startups, but once it is really up and running, it needs to be spun off."
In a deal that took effect Nov. 7, IDEXX Laboratories Inc. of Maine bought RADIL for $43 million.
"The terms of the deal were outstanding," said Neil Olson, dean of the MU College of Veterinary Medicine, which oversaw RADIL. "There's no borrowed money — it was all wired."
The funds were transferred into a veterinary school account and an undetermined amount will be transferred to MU in the future, Olson said.
RADIL does diagnostics, biomedical research and genetic testing on animals used for research in medical facilities and private institutions.
IDEXX has a similar focus but also does diagnostics such as X-rays, cardiology and heartworm testing on small animals for veterinarians. IDEXX also works to identify and find solutions for diseases in livestock and poultry animals, diagnose and provide digital imaging for horses, and engage in dairy and water testing.
RADIL will be incorporated into these existing IDEXX "strategies," Olson said. IDEXX has a global reach in animal diagnostics and will be able to expand RADIL beyond what would have been possible had it remained with MU.
"In order for it (RADIL) to grow, it needs to spread its wings," Olson said. "It was reaching its upper levels of growth while contained in the university, and it was as valuable to sell it now as it ever would be."
The lab's location will stay the same: 4011 Discovery Drive.
Plans to sell RADIL began two years ago, Olson said. In December 2010, MU announced a Chicago brokerage firm would be responsible for finding a buyer.
"I was hopeful that a company would want to keep the operation in Columbia and keep jobs here and also have the growth strategies in place so that RADIL could grow and be of greater benefit to the Columbia community," Olson said.
Years of controversy
RADIL was founded in 1968. But in the past 10 years, it boomed, and profits poured into the lab, according to a 2006 Missourian article. With the increased growth in profits, however, concerns arose from others in the College of Veterinary Medicine, according to a 2005 Missourian report.
The conflict centered around incentives for eight RADIL employees who were also faculty members at MU. Fee-for-service activities from RADIL produced significant additions to faculty members' salaries. Several were receiving more in fees than their base salaries.
That incentive compensation, as it is known, created a sense of unfairness among faculty of the veterinary college, according to the 2006 article. RADIL employees were able to do lab work for the government and the private sector and, in turn, received the benefits of this work.
However, those types of incentives were not available to the rest of the veterinary faculty and created a sense of exclusivity around the lab.
"Some faculty were given bonuses at figures above their base salary — that was a shock to everyone," said Rubin, who was chairwoman of MU's Faculty Council during part of the RADIL controversy. "That corporate incentive structure was new. I think on some level some got over it, and some didn't."
In 2003, the Faculty Council unanimously recommended that two faculty members associated with RADIL, Lela Riley and John Critser, step down or give up their incentives from the lab. That was in response to an earlier decision by an MU conflict-of-interest committee to allow Riley and Critser to keep their incentives.
However, a faculty forum including Riley, Critser, then-MU provost Brady Deaton and former College of Veterinary Medicine Dean Joe Kornegay defended the incentive program and allowed the employees to keep their incentives, according to a 2003 Missourian report.
Two years later, in 2005, all but two of the eight faculty members had incentives exceeding $100,000. In 2006, contracts were renegotiated to move more profits away from the faculty and into the veterinary college.
Then, in 2009, Riley stepped down as lab director amid conflict-of-interest issues.
Riley referred questions to IDEXX. Critser died in March.
Incentives with RADIL haven't been a problem during recent years, Olson said, and related concerns appear to have died down.
"It reached its zenith about five years ago," he said.
On Nov. 7, RADIL's 43 staff members and six of the eight faculty members became employees of IDEXX Laboratories. The other two of those eight will stay with the university.
The veterinary school will work to replace three of the six faculty members — Olson said he hopes it will be during the next year. The two faculty members who chose to stay with MU will continue to teach and work on research grants, he said.
"The two that chose to stay desired to maintain their academic and teaching career and didn't want to be a part of a private enterprise," Olson said. "Professors enjoy a huge amount of academic freedom — when you go and work with a private entity, I think you give up some of that freedom. There's pluses and minuses for each route."
RADIL is owned by a billion-dollar private enterprise now and will be separate from the veterinary school, Olson said. Any possible relationships between the university and what is now called IDEXX-RADIL will be determined on a case-by-case basis. There is currently no formal relationship between the two, but room for possible future collaboration exists.
"We have the opportunity now not only to collaborate with RADIL but also with IDEXX," Rubin said. "It's going to expand our interactions with corporations — we didn't lose RADIL, we gained IDEXX."