Venture Update Vol. XII, #3, April 2008
- Done Deals
- On the Up
- New Developments
- Featured Fund
- In the Pipeline
- CED's 25th Annual Venture Conference
- Mark Your Calendar
Done Deals
Research Triangle Park — AVI Biopharma (www.avibio.com, Nasdaq: AVII), a Portland, Ore.-based biotech company, will acquire Ercole Bitoech (www.ercolebiotech.com), which develops drugs that target specific genes in the treatment of various diseases. Under the terms of the agreement, AVI will issue up to $7.5 million in its common stock in exchange for all outstanding shares of Ercole Bitoech stock not already owned by AVI. It also will assume up to $1.5 million in Ercole’s liabilities. The two companies have collaborated since 2006 on drug candidates including AVI–4658, a drug for Duchenne muscular dystrophy, the most common type of the fatal disorder. Contact Ted Bebenek (919.647.4452).
Durham — Chesson Laboratory Associates (www.chessonlabs.com), developer of technology for a liquid bandage and products to treat bites, stings and nail fungus, closed on $3.3 million in Series A financing from angel investors. The investment will primarily fund future product development efforts and the introduction of products to the healthcare marketplace. Contact Scott Neuville (919.419.4900).
Cary — Horticultural Asset Management (www.moneygrowsontrees.com), provider of software and services for use in the horticultural industry, raised $3.2 million in Series B venture capital financing. Mooresviile, N.J.-based Zekavat Investment Group and Omaha, NE-based Rockbrook Advisors (www.rockbrookadvisors.com) led the round. Contact Doug Cowles (919.460.5445).
Morrisville — Ziptronix (www.ziptronix.com), developer of semiconductor integration strategies and processes, closed on $2.3 million in venture financing. Investors for the round were not disclosed. Contact Richard Gianni (919.459.2400).
Durham — Serenex (www.serenex.com), developer of inhibitors of a protein involved in cancer, inflammatory and neurodegenerative diseases, entered an agreement to be acquired by Pfizer Inc. The terms of the transaction, expected to close in the second quarter of 2008, were not disclosed. Contact Ian Howes (919.281.6031).
Research Triangle Park — Affinergy, Inc. (www.affinergy.com), a Duke University spinout with a proprietary site-specific biological delivery system, won multiple SBIR grants. One of the awards is a Phase 2 SBIR program for $2,053,845, funded through the NIH by the National Institute of General Medical Sciences. The other 4 grants, which are for Phase 1 programs, exceed a combined total of $1 million. Contact: Peyton Anderson (919.433.2229).
Durham — Phase Bioscience, Inc., (www.phasebio.com), a development-stage biotechnology company, closed on a $1-million secured equipment loan with SVB Silicon Valley Bank (Nasdaq: SIVB). The company is planning a move to larger headquarters and laboratory facilities in Morrisville’s Aerial Center. Contact June Edgerton (919.544.6177).
Research Triangle Park — The Hamner Institutes for Health Sciences (www.thehamner.org), an independent, nonprofit organization specializing in health sciences research, received a $655,367 contract from the Navy Health Research Center Environmental Health Effects Laboratory Detachment. The grant will fund the research of Dr. Darol E. Dodd, for the study of the inhalation toxicity of a new jet fuel, Syntroleum®S-8. Contact Erin Knight (919.558.1215).
Winston Salem — Targacept (www.targacept.com), a biopharmaceutical company developing treatments for central nervous system disorders, received up to $5.3 million in loans from BB&T to upgrade its lab equipment. Targacept, which has drug discovery partnerships with AstraZeneca and GlaxoSmithKline, has also initiated a Phase 1 clinical trial of TC-5214, an augmentation therapy for major depressive disorder (MDD). A Phase 2 clinical proof of concept trial is planned for later in 2008. Contact lan Musso (336.480.2186).
High Point — TransTech Pharma, Inc. (www.ttpharma.com), a clinical-stage pharmaceutical company, acquired all rights to a portfolio of drug candidates being developed to treat metabolic disorders from Novo Nordisk (www.novonordisk.com). Novo Nordisk selected TransTech to develop three programs based on its prior success working closely with the company on novel drug development. Contact Stephen Holcombe (336.841.0300).
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On the Up
CoLucid Pharmaceuticals
Indianapolis, Ind.
After a 20-year career at Eli Lilly and Company and a previous stint at Boston-area start-up Hypnion, Inc., Jim White was ready for something different.
Enter Pappas Ventures, which had seed funded and formed CoLucid, a virtual biotechnology/drug development company with a focus on central nervous system disorders, including migraine headaches. Founded in 2005, the company is built on a novel clinical stage migraine compound licensed from Lilly, and the acquisition of a novel chemistry platform from an un-named East Coast biotech company. A $16.5-million Series A round came in 2005, led by Pappas and other investors, Domain Associates, Pearl Street Venture Funds, and Triathlon Medical Ventures. That same year, White was tapped to head the company.
“My experience in big pharma and my first experience in biotech were very much brick and mortar operations with a lot of fixed costs,” White recalls. At Hypnion, White was executive vice president of R&D and COO, leading a multi-disciplinary team to discover and develop new non-addicting sleep and wake promoting medications. At Lilly, he held several senior leadership roles in central nervous system research and development.
“I find that a virtual company offers the opportunity to capture the very best talent quickly, the ability to change direction quickly and the ability to apply more of your capital toward the scientific challenges you are facing,” he says. “If you have the right self-starting people involved, you can operate in a virtual mode without sacrificing good communication and good decision making.”
White, a licensed pilot and avid salt-water fisherman, is recognized in the industry as a home-grown leader, whose feet are firmly planted on the ground. “I define success for myself as how well I have set and communicated aggressive objectives for the team,” he explains, “and how well I have inspired commitment and effort from them to achieve those objectives. I see the company’s success flowing from those objectives.”
So far, things are on track. CoLucid’s lead compound in the $5-billion CNS market, is COL-144. It recently completed a Phase II proof of concept study, and data is expected to be released by year-end.
“In the drug discovery business there are acts of God and acts of man that can hold us back,” he says. “We try to do everything we can to minimize the acts of man. If we have thought clearly about a problem and done everything we can to solve it, then we have been successful regardless of the outcome.”
CoLucid is a Showcase Presenter at CED’s 25th Annual Venture Conference.
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New Developments
Cary — DataFlux (www.dataflux.com), a provider of data quality and data integration solutions, was granted a patent for its “computer-implemented system and method for managing data integrity validation rules.” The patent covers a technology platform employed by DataFlux to standardize, match and validate data through user-generated rules. Contact Daniel Teachey (877.846.3589).
Charleston, S.C. — Argolyn Bioscience Inc. (www.argolyn.com), a biotechnology company developing novel drugs to treat psychosis, pain and other disorders, named M. Nixon (Nick) Ellis, Ph.D., as president and CEO. Ellis previously served as president and COO of Triangle Pharmaceuticals and Trimeris. The company will move its headquarters from Charleston to Research Triangle Park. Contact Pearce Gilbert (919.806.4634).
Charlotte — SekChek® Information Protection Services (www.sekchek.com), a provider of automated host system security assessment tools, released SekChek_Local™, a new version of its automated computer security assessment tool. The tool can now analyze security controls without having to send data off-site for processing. Contact Andrew Chodelski (888.725.7859).
Durham — Virtual Heroes Inc. (www.virtualheroes.com), developer of advanced learning technologies, created 3DiTeams™, an interactive healthcare team trainer designed to maximize team synchronization and skills proficiency to reduce medical errors. The program was designed in collaboration with faculty from Duke University Medical Center and was developed with funding from the U.S. Army's Telemedicine and Advanced Technology Research Center. Contact Amy Needham (919.293.0607).
Morrisville — NeoNova Network Services (www.neonova.net), an Internet service provider serving the U.S. rural telephone and cable service providers, was spun out of Digitel, Inc. Terms of the transaction were not disclosed. The new company will focus on continued transformation and expansion of technology services for the country's more than 2,000 independent communications service providers. Contact Frank Stoltmann (919.460.3330).
Wilmington — Inclinix, Inc. (www. inclinix.com), an enrollment contract research organization (CRO) and provider of clinical trial recruitment solutions, received a patent for its Expert System Platform (ESP). ESP guides interview questions during patient qualification for clinical trials of new drugs or medical devices. Contact Chris Sleat (910.395.5674).
Cary — PharmaDirections, Inc. (www.pharmadirections.com), drug development management company, launched PHARMADIRECTNET™, a proprietary network representing more than 120 Ph.D.-level drug development scientists, regulatory experts and quality experts, and more than 40 global laboratory and manufacturing providers. Contact Richard Basile (919.657.0723).
Research Triangle Park — Metabolon, Inc. (www.metabolon.com), a diagnostics and services company, launched a third-generation metabolomics platform that powers its mVision global biochemical profiling service and its diagnostic product development. This platform gives Metabolon greater speed and resolution for the discovery of biochemical markers from numerous chemical classes and various sample matrices. Contact Don Rose (919.572.1711).
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Featured Fund
Chrysalis Ventures
Louisville, Ky. and Cleveland, Ohio
Great ideas require great people. “Strong management teams, coupled with a smart business model, are the keys to successful entrepreneurial ventures,” says Wright Steenrod, principal with Louisville, Ky.-based Chrysalis Ventures.
Chrysalis found that winning combination in Raleigh-based Digitalsmiths, a digital video asset management technology company. Last June, the venture firm and Durham’s Aurora Funds co-led an initial $6-million round of investment in the company.
“Ben Weinberger is a strong, young CEO and has grown that company from a two-person college business started 10 years ago in a college dorm room into a market-leading technology company” says Steenrod. “In addition, he has assembled a phenomenal team of talented players who are working hard to propel Digitalsmiths to the cutting edge of online advertising and marketing technology.”
Digitalsmiths is one of several successful investments for Chrysalis, which has $375 million under management. Chrysalis’ fourth and largest fund was oversubscribed by $13 million, closing on a total of $163 million in February 2008.
It has invested in more than 55 businesses through its first three funds, including Atlanta, Ga.-based Actamed, which merged with Healtheon, went public, and was eventually acquired by WebMD. Another success story is Tritel, a Jackson, Miss., wireless telecom company that went public and was eventually sold to AT&T Wireless in 2002.
Recognizing the absence of resident venture capital managers in Middle America as a business opportunity, David Jones Jr., founded Chrysalis Ventures in 1993. Steenrod joined Chrysalis in June 2001 from portfolio company Darwin Networks, a Louisville-based provider of public Internet kiosks and high-speed Web access, where he served as vice president of business development.
Its two offices in Louisville and Cleveland, review investment opportunities throughout the South and Midwest. The focus is primarily on early stage and expansion-stage companies in healthcare services and technology, media and communications, and business services.
At Chrysalis, Steenrod’s territory includes North Carolina, with particular focus on companies in the media and communications industry. He sees CED as a fundamental driver of the entrepreneurial growth in RTP.
"CED has done a great job building the basic entrepreneur ecosystem and making sure all of the pieces fit together," he says. “And RTP has done a super job of establishing itself as a great place to start and grow businesses. There’s a lot of talent ready to work in entrepreneurial businesses. And companies are focused on building real value, not just sizzle or press releases.”
Digitalsmiths is a Late Stage Presenter at CED’s 25th Annual Venture Conference.
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In the Pipeline
Kannapolis — The North Carolina Research Campus (www.ncresearchcampus.net), a biotech research campus created to foster collaboration between North Carolina’s universities, community colleges and private industries, shared with N.C. State University and Duke University in two multimillion-dollar donations from N.C. billionaire David Murdock:
- N.C. State University (www.ncsu.edu) received a $2-million donation to help create endowments for three faculty jobs at the new campus. The gift will be matched with $1 million from the N.C. Distinguished Professors Endowment Trust Fund, and will be used to create new jobs for N.C. State's Fruit and Vegetable Science Institute. Contact Clyde Higgs (704.938.5400).
- Duke University School of Medicine (www.duke.edu) will receive $35 million to support a massive biomedical research project at the Cabarrus County location. Contact Michelle Gailiun (919.660.1306).
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CED’s 25th Annual Venture Conference
CED announced additional presenting companies the 25th annual Venture conference, on April 16-18 at the Washington Duke Inn in Durham.
Showcase Presenters will include:
SciQuest, Inc. (www.sciquest.com), Cary-based
provider of e-procurement, strategic procurement, and supplier
enablement solutions to academic, biotech and research-centric
organizations
Late Stage companies will include:
Hatteras Networks, Inc. (www.hatterasnetworks.com),
RTP-based provider of broadband Ethernet solutions over
existing copper facilities
StrikeIron, Inc. (www.strikeiron.com), Cary-based Data as a Service (DaaS) company
Angel Retreat companies will include:
Arbovax, Inc. (www.arbovax.com), Raleigh-based
developer of a vaccine technology platform that modifies
arthropod-borne viruses
Countervail Corporation (www.countervailcorp.com), Charlotte-based provider of antidotes for nerve gas and pesticide
Floorazzo Tile (www.floorazzo.com), Siler City-based tile manufacturing company
Galaxy Diagnostics, Inc. (www.galaxydx.com), Chapel Hill-based developer of infectious disease diagnostics
Maestro Music, Inc. (www.getmaestro.com), Atlanta, GA-based social and interactive music portal
NanoVector, Inc., Raleigh-based biotech company commercializing a patent-pending nanoparticle drug delivery system
Nomad Innovations, LLC (www.nomadinnovations.com), Louisville, Ky.-based provider of broadcast-quality connectivity solutions utilizing wireless broadband networks
TerraBuilt Corporation International (www.terrabuilt.com), Middleburg, Va.-based developer of patented new sustainable building technology
Start-Up Speed Dating companies will include:
3F, LLC (www.3fonline.com), Raleigh-based
developer of fundamentally-formed-fiber
technology for ballistic and armor applications
AtomFan.com, Inc., Durham-based searchable, sortable video and statistics for fantasy sports
Blue Angel Optics (www.blueangeloptics.com), Durham-based developer of multi-spectral and compact imaging systems
Caralight, Inc. (www.caralight.com), Cary-based developer of photochemical destruction systems for toxic air pollutants
DevScale, Holly Springs-based developer of on-demand scaleable development and testing environments
iCustom (www.icustom.net), Apex-based developer of online platform for designers and customization
PRKL8.com, Inc. (www.prkl8.com), Apex-based Internet-based personalization and content discovery service
Rau Learning Systems, Inc. Durham-based developer of innovative online e-learning software
Mark Your Calendar!
CED’s Venture 2008 Conference
April 16-18, 2008
CED’s 25th year showcasing the Southeast and Mid-Atlantic’s
most dynamic and promising business opportunities for venture
investment. Held at the Washington Duke Inn & Golf Club,
Duke University. Visit www.cednc.org/venture for
more information.
Angel Investor Retreat
April 17, 2008
Held in conjunction with CED's 25th Annual Venture Conference.
Visit www.cednc.org/conferences/venture/2008/registration/
for more
information.
Nominations Due for CED's 22nd
Annual Entrepreneurial Excellence Awards
April 21, 2008
CED’s Entrepreneurial Excellence Awards highlight North
Carolina’s top entrepreneurs and high-growth companies in
various categories. For more information, visit www.cednc.org/awards.
CED’s Biotech 2008 Conference
May 19-20, 2008
The 18th annual conference brings members of the Southeast's
life science communities together, from biotech entrepreneurs
and major pharmaceutical companies to life science research
leaders, policy makers and nationally prominent investors.
Held at the Benton Convention Center, Winston-Salem, N.C.
Visit www.cednc.org/biotech for more information.
Venture Update is published by the
Council for Entrepreneurial Development (CED)
an entrepreneurial support organization located in the Research
Triangle Park, N.C.
P.O. Box 13353, RTP, NC 27709
Phone: 919-549-7500
email: news@cednc.org