Venture Update Vol III, #8, August, 1999

Done Deals

Durham-Apex Bioscience (www.apexbioscience.com), a biotechnology company engaged in the development of patented products based upon hemoglobin and nitric oxide technologies, was acquired by VitaResc Biotech AG of Munich for an undisclosed amount in July 1999. The acquisition will provide Apex with funding from Techno Venture Management, based in Munich and Boston, to continue its development of toxic shock therapy. Contact: John McPherson (919.405.4000).

Fuquay-Varina-SDM International (www.sdm-international.com), a developer of software for electronic payments (ATM and POS) and electronic data interchange (EDI), formed an agreement to be purchased by Nebraska-based Transaction Systems Architects in July 1999. The deal is for 475,000 shares of Transaction Systems stock and is valued at nearly $15 million. Contact: (919.552.1100).

Winston-Salem-Elcatech (www.elcatech.com), a developer of screening products for ovarian and other forms of cancer, closed on $250,000 in venture investment in July 1999 from Eno River Capital. Eno River plans to invest an additional $1 to $2 million dollars in the company later this summer. Contact: Eric Button (336.777.3624).

Research Triangle Park-Security Force Software (www.securityforce.com), a developer of software for the analysis and repair of security problems, has signed a deal to be acquired by Hewlett-Packard in June 1999. The company will be incorporated into HP's networks system testing division. Contact: Craig Anderson (919.484.2188).

Morrisville-The Marathon Group (www.marathongroup.com), a developer of Internet-based business solutions for large corporations, formed an agreement in July 1999 to be acquired by Merant, a mid-sized British software company. The deal is worth $15 million. Contact: Michael Doernberg (919.462.9880).

Durham-Trimeris, Inc. (www.trimeris.com), a biopharmaceutical developer of novel therapeutic agents that block viral infection, concluded an agreement with Swiss healthcare company Roche in July 1999. Under the agreement, Roche will pay Trimeris $10 million initially to help the company fund ongoing clinical trials of Trimeris' T-20 and T-1249 compounds, which are intended to prevent HIV from fusing into healthy cells. Contact: Matthew Megaro (919.419.6050).

Research Triangle Park-The North Carolina Biotechnology Center (www.ncbiotech.org), a nonprofit organization, awarded $10,000 awards to three young biotechnology companies from the Business Development Award Program. The companies are ChemCodes of Durham, EnSolve Biosystems of Raleigh and Stevens Research of Wilmington. Contact: Leslie Broberg (919.541.9366).

Greensboro-Geneva Merchant Group of Companies completed the first of two scheduled closings for a $100 million private equity fund, Geneva Merchant Banking Partners I, LLC. The second and final close is scheduled for July 1999.

New Developments
Raleigh-BTI Telecom Corporation, a provider of local and long distance telecommunication services, filed with the U.S. Securities and Exchange Commission in July 1999 to make a public offering. The company plans to raise $125 million in funding through its first sale of its common stock to the public. The offering will be made through Morgan Stanley Dean Witter, Salomon Smith Barney, Banc of America Securities LLC and Bear Stears & Co., Inc. Contact: Beth Woods (919.510.7000).

Greensboro-RF Micro Devices, Inc., a provider of proprietary radio frequency integrated circuits (RFICs) for wireless communications applications, has entered into a development agreement with Ericsson Mobile Communications AB. RF Micro Devices will design specific solutions for their 3G (third-generation) terminal platforms. Contact: Dean Priddy (336.664.1233).

Durham-Relativity Technologies Inc. (www.relativity.com), a developer of software for legacy transformation for older mainframes to more modern platforms, formed an agreement with Unisys. Under the partnership, Unisys Europe will bid on projects to create e-commerce capabilities for large corporate customers using Relativity's RescueWare software. Contact: Rich Cronheim (919.678.1500).

Durham-Red Hat Inc. (www.redhat.com), a developer and distributor of Linux computer operating systems, formed a partnership with Global Knowledge Network to offer Red Hat's training and certification courses in 15 cities across the country. Contact: Matt Szulik (919.547.0012).

Durham-BuildNet Inc. (www.buildnet.com), a developer of software for managing home construction, has formed an agreement with General Electric in June 1999 that will allow GE to begin selling appliances to home builders over the BuildNet Web site. Contact: Keith Brown (919.941.6269).

Morrisville-Eduprise.com (www.eduprise.com), a provider of software and services that enable universities to put courses online, left parent company Collegis to become a separate, private company in June 1999. Contact: William Graves (919.376.1339).

Cary-SAS Institute (www.sas.com), a developer of datamining software, has launched SAS InSchool, a division of the company that will develop information software for grades K-12. The company plans to release 12 software titles in September 1999. Contact: Pamela Meek (919.677.8000).

Cary-MicroMass Communications (www.micromass.com), a developer of relationship management software, signed a contract with Roche Laboratories in June 1999. Under the contract, MicroMass will develop XeniCare, a personalized treatment support program. Contact: Paul Rasmussen (919.851.3182).

Raleigh-HiddenMind Technology Inc., a developer of software for use with wireless communications, has formed an agreement with Omnipoint Technologies, Inc. for the launch of a new product called HiddenAssistant. The product will allow users to exchange data between wireless phones, personal digital assistants computers and pagers. Contact: Ken Tyra (919.829.1933).

Morrisville-Random Games (www.randomgames.com), a developer of software games, shared the award for best product with Hasbro, Inc. at Toy Fair 1999, the biggest trade-show in the toy industry. Random Games created all of the initial and prototype email games for Hasbro's email games line. Contact: Bonita Masteller (919.469.8676).

On The Up
DELTA PHARMACEUTICALS
Luther Hodges' 40-year-old vision of a research-based business park has garnered an additional return on the original investment. The major corporations he lured to the area have given rise to a second generation — entrepreneurial life sciences and information technology ventures.

Case in point: Delta Pharmaceuticals, Inc., a company founded in 1996 by a group of Burroughs Wellcome Company expatriates after BWCo.'s merger with Glaxo. "Because of our corporate experience, we started the company with good contacts, a high level of experience and a solid understanding of the marketplace," recalls Hugh Pettit, vice president of research and development.

The biopharmaceutical company is focused on developing new and safer analgesics, urinary incontinence agents and other therapeutic applications based on novel delta receptor compounds. Its lead product, DPI-3290, recently completed Phase I clinical trials with favorable results. The company has also targeted four other lead products for development, three of which have a potential market in excess of $1 billion/year. "We just completed a licensing agreement with Organon Technika for an injectable form of our lead compound," Pettit notes, though he's unable to disclose terms of the deal.

Delta currently has $3.5 million in funding from private investors and is seeking an additional $5 million. They're also seeking a CEO and CFO. "Our goal is to build the corporate structure that will take us to the next level," Pettit says. "We're poised to carry other compounds into clinical trials and see the further development of our lead compound into the marketplace," Pettit says. "We're also poised for an IPO in a short time period-say a three- to five- year period."

Mark Your Calendar!
North Carolina Tech 50 Awards
August 19, 1999
5:30 p.m.
North Raleigh Hilton

STREAK Luncheon
September 2, 1999
Noon-1:30 p.m.
Sheraton Imperial, RTP

Corporate Partnering Seminar
September 9, 1999
1:30-5:00 p.m.

Venture Capital for Entrepreneurs
September 28, 1999
1:00-5:00 p.m.
NCBC

For more information about these events or to register, visit the CED Web site at www.cednc.org or call 919.549.7500.

CED is a private non-profit organization supported, in part, by corporate contributions, including funding from Atcom Business Telephone Systems, Carolina Power & Light And Capitol Broadcasting Company, Inc.

Research Triangle Venture Update is published by the Council for Entrepreneurial Development (CED), a non-profit organization located in Research Triangle Park, N.C.
Editor Carolyn Foy, CED
P.O. Box 13353
RTP, NC 27709
Phone: 919.549.7500
Fax: 919.549.7405
Email: mcfoy@cednc.org