Venture
Update Vol VII, #5, June 2003
Done Deals
Charlotte – Optical Experts Manufacturing (www.oemdisc.com), a maker of CDs and DVDs, has obtained $8 million to continue its expansion. Optical Experts Manufacturing received $3 million in equity funding from Frontier Capital of Charlotte and Tampa, FL-based Ballast Point Ventures. Harbinger Mezzanine of Nashville, TN, added another $5 million in the form of subordinated debt. OEM is a contract manufacturer and reproducer of DVDs and CDs for movies, educational programs and computer software. The recent financing will be used to buy new equipment for continued growth. Contact Max Harris (704.504.1877).
Raleigh – Kyma Technologies (www.kymatech.com), a supplier of materials for the optoelectronics, communications, and microelectronics industries, has received $4 million in its second round of funding. Connecticut-based Digital Power Capital and Germany-based Siemens Venture Capital co-led the funding, which was also supported by former Kyma investors. The company's materials -- called nitrate substrates -- help device manufacturers eliminate processing steps and improve device quality. The materials are used extensively for wireless devices. Contact Edward Pupa (919.789.8800).
Durham – XActional, Inc. (www.xactional.com), an application and information security software firm, has secured $2.5 million in its first round of venture capital financing. Triangle-based venture funds Intersouth Partners and The Aurora Funds contributed to XActional's recent round, with additional participation from NextPoint Partners in Washington, D.C. XActional's first round will be used for product development, hiring software engineers, initial sales and marketing activities and expansion to new office space. Contact David Logan (919.593.1138).
Raleigh – Encelle, Inc. (www.encelle.com), which develops products for tissue regeneration, has closed on more than $2 million in its series D preferred stock offering. North Carolina Enterprise Fund and Intersouth Partners led the "all-insider" funding round. Encelle is focusing on new product development in the area of connective tissue and bone regeneration as well as applications within plastic surgery. The recent funding will give Encelle the ability to develop new applications and move them quickly to the clinic. Contact James Woodward (919.877.8101).
RTP – Bright View Technologies (www.brightviewtechnologies.com), a company developing improved versions of rear-projection screen technology, has raised $2 million in venture capital. The Tri-State Investment Group IV, LLC (TIG) led the investment, with additional support from Charleston Angel Partners, Piedmont Angel Network and Charlotte Angel Partners. Bright View has developed a prototype screen based on technology licensed from Duke University, designed to improve picture contrast dramatically and solve the problem of image jitter. The six-person company is about to move into a new space, expanding from 700 square feet to between 6,000 and 7,000 square feet, according to reports. Contact Ed Fadel (919.490.0719).
RTP – Tranzyme (www.tranzyme.com), a privately held drug discovery company, has raised $1 million from Japan-based Shin Nippon Biomedical Laboratories (SNBL), a provider of contract research services for the pharmaceutical industry. In addition to providing financial resources, SNBL will bring pre-clinical testing and development capabilities that meet global regulatory standards. SNBL's standards will assist in Tranzyme's drug discovery process. Contact Vipin K. Garg (919.597.6614).
New Developments
RTP – Hemocellular Therapeutics, Inc., has received a $150,000 loan from the N.C. Biotechnology Center (www.ncbiotech.org) to fund dosage studies in preparation for Phase I clinical trials of the company's specialized blood platelets. Hemocellular has an exclusive license for technology developed over a period of 10 years at UNC-Chapel Hill and East Carolina University. Hemocellular's freeze-dried blood platelets are intended to have a much longer shelf life -- up to five years -- than existing technologies, which must be discarded after five days. Contact Stan Eskridge (919.419.3169).
Durham - Duke University (www.duke.edu) has received a $6 million grant from the Pediatric Brain Tumor Foundation to launch the "Pediatric Brain Tumor Institute" at Duke. The $6 million grant from the Asheville-based Pediatric Brain Tumor Foundation is the group's largest grant to date. Duke's new facility will focus exclusively on brain tumor research. The goal of the institute is to develop less invasive clinical treatment for children who have brain tumors. Duke said the grant is the largest the cancer center has received. Contact Jill Boy (919.664.2619).
RTP – Paradigm Genetics (www.paragen.com) and UNC-Chapel Hill (www.unc.edu) have joined a research project to find better means of diagnosing and assessing liver damage and how patients respond to treatment. Also participating in the project are the National Institute of Environmental Health Science (NIEHS) and National Institutes of Health (NIH). The project aims to identify liver problems with so-called "biomarkers" long before they normally are detected. Contact Melissa Matson (919.425.3725).
Winston-Salem – Targacept (www.targacept.com), a biotechnology company based in Winston-Salem, has formed an alliance with Winston-Salem State University (www.wssu.edu) to seek research, training and education grants. Targacept and WSSU will also explore the opportunity of creating student internships. Company researchers and faculty with the university's life and biological sciences department may also collaborate on research projects. Targacept develops neuronal, nicotinic receptor-based drugs for anxiety, Alzheimer's disease and others. Contact Alan Musso (336.480.2100).
RTP – The North Carolina Biotechnology Center (www.ncbiotech.org) opened its first satellite office in Winston-Salem in June. The Triad office opened through a $200,000 contribution from Wake Forest University to be paid over two years. The N.C. Biotech Center has also pledged $25,000 toward the effort in the first year. Wake Forest University is providing office space, Forsyth Technical Community College is donating hardware, and WinstonNet is providing high-speed Internet access. A full-time director for the office and an assistant will be hired in the coming months. Contact Barry Teater (919.541.9366).
Raleigh – North Carolina State University (www.ncsu.edu) has received a $1.5 million grant from the Wachovia Foundation. The grant will support programs and curricula in two NC State colleges as well as a new visitor center to be built next year. NC State's College of Management will receive $1 million, which will be used for undergraduate scholarships and graduate fellowships, diversity initiatives and support for minority students, and MBA Program enrichment activities. The College of Education's William and Ida Friday Institute for Educational Innovation, which will house educational research on NC State's Centennial Campus, and the proposed E. Carroll Joyner Visitor Center, will each receive $250,000. Contact Mick Kulikowski (919.515.3470).
RTP – The Aurora Funds (www.aurorafunds.com), an early stage venture capital firm, has named Tom McMurray as a special venture partner. He will lead Aurora's efforts to identify promising new investment opportunities in the Washington, DC area. The Aurora Funds already has four portfolio companies in the Washington, D.C. region, including Blackboard, Engenia, InPhonic, and VetCentric. McMurray formerly served as general partner at Silicon Valley-based Sequoia Capital. He has also worked for several venture-backed startups in California. McMurray is a former associate professor and associate dean at the Pratt School of Engineering at Duke University. Contact Jeff Clark (919.484.0400).
Durham – Intersouth Partners (www.intersouth.com), an early stage venture capital firm focusing on the Southeast, has named two new partners -- John Glushik and Garheng Kong. Glushik has been with Intersouth since September 1999 with an emphasis on technology investments and serves as a board observer for several companies. He most recently led Intersouth's investment in XActional and is a director on the board of SmartPath. Kong, a medical doctor with a doctoral degree in biomedical engineering as well, has been working with Intersouth portfolio companies strategically, operationally and scientifically since 2000. He has assisted in several life science investments, including Serenex and Sopherion. Contact Andrea Cook (919.493.6640 x108).
RTP – Incara Pharmaceuticals Corp. (www.incara.com) has received approval from the European Patent Office for a class of compounds, which includes its lead antioxidant molecule for cancer therapy. The antioxidant compound is a molecule known as AEOL10113. The European patent, listed as number 1,045,851, includes the chemical structure of AEOL10113 and related compounds. To validate the European patent, Incara will have to prepare translations of patents for AEOL 10113 and related compounds for various national patent offices. Incara Pharmaceuticals Corp. is focused on developing a new class of disease modifying antioxidant small molecules. Contact W. Bennett Love (919.558.1907).
Chapel Hill – POZEN Inc. (NASDAQ: POZN, www.pozen.com) and pharmaceutical giant GlaxoSmithKline (NYSE:GSK, www.gsk.com) have inked a major deal to make and market a migraine remedy. The two companies will team up for the development and commercialization of a drug that may improve the effectiveness of acute treatment and provide sustained pain relief for patients suffering from migraine headaches. POZEN's experimental drug, MT 400, could be developed into several treatments for people who suffer from acute migraine headaches. POZEN will be responsible for development, while GSK will provide formulation development and manufacturing. The companies expect to begin Phase III trials under the agreement in 2004. Contact Lisa Barthelemy (919.913.1044).
On The Up
XActional, Inc.
Cary, NC
With corporate software becoming increasingly more Web-based, large companies are finding themselves sending crucial information via the Internet, giving rise to security issues. To address these concerns, Cary-based XActional, Inc., is working to help businesses safely and consistently deliver applications and services online.
XActional (www.xactional.com) has tackled the growing online security problem by building a new infrastructure solution that will allow businesses to reliably and securely deliver web services and web applications to employees, customers, distributors and suppliers.
Ken Gramley, David Motsinger and David Logan founded XActional in 2002 after six months of research and discussions with 30 to 40 enterprise companies and service providers. According to their findings, one of the biggest concerns companies share is the security of Web applications and services – and the likelihood of online attacks and surveillance activities.
The full details of XActional’s new product have not been disclosed, but the company has already attracted investors’ attention.
In fact, the company recently closed $2.5 million in venture capital. Local venture funds Intersouth Partners and The Aurora Funds contributed to the startup’s first round, with additional participation from NextPoint Partners in Washington, D.C.
"This funding will allow us to land on the beach, establish a beachhead and get some early customers," said Logan, XActional’s acting president.
The company will use the funds for product development and for hiring software engineers. In addition, the funds will help drive initial sales and marketing activities, as well as XActional’s expansion into new office space.
XActional currently has nine employees after newly hiring six personnel to their team, and it plans to grow to 15 by the end of 2003.
Contact David Logan (919.593.1138).
Mark Your Calendar!
Entrepreneurial Excellence Awards & Family Fun Festival
August 8, 2003
RBC Center
Raleigh, NC
www.cednc.org/awards/
Infotech 2003 Conference
October 27, 2003
Sheraton Imperial Hotel
RTP, NC
www.cednc.org/infotech
For more information, visit the CED Web site (www.cednc.org) or call 919-549-7500.
Venture Update is published by the Council for Entrepreneurial Development (CED) an entrepreneurial support organization located in N.C.
Lisa Rowe-Ralls, editor
P.O. Box 13353, RTP, NC 27709
Phone: 919-549-7500
FAX: 919-549-7405
Email: news@cednc.org