Venture Update Vol. XI, #12, December 2007 - January 2008
Done Deals
Greensboro-based RF Micro Devices (RFMD) (www.rfmd.com), a developer of high-performance radio frequency (RF) systems, has acquired two companies: Sirenza Microdevices, a supplier of RF components for approximately $900 million in cash and stock; and Filtronic Compound Semiconductors for approximately $25.1 million in cash. Contact Dean Priddy (336.678.7975) or Doug DeLieto (336.678.7968).
Atlanta-based Firethorn (www.firethornmobile.com), a provider of mobile banking and payments applications, has been acquired by San Diego-based Qualcomm, a developer of wireless technologies. Under the agreement, Qualcomm will pay about $210 million in cash for Firethorn. Contact Christine Trimble (858.845.5959).
RTP-based EMC2 (www.emc.com), a developer and provider of information infrastructure technology, has acquired Texas-based Voyence, a provider of network configuration and change management solutions including VoyenceControl, a product that helps organizations drive down operational costs, increase availability, improve security, and demonstrate regulatory compliance. Terms of the deal were not disclosed. In addition, EMC is set to purchase publicly-traded, California-based Document Sciences Corp. (DSC) for approximately $85 million in cash. The acquisition is an effort to boost EMC’s document management offerings. Once the deal is complete, DSC will operate as a unit within EMC's content management and archiving division. EMC employs close to 700 persons in the RTP region. Contact Craig Librett (508.293.7298).
Charlotte-based Chelsea Therapeutics (www.chelsearx.com), a biopharmaceutical development firm, has raised $48.9 million through its previously announced private offering of stock. Earlier this month, the company sold 7.4 million shares of common stock at $6.62 per share. Ridgeback Capital Management, LLC was the lead investor in the financing, along with several other new and existing healthcare investors. Contact Kathryn McNeil (718.788.2856).
Cary-based BluePhoenix (www.bphnx.com), a software company which helps companies update software and networking infrastructure, has raised approximately $35 million in a private stock placement. The Company plans to retire approximately $32 million in existing debt, and net proceeds remaining after the retirement of the debt will be used for general corporate purposes. The net effect of retiring the debt is the elimination of around $2.3 million in annual interest payments. Contact Paul Holm (212.888.4570).
Reston, VA-based Harmony Information Systems (www.harmonyis.com), a software company which provides products to the health and human services sector, has closed on $28 million in Series B equity and debt financing. The round was led by existing investors JMI Equity and Updata Partners as well as new investors ORIX Venture Finance and Comerica Bank. The company will use the financing to expand its sales and marketing team, develop new on-demand software solutions and increase its consulting service offerings. The company most recently merged with Burlington, VT-based Synergy Software Technologies. Contact Kyle F. Flaherty (781-356-7166).
RTP-based Oriel Therapeutics (www.orieltherapeutics.com), a drug development company, has closed on $26.5 million in Series C financing led by New Leaf Venture Partners of New York and California. The company has received several patents for its technology of drug delivery through inhalers. The company, founded in 2002, uses technology that was first developed at the University of North Carolina at Chapel Hill. Contact Paul Atkins (919. 313.1290).
RTP-based Tranzyme Pharmaceuticals (www.tranzyme.com), a biopharmaceutical company, has closed on $20 million in venture capital financing. The investment was led by existing investors H.I.G. Ventures; Thomas, McNerney & Partners; Quaker BioVentures; and BDC Venture Capital. The funds will be used to further clinical development of Tranzyme’s gastrointestinal drugs. The company recently initiated two Phase IIb clinical trials to test the efficacy and safety of its first product, TZP-101, and in July 2007, the FDA granted TZP-101 fast-track designation for treatment of severe gastroparesis. Contact Susan Sharpe (919.313.4761).
Atlanta-based Arcapita Ventures (www.arcapita.com), a venture capital firm and arm of Arcapita Bank, has co-led a $15.5 million third round of financing for California-based Intelleflex, a provider of radio frequency identification (RFID) technology for commercial and industrial applications. The investment deal was co-led by Motorola Ventures, the strategic venture capital arm of Motorola, and included participation from existing investors Morgenthaler Ventures, Woodside Fund, Alloy Ventures, and Selby Venture Partners. Contact Tory Klaubo (407.767.0452).
Morrisville-based Centice (www.centice.com), a medical device and diagnostics startup, has closed on $11.3 million in venture capital funding. Participating in the round is Durham-based The Aurora Funds. Centice has licensed technology developed at Duke University for use in spectroscopy, which is the study of the interaction between light and matter. Its latest patent covers methods and systems for making spectral measurements on weak diffuse resources while at the same time maintaining high resolution. The company has applied for more than 20 patents. Contact Arthur Bergens (919.653.0424).
Morrisville-based Cempra Pharmaceuticals (www.cempra.com), a biotechnology company, has closed on $10 million in venture funding from Intersouth Partners, Aisling Capital, Optimer PharmaceuticalsInc. and banker I. Wistar Morris III. The company has proprietary chemistry technology related to macrolides, which are antibiotics which combat a wide range of bacterial infections. The two-year-old company has now raised $24 million in financing from investors. Contact Prabhavathi Fernandes (919.467.1716).
Greensboro-based Piedmont Pharmaceuticals LLC (www.piedmontpharma.com), a specialty pharmaceutical company focused on parasitology and drug delivery systems for human and companion animal use, has raised $8.5 million in Series B funding from Australia-based CM Capital Investments and other investors. The funds will help advance development of the company’s pipeline, including the Phase III clinical trials of its patented, insecticide-free head lice treatment. The company’s product, already available in the U.K., Ireland and Canada, is awaiting FDA approval for U.S. distribution. Contact Michael Nestor (336.544.0320).
Durham-based Trinity Convergence (www.trinityconvergence.com), a developer of software for use in mobile devices and telephony, has raised $8 million in funding to expand increased demand for its software for IP (internet protocol) technology. The lead investor is Needham Capital and other participating funders include Intersouth Partners, Core Capital and Mid-Atlantic Ventures. The company also raised $4 million in debt financing from Square 1 Bank. Prior to this round of funding, the company has raised $16.1 million. Contact Jeff Schline (919.433.7005).
RTP-based RTI International (www.rti.org), a scientific and technology research organization, has been awarded a three-year, $6.8 million contract from the National Institutes of Health to maximize the benefits of research exploring the relationships between genetics, environment, health and disease. The grant, the PhenX project, calls for RTI to develop a set of standard measures to be used in future genetics research; the standard measures will be recommended for use in Genome-Wide Association Studies and other large-scale population genomic and epidemiologic research efforts to maximize the benefits of future research. Contact Lisa Bistreich (919.316.3596).
Raleigh-based Southern Capitol Ventures (www.southerncapitolventures.com), a venture capital firm, has participated in a $4 million round of Series B funding for DoublePositive Marketing Group, a Baltimore sales lead company. Other investors in the round include Hamilton Investment Partners of New York and Slate Venture Group of Maryland; existing investors include The Grosvenor Funds of Washington, D.C., and WWC Capital Group of Reston, Va. DoublePositive has developed a way to generate real-time Internet sales leads; it compiles data from online advertising to generate most of its leads. Contact Chris Beauchamp (443.278.8582).
Raleigh-based Inlet Technologies (www.inlethd.com), a developer of video encoding technology, has raised $3 million in new funding from existing investors including Technology Venture Partners, Telecommunications Development Fund and Capitol Broadcasting Corp. Inlet has developed video technology which allows scaling from mobile video to HD, for applications including video-on-demand; real-time streaming; and digital archiving. Customers include HDNet, Akimbo, CinemaNow and Microsoft Studios. The company will use the funds to expand its marketing and sales efforts. Contact Shawn Ramsey (919.621.0737).
Winston-Salem-based Targacept (www.targacept.com), a biopharmaceutical company, has secured an option for AstraZeneca to license Targacept’s product, TC-5619, a treatment for cognitive disorders such as Alzheimer’s and schizophrenia. The agreement calls for AstraZeneca to make a $2 million payment to Targacept, which began Phase I clinical testing on TC-5619 in July 2007. The drug is the lead product candidate in Targacept’s alpha7 Neuronal Nicotinic Receptors program. Contact Alan Musso (336.480.2186).
Hillsborough-based InnerOptic Technology Inc. (www.inneroptic.com), a medical device company, has secured $370,000 in funding from CatoBioVentures and an unidentified angel investor. The company hopes to raise an additional $4.3 million in the coming months. The funds will be used to further develop its InVision System for use in laparoscope procedures. The company is developing technology that provides surgeons with a 3-D view of a patient’s body during minimally invasive surgery. The technology is licensed from the University of North Carolina. The company is also developing cancer-detection capability. Contact Caroline Green (919.732.2090).
RTP-based Quintiles (www.quintiles.com), a biotech, pharma and healthcare contract research organization, has formed a new investor partnership which includes current Chair and CEO Dennis Gillings, Bain Capital, TPG Capital, new investor 3i and Temasek Holdings. Terms of the new partnership, which does not result in any new debt, were not disclosed. The company sells broad range of professional services in drug development, financial partnering and commercialization for the pharmaceutical, biotechnology and healthcare industries. It has 20,000 employees and offices in more than 50 countries. Contact Pat Grebe (919.998.2091).
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On the Up
Grancrete, Inc.
Durham, NC
Consider the many global challenges facing new home construction or remodeling — increased demand and prices for cement, steel and lumber coupled with declining infrastructures and environmental concerns — and it’s clear to see that new solutions are needed to tackle today’s ever-changing construction landscape.
Durham-based Grancrete, Inc. (www.grancrete.net), with its promising family of high-performing and “green” construction materials, believes it is prepared to tackle such large scale issues. The company was recently featured as a demo participant at CED’s Tech conference.
With over ten years of development and testing of its environmentally-friendly and durable materials, the company has come to manufacture three products: Grancrete A, Grancrete B and Grancrete HFR (High Fire Resistant). While all three products offer similar baseline characteristics (such as high compressive strength, high flexural strength, strong bonding strength, long durability, fire resistance, and water/salt/acid resistance), each offers its own value depending on the end-user’s situation and application.
According to the company, of the three products, Grancrete A has the fastest setting time, usually less than 10 minutes while Grancrete B and Grancrete HFR each set within 15-20 minutes. Grancrete A and B both have good fire and heat tolerances, while Grancrete HFR can withstand significantly higher heat which makes it a better product for high heat and fire applications. In addition, the company is developing a number of additional products to address applications where additional strength, durability or color is needed.
Under the leadership of Jim Melton, President and CEO, the company has developed a core set of beliefs to guide its ongoing growth in today’s changing building environment: 1) develop, manufacture and distribute high quality, innovative materials; 2) maintain supply chain to improve quality, find new materials/products, supply in timely manner and bring value to suppliers and customers; 3) partner to mutual benefit and trust; 4) provide good return for shareholders; 5) provide creative and growth opportunities for employees; and 6) be a good corporate citizen.
To learn more about the company and its products, visit www.grancrete.net or contact Jim Melton (919.656.1573).
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New Developments
North Carolina was again ranked No. 1 for having the “Top Business Climate” in the U.S., according to Site Selection magazine (www.siteselection.com). The State, which has held the top spot in this ranking for six of the last seven years, was recognized as the top choice for businesses to expand or relocate by real estate decision makers and company executives for its strong academic and research capabilities, trained workforce and high quality of life. Georgia and Texas ranked second and third, respectively, on the list.
Raleigh-based North Carolina State University’s (NCSU) Centennial Campus (centennial.ncsu.edu), a self-described “technopolis consisting of multi-disciplinary R&D neighborhoods, with university, corporate, and government facilities intertwined,” has been ranked the No. 1 “Research Science Park of the Year” by the Association of University Research Parks. The Campus, home to over 130 companies including Linux software developer Red Hat, was recognized for its innovation, technology partnerships and economic development. Contact David Winwood (919.515.7036).
RTP-based Hamner Institutes for Health Sciences (www.thehamner.org), a nonprofit health and medicine research organization, has been awarded a grant to analyze the effects of certain chemicals and pesticides on human health. A portion of the funds, $750,000 over a three-year period, will be used to develop models that interpret data gathered to monitor the effects of certain pesticides. The remaining $220,000 is designated for the discovery of how exposure to chemicals affects the bloodstream or tissue. The grant came from the U.S. Environmental Protection Agency. Contact Erin Knight (919.558.1215).
Raleigh-based North Carolina State University (www.ncsu.edu) has accepted a major contribution to its Virtual Computing Lab (vcl.ncsu.edu) from computer processor giant Intel. The company has donated $2.4 million to the Lab for the purchase of equipment. The Lab is designed to bring affordable computing resources to K-12 schools, community colleges and universities throughout the state of North Carolina. Lab partners include East Carolina University; North Carolina Central University; University of North Carolina (UNC) Greensboro; UNC Chapel Hill; Duke University; NCSU College of Engineering, Information Technology Division, and Friday Institute/College of Education; IBM Corporation; Intel; NetApp; SAS Institute; and Sun Microsystems.
RTP-based SCYNEXIS (www.scynexis.com), a drug discovery and development company, has received a milestone payment as part of its multi-year research collaboration with U.K.-based Merial which began in 2005. SCYNEXIS focuses on medicinal chemistry, advanced biological screening, and bioanalytical efforts towards Merial’s animal health discovery efforts. Details of the payment were not disclosed. Contact Terry Marquardt (919-544-8600).
North Carolina-based Carolinas Photonics Consortium (www.carolinasphotonics.com), the nation’s largest concentration of photonics-based resources, has awarded two scientists each $10,000 towards the development and commercialization of their research. Duke University’s Quincy Brown plans to develop a non-invasive, quick way to examine potentially cancerous breast tissue. North Carolina State University’s (NCSU) Mike Fiddy is looking to improve the way power is delivered to devices such as surgical and industrial tools.
Morrisville-based Lenovo (www.lenovo.com), an international computer maker which bought out IBM’s personal computing division in 2005, is strengthening its North Carolina roots with the construction of a third office structure at its Morrisville headquarters. The company recently broke ground on the new facility which is expected to be complete by December 2008 which will house its existing 1,500 local employees. The company already has two office structures in Morrisville is also constructing a distribution center in the Triad region of N.C.
Atlanta-based Metastatix (www.metastatix.com), a drug development company, received approval from the FDA to launch Phase I clinical testing of MSX-122, a drug to treat tumors. The company, founded in 2005, focuses on treatments for HIV and cancer. In October 2007, the company closed a $35 million Series B round of funding from Frazier Healthcare Ventures, H.I.G. Ventures, The Aurora Funds, CM Capital, SR One, MedImmune Ventures, Georgia Venture Partners, Centrosome Ventures and the State of Georgia. Contact Carol Gallagher (678.367.0720).
RTP-based BioMarck Pharmaceuticals (www.biomarck.com), a biopharmaceutical company, has been granted an intellectual patent from the U.S. Patent and Trademark Office for its proprietary technology of “methods and compositions for alternating mucus secretion.” The company is testing a treatment for respiratory diseases based on technology that it has licensed from North Carolina State. The treatment is designed to combat mucus. Contact Allen F. Gant (919.539.2288).
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In the Pipeline
Durham-based Addrenex Pharmaceuticals (www.addrenex.com), a pharmaceutical company, along with Atlanta-based Sciele Pharma, Inc., has initiated patient enrollment for Phase III clinical trials for Clonicel, a treatment for attention deficit and hyperactivity disorder (ADHD) in children. Sciele entered into an exclusive licensing agreement with Addrenex in July 2007 to market the drug. In other company news, Addrenex has licensed adrenalin-related technology from the University of Nebraska. The company will research close to 400 compounds which target adrenergic receptors on cells that react to adrenalin and noradrenalin and hope to find uses for a variety of fields from blood pressure to pain and addiction. Financial terms of the deal were not disclosed. Contact Becky Levine (919.786.4918).
Morrisville-based BioDelivery Sciences International (BDSI) (www.bdsinternational.com), a pharmaceutical company, announced it has filed a new drug application with the FDA for its BEMA Fentanyl. An FDA decision to approve for deny the company’s request is expected by August 2008, the estimated time for which all stages required by the regulatory agency would be complete. The drug is a pain treatment for cancer patients who experience severe discomfort above and beyond the chronic pain associated with the disease. Under terms of a previous commercialization partnership with Sweden’s Meda AB, BDSI stands to earn a $30 million milestone payment from Meda if the drug is approved for clinical use by the FDA. The company expects the drug to generate revenues of at least $250 million in the U.S. alone. Contact Contact Mark Sirgo (919.852.9050).
RTP-based Biogen Idec (www.biogenidec.com), a biotechnology company, has completed its $30 million sale of the cancer drug Zevalin to Seattle-based Cell Therapeutics. The company, which employs 750 people in the Triangle region, has received an initial payment of $10 million and will receive an additional $20 million if the U.S. Food and Drug Administration approves the drug for further indications. The company has earned $16.4 million from the drug since 2006. In other news, Biogen Idec has formed an alliance with Neurimmune Therapeutics AG of Switzerland to develop and commercialize a treatment for Alzheimer’s disease (AD). The alliance will focus on the development of antibodies that bind to amyloid beta (Aβ), pathogenic molecule thought to cause neurodegeneration and loss of cognitive function in AD patients. Currently there are no therapies for AD approved to slow or stop the progression of the disease. Neurimmune will conduct research to identify potential therapeutic antibodies using the company's Reverse Translational Medicine (RTM) platform. Biogen Idec will be responsible for the development and commercialization of all products. Neurimmune could receive an aggregate of $380M in upfront and success-based milestone payments, as well as a royalty on net sales of any products. Contact Amy Reilly (617.914.6524).
Durham-based Argos Therapeutics (www.argostherapeutics.com), a private biotechnology company, has entered into an exclusive agreement with Therakos, Inc., a Johnson & Johnson company, for the research and development of novel treatments based on regulatory T cell technology. Terms of the agreement have not been disclosed. Regulatory T cells are a specialized subpopulation of T cells that actively control immune system responses and prevent immune-mediated diseases. To function properly, the immune system must recognize and discriminate between itself and foreign antigens, however if this recognition fails, the immune system destroys cells and tissues of its own body, resulting in autoimmune diseases. Argos’ treatment, “Arcelis” technology, trains the immune system to recognize and attack the disease. Contact Jeff Abbey (919.287.6308).
Durham-based Inspire Pharmaceuticals (www.inspirepharm.com), a biopharmaceutical company, has launched Phase III clinical trials of epinastine, a proposed nasal spray for treatment of allergies. The testing is designed to determine the efficacy of the spray to affect runny nose, itchy nose and sneezing as well as other symptoms. Results of the trials are expected in the second quarter of 2008. The company licensed rights to the drug from Boehringer Ingelheim International GmbH in 2006. Contact Jenny Kobin (919.941.9777).
Durham-based Chimerix (www.chimerix-inc.com), a biotechnology company focused on developing orally available antiviral therapeutics, has initiated a multi-dose trial with its lead drug candidate, CMX001, an oral treatment for smallpox infection. This trial will study the pharmacokinetics and safety of three doses of the drug given to healthy volunteers. CMX001 is being developed for the treatment of smallpox infection and other double stranded DNA virus infections that cause significant human morbidity and mortality. A safe, orally active antiviral drug for smallpox is needed to provide a means of treating people who become ill post exposure to the disease or who cannot be vaccinated. The work is partially funded by a $36.1 million grant awarded to the company by the National Institutes of Allergy and Infectious Disease. Contact Athanasios (Thanos) Maroglou (919.806.1074).
Winston-Salem-based Targacept (www.targacept.com), a clinical-stage biopharmaceutical company, has initiated a Phase I clinical trial of its product candidate TC-6499. The initiation of the trial triggers a $6 million milestone payment to the company under the terms of its agreement with GlaxoSmithKline (GSK). TC-6499 is a small molecule that Targacept plans to develop initially as a treatment for neuropathic pain. The company anticipates that its Phase I program for TC-6499 will include, in addition to the ongoing single dose trial, a multiple rising dose trial. Under its agreement with GlaxoSmithKline, Targacept is eligible to receive an additional milestone payment if, following completion of its Phase I program, Targacept determines to advance TC-6499 into Phase II. Contact Alan Musso (336.480.2186).
Raleigh-based Salix (www.salix.com), a pharmaceutical company, has agreed to work with California-based Watson Pharma to offer a generic version of Colazal, a drug to treat mildly to moderately active ulcerative colitis. Colazal is produced by Salix and the company looks to increase its market share with the offering of the generic version of the drug. Contact G. Michael Freeman (919.862.1000).
Durham-based OncoMethylome (www.oncomethylome.com), a life sciences company, has signed a research and collaboration deal with Abbott Laboratories for testing of the pharmaceutical giant’s biomarkers on biological samples. The companies will use the data collected to profile tumors. Financial terms of the agreement were not disclosed. OncoMethylome has licensed technology from Johns Hopkins University related to methylation, a type of chemical modification of DNA. The firm’s technology is designed to detect cancer at an early stage. Contact Lucija Turcinov (+32-479-801-902).
RTP-based GlaxoSmithKline (www.gsk.com), a research-based pharmaceutical company, has submitted a new blood disorder drug, Promacta, for approval by the U.S. Food and Drug Administration. The treatment is delivered orally and triggers blood platelet growth and helps reduce or prevent bleeding in patients with chronic idiopathic thrombocytopenic purpura (ITP). The drug has already undergone clinical trials. The company will seek market approval in Europe next year. Contact Frank Murdolo (215.751.7002).
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Mark Your Calendar!
CED’s
Globalization Conference
February 14, 2008
Embassy Suites RTP East
Cary, N.C.
CED’s
MedTech Conference
March 6, 2008
Duke University
Durham, N.C.
CED’s
25th Annual Venture Conference
April 16-18, 2008
Washington Duke Inn
Durham, N.C.
Do you know a company that should present at Venture 2008? Final application deadline February 8.
CED’s
Biotech Conference
May 19-20, 2008
Benton Convention Center
Winston-Salem, N.C.
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