Bill McCulloch, formerly an executive vice president at A.M. Pappas, a venture firm that specializes in biotechnology investments, says his job at InterOptic Inc. is to help it land $500,000 in funding.

McCulloch also has worked with Sparta Pharmaceuticals, which went public while in the Research Triangle, and also leads Alba BioPharm Advisors Inc. along with his wife, Margaret. He took the chief executive position with InterOptic in January. “We’re just completing the licensing agreement with UNC now,” he tells Local Tech Wire.

McCulloch says InterOptic has also hired Rick Scott, another former Sparta executive and chief financial officer with several Research Triangle companies, as chief financial officer.

The company’s technology is based on work in the world-famous UNC computer laboratory by Henry Fuchs, Andre State, and Curtis Keller. The co-founders will remain at UNC for at least a year until InterOptic obtains a round of funding, McCulloch says.

“We would like to get $500,000, but we wouldn’t turn down $100,000,” McCulloch says. “The truth is, $3.5 million over 30 months would get us to the stage of having a prototype developed and that’s not a lot of money to get that far, except in 2003 when there’s not a lot of money around. But that’s my next task after licensing is completed and my biggest job here.”

McCulloch says InterOptic plans to develop the 3D technology for minimally invasive surgeries that use laparoscopes and endoscopes. Current scopes do not offer the three-dimensional view that makes such operations much easier for the surgeon, giving him depth perception missing in the current two-dimensional view.

InterOptic intends to do a research agreement with UNC so that its scientists will remain in their UNC labs until the company receives funding. “Then we’ll move out lock, stock and barrel,” says McCulloch.

At Pappas, he served as the executive vice president and medical director from 1997 to 2002. McCulloch spent seven years as a doctor in the UK.

AM Pappas forum: ‘Why Stay in the Game?’

A.M. Pappas & Associates fourth annual symposium on timely issues in life sciences April 16 at the Sheraton Imperial asked if there is a “new paradigm for life science investing?”

A distinguished audience heard well known major figures in biotech investing discuss the question, which boiled down to “why stay in the game?”

They were: Arthur Klausner, general partner of Domain Associates, Robert Curry, a former general partner with the Sprout Group, Dennis Purcell, senior managing partner with Perseus Soros Biopharmaceutical Fund, Arda Minocherhomjee, managing director at William Blair Capital Partners, and Art Pappas address the question. Karen Bernstein of BioCentury, an industry newsletter, moderated.

Those in attendance did not hear upbeat answers. Bernstein said investment in biotech start-ups lags 2002 this year. Panelists agreed a window of opportunity to launch initial public offerings of stock is much desired. But no one sees much hope of a renewed market for life science IPOs emerging until mid or late 2004.

The panel also appeared to agree that strategic partnerships are not as important to life sciences start-ups as they once were. “Once it was essential and it isn’t anymore,” one said.

They also agreed that mergers and acquisitions are more likely exits for most biotech and drug development start-ups rather than going public.

Bernstein outlined the current state of investment and market conditions for the biotech and pharmaceutical industries, both, like the economy, still recovering from the 1990s-2000 market bubble burst.

“With financial bubbles, the pain is so much more than the gain except for a few people who cash in,” Bernstein said.

The panel also agreed that early stage and late stage companies have better chances of getting funding than middle-stage ones. The market, Bernstein said, is “rationing capital,” with top tier companies getting most of the action.

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