Fresh off closing its $85 million fourth investment fund, Durham venture firm Aurora Funds already has staked out a lead position in two first-round financings of area startups.
Aurora has invested an undisclosed amount of seed funding into Metabolon Pharmaceuticals, which is headed by John Ryals, the founder and former chief executive of Research Triangle Park-based agribiotech-turned-drug discovery firm Paradigm Genetics. While making the rounds at the Venture 2003 conference Wednesday, Ryals and Aurora partner Jeff Clark say the venture firm now will head a group of investors in a planned $4 million to $6 million round that may be completed as early as this summer.
Metabolon moved from Boston, where it was founded two years ago, to RTP early this year. The company has developed a technology that tracks the metabolic process in human cells and hopes to use it to screen for new drug candidates for neurologic and other diseases, according to Ryals. It already has signed up human genome decoder Craig Venter to its scientific advisory board.
“That’s not a bad place to start from,” Clark says of Venter’s affiliation with the firm.
Aurora also will lead a planned $7 million round for Regado Biosciences, which spun out of the Duke University Medical Center last summer. Aurora joined with Intersouth Partners of Durham and Toronto-based MDS Capital at that time to seed the company, but the latter two firms apparently won’t be taking part in the Series A round.
Regado, which presented at Venture 2003 on Tuesday, aims to create drugs whose effects can be regulated by physicians, such as blood thinners that can be turned on and off during surgery. The firm, whose name means “control” in the artificial language of Esperanto, was founded by the same scientific team behind Merix Bioscience, a Durham firm developing cancer vaccines.
Metabolon and Regado would join Cropsolution, an agribiotech in Morrisville, N.C., and TissueInformatics, a pathology bioinformatics firm in Pittsburgh, that Aurora backed last year with some early money from its fourth fund.
The firm also recently put some seed money into StrikeIron, a local startup founded by veteran entrepreneur Richard Holcomb that is developing tools for web services.
BioVista raising money
Aurora isn’t the only venture firm that has been on the trail for investment dollars.
BioVista, which has attracted more controversy than money to date, expects to have its first close on $50 million sometime this summer, partner John Crumpler says.
Forty percent of that will come from Golden LEAF, the foundation charged with distributing a portion of North Carolina’s tobacco litigation settlement money. Golden LEAF last fall committed to sinking $30 million into BioVista – another $10 million went into the new Aurora fund – as part of the foundation’s efforts to spur biotechnology growth in the state and spawn biotech-related manufacturing jobs in rural counties.
But Crumpler’s political contributions to Gov. Mike Easley and the relative lack of experience in biotech investing by his venture and consulting firm, Catalysta Partners, raised numerous eyebrows in the legislature and elsewhere.
Crumpler says he’s talking with the usual suspects in the institutional investment crowd – pension funds, university endowments and foundations – and also has lined up a European investment partner.
“Each one is going to have some connection to North Carolina or to our team and will be interested in investing in this state, although we’re not going to limit ourselves to local deals,” he says, declining to say whether he has tapped State Treasurer Richard Moore, who was standing nearby, for a piece of North Carolina’s billions in pension money.
BioVista plans to have a final close early next year, when Golden LEAF will release the remaining $10 million of its commitment to the fund and the fund should have $90 million altogether, he says.
More numbers
It may have been the 20th year the Council for Entrepreneurial Development sponsored a venture capital conference, but not as many people seemed interested in celebrating the anniversary.
Just over 850 people attended the two-day event, including about 275 investors from area and out-of-state firms, CED officials say. Those numbers were down slightly from the more than 900 people and 300 investors at the Venture 2002 conference, marking the second straight year of declining attendance.
Still, CED Chairman Steve Nelson was ecstatic Wednesday afternoon as the event began to wind down. Given the ongoing malaise in the venture industry, it was a feat to showcase more than two dozen promising young North Carolina firms to that many potential investors, says Nelson, a partner in Charlotte-based venture firm Wakefield Group.
“We had a lot of first-time investors here, and it’s good to expose them to what kind of opportunities are in North Carolina,” he says. “The quality of the presenting firms was excellent, and we’ve had good feedback about our keynote speakers.”
Let’s make a deal?
One the keynoters was GlaxoSmithKline Vice Chairman of Pharmaceuticals Bob Ingram, who in the midst of defending the high prices charged for prescription drugs and lobbying for Medicare reform so the government will pick up the tab for pills needed by elderly Americans also laid out a blueprint for biotech and small pharma companies looking to do business with GSK.
The drug giant has signed more than two dozen licensing and alliance deals in the past couple of years to beef up its pipeline, Ingram says. GSK looks for any of three things in a deal: Better or faster ways to find drug targets, improved screening mechanisms to identify promising compounds more quickly and what Ingram calls “proof of concept” ability.
Dan Allred moving on up
As CED vice president, Dan Allred was all over Venture 2002, making sure the event went off without a hitch. At this year’s event, Allred was scouting for deals and was preparing to assume the top spot for Silicon Valley Bank’s regional office.
Allred joined SVB several months ago to help with business development, but he will become head honcho for the bank’s RTP office this summer when Andy Rico, who opened the office a few years back, moves to a branch in Reston, Va.
“We’re keeping busy chasing deals,” Allred says, noting the bank is working to supply credit to startups seeking second-round and later venture capital. He also says the bank is maintaining a healthy level of deposits despite the lagging venture market.
Mark Weedon’s new venture
A year ago, Mark Weedon was on stage, making a presentation as chief executive of Merix Bioscience, which was one of the hotter properties at the event despite not needing any money, having raised $40 million the previous fall. Weedon left Merix last July following an apparent dispute with board members, and on Wednesday, he was pitching for deals for his new consulting firm.
Weedon and a handful of other former GlaxoWellcome executives plan to launch Biopharma Management Resources in the next few weeks, he says, providing companies with administrative, research and financial advice.
