Home > = News > Venture Update >=20 Volume&= nbsp;12 2008 >=20 March Number 2

Venture Update Vol. = XII, #2,=20 March 2008

Done=20 Deals
On=20 the Up
New=20 Developments
Featured=20 Fund
In=20 the Pipeline
Venture=20 2008
Mark=20 Your Calendar

Done Deals

Research Triangle Park=E2=80=94 Kryosphere (http://www.kryosphere.com/), an=20 independent biostorage facility, secured slightly more than $1 million = in=20 working capital from angel investment and a secured credit line. The = company=20 plans to open its first facility in RTP in May 2008. Contact Eric = Hallman=20 (919.810.1810).

Winston-Salem =E2=80=94 SilkRoad technology, inc. = (http://www.silkroadtech.com/), = provider=20 of Web-based human resources tools including talent management = solutions,=20 secured $10 million in growth capital. Azure Capital Partners led the = round,=20 which included existing investors SilkRoad Equity and private = individuals. The=20 funding will be used to expand direct sales and marketing efforts, and = to=20 support new product development. Contact Red Maxwell (336.201.5100).

Washington, D.C. =E2=80=94 The U.S. Department of = Energy awarded a=20 three-year, $3.2-million research grant to researchers from N.C. State=20 University (http://www.ncsu.edu/), = RTI=20 International (http://www.rti.org/) = and the=20 University of Utah (http://www.utah.edu/).=20 The grant will fund the joint project of the newly formed Research = Triangle=20 Energy Consortium to attempt to create liquid fuels from biomass = products like=20 sawdust or bark, prove that large-scale biofuels production technology = can be=20 performed, and establish that the process is cheaper than extracting = ethanol=20 from corn. Contact Dr. Steve Peretti (919.515.6397).

Cary =E2=80=94 Carpio Solutions (http://www.carpio.com/), provider of = software=20 and services solutions for financial and operational efficiencies, = closed on $10=20 million from Palladium Equity Partners. The funds will be used to make=20 acquisitions in Brazil and the U.S. Contact Marco Fregenal = (919.654.4574).

Research Triangle Park =E2=80=94 Clinipace (http://www.clinipace.com/), a = clinical=20 research software company, closed $2.6 million in Series B financing. = Hatteras=20 Venture Partners led the round, which included existing investors Brook = Private=20 Equity Advisors and Emergent Growth Fund. Clinipace plans to use the = capital for=20 company expansion, with an emphasis on bolstering sales and marketing to = accelerate growth. Contact Jeff Williams (919.224.8800).

Durham =E2=80=94 SIMtone Corporation (http://www.simtone.net/), developer = of=20 virtual desktop computing technology, purchased Aspeed Software, a New=20 York-based provider of acceleration and optimization software. SIMtone = will use=20 Aspeed=E2=80=99s software to offer better optimized scalability and = performance for=20 server and hardware platforms. SIMtone did not disclose terms of the = deal.=20 Contact (919.926.7285).

Washington, D.C. =E2=80=94 The U.S. Department of = Energy awarded a=20 $900,000 grant to RTP-based Semprius (http://www.semprius.com/), = developer of=20 patented technology for the transfer printing of high-performance = semiconductors=20 onto multiple types of surfaces, and the University of Illinois (http://www.uiuc.edu/). The team will = seek a=20 low-cost concentrator of photovoltaic energy from automated printing and = the=20 interconnection of a large number of microcells with built-in optics. = Contact=20 Joe Carr (919.806.4923).

Pittsboro =E2=80=94 Biolex Therapeutics (http://www.biolex.com/), a = clinical-stage=20 biopharmaceutical company that uses its patented LEX SystemSM to = optimize=20 monoclonal antibodies, withdrew its planned $80-million initial public = offering.=20 Management cited =E2=80=9Cunfavorable market conditions=E2=80=9D as the = reason. In other news,=20 the company formed an agreement with Merck KGaA, Darmstadt, Germany = (acting for=20 its division for innovative pharmaceuticals, Merck Serono), to evaluate = antibody=20 optimization and production in the LEX SystemSM. Contact Glen Williams=20 (919.542.9901).

[ top=20 ]

On the Up

Centice Corporation
Morrisville,=20 N.C.

The Federal Drug Administration estimates that more than 1.3 million = people=20 are injured annually from medication errors. Malpractice statistics show = there=20 are more drug-error deaths each year than from breast cancer, AIDS or = traffic=20 fatalities. The costs associated with these errors? At least $29 billion = per=20 year.

With increasing demand for prescriptions (almost 4 billion annually), = limits=20 on the number of available pharmacists and manual visual methods for = final=20 inspection, =E2=80=9Cthe potential for errors will very likely = increase,=E2=80=9D notes Ray W.=20 Swanson, president and CEO of Centice Corporation. The drug verification = and=20 safety company develops products to make dispensing medication more=20 accurate.

Its first product will go to market later this year. PASS Rx will = help=20 pharmacists reduce errors by scanning the contents of a filled = prescription=20 bottle prior to handing it off to the customer. =E2=80=9COur instrument = contains sensor=20 systems allowing the pharmacist to perform a chemical check of the = contents of=20 the bottle and then verify whether it is correct by comparing that = =E2=80=98fingerprint=E2=80=99=20 to the =E2=80=98fingerprint=E2=80=99 of the correct drug stored in our = proprietary database,=E2=80=9D=20 Swanson explains. The scanning technology was patented in early = 2006.

In addition to purchasing the instrument and software, pharmacies = will pay a=20 subscription fee to access a proprietary database containing the = majority of=20 oral solid pharmaceuticals in a pharmacy=E2=80=99s everyday workflow. = =E2=80=9CGiven the broad=20 applicability of our technology to other formats, like liquids in IV = solutions,=20 we plan to extend this model to other medication formats in the = future,=E2=80=9D Swanson=20 adds.

The company was founded in 2004 after a team led by co-founder David = Brady,=20 Addy Family Professor at Duke University and leader of the Duke Imaging = and=20 Spectroscopy Program, won the Duke Startup Challenge. =E2=80=9CEarly = work at Centice=20 validated the raw technology out of Duke by creating a series of = enhanced=20 spectrometers,=E2=80=9D Swanson explains. =E2=80=9CUse of these = instruments gained the company=20 additional visibility and ultimately led to market-based discussions = around the=20 potential to tackle the drug error problem.=E2=80=9D

The competition included $50,000 in seed funding, giving Centice the = cash it=20 needed to get off the ground. The following year, it won CED=E2=80=99s = Spin-Out of the=20 Year award, gaining more attention from investors.

=E2=80=9COur relationship with the Council for Entrepreneurial = Development has given=20 us needed exposure in our earlier stages of development,=E2=80=9D = Swanson says. =E2=80=9COur=20 visibility at past CED Venture and Tech conferences has been positive. = The=20 events certainly attract strong regional and national investors and = partners who=20 are interested in our technology and its application.=E2=80=9D

Late last year, Centice closed an $11.3 million Series B round led by = S-Group=20 Direct Investments Ltd., and founding investors, The Aurora Funds and = Novak=20 Biddle Venture Partners. Additional investors included Innovation = Ventures,=20 along with several other individuals.

Swanson, who has over 20 years experience of bringing new products = and=20 technologies to market, has been at the helm since September 2006. The = company=20 currently has 30 employees and expects to grow by another 30 to 40 = percent this=20 year. The new hires will scale sales, marketing, and support, and = continue to=20 develop the product pipeline.

=E2=80=9CThe Centice team is passionate about what we are doing, and = that our=20 products will have positive impact to empower healthcare professionals = to=20 further secure the safety of their patients,=E2=80=9D Swanson notes. = =E2=80=9CWe are privileged=20 to have some of the brightest minds in the Triangle working diligently = to bring=20 this unique technology to fruition.=E2=80=9D

[ top=20 ]

New Developments

Research Triangle Park =E2=80=94 Hatteras Networks = (http://www.hatteras.com/), which = delivers=20 broadband Ethernet solutions over existing copper facilities, closed a = series of=20 agreements in Europe, Africa and Australia to transform traditional = networks=20 into higher-speed conduits for Ethernet broadband technology. The deals = are=20 with:

ATL: For network upgrades in Hungary, Romania and = Central=20 Europe
Demand Broadband: To deploy Ethernet technology = in=20 Australia that meets international network carrier standards.
Telecom 180 Group: To expand Ethernet services = across=20 southern Africa.

Hatteras did not disclose the financial terms of the agreements. = Contact=20 Barry Shapiro (919.991.5440).

Research Triangle Park =E2=80=94 ChannelAdvisor (http://www.channeladvisor.com/),=20 provider of e-commerce channel management solutions, extended its = strategic=20 alliance with Overstock.com = (NASDAQ:=20 OSTK) through August 31, 2011. Under the alliance, ChannelAdvisor=20 Complete is fully integrated with Overstock.com to enable online = retailers=20 to list their merchandise and process orders placed on the Overstock.com = shopping site from a single interface. Contact Ashley Jones = (919.349.4177).

Research Triangle Park =E2=80=94 The North Carolina = Biotechnology Center (http://www.ncbiotech.org/), the = nonprofit=20 organization that supports biotechnology research, business and = education in=20 North Carolina, awarded a $71,000 grant to Mount Olive College to fund=20 construction of cell and molecular biology lab at the Goldsboro school. = Contact=20 Jim Shamp (919.541.9366).

Raleigh =E2=80=94 Lulu.com (http://www.lulu.com/), provider of = online=20 publishing tools for self-publishers, formed a partnership with Borders = to power=20 the Borders Personal Publishing program. Currently available through = interactive=20 kiosks in the Ann Arbor concept store's Digital Center, the service will = be=20 rolled out to 13 other concept stores later this year. Contact Gail = Jordan=20 (919.460.7022).

Research Triangle Park =E2=80=94 BioMarck = Pharmaceuticals (http://www.biomarck.com/), a=20 biopharmaceutical research and development company focused on the = treatment of=20 respiratory diseases, obtained agreement from the FDA for a Phase 2 = trial of the=20 novel respiratory drug BIO-11006 Inhalation Solution. Contact: Scott = Yates=20 (919.450.6452).

Research Triangle Park =E2=80=94 StrikeIron Inc. (http://www.strikeiron.com/), = provider of=20 Data as a Service (DaaS), partnered with The Sports Network, a real-time = sports=20 wire, to deliver information such as sports scores, team and player = statistics,=20 schedules, live analysis and college basketball news straight to any=20 application, Web site or device. Contact Jane Foreman (919.405.7010 = x112).

[ top=20 ]

Featured Fund

Pappas Ventures
Durham, N.C.

Smart money=E2=80=94it comes from investors who are not only experts = at building a=20 business, but who know the industry in which they are investing. = That=E2=80=99s the=20 profile of Durham-based Pappas Ventures (http://www.pappasventures.com/). With=20 $250 million under management, it=E2=80=99s the largest venture firm in = the Southeast=20 focused solely on life science.

Founder and Managing Partner Art Pappas is a life science veteran, = with=20 executive experience with Abbott, Merrell Dow and Glaxo. =E2=80=9CWhen I = left Glaxo, I=20 saw a unique and interesting opportunity to work with life science = companies and=20 assist them in entering an overseas market,=E2=80=9D he says. = =E2=80=9CWe began as a project=20 financing firm for life science companies, managing founder=E2=80=99s = funds, and through=20 that process we grew into a venture capital firm, managing institutional = money.=E2=80=9D=20

The fund builds portfolios of companies that have a balanced mix of = early-=20 and mid-stage enterprises. Its national portfolio includes 40 companies: = Roughly=20 80 percent of all investments are in biotechnology and pharmaceuticals, = and 20=20 percent are in the medical device and diagnostics space.

The firm is especially well-known in the industry for its clinical=20 development expertise. Among its earliest success stories were RTP-based = Quintiles Transnational and Quebec-based BioChem Pharma. More recent = wins=20 include Alameda, Calif.-based Peninsula Pharmaceuticals, acquired by = Johnson=20 & Johnson for $250 million; Cerexa (also in Alameda), acquired by = Forest=20 Laboratories for $483 million; and Waltham-Mass.-based Syntonix, = acquired by=20 Biogen Idec for $120 million.

Pappas expects the local life sciences industry to grow. =E2=80=9CThe = environment is=20 ripe for development in the life science industry, and there is adequate = capital=20 to fund the growth,=E2=80=9D he says.

Scott Weiner, a Pappas Ventures principal who joined the firm in = 2006,=20 agrees. =E2=80=9CThe Research Triangle region has a combination of = factors that you just=20 don=E2=80=99t find in most other areas,=E2=80=9D he says. =E2=80=9CThe = combination of world class=20 universities for research and tech transfer, mature pharmaceutical = companies as=20 a source of research and management expertise, and the support of the = state=20 government have made the Research Triangle region a successful area for = the=20 development life science companies.=E2=80=9D

Aiding the industry and region in its growth is CED. = =E2=80=9CIt=E2=80=99s is a natural=20 bridge between the entrepreneur and the necessary infrastructure for = building a=20 life science company,=E2=80=9D Pappas says. =E2=80=9CI have encouraged = other regions of the=20 country to partner with CED or to build similar organizations as a way = to spur=20 the successful growth much like we=E2=80=99ve experienced in this = area.=E2=80=9D

[ top=20 ]

In the Pipeline

Durham =E2=80=94 Duke University Institute for = Genome Sciences &=20 Policy (http://www.genome.duke.edu/),=20 a center for inter-disciplinary research, developed a new method for = finding=20 connections in the genetic pathways underlying cancer. Using gene sets = in=20 modeling tumor progression rather than single genes, it permits = characterization=20 of gene networks over time as the cancer progresses from normal tissue = to early=20 cancerous tissue to metastasis or spread. The research could lead to new = drug=20 targets. Contact Dr. Huntington F. Willard (919.668.4477).

Durham =E2=80=94 Addrenex Pharmaceuticals (http://www.addrenex.com/), = developer of=20 drugs for the treatment of adrenergic dysregulation, filed a new drug=20 application with the Food and Drug Administration for its first drug, = CloniBID.=20 Upon approval from the FDA, Addrenex and its licensing partner, Sciele = Pharma,=20 Inc., will launch the drug, which treats hypertension, in the first half = of=20 2009. Contact Paul Ketteridge (919.941.0800).

Durham -- Serenex, Inc., a privately-held biotechnology = company with a=20 Phase I clinical candidate and an extensive compound library that = targets Heat=20 Shock Protein 90 (Hsp90), announced it had entered into an acquisition = agreement=20 with Pfizer Inc. Pfizer will purchase the rights to SNX-5422, an oral = Hsp90=20 inhibitor currently in Phase I trials for the potential treatment of = solid=20 tumors and hematological malignancies, and Serenex's proprietary drug = discovery=20 technology and extensive small molecule Hsp90 inhibitor compound = library.The=20 transaction is expected to close in the second quarter of 2008, subject = to=20 customary closing conditions, including approval under the = Hart-Scott-Rodino=20 Antitrust Improvements Act of 1976. Financial terms of the deal were not = disclosed.

[ top=20 ]

Venture 2008

CED announced the first set of presenting companies for Venture 2008, = the=20 25th annual Research Triangle venture capital conference, on April 16-18 = at the=20 Washington Duke Inn in Durham.

Late Stage companies will include: =
Agility=20 Healthcare Solutions (http://www.agilityhealthcare.c= om/),=20 Glen Allen, Va.-based developer of healthcare resource and workflow to = control=20 patient-care process

Argos Therapeutics (http://www.argostherapeutics.c= om/),=20 Durham-based developer of breakthrough immunotherapies that target the = unique=20 features of a patient=E2=80=99s disease

Chimerix, Inc. (http://www.chimerix-inc.com/), = RTP-based=20 antiviral drug discovery and development company

Digitalsmiths (http://www.digitalsmiths.com/)= ,=20 Beaufort, S.C.-based video search company providing solutions for = advertising,=20 user generated content and other consumer opportunities

Inlet Technologies (http://www.inlethd.com/), = Raleigh-based=20 provider of digital media technology for content creation and = distribution

Integrated Oncology Solutions (http://www.oshealth.com/), = Raleigh-based=20 oncology nuclear receptor drug discovery and development company

MaxCyte (http://www.maxcyte.com/), = Gaithersburg,=20 Md.-based creator of cell therapeutics that cannot otherwise be = developed.

Omnilink Systems (http://www.omnilinksystems.com/<= /A>),=20 Alpharetta, Ga.-based provider location-based services technology = solution

Optimal Reading Solutions, (http://www.optimalreadings.com/<= /A>),=20 Birmingham, Ala.-based company optimizing patient care through faster,=20 higher-quality radiology interpretation processes and results

Phase Biosciences (http://www.phasebio.com/), = Durham-based=20 pharmaceutical drug delivery and protein purification company

Proventys (http://www.proventys.com/), = Durham-based=20 personalized medicine knowledge service provider focused on delivering=20 cutting-edge risk prediction technology

SCYNEXIS, Inc. (http://www.scynexis.com/), = RTP-based drug=20 discovery and development=20 company.

Semprius (http://www.semprius.com/), = RTP-based=20 provider of photovoltaic modules for solar farms

Tricycle, Inc. (http://www.tricycleinc.com/),=20 Chattanooga, Tenn.-based provider of eco-efficient merchandising = alternatives=20 for commercial = interiors =20

Yap (http://www.yapme.com/), = Charlotte-based creator=20 of an automated speech-to-text messaging platform for mobile devices

Zenoss, Inc. (http://www.zenoss.com/), Annapolis, = Md.-based=20 provider of open source application, server, and network management

Early Stage companies will = include:
Abeome=20 Corporation (http://www.abeomecorp.com/),=20 Athens-Ga.-based developer of monoclonal
antibody therapeutics and=20 diagnostics

ADial Corp., Keswick, Va.-based pharmaceutical drug=20 development company

Amulet Pharmaceuticals (http://www.amuletpharma.com/), = Rockville, Md.-based developer of a novel treatment for idiopathic and = diabetic=20 gastroparesis

Blue Square Energy (http://www.bluesquareenergy.com= /),=20 North East, Md.-based high-performance, low-cost solar cell = manufacturer

BLUERIDGE Analytics (http://www.siteops.com/), = Charlotte-based=20 land optimization Software-as-a-Service (SaaS) platform developer

Chaologix (http://www.chaologix.com/), = Gainesville,=20 Fla.-based morphing logic-based semiconductor = company

Escape=20 Media Group d/b/a Grooveshark (http://www.grooveshark.com/),=20 Gainesville, Fla.-based P2P music sSharing community

FirstString Research, Inc. (http://www.firststringresear= ch.com/),=20 Charleston, S.C.-based developer of a wound-healing peptide gel

Innegrity (http://www.innegrity.com/), = Greer,=20 S.C.-based Maker of a high-modulus thermoplastic fiber to enhance = fiberglass and=20 carbon in performance composite applications

Intercede (http://www.intercedeservices.c= om/),=20 Charlotte-based provider of intelligent incident and allegation = management=20 solutions

NexGenVS LLC (http://www.vidrunner.com/), = Blacksburg,=20 Va.-based developer of P2P live streaming video over mobile devices

NextRay, Chapel Hill, N.C.-based medical device=20 manufacturer

OcuCure Therapeutics (http://www.ocucure.com/), Roanoke, = Va.-based=20 ophthalmic drug development company

Precision BioSciences, Inc. (http://www.precisionbioscie= nces.com/),=20 RTP-based genomic molecular biology company

Qualtr=C3=A9, Inc., Atlanta, Ga.-based supplier of = MEMS inertial=20 sensor components

SoloHealth, Duluth, Ga.=E2=80=93based developer of = elf-service=20 health screening and digital media

Spectrum Bridge, Inc. (http://www.spectrumbridge.com/), Lake=20 Mary, Fla.-based real-time, dynamic spectrum exchange

Showcase companies will include:
CoLucid=20 Pharmaceuticals, Inc., Indianapolis, Ind.-based = biopharmaceutical=20 company focused on new therapeutics for neurological diseases =E2=80=93 = developed a=20 novel clinical stage migraine molecule

Regado Biosciences, Inc. (http://www.regadobiosciences.c= om/),=20 Durham, N.C.-based biopharmaceutical company developing = antidote-controlled=20 therapeutics via simultaneous rational design of drug-antidote = pairs.

This line-up is subject to change. The April issue of Venture = Update=20 will feature names of the Angel Retreat, Start-Up Speed Dating and=20 additional presenting companies.

[ top=20 ]

Mark Your Calendar!

CED=E2=80=99s=20 MedTech Conference
March 6, 2008
Meet with leading = investors,=20 corporate partners and industry entrepreneurs as they focus on the = Southeast=E2=80=99s=20 growing medical device industry. Held at Duke Unviversity=E2=80=99s = Fuqua School of=20 Business. Visit www.cednc.org/medtech=20 for more information.

CED=E2=80=99s Entrepreneurial Excellence Awards-Call for=20 applications
Event: June 5, 2008
Deadline for = nominations=20 for CED=E2=80=99s Entrepreneurial Excellence Awards is April 21, 2008. = Contact Kristen=20 Jeffers 919.226.0473 or kjeffers@cednc.org.

CED=E2=80=99s=20 Venture 2008 Conference
April 16-18, = 2008
CED=E2=80=99s 25th year=20 showcasing the Southeast and Mid-Atlantic=E2=80=99s most dynamic and = promising business=20 opportunities for venture investment. Held at the Washington Duke Inn = & Golf=20 Club, Duke University. Visit www.cednc.org/venture for more = information.

Angel=20 Investor Retreat
Thursday, April 17, 2008
Held in = conjunction with=20 CED's 25th Annual Venture Conference, the Angel Retreat showcases 10+ = companies=20 from across the Southeast and Mid-Atlantic seeking seed-stage funding = from angel=20 and early-stage investors. Register now- visi= t the=20 Venture Web site for more information.

Venture Update is published by the
Council for Entrepreneurial = Development (CED)
an entrepreneurial support organization located in = the=20 Research Triangle Park, N.C.
P.O. Box 13353, RTP, NC 27709
Phone:=20 919-549-7500
email: news@cednc.org

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"CED has provided=20 entrepreneurs like myself with an effective way to network and gather = valuable=20 information and meet other business leaders in the Research = Triangle."=20 -- Scot Wingo, President and CEO, ChannelAdvisor = Corp.

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