The Biotech 15….our short list of some of the promising future stars of biotech in the Southeast.

Oncose
Athens, GA
Brief: Develops less expensive and less invasive cancer diagnostic tests.

Oncose is engaged in cancer detection, diagnosis and treatment using proprietary technology to detect structural changes in glycoproteins. Glycoproteins are protein molecules with sugars (glycans) attached that are often found on cell membranes. Recent discoveries have shown that glycoproteins alter their structure when cells turn malignant. Detecting and tracking these changes has potential to provide enhanced clinical insight into disease progression and appropriate therapeutic choices. Oncose is developing tests that help reduce the need for more expensive and invasive cancer tests and will assist to select the most effective therapies. The company is a university of Georgia spin out.

Market: Cancer diagnostics market is estimated to reach the $7.4 billion mark by 2009. In the US, nearly 11 million new cancer cases are diagnosed each year.

Leadership: Mike Wanner, President/CEO. Most recently he built ProLinia (agricultural cloning company) from scratch and helped complete a successful exit of the business to Exeter Life Sciences. Prior to ProLinia, he helped lead Rhone Merieux, Inc. (RMI) from a one product start up in 1988 to a dominant North American presence in the animal health market and successful merger in 1997 with Merck AgVet to form Merial. Merial is now the world’s largest animal health company. Mike served on the BOD of RMI.

Founded: 2001
www.oncose.com

NovaMin
Alachua, FL
Brief: Dental repair and whitening technology.

The company took bone repair technology originally developed at the University of Florida and applied it to teeth. NovaMin’s creators say the product heals painful, sensitive teeth by creating a new layer of minerals that block nerves from being stimulated. The product also contains calcium, phosphorous, silica and sodium, which react with water to help repair decayed teeth and make them whiter.

Market: In the United States alone, oral health care products including toothpaste, mouthwash and tooth-whitening products are a $7.4 billion market. Sale of bulk NovaMin as a branded ingredient for use in consumer oral care products (i.e. toothpaste, chewing gum, etc.) represents a $500-700 million, long-term revenue opportunity; Sale of specialty NovaMin-containing products used or dispensed by dental professionals is a more than $200 million business.

Leadership: Randy Scott, President, CEO. Scott has background in marketing and corporate strategy including brand management at Proctor & Gamble Co. and LensCrafters. He has also served as Vice President of Marketing at Nine West Group.

Investment: April 2005, the company closed $4.4 million Series B round. Led by Intersouth Partners (Durham, NC).
www.novamin.com

Respirics
Raleigh, NC
Brief: Dry powder delivery system

Respirics has developed a proprietary dry powder respiratory drug delivery system that can incorporate a range of drug products to treat respiratory diseases as well as other diseases where systemic drug targeting is required.

Leadership: Gill Mott, CEO. Mott has 25 years in the pharmaceutical and medical device field, having spent 16 years with Glaxo, serving as Vice President of Marketing and Vice President of Managed Care.

Investment: Received a $3.4 million Series A round of financing in September 2005 from Catalysta Ventures and Research Triangle Ventures.

Founded: 2000
www.respirics.com

InsectiGen
Athens, Georgia
Brief: Creates environmentally friendly alternatives to chemical pesticides.
Developed by University of Georgia professor, InsectiGen’s BtBooster product can be effective against pests in both biotech crops and plant surface applications.

Market: Harmful insects cause $30 billion in crop damage and $4 billion in forest damage in the United States alone and kill more than 2.8 million people annually. Technology can potentially create considerable increases in yield on crops such as corn, soybeans, cotton, rice and canola. Company will offer performance improvement technologies to the genetically modified crop protection trait markets. The total available market for this line of business is $3 billion. Company will offer engineered Bt proteins and performance enhancement proteins for use by the row and high-value crop industries, the forest pest control market and public health agencies. The total available market for this class of
biopesticides is now $160 million. In July 2005, InsectiGen licensed its technology for cotton to Pioneer Hi-Bred International, a subsidiary of DuPont, for use in making better pest-resistant crops.

Leadership: Cliff Baile, CEO. Georgia Research Alliance Eminent Scholar in Agricultural Biotechnology and distinguished professor of animal science and foods and nutrition at the University of Georgia.

Investment: Raised $1.2 million in funding, December 2005. Led by Georgia Venture Partners Seed Fund and the Georgia Biosciences Seed Capital Fund with additional funding from angel investors.

Founded: 2003

AxoGen
Gainesville, FL
Brief: Develops products to help repair and regenerate peripheral nerves.

AxoGen, a university of Florida spinout, provides surgeons a biological solution to repair and regenerate peripheral nerves. AxoGen technology helps facilitate the repair and regeneration of the nerve itself. The products help surgeons to restore function across a severed or injured nerve without requiring a graft from elsewhere on the patient. Product can also be used as a supplemental regenerative agent in common procedures, such as nerve suturing.

Market: Every year in the US, several million people suffer serious traumatic, iatrogenic or nontraumatic peripheral nerve injury. Injuries to the peripheral nervous system (PNS) are a major source of disability, impairing the ability to move muscles or to feel normal sensations. In 2002, more than 250,000 US patients suffered major traumatic wounds to peripheral nerves, including injuries from collisions, motor vehicle accidents, gun wounds, fractures, dislocations, lacerations, or some other form of penetrating trauma. Due to the difficulty and low efficacy of treating major peripheral nerve injuries, only 15% of patients were actually treated for their peripheral nerve problem. In addition, more than 485,000 patients in 2002 were treated for nontraumatic peripheral nerve injuries, the vast majority of which were attributed to nerve compression and adhesion problems.

Leadership: CEO, Jamie Grooms. Previously founded Regeneration Technologies and guided the company from its establishment in 1996 through venture-capital funding in 1998 to an IPO in 2000.

Investment: Currently seeking financing.

Founded: 2002
www.axogeninc.com

Oriel Therapeutics
Durham, NC
Brief: Advanced inhaler technology

Oriel Therapeutics aims to create a better inhaler device based on technology developed at the University of North Carolina. The inhaler is designed based on the characteristics of powder flow, powder separation and pulmonary drug delivery characteristics in an attempt to create a more efficient and consistent method to get inhaled drugs to a patient. The company is currently working on drug deliveries that treat asthma, cystic fibrosis and Chronic Obstructive Pulmonary Disease.

Market: The market for dry powder inhalers in the U.S. is expected to grow from less than $700 million in 2000 to $7 billion by the end of the decade. More than 25 million Americans are currently estimated to have asthma, with the prevalence of asthma doubling globally in the last 15 years. Direct healthcare costs for asthma in the United States total more than $9.8 billion annually. Almost two-thirds of 6,600 asthma patients studied underused their inhaled medication for the long-term treatment of asthma.

Leadership: Paul J. Atkins, PhD, Chief Executive Officer. Atkins joined Oriel from GlaxoSmithKline where he was involved with the development and commercialization of inhaled delivery systems, most recently as Director, Delivery Systems in the Global Respiratory Therapeutic Development group. Atkins is also a founder of Oriel Therapeutics.

Founded: 2001
www.orieltherapeutics.com

Affinergy
Research Triangle Park, NC
Brief: Medical device coatings

Affinergy develops medical device coatings that help prevent infections and promote specific cell growth.
The company partners with medical device companies to help improve their existing products or create new ones. The company hopes its tools can contribute to the lowering of healthcare costs and improving of patient outcomes.

Market: Over 500,000 cases of hospital-acquired infections are reported each year. 90% of nosocomial urinary tract infections are associated with urinary catheter usage that cost the healthcare system $1.8 billion annually. Over 250,000 infection cases are reported each year for central venous catheters in the U.S. 12-25% of those people die; that is 30,000 to 62,500 deaths each year. The incremental healthcare cost for each case is $25,000 for a total of $6.25 billion.

Leadership: Peyton Anderson, CEO. Peyton is a successful entrepreneur who co-founded SciQuest, Inc. in 1995 and was the startup CEO through 1997 and Board Member until after the company went public. From 1998 to 2003, Peyton served as the VP of Business Development for SciQuest and was responsible for raising capital, making strategic partner deals, mergers & acquisitions and recruiting the management team. SciQuest raised over $175 million including its IPO in 1999 and completed 8 acquisitions.

Investment: The company closed on $2 million Series A in August of 2004. Investors included MCNC, Trinity Healthcare, Charleston Angel Partners and the Wilmington Investor Network. Received a number of smaller SBIR grants since.

Founded: 2002
www.affinergy.com

Gentris
Morrisville, NC
Brief: Uses genetic profiling to predict drug response.

Gentris Corporation is engaged in the development of clinical pharmacogenomics products. Pharmacogenomics is the study of an individual’s genetic profile (obtained through genetic tests or genotyping) to predict response to specific drugs. This information helps reduce the time and cost of drug development significantly and helps physicians make better and safer treatment decisions for their patients. Gentris believes that the application of pharmacogenomics knowledge to drug development will improve trial design and predictability, shorten the drug development cycle, improve new drug approval rates and market positioning, and enable companies to retest drug candidates that fail to meet clinical trial or FDA approval standards.

Market: Pharmacogenomic testing (research, clinical, and diagnostic) is estimated at $4 billion in 2005. Gentris products seek to predict drug efficacy and decrease adverse drug reactions, which is the fourth leading cause of death and the fifth leading cause of illness in the United States.

Leadership: Michael Murphy, President and CEO. Murphy is recognized as one of the pioneers of the pharmacogenomics industry and was the founder of Intek Labs, the first international pharmacogenomics company. Murphy has also held senior management positions with PPGx and Clingenix.

Investment: Closed a $5 million Series C funding round with Mitsui & Co. in April 2005.

Founded: 2001
www.gentris.com

Metabolon
Durham, NC
Brief: Uses molecule analysis to help improve drug development process.

Metabolon’s technology analyzes small molecules in cells (metabolomics), helping to identify and understand a disease state faster and more accurately than previously possible. The company hopes to entrench this technology in the drug development and testing processes. The technology helps to identify safer compounds for development, shorten the time for drugs to get to market and identify diagnostic markers for earlier disease detection.

Market: New drugs cost an estimated $800 million or more to bring to market after about 15 years from conception to sales. With the direct cost to bring a single successful drug to the market on the order of $250 to $350 million, the major portion of the $800 million represents the cost of failed drugs.

Leadership: John Ryals, Ph. D., President and Chief Executive Officer. Prior to joining Metabolon, Ryals was CEO, President and Founder of Paradigm Genetics. At Paradigm, he raised over $100 million in equity financing, including an Initial Public Offering in 2000 and a follow on offering in 2001 and closed on R&D partnerships valued at over $200 million. Ryals has also served in senior research positions at Novartis and Ciba-Geigy and currently serves on the Boards of Athenix Corporation and North Carolina State University College of Physical and Mathematical Sciences. Ryals received a Ph. D. in Molecular Biology from the University of Texas at Dallas.

Investment: Closed $8 million Series B round in January 2006. Sevin Rosen Funds (Palo Alto, CA) led the round with participation from previous investors including The Aurora Funds (Durham, NC) and The Trelys Funds (Columbia, SC). Harris & Harris Group (New York, NY), also participated. Company had prior closed a $9 million Series A round in October 2004.

Founded: 2000
www.metabolon.com

Qualyst
Chapel Hill, NC
Brief: Products to aid drug development.

Qualyst was founded on discoveries from research by three professors in the School of Pharmacy at the University of North Carolina at Chapel Hill. Some of the major challenges in drug development today center around absorption, distribution, metabolism and excretion (ADMET) processes at the cellular and molecular level. ADMET challenges have been and continue to be a major cause of compound attrition during the drug development process, resulting in the loss of millions in investment dollars and valuable research time. Qualyst focuses on commercializing novel and proprietary ADMET products to drug discovery and development customers.

Market: Over $20 billion are spent on drug discovery process. One market estimate shows that for every 100,000 compounds screened, about 100 hits are identified. Of these 100 hits, only one makes it to the lead compound stage. Between 40% and 60% of these lead compounds fail ADMET testing.

Leadership: Scott Neuville, President and CEO. Neuville is the former Chairman of the Board and Chief Executive Officer of iBiomatics, a SAS company. Neuville spent seven years at STERIS Corporation (STE) in several senior executive roles including President of the Americas Healthcare Division.

Investment: Qualyst closed a Series A round of investment in February 2004. Received small grant from NC Biotech center in 2005.

Founded: 2002
www.qualyst.com

Entegrion
Research Triangle Park, NC
Brief: Creates drugs that stop bleeding.

Creates drugs that help stop bleeding patients both externally and internally.

Market: The U.S market for platelet transfusions is expected to be around $2 billion by 2007, with the global market twice that. Over 600,000 platelet transfusions are required in Europe and the U. S. each year for cancer patients who bleed. 93,000 people die from accidents in the U.S. each year, with bleeding remaining the major cause of preventable death. 50% of all battlefield deaths result from uncontrolled hemorrhage. One in four patients who undergo open-heart surgery suffer severe bleeding.

Leadership: Clayton Duncan, CEO: 16 years of experience as CEO in the biotech industry, most recently serving as CEO of Incara Pharmaceuticals. Successfully led multiple rounds of venture funding, 2 IPO’s.

Investment: The company (formerly Hemocellular) closed on a $1 million seed round early in 2004 led by Catalysta Ventures. Merged with Dutch firm and raised $1.5 million in grants January 2006.

www.entegrion.com

Syntherica
Durham, NC
Brief: Synthetic antibodies

Syntherica is developing what it calls Synthe-tide, a surrogate antibody technology. Basically, that means it makes synthetic antibodies using nucleotides, the building blocks of DNA, with advantages natural antibodies don’t have. These synthetic antibodies can reduce the slow, cumbersome search for monoclonal antibodies from man-years to man-weeks. Also, because they’re not size-constrained the way natural antibodies are, Synthetide molecules may detect surface markers on cancer cells or other diseases not possible using natural antibodies. Synthetide size variability may help pinpoint cancer cell markers larger or smaller than those the natural immune system identifies. Synthetide detects binding molecules for new targets quickly, making them ideal, the company says, for biodefense. It may be necessary to detect not only known toxins and pathogens, but also variations engineered to elude detection.

Leadership: Joe Smith, CEO. Smith was formerly President of Novalon Pharmaceutical, which became Karo Bio USA. Smith co-founded Novalon in 1996. Prior to entering the biotechnology field, Smith practiced law in Washington, D.C. for many years, where he was a partner at Jenner & Block from 1990 to 1998. Smith holds J.D. and M.A. degrees from Yale.

Investment: Raised $650k from angels, over $1 million in grants.

Founded: 2002
www.syntherica.com

Regado
Biosciences
Morrisville, NC
Brief: Blood clot prevention drug development.

Regado is involved in the discovery, development, and commercialization of antidote-controlled therapeutics. The initial focus of the Company is on developing antidote-controlled drugs that prevent or eliminate blood clots (antithrombotics). Antidote-controlled neuromuscular blocking agents and applications to cell therapy are two future applications for the company.

Market: Antithrombotic therapies (anticoagulants, antiplatelets and thrombolytics) represent a current combined global market of approximately $10 billion. Regado’s antidote-controlled drugs address the fastest growing sector of this market, injectable antithrombotics, which represent a current global market over $4.4 billion, with total sales expected to exceed $7.5 billion by 2010.

Leadership: Douglas Gooding, President. Gooding serves as President of the Company and is also a Venture Partner with investor The Aurora Funds. Previously, Doug was a Principal with Aurora and led the investments in, and serves on the Boards of Directors of, Regado, Cropsolution, and Metabolon. Prior to Aurora, Doug was a Director of Business Development of Paradigm Genetics.

Investment: Regado Biosciences of Research Triangle Park completed a $20 million Series B in the fall of 2005 financing co-led by Domain Associates of Princeton, N.J., and Quaker BioVentures of Philadelphia. Also participating in the round was Durham-based The Aurora Funds, which provided seed funding for the company and led the Series A financing, as well as individual investors.

Founded: 2001
www.regadobiosciences.com

DiaKine
Therapeutics
Charlottesville, VA
Brief: Drug discovery firm targeting diabetes.

DiaKine Therapeutics is an early stage drug discovery company focused on bringing novel therapies for type 1 and type 2 diabetes to market.

Market: 20.8 million people in the United States have diabetes. Of these, 14.6 have been diagnosed while another 6.2 million remain undiagnosed; 1.5 million new cases of diabetes were diagnosed in people over 20 years of age last year. Another staggering statistic: 41 million Americans are in a pre-diabetic condition. All of this adds up to a potential market opportunity in excess of $13 billion.

Leadership: Keith Ignotz, President & CEO. Ignotz has over 25 years of experience in the global healthcare market with 14 of those in diabetes. He joined DiaKine from SpectRx, a diabetes management company which he co-founded in 1993 and took public in 1997. Mr. Ignotz has extensive experience in venture, public, and grant financing of start-ups and development stage companies; he has raised more than $70M in the last 10 years. Previously, he was President of Humphrey Instruments SmithKline Beckman (Japan), President of Humphrey Instruments (Germany), and Senior Vice President of Allergan Humphrey.

Investment: $1.5 million in financing. Company is currently seeking Series A venture capital round.
www.diakine.com

Applied Genetic Technologies
Alachua, Florida
Brief: Emphysema treatment.

AGTC’s lead product candidate is a treatment for Alpha One Antitrypsin Deficiency (Alpha One) an inherited cause of Emphysema.

Market: Alpha One is the most common potentially fatal hereditary disease of Western World adults; approximately 200,000 individuals are estimated to have Alpha One.
Leadership: Sue Washer, President and CEO. Washer has 10 years of pharmaceutical management and research experience from Abbott Labs and Eli Lilly as well as 11 years of senior management experience with entrepreneurial firms in the Gainesville area.

Investment: AGTC’s most recent round of financing was completed in November 2003 and was led by Interwest Partners of Menlo Park, CA. Other investors included Skyline Ventures of Palo Alto, CA; Intersouth Partners of RTP, NC; and MedImmune Ventures of Gaithersburg, MD. The Company raised over $20M in this round to fund clinical development of its lead product and to complete scale-up of its manufacturing process.

Founded: 1999
www.agtc.com

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