By Allan Maurer
ALEXANDRIA, VA – Oxford Finance Corp. is still actively lending funds to biotech and life sciences companies, both traditional asset-based loans and growth capital debt financing. J. Alden Philbrick, IV, president and CEO, says Oxford’s parent company, Japanese firm Sumitomo, was not involved in the home markets crisis affecting so many financial institutions. “For the most part, they missed the toxic asset problem,” he says.
Oxford Finance has originated over $1 billion in loans over the past few years, with lines of credit ranging from $500 thousand to $30 million.
Oxford is a subsidiary of Sumitomo America, which purchased it in 2004 for $85 million. “We’re part of a conglomerate of about 150 companies they own worldwide, 60 in the United States,” says Philbrick. He notes that while Sumitomo is being careful, it is not in any trouble.
Philbrick notes that the current environment makes it tough for life science companies to raise a round of venture capital. “We’re seeing private companies taking bridges from investors to get them through this period of retrenchment.” But he adds, “We’re lending into this marketplace.”
He says Oxford looks for companies to make sure they have “some avenue to capital.” That may include a syndicate of private investors or “some semblance of revenue starting,” and those with fairly long runways.
“Anything that is a novel technology with data supporting it that solves a big problem is going to get funding,” he says.
Oxford contributed half of a $5 million debt financing of Alexandria, VA-based Tranzyme Pharma, a company developing novel drugs to treat gastrointestinal disorders, in February, joined by frequent lending partner, Silicon Valley Bank.
“Transzyme has all the ingredients we look for,” says Philbrick. “Partners, investors, good management, a novel technology and a diversified pipeline.”
The company invests across the entire spectrum of the life sciences, including in medical device companies. Philbrick says diagnostics and companies with a good platform technology are hot right now, but cautions that “When things get hot and overcrowded, you don’t want to be in them.
Areas Oxford avoids, he says, “Are me-too compounds that just improve dosing or offer just improved delivery but not efficacy. I don’t think they’re hot in this environment. There is no appetite for them on the development side.”
Oxford lends worldwide, but 90 percent of its lending goes to U.S. firms. It has invested in quite a few North Carolina life science firms, including AlphaVax, LipoScience, Norak Biosciences, and Biolex.
Philbrick says Florida is also coming on strong in the life sciences, and that it made a good bet spending $300 million in state money to help attract the Scripps Research Institute’s East Coast facility.
Online: www.oxfordfinance.com
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