Venture Capital News
MetroPCS Announces a $739 Million Investment Led by Madison Dearborn Partners/TA Associates
Representatives of MetroPCS Communications Inc. announced that Madison Dearborn Partners, LLC and TA Associatates are each investing US$300 million to complete a $739 million minority equity investment in MetroPCS. The company will use $50 million of the proceeds as working capital to fund its expansion into new markets, including Dallas and Detroit, with the remaining proceeds paid to certain existing stockbrokers of to purchase their stock.
Current investors in MetroPCS include Accel Partners, Battery Ventures, MC Venture Partners, Columbia Capital and a number of other firms. The tender offer is expected to conclude before the end of October 2005.
[ FYI Index ]
Serenex Raises $30 Million
Serenex, an unprofitable drug- development company that was in danger of running out of cash by the end of year, has raised $30 million in venture capital, enough to keep it afloat through 2007. The Durham company also announced that it acquired the rights to a promising experimental drug that treats painful mouth sores that often accompany chemo- therapy.
Most of the US$30 million will be used to finance additional clinical studies of the drug, said Ian Howes, chief financial officer of Serenex. Early tests of the compound, known as SNX-1012, have shown it to be safe and effective.
Serenex has been trying to move beyond its business of providing drug screening and research for large pharmaceutical companies to developing its own portfolio of medicines. In buying SNX-1012 from Mucosal Therapeutics of Wellesley, Mass., Serenex gets a drug that is relatively far along in the development pipeline.
Serenex joins a growing list of local companies that have obtained sizable investments this year as lenders loosen their purse strings.
Biolex, a Pittsboro company that produces experimental drugs with the help of small, leafy plants commonly found on the surface of ponds, announced in late August that it had raised $36 million. Earlier this year, Durham wireless technology company Motricity received $30 million.
Venture capitalists invest in small, private companies they believe have strong growth potential. The money is important to the local economy because it allows those companies to expand, develop new products and hire new workers.
SNX-1012 is being tested to treat oral mucositis, which affects about 450,000 people who undergo chemotherapy or radiation treatment. The symptoms include inflammation and ulcers in the mouth and throat. The pain often becomes so severe that patients can't eat or drink and doctors are forced to interrupt cancer treatments.
There is now no treatment for about 90 percent of the affected patients, Howes said. The potential market for the drug exceeds $1 billion a year, he said. But winning regulatory approval for an experimental drug isn't easy. For SNX-1012 to receive approval from the Food and Drug Administration, it will require several rounds of successful clinical trials -- and time. If the drug meets all goals, it could be on the market by 2010, Howes said.
Serenex will use part of the money to continue development of another drug, called Hsp90, which inhibits the growth of cancer cells. The remainder of funds will be used to hire at least six clinical developers, Howes said.
When Serenex was started in 2001, it provided drug screening and research to help large pharmaceutical companies discover new drugs. In 2003, it expanded to include developing its own drugs. As the company shifted its focus from early-stage development, it reduced the number of researchers, cutting its work force to 27, from 41. The latest venture-capital funding brings the total amount the company has raised to $55 million.
Ritchie Capital led the latest round of financing, which included existing investors Intersouth Partners, Lilly Ventures, Mediphase Venture Partners, Takeda Research Investment and Seaflower Ventures.
Devin Hosea, director of Ritchie Capital's Biotechnology Venture Group, will join the Serenex board of directors.
[ FYI Index ]
Drexel, Penn and Ben Franklin Technology Partners of Southeastern PA Form Nanotechnology Commercialization Group Through The Nanotechnology Institute
The founding members of the Nanotechnology Institute (NTI) -- Drexel University, the University of Pennsylvania and Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP/SEP) – have agreed to create a Nanotechnology Commercialization Group, funded by the Nanotechnology Institute, to facilitate the commercialization of intellectual property discoveries by NTI-member institutions.
The agreement funds the creation of the Nanotechnology Commercialization Group (NCG) that will operate as a separate new unit with a three-member professional staff comprised of both Penn and Drexel personnel that will be located in Penn’s Technology Transfer offices. The NCG will provide commercialization services to NTI-member institutions through an Inter-Institutional Agreement with Penn for all nanotechnology patents and patent applications including, but not limited to, those arising from NTI-funded research. Such services may include evaluating the IP for commercial potential, devising a commercialization strategy, marketing the IP, facilitating the formation of a start-up company, and or negotiating licenses on behalf of the IP owners and participating institutions.
The agreement also establishes a Nanotechnology Proof of Concept Seed Fund (PoC Fund) through the NTI. The PoC Fund will support the costs of projects recommended by the NCG and approved by the PoC Fund Review Committee which will be comprised of internal and external reviewers.
Representatives of Drexel, Penn and BFTP/SEP said they expect the new partnership to greatly enhance the capabilities of the NTI to facilitate commercialization of nanotechnology’s real -world applications into the marketplace.
Penn and Drexel – two of the nation’s leading academic and research universities -- and BFTP/SEP, a national leader in technology-based economic development, founded the Nano-technology Institute four years ago with seed capital from the Commonwealth of Pennsylvania.
[ FYI Index ]
CenterStone Software Completes $5.5 million Series D Round
Hopkinton-based CenterStone Software Inc., a maker of software to manage corporate real estate and facilities, reports it has landed a $5.5 million Series D round from its investors.
This round was led by Egan-Managed Capital of Boston, the venture firm formed and run by the Egan family and started by Richard Egan, co-founder of Hopkinton-based storage leader EMC Corp.
Trans-National Group, Velocity Equity Partners and the Massachusetts Technology Development Corp. were also investors in this round. To date, CenterStone has managed to raise $15.4 million.
CenterStone reports it plans to use the money to expand its sales, marketing and development of its products for the integrated workplace management systems market. The company counts more than 50 customers, including AIG, Dell and EMC.
Egan-Managed Capital managing partner John R. Egan, who held executive positions at EMC, said CenterStone is helping a blue chip list of customers solve complex real estate management problems.
CenterStone officials said the company, which was founded in 1999, has had a 100 percent growth rate over the past two years.
[ FYI Index ]
Angel Funding Dollars Rise, Deals Decline
A study released Wednesday showed that the angel investment market for the first half of 2005 was steady and robust, but signs of instability loom.
According to a report from the Center for Venture Research at The University of New Hampshire, total angel investments for the first two quarters of the year came to $11 billion, slightly less than the $12.4 billion invested during the same time last year, but on target to match last year's $22.4 billion total.
Jeffery Sohl is the director of the CVR.
Some 26,000 entrepreneurial endeavors received angel funds in the first two quarters of 2005. Angel financing is still the largest source of seed and start-up funds, with 48% of the first-half angel investments going to the start-up and seed companies. However, it is shrinking, dropping 11% from the first two quarters of 2004.
Sohl also pointed to the 23.3% yield rate for the first half of the year as a reason for slight concern.
Life sciences led the way as the most popular sector for funding, (20%) followed by biotech, (17.5%) software, (17%) and IT services (13%).
Sohl also highlighted that the overall numbers were strong and expected them to remain sturdy throughout the year. However, he also solidified his concern with the fact that 66% of membership in angel groups remained latent during the first half of the year - up significantly from 48% last year.
