Venture Update Vol. XI, #9, September 2007

• Done Deals

• On the Up
• New Developments
• In the Pipeline
• Mark Your Calendar

Done Deals

Pittsboro – Biolex Therapeutics (www.biolex.com), a privately held biopharmaceutical company, has filed an $80 million IPO. Lehman Brothers and Deutsche Bank Securities are handling the IPO. If the offering is a success, Biolex will trade on the Nasdaq using the symbol BLEX. Biolex will use the earnings from the offering to fund clinical trials and other research and development activities. Biolex is backed by Intersouth Partners, which holds a 20.3% stake in the company. Contact Michelle Linn (508.419.1555).

RTP – NovaQuest (www.novaquest.com), has made a strategic investment in TOPIGEN Pharmaceuticals Inc., a clinical-stage biopharmaceutical company specializing in respiratory disorders. The investment was part of a private placement of $25 million in the Montreal-based company. TOPIGEN will use the funding to help accelerate its Phase II lead-product clinical programs in the treatment of respiratory diseases. Contact Jay Johnson (919.998.2066).

RTP – Eli Research Inc. (www.eliresearch.com), a diversified business-to-business media company, has received $10 million in investments from BIA Digital Partners II LP. Eli will use the growth capital to help finance its strategic initiatives. Eli produces more than 120 print and online publications, teleconferences and audio learning products, primarily for the healthcare sector and secondarily for law and litigation and financial services. Contact Gretchen Boyd (703.227.9646).

RTP – BioMarck Pharmaceuticals (www.biomarck.com), a drug development company, raised $4 million through private placement funding. The new investment, combined with previous grants from the National Institutes of Health, will be used to complete a Phase II, proof of concept clinical study for the company’s proposed treatment of respiratory diseases associated with mucus hyper secretion and inflammation. The product is based on scientific concepts developed by a professor of cell biology at North Carolina State University. Contact Indu Parikh (919.768.1335).

Durham – Constella Group (www.constellagroup.com), a provider of professional health services, has been acquired by Fairfax, Va.-based SRA International for $185 million. SRA bought Constella to incorporate health care services into its portfolio. Constella CEO Don Holzworth will lead the health care business unit for SRA. Contact Sue Ann Pentecost (919.313.7601).

Cary – 3Dsolve Inc. (www.3dsolve.com), a creator of simulation-based learning solutions, has been acquired by Lockheed Martin (LM STS) for an undisclosed amount. The company’s innovative software tools assist clients with collaborative training utilizing interactive 3-D graphics. 3DSolve’s employees and software products will remain based in Cary, N.C., and become fully integrated into LM STS. LM STS, headquartered in Orlando, Fla., is a supplier of simulation and training solutions, military logistics support and test equipment to the U.S. government and international customers. Contact Jeff Adams (301.897.6308).

Charlotte – SPX Service Solutions (www.spx.com), a company focused on providing solutions that support the expansion of global infrastructure, has entered into a definitive agreement to acquire Matra-Werke GmbH, a wholly-owned subsidiary of Wiesbaden, Germany-based KION Group GmbH for an undisclosed amount. Matra will be operated as a part of SPX Service Solutions’ CarTool subsidiary. The transaction is subject to certain regulatory approvals and customary closing conditions. The transaction is expected to be completed in the fourth quarter of 2007. Contact Tina Betlejewski (704.752.4454).

Cary – Epic Games (www.epicgames.com), a computer game developer, has acquired a majority interest in Warsaw, Poland-based game development company People Can Fly for an undisclosed amount. In addition the two companies are collaborating on a new intellectual property which Epic previewed privately to publishers at the Games Convention in Leipzig, Germany last month. The relationship began last year when People Can Fly was evaluating Unreal® Engine 3 to use for a new multi-platform game project. Contact Mark Rein (919.854.0070).

Morrisville – ParagonDx LLC (www.paragondx.com), a genetic and molecular testing diagnostics company, has acquired the assets of Gentris Diagnostics, Inc, a subsidiary of Gentris Corporation. As a stand-alone company, ParagonDx will focus on developing molecular diagnostic products for laboratories. These products are intended to enhance medical care by providing early diagnostic information rapidly. Contact Mariana McCulley (919.459.8159).

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On the Up

Aldagen Inc.
Durham, N.C.

Stem cell research has generated much attention and excitement in the scientific world in recent years. Aldagen Inc. is a biotechnology company that strives to make important advancements in this field for regenerative therapy purposes.

Since its founding in 2000 as StemCo Biomedical, Aldagen has created three products: Aldesort, Aldefluor and Aldecount. By identifying and isolating adult stem cells that demonstrate high levels of the intracellular enzyme aldehyde dehydrogenase (ALDH), these products help in the efforts to make advancements in the treatment of both cardiovascular and degenerative diseases.

In recent news, Aldagen established a manufacturing facility for its cellular products. The work area is fully validated and supported by environmental monitoring and quality control activities. The new facility comes as a giant step in the advancement of Aldagen’s products via clinical trials. The company already plans to conduct three ongoing studies from the new location in preparation for FDA product approval.

In early July, Aldagen announced the addition of three new clinical sites for the clinical trial of the product ALD-301 for the treatment of critical limb ischemia. The new sites are located on the campuses of three prestigious institutions, Duke University Medical Center, Indiana University and Saint Joseph’s Research Institution.

Aldagen’s developing technology is the only one able to isolate a potent population of therapeutic cells for a wide range of clinical uses from a patient’s bone marrow. This advancement, along with the company’s $17.3 million dollars secured funding, the new clinical site locations and facility, and the recent recruitment of CFO Matthew Czajkowski, prove that the prospects for Aldagen only look promising. Contact Kelly Larson (919.484.2571).

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New Developments

Raleigh – LipoScience Inc. (www.liposcience.com), a medical technology company, is collaborating with BioReference Laboratories Inc. to offer the NMR LipoProfile test. Portions of the NMR LipoProfile test, developed by LipoScience, will be used by BioReference Laboratories in its new Advanced Cardiovascular Testing (ACT) program. The ACT program provides physicians a comprehensive cardiovascular report including a full suite of results to aid physicians in management of their patients’ cardiovascular health. The patient-friendly report also functions as a "report card" to help patients and their physicians track the results of the ACT test over time. Contact Michelle Turenne (919.256.1306).

RTP – The North Carolina Biotechnology Center (www.ncbiotech.org), has awarded $822,000 in grants to 11 bioscience researchers. The program, which started a year ago, offers grants up to $75,000. The grants were divided among scientists at the University of North Carolina Asheville, Carolinas Medical Center, the University of North Carolina Charlotte, Wake Forest University, North Carolina Central University, East Carolina University and the University of North Carolina Wilmington. The N.C. Biotech Center hopes this monetary aid will help scientists commercialize their discoveries and attract additional funding from other sources. Contact Barry Teater (919.549.8814).

Durham – Icagen Inc. (www.icagen.com), a drug development company, has signed a collaboration and licensing agreement with Pfizer for discovery, development and commercialization of compounds which modulate three specific sodium ion channels as new treatments for pain and related disorders. Under the terms of the agreement, Pfizer will provide $38 million in committed funding to Icagen over the first two years, including an initial upfront license fee of $12 million, and up to $15 million through an equity commitment. In addition, Icagen is eligible to receive $359 million in research, development, regulatory and commercialization milestones for each of the three products. Contact Richard D. Katz, M.D. (919.941.5206).

Charlotte – Global Compliance (www.globalcompliance.com), a global ethics and compliance solutions provider, and PrecisionIR Group, a worldwide provider of online investor relations services and web-based communications solutions, have formed a strategic partnership. The alliance will enable PrecisionIR to package ethics and compliance solutions with current communications offerings. PrecisionIR currently delivers a comprehensive investor relations package that attracts and informs corporate investors of public entities worldwide. Contact Karen Kistenmacher (704.973.0355).

RTP – Hatteras Venture Partners (www.hatterasvp.com), has raised an additional $20 million for its third fund, Hatteras Venture Partners III. The recent influx has raised the fund to $82 million. The funding will be used for investments in seed and early stage companies in biopharmaceuticals, medical devices, diagnostics and related opportunities in human medicine. The ultimate fund size is expected to be $100 million. Contact John C. Crumpler (919.484.0730).

Durham – Parion Sciences (www.parion.com), a privately held pharmaceutical company, has signed an exclusive licensing agreement with California-based biopharmaceutical company Gilead Sciences to co-develop a treatment for pulmonary diseases, including cystic fibrosis, chronic obstructive pulmonary disease and non-cystic fibrosis bronchiectasis. Gilead will make a $5 million investment in Parion and provide an upfront payment of $5 million for the license. Parion could potentially assume a total investment of $156 million through the deal, which calls for Gilead to supply additional research funding based upon achievement of development milestones. Contact Paul Boucher (919.313.1195).

Cary – Virtual Heroes Inc. (www.virtualheroes.com), a developer of advanced learning technologies, has entered into a licensing agreement to use Epic Games’ Unreal Engine 3 in its development of serious games and advanced learning technology. This license provides Virtual Heroes access to a development framework including a variety of core technologies, content creation tools, and support infrastructure. The combination of its own Advanced Learning Technology (ALT) and the Unreal Engine 3 will create cost efficient and high caliber products and technology to its clients. Contact Shawn Ramsey (919.821.2822).

Durham – Constella Group (www.constellagroup.com), has awarded $20,000 to four organizations to improve the lives of orphans living with HIV/AIDS, reduce the stigma surrounding AIDS and other sexually transmitted diseases, and promote family and children health and wellness programs. This endeavor is one of the many that Constella has participated in to promote the enhancement of human health. Constella awarded the money to Generation, Inc., the Blue Diamond Society, the Decatur Education Foundation and the Foundation for the University of North Carolina Asheville. Contact Sue Ann Pentecost (919.313.7601).

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In the Pipeline

Winston-Salem – Targacept Inc. (www.targacept.com), a clinical-stage biopharmaceutical company, along with its strategic collaborator, AstraZeneca, has initiated a Phase IIb clinical trial of AZD3480 (TC-1734) in cognitive deficits in schizophrenia, or CDS. The CDS trial is a double blind, placebo controlled study being conducted at sites in the United States and Canada. The trial design provides for approximately 400 patients currently taking medication from the class known as atypical anti-psychotics to be randomly assigned to one of three dose groups of AZD3480 or to placebo and to be dosed over a 12-week period. Contact Alan Musso (336.480.2186).

Durham – Inspire Pharmaceuticals (www.inspirepharm.com), has released its new eye treatment drug, AzaSite, used to combat pink eye. The company received FDA approval for the drug, which it licensed from InSite Vision. A sum of $32 million was paid for the U.S. and Canadian rights to InSite Vision. Inspire expects sales to reach $30-45 million in 2008. Contact Dan Budwick (212.477.9007).

RTP – North Carolina Healthcare Information and Communications Alliance Inc. (NCHICA) (www.nchica.org), a nonprofit association that aims to improve health and care in North Carolina through health information technology initiatives, has announced the release of its new security template for Managing Sensitive Electronic Information (SEI). The new template can be used on portable devices and removable media, including PDAs, laptops, USB drives and CD/DVDs. This comprehensive package helps manage risk associated with the deployment and storage of SEI, including individual health information or mission-critical business data. Contact Alyssa Willard (919.791.0012).

Durham – Duke University’s Pratt School of Engineering (pratt.duke.edu), has launched a study surrounding an intense form of ultrasound that shakes tumors, causing its cells to leak and trigger immune defense activity against cancer. Researchers tested the ultrasound treatment on animals, and found that once the immune system is activated, it may go as far as to seek out and destroy the present cancer cells, including those that have spread through the bloodstream. Duke researchers, however, have found that the HIFU may be more effective when initially subjected to the shaking method. Contact Deborah Hill (919.660.8403).

RTP – Alphavax (www.alphavax.com), a vaccine technology company, has announced the interim results from its Phase I influenza vaccine clinical trial. The vaccine contains a replicon vector, derived from an attenuated alphavirus that expresses the hemagglutinin (HA) gene from the A/Wyoming H3N2 strain of influenza virus. A key safety feature of this system is, after initial exposure of the influenza HA protein in vaccine recipients which induces the immune response, there is no further replication of the vaccine particles. Contact Dr. Jonathan F. Smith (919.595.0397).