Xconomy-Boston

Roundup, Life Sciences, Biotech Erin Kutz wrote:

This week saw a long-awaited FDA approval for a Boston-area drug maker, speculation about a possible buyout of a local biotech giant, and some in-depth profiles on other key life sciences players.

—Hospital software maker Picis, of Wakefield, MA, said it is being acquired by Ingenix, an Eden Prairie, MN-based healthcare intelligence and analytics firm. The companies didn’t disclose financials details of the transaction, but Ingenix said it will maintain Picis’ locations in Wakefield and throughout the U.S. and Europe.

—Cambridge, MA-based Momenta Pharmaceuticals nabbed a long-sought FDA approval for a generic version of the anti-clotting drug it developed with Novartis unit Sandoz. The regulatory approval proves that Momenta (NASDAQ: MNTA) can make equivalents of more complex drug mixtures, which pose a greater challenge for would-be generics makers than do more conventional small-molecule pills, Luke wrote.

—Ryan took a look at RainDance Technologies, a Lexington, MA-based company developing next-generation genomic analysis technology. The startup’s first commercial product is a system that conducts thousands of DNA experiments simultaneously, which has caught the eye of research houses and pharma companies.

—Cambridge-based BioScale has flown relatively under the radar while developing a method of measuring biological samples using sound wave technology, Ryan wrote. But the company has caught the eye of another Cambridge biotech player: Millennium, The Takeda Oncology Company, which is using BioScale’s technology to measure cancer-related proteins for its drug research. The access comes as part of BioScale’s beta release of its technology.

—Following last week’s talk of a potential acquisition of Genzyme by drug giant Sanofi-Aventis, Ryan asked readers to weigh in on how much they thought Cambridge-based Genzyme’s stock would be worth in a buyout. Their answers averaged out to $76.29 per share, for a total value of about $20.4 billion. That’s well above the $70 per share that the Sanofi (NYSE: SNY) board authorized the company to offer for Genzyme (NASDAQ: GENZ).

Comments | Reprints | Share:        
UNDERWRITERS AND PARTNERS
32 [1] => 30 ) 1 --> 18 [1] => 20 [2] => 18 [3] => 16 ) 1 --> 28 [1] => 26 [2] => 22 ) 1 --> 4 ) 1 --> 14 ) 1 -->
169 ) 1 --> 51 ) 1 --> 138 ) 1 --> 62 ) 1 --> 47 [1] => 43 [2] => 35 [3] => 39 [4] => 37 [5] => 340 [6] => 45 [7] => 41 ) 1 -->

cleantech, Biotech, Biofuels Luke Timmerman wrote:

LS9 is on a quest to make renewable fuel at $50 a barrel, and today it is revealing at least part of the scientific road map it’s been following to get there.

The South San Francisco-based biofuel company is reporting today that it has discovered novel genes from strains of cyanobacteria that are the basis for a one-step process that converts sugars into alkanes—the primary component of gasoline, diesel, and jet fuel. The discovery and methods used to find these genes are being disclosed online today in Science magazine.

The paper is an important step for LS9, which has already gotten its share of attention because of its ambitious science, prominent founders, big money backers, and the enormous societal problem it is seeking to solve. The company was founded in 2005 by UC Berkeley’s Jay Keasling, Chris Somerville of the Energy Biosciences Institute, and Harvard University’s George Church. LS9 has raised more than $45 million since its beginning from Flagship Ventures, Khosla Ventures and Lightspeed Ventures. The people and the money have rallied behind the idea of swapping a few enzymes inside bacteria so that instead of converting sugars into fatty acids, they could become super-efficient engines for converting sugars into fuels.

LS9 has talked generally about its concept before, but today’s paper in Science is the first to show in detail how a handful of people at the company actually identified the genes in publicly available databases. Competitors like Cambridge, MA-based Joule Biotechnologies and several academic labs have also been on the hunt for these genes, but LS9 says it was confident enough to lay out its scientific methods in a top journal because the patent applications have already been filed and it believes it owns the process.

“It’s a major achievement,” says Andreas Schirmer, the associate director of metabolic engineering at LS9, and the study’s lead author.

These are still very early days in the renewable fuel business, and LS9 has only performed small-scale runs with this process in 1,000-liter tanks at its South San Francisco-based facility. A much more important test for the business will come later this year, as it seeks to reproduce the same process at industrial-sized scale, as I described in a company profile last month. And this is far from the end of the road. LS9 is actively working now to better characterize and optimize the bacterial enzymes that are produced by the genes to create an ever-more efficient process that can really hum at commercial scale.

Cyanobacteria

But today’s news is about the science, so that’s what I asked Schirmer about the most. For more than two decades, scientists had sought to enable natural organisms to convert biomass into alkanes. There are examples in nature of organisms that can pull off this nifty trick in trace quantities, but nobody had been able to pinpoint the genes that carry the instructions for making enzymes that carry out that task.

The LS9 team benefitted from the era of genomics, in which scientists now have public access to vast databases of genome sequences for all sorts of species, including many different strains of cyanobacteria (also known as blue-green algae). The company’s scientists looked at some of these bacteria that made alkanes, and some that didn’t, and compared their genomes for differences. That helped narrow down the search for the right gene considerably, to make the experiments go quickly, Schirmer says.

In the end, LS9 identified two key enzymes at the heart of the process for creating alkanes. Once those enzymes were identified, it was really just the beginning. The bacteria strains …Next Page »

Comments | Reprints | Share:        

Life Sciences, deals, Big Pharma Ryan McBride wrote:

We asked our readers to chime in this week on the value of the venerable biotech Genzyme (NASDAQ:GENZ), which has reportedly become an acquisition target of the French drug giant Sanofi-Aventis (NYSE:SNY). Well, the results are in, but the question remains how our readers’ predicted price will match up with what Sanofi offers, and whether that offer will be enough to persuade the powers that be at Genzyme—especially company chief Henri Termeer—to sell.

Our readers sent in the Genzyme stock price that they felt best reflected the company’s value in a buyout, and the average price from our first 100 respondents was $76.29 per share. (See our graph below for a distribution of prices that people submitted.) Thus, our readers think that Genzyme, the world’s biggest maker of drugs for rare diseases, is worth about $20.4 billion. That’s a good deal more than the $70.24 price of Genzyme stock as of 10:31 am Eastern time today, and it might be more than Sanofi wants to part with to own the biotech company.

Sanofi’s board has authorized the company’s executives, led by CEO Chris Viehbacher, to formally offer up to $70 per share or $18.7 billion for Genzyme, Thomson Reuters reported this morning. If it were up to our readers, Genzyme’s Termeer will say “no thanks” to Sanofi’s offer. And according to a Bloomberg News report, Termeer already passed on an informal offer from Sanofi last week, and sources tell the news service that Genzyme is worth up to $22 billion or $80 per share in a takeover.

Genzyme, which had 2009 revenue of $4.5 billion, makes several high-margin drugs for rare illnesses like Gaucher’s and Fabry diseases that would make nice additions to almost any Big Pharma company’s menu of products. (Reports say that other potential Genzyme bidders include British drug behemoth GlaxoSmithKline (NYSE:GSK) and New Jersey-based Johnson & Johnson (NYSE:JNJ). On the other hand, Genzyme’s manufacturing woes in recent years, especially at its Allston Landing factory in Boston, present any prospective buyer with some unwanted baggage to inherit in a takeover. Genzyme already paid $175 million in fines to the FDA this year for messy drug-vial-filling operations in Allston, and the agency is threatening the firm with further expensive penalties if it doesn’t clean up its act.

After major shareholders complained about the company’s handling of the manufacturing problems, Genzyme cut deals with activist investors Ralph Whitworth and Carl Icahn this year. Whitworth and two Icahn associates have taken seats on Genzyme’s 13-member board of directors.

Very quickly, we will learn what the Genzyme board’s appetite is for selling the company. In most such cases, it all comes down to how much.

Comments | Reprints | Share:        

acquisitions, IT, Data Compression Erin Kutz wrote:

Storwize, a Marlborough, MA-based maker of technology for the real-time compression of data, has agreed to be acquired by IBM (NYSE: IBM). The companies did not reveal the financial terms of the deal, which is expected to close third quarter of this year, but previous press reports have priced the transaction in the neighborhood of $140 million. IBM says the Storwize technology will better enable it to help clients handle large amounts of data, for functions such as analytics. Storwize investors include Bessemer Venture Partners, Sequoia Capital, Tenaya Capital, Tamares Group, and Tokyo Electron Device Limited, according to the company’s website.

Comments | Reprints | Share:        

startups, deals, funding Erin Kutz wrote:

It wasn’t just temperatures that were heating up in Massachusetts in June. Venture investing in the Bay State’s tech and life sciences startups soared to $307.1 million, brought in through 31 equity-based deals.

For several months this spring, venture investing in the region hovered in the neighborhood of $200 million, according to data provided by our partner, private company intelligence platform CB Insights. A very small part of the increase in June is an artifact of a change in the way we’re putting the list together—we previously reserved the “under the radar” deals worth less than $1 million apiece for a separate list. But the inclusion of those smaller transactions only accounted for an additional $4.1 million and 7 deals.

The real boost came from some mega-deals that went to companies in sectors beyond healthcare—breaking another trend from the past few months, when life sciences companies usually nabbed the top funding spots on our monthly roundups. The big winner in June was Boston-Power, a Westborough, MA-based maker of advanced lithium-ion batteries. Greg reported on this growth equity Series E round when news of it first hit, noting that Boston-Power plans to use the money to expand into international markets, boost production of its battery technologies, and build up its Boston-Area presence. The company is in the early stages of a foray into the electric utility markets, with technologies out to store energy from renewable sources.

Boston-Power was the only company in the energy sector to attract funding last month, but the $60 million deal still made energy the runner-up industry for dollars raised in June. June’s energy investment was also a twenty-fold increase from the $3 million the sector raised in May. Healthcare topped the list for dollars raised by sector in June, with nearly $165 million brought in across 14 equity deals. Ryan wrote about the top healthcare deal in June, $29 million for Cambridge, MA-based FoldRx Pharmaceuticals, a drugmaker that’s soon to file for FDA approval of its first product, a treatment for the neural disease TTR amyloid polyneuropathy, which causes sufferers to lose control of movement in their arms and legs.

There were also a few interesting companies in the smaller deals section of the June investing list. There’s JamHub, a Whitinsville, MA-based startup that’s making what it calls a “silent rehearsal studio” and brought in a $370,000 equity deal last month. Users plug their instruments into the company’s device and can listen and jam out at top volume with their headphones on, while the rest of the world remains undisturbed by the volume that typically accompanies band rehearsals. Check out the demo here.

It seems that startup funding in June followed a trend that we’ve reported in other stories on venture investing in Q2 2010: the dollars are way up this year compared to last. This year’s June numbers are more than double the $145 million that Massachusetts startups pulled in during the same month of 2009.

See below for the full list of Massachusetts equity investments in June.

There were also another seven non-equity deals, that brought in $27.3 million in June. See below for the breakdown.

Comments | Reprints | Share:        

cleantech, Ventilation, IT Erin Kutz wrote:

Given that the air system at Xconomy’s offices seems noisy and erratic most days, I wasn’t that surprised to hear that most buildings are over-ventilated (a bit of information I picked up from Aircuity president and chief operating officer Rob Brierley).

But for businesses running their air systems on overload, this can be more than uncomfortable—it can be costly and harmful to the environment. That’s a problem that Newton, MA-based Aircuity is trying to fix with its ventilation control system, called OptiNet.

Aircuity’s system continuously monitors and samples air particles and sends them to a building’s data center via structured cables that keep the components of the air sampled intact. The data collected is designed to feed directly into systems, built by companies like Honeywell, that typically control ventilation in these large buildings. Based on how a sample matches up with the air quality settings the building system is programmed to meet, these systems can then more intelligently adjust their ventilation. It can also catch harmful levels of substances like carbon monoxide or organic compounds, helping facilities managers directly target the problems.

“We do with air packets what data networks do with data packets,” says Brierley, likening Aircuity’s system to how a data network packages different elements of data together to send them more efficiently to their designated targets. OptiNet tracks building air quality based on parameters like carbon dioxide and carbon monoxide content, dew point, particle content, and total volatile organics composition. Originally Aircuity shipped its technology in stand-alone units for remote sampling and air monitoring, but has since shifted to permanently installing the systems in buildings to interact with ventilation controls.

Aircuity targets customers with buildings whose conditions are continually changing throughout the day due to shifts in occupancy. Those fall into five categories: commercial office buildings, research facilities, hospital and healthcare settings, colleges and universities, and public assembly, which covers facilities like government buildings, conference centers, arenas, and museums. The Aircuity system has been implemented at roughly 120 sites, Brierley says. That includes Boston’s Beth Israel Deaconess Medical Center, and New York City’s Bank of America Tower, which has nabbed LEED platinum certification, the highest LEED green building rating based on environmental performance and sustainability.

The data monitored in buildings with the Aircuity system are uploaded via an Internet connection to a knowledge center, which Aircuity also monitors remotely for all of its customers, Brierley says. The building systems automatically adjust ventilation based on this data, but Aircuity tracks the information as an additional watch-dogging measure, Brierley says.

Typically, most of these buildings pump too much air through their vents because …Next Page »

Comments | Reprints | Share:        

Mobile, IT, ceos Erin Kutz wrote:

We tracked a duo of new CEO announcements today, both at companies in the mobile sector.

—Aylus Networks, a Westford, MA-based developer of technology to help mobile operators manage video data on their networks, announced Mark Edwards will be joining the company as CEO. Edwards comes from the helm of mobile device management software company Mformation Technologies. He replaces founder Shamim Naqvi, who will serve as chairman and chief technology officer at the startup, which raised $5.7 million in November.

—Waltham, MA-based Pyxis Mobile, a maker of enterprise platforms for managing mobile applications, said it is bringing on Steven Levy to take over the role of CEO from Bob Mazzarella, who will stay on as chairman of the company’s board. Previously, Levy co-founded and led Macgregor, a maker of order management systems.

Comments | Reprints | Share:        

Biotech, Genomics, people Daniel MacArthur wrote:

Last week’s U.S. House Energy and Commerce Committee hearing into the direct-to-consumer (DTC) genetic testing industry was a vicious affair, with more than a whiff of the show trial about it. Representatives from testing companies 23andMe, Navigenics and Pathway Genomics faced a barrage of questions about the accuracy and utility of their tests, made all the worse by the fact that most of the Committee’s members seemed unable to distinguish between the more responsible companies in the field and the scammers and bottom-feeders. (Lawyer Dan Vorhaus has a thorough summary of the hearing here.)

And the news for direct-to-consumer companies just kept getting grimmer: the star attraction of the hearing was a new report from a sting operation by the US Government Accountability Office, which detailed the results of anonymous purchases of kits from four DTC testing companies as well as assessments of marketing from 11 other companies approached by the GAO “both by phone and in person” without purchasing kits. While all the companies are listed as anonymous numbers in the report, the first four were revealed in the hearing as the four most prominent personal genomics companies: 23andMe, deCODEme, Pathway Genomics, and Navigenics. The remaining 11, which appear to mostly occupy a far less reputable corner of the industry, currently remain nameless.

The report details a litany of complaints—ranging from the flimsy to the serious—about the marketing, reporting and scientific basis for the companies’ operations. More damagingly, it also includes covertly taped conversations between GAO employees and several DTC companies, now published by the GAO on YouTube. In the tapes, a representative from one company (apparently Navigenics) offers terrible advice to a customer about the implications of breast cancer risk predictions, and a call center operator from another company (apparently Pathway Genomics) enthusiastically promotes non-consensual DNA testing for a customer’s fiance. The remaining companies on the tape, who offer a variety of scientifically bizarre claims to the undercover GAO operatives, aren’t members of the first four (reputable) testing companies, but rather of the still-anonymous 11.

There’s no denying it: the tapes are pure gold for the critics of the DTC testing industry. In the first and third clips, a couple of poorly-trained call center operators at otherwise reputable companies nonchalantly produce stakes that will now be driven into the heart of the DTC genetics industry, over and over again. The remaining three clips appear to depict scam operations—nothing like the products offered by 23andMe, deCODEme, Pathway or Navigenics—that will nonetheless be effectively conflated in the public mind with DTC genetic testing as a whole.

A one-sided attack

The report itself includes some nonsensical complaints. For instance, the fact that “one donor who had a pacemaker implanted 13 years ago to treat an irregular heartbeat was told that he was at decreased risk for developing such a condition.” The tests are clearly labelled as providing a probabilistic risk prediction, not a diagnosis. The GAO criticism is like claiming that the link between smoking and lung cancer is spurious because one individual with lung cancer never smoked.

Others criticisms are more justified. For instance, the differences in the risk predictions offered by different companies to the same individual is a problem that has been raised periodically since the industry’s inception. There’s a clear need for industry-wide standards for marker inclusion and background risk figures. This isn’t disputed by the companies themselves, who in fact have been pleading for the FDA and the NIH to provide official guidelines in these areas; nonetheless, the companies deserve a substantial share of the blame for not resolving these issues earlier.

But overall, the document is obscenely one-sided. It conflates responsible companies offering scientifically valid products with small-time con artists. It ignores …Next Page »

Comments (1) | Reprints | Share:        

funding, startups, Internet Erin Kutz wrote:

JAZD Markets, an Andover, MA-based startup developing an online business-to-business marketing platform powered by directories, has pulled in a $4 million equity round from four investors, according to an SEC filing. The company raised $8 million in equity-based funding in 2008, and its website names Commonwealth Capital Ventures and Pilot House Ventures as investors. The filing for the newest funding lists members of those firms as JAZD board members.

Comments | Reprints | Share:        

Life Sciences, startups, research tools Ryan McBride wrote:

Until recently, BioScale had operated out of the public eye for some eight years as it engineered a new way of measuring biological samples with sound wave technology. Now the Cambridge, MA-based startup has garnered some validation for its acoustic technology from a very visible player in biotech—Millennium, The Takeda Oncology Company.

Cambridge-based Millennium has used BioScale’s technology to measure cancer-related proteins for its drug research. While the results of the research have not been published, Millennium revealed in two posters at a recent science meeting that BioScale’s analyzers bested in a few ways the traditional Western blot method and Waltham, MA-based PerkinElmer’s (NYSE:PKI) AlphaScreen system in detecting specific proteins in tumor samples from cell cultures and mice. Millennium is the first group outside of BioScale to report such findings, says Mark Lundstrom, founder and chief executive of the startup.

The firm’s analyzers are designed to detect proteins in multiple types of samples, including blood, urine, and tissue, among others. In pharmaceutical research, measuring the presence of proteins in a sample can show whether a drug is hitting its molecular target. In diagnostics, the technology can be applied to tell whether a person has a virus or other molecular indicators of disease in their system.

The startup—which made its first public announcement last month about the closing of a $25 million Series C funding round—has made its technology available to Millennium and other top corporate and academic research groups as part of a beta release, Lundstrom says. The CEO says expects more studies involving the firm’s technology to be revealed in the coming months, though he wouldn’t say yet who else is using the technology.

At Millennium, researchers found that BioScale’s “Vibe” analyzers required fewer steps than a protein-measuring technique known as Western blot. Also, the acoustic analyzers provided measurements from complex tumor samples, which can often skew results when measured with optical systems. Millennium, which is a subsidiary of Japanese drug giant Takeda Pharmaceutical, tested the BioScale analyzers to measure two specific molecules: a DNA damage protein and a protein that helps tumors grow. In the DNA damage protein tests, Millennium found that BioScale’s results were devoid of the chemical and optical interferences it found in PerkinElmer’s optical system.

“When you look at the data that Millennium has put out, it basically concludes that …Next Page »

Comments | Reprints | Share:        

Roundup, deals, acquisitions Erin Kutz wrote:

Acquisitions were a big theme in the New England-area deal news this past week. We also saw several funding rounds and an intellectual property deal.

—Providence, RI-based Alektrona, a maker of smart-grid software and hardware, grabbed $250,000 in funding from the Slater Technology Fund, also of Providence. The money comes as part of a $510,000 seed funding round, which also included backing from NStar’s former chief information officer, Gene Zimon.

—Cara Therapeutics, a developer of treatments for pain and inflammation, raised $15 million in a Series D funding led by Rho Ventures. Alta Biopharma, Ascent Biomedical Ventures, CT Innovations, Devon Park BioVentures, Healthcare Private Equity, Mitsubishi International, and MVM Life Science Partners also participated in the financing for Shelton, CT-based Cara, which has now raised a total of around $43 million.

—Boston-based Gazelle, a website that facilitates the selling and recycling of used electronics, raised $12 million in a Series C funding round led by Physic Ventures. The financing also included Gazelle’s existing investors, Venrock Associates and RockPort Capital Partners. Gazelle says it will put the money toward scaling its businesses to meet new customer demand.

—Acton, MA-based Mintera, an optical-switch maker, was acquired by Oclaro, a San Jose, CA-based optical communications and laser technology firm, for $12 million in cash upfront. The deal could total $32 million if Mintera brings in revenues of $70 million over the next year and a half. Its revenue for the most recent fiscal year was in the neighborhood of $20 million.

—Euthymics Bioscience, a Cambridge, MA-based startup working on depression treatments that lack the side effects of many existing drugs, said it pulled in the first tranche of its Series A funding round, led by Novartis Venture Funds and Venture Investors. The financing could total …Next Page »

Comments | Reprints | Share:        

video games, startups, moves Erin Kutz wrote:

38 Studios, the Maynard, MA-based video game company started by former Red Sox pitcher Curt Schilling, has confirmed that it will be moving its headquarters to Rhode Island, according to a report in the Boston Globe. The gaming company attracted a $75 million loan guarantee from the Rhode Island Economic Development Corporation, and has said it will bring 450 direct jobs to the state by the end of 2012. We reported earlier in July that 38 Studios was considering the move, news that came a few months after Schilling urged the state of Massachusetts to offer more financial support to the video game industry. 38 Studios also made headlines late last week with the unveiling of its first video game product: a single-player game entitled “Kingdoms of Amalur: Reckoning.”

Comments | Reprints | Share:        

startups, Online Media, cleantech Gregory T. Huang wrote:

Everyone has their own green environmental “a-ha” moment. Maybe it’s seeing birds drowning in oil, or paying $4 a gallon for gas, or reading about the plastic trash heap the size of Texas swirling around in the Pacific Ocean. For Susan Hunt Stevens, it was discovering her young son had serious food and environmental allergies, which prompted her to examine which ingredients and toxins were causing the health problems.

Her discovery came back in 2007, and it roughly coincided with Stevens and her family moving into a 19th-century Victorian home outside of Boston. So, in part to create a better living environment for her family, she decided to do a major “green renovation.” This effort has included generating electricity from waste energy (boiled water), using light-emitting diodes and compact fluorescent lamps for lighting, buying energy-saving appliances and plywood cabinetry made without formaldehyde glues, insulating the roof with healthy spray foam, installing bamboo shades and cork floors, using low-flow faucets and toilets, composting kitchen waste, and so on.

Along the way, Stevens decided to blog about the experience. She knows a thing or two about online media and consumer marketing, having been a longtime senior executive with The New York Times and Boston Globe, where she oversaw the news site Boston.com, among other things. [Disclosure: Stevens joined Xconomy’s board of directors last month---Eds.]

But when she originally started blogging about green issues, she got questions from readers about the industry that she couldn’t answer. That started her on the road to taking classes at the Boston Architectural College, where she learned cutting-edge green design.

Stevens is now the founder and CEO of Practically Green, a stealthy Web startup based in Boston that combines many of the things she has done in her career. I sat down with her last week to talk about the company and its significance to green sustainability issues, online business models, and technology trends like social networking and videogame mechanics.

The first thing to know about Practically Green is that it’s not just another “green content” site, or how-to blog about sustainability and the environment. Instead, think of it as being like Foursquare or FarmVille for the green lifestyle, mixed with WeightWatchers.com in terms of accessibility and support networks. And throw in a little Amazon.com and TripAdvisor for consumer reviews and e-commerce. The site uses social networks, gaming mechanics, and expert content to help consumers figure out “how green” they are, find reputable green products and services, and connect with other like-minded people so as to stay motivated to live a greener lifestyle. The big idea is to help consumers lead healthier lives, while also aiding the environment—and saving on their electric bill.

It’s also an intriguing example of the “gamification” trend we’ve been reporting on lately, whereby consumer websites and companies are trying to boost traffic, engagement, and customer loyalty …Next Page »

Comments | Reprints | Share:        

Life Sciences, DNA, startups Ryan McBride wrote:

Roopom Banerjee, the chief executive of genomic research tool maker RainDance Technologies, is aware of the criticisms facing genomics. “There’s been a lot of talk recently about how productive has the Human Genome Project really been in terms of delivering on the promise of personalized medicine,” he says.

RainDance is helping scientists conquer part of this major challenge and question in disease research: Now that we’re able to map our DNA quickly and cheaply, how do we use these vast stockpiles of genomic data to actually improve our health? The company bridges part of this gap by giving researchers the tools to rapidly perform experiments of specific genes, helping them figure out how those genes affect a variety of diseases. This could expedite the development of treatments and diagnostics personalized to individuals’ specific genetic makeup.

The Lexington, MA-based company launched its first commercial product—a system that can conduct thousands of DNA experiments every second, contained in ultra-tiny fluid droplets—in April 2009. And it’s already found an audience for the system, called the “RDT 1000,” at major research hubs such as Memorial Sloan-Kettering Cancer Center and The Rockefeller University as well as at big drug companies like Paris-based Sanofi-Aventis.

RainDance’s micro-droplet technology is helping researchers at these institutions do what is known as targeted genetic sequencing, which involves studying specific genes within the vast genome to better understand specific illnesses such as cancer, rare diseases, autoimmune disorders, and other ailments. It’s also making these studies—which amplify specified genes using a tried and true technology known as polymerase chain reaction, or PCR—faster and cheaper than previous processes by orders of magnitude.

“In the space that a customer would traditionally do one or 96 samples of PCR, we do …Next Page »

Comments | Reprints | Share:        

X Factor, VC, people Robert Buderi wrote:

Every venture capital firm and every venture capitalist touts itself/herself/himself as adding value to the entrepreneur’s quest to build great companies. But when it comes to backing up that talk with action, few venture capitalists have the track record of Henry McCance, now chairman emeritus of Greylock Partners.

I recently visited McCance in the firm’s Harvard Square offices. Yesterday, I reported on Greylock’s origins and legacy, and McCance’s views of why the firm moved its headquarters to California and what New England can do to reclaim a greater portion of the center of startup gravity. The legendary investor was objective in his assessment that New England lost its edge with the setting of the minicomputer sun some 25 years ago, but he doesn’t think the situation is irreversible. Harvard and MIT aren’t going away, he says, and a new wave of startup energy in emerging areas such as cleantech might change the game.

Whether we’re talking about a New England resurgence, or generally raising the odds for startups to grow and become successful and boost the economy wherever they may be, VCs, of course, can help—by investing in the right firms and people and providing great connections and guidance. And a big part of my conversation—and follow-up e-mails—with McCance was about what makes a great VC. In straightforward fashion, he laid out four criteria or elements. I thought they might be of great interest to other VCs, but especially to entrepreneurs looking for investors.

1) Find the Visionaries—The best VCs are not reactive, McCance says. “They instead are proactive.” That means they proactively identify and recruit the visionaries in emerging fields. “We want to work with the best entrepreneurs on the ideas they are most passionate about. That’s how you get the great talent,” McCance says. One quick example he gave involved pioneering biotechnology firm Genetics Institute, which was formed in 1980. “We realized in the late 1970s that a new industry called biotechnology was going to be created on top of important advancements coming out of academic research in chemistry and biology,” says McCance. “This was going to enable new approaches to drug development, which before then had been very much a trial and error approach at ‘big pharma.’ Mark Ptashne and Tom Maniatis were world-class Harvard scientists with an entrepreneurial itch. Walter Cabot, the chairman of Harvard Management, had recently invested in Greylock and wanted to be sure Harvard’s key, but perhaps naïve, scientists were in good hands, therefore he steered them towards Greylock. I believe J.H. Whitney and Venrock were our partners. Kleiner Perkins funded Genentech at about the same time, and Amgen was founded a year later. All three companies had their pick of the best and brightest researchers coming out of Harvard, M.I.T., Stanford, Caltech, and UCLA, because there was an exciting, free form, entrepreneurial research environment that big pharma could not replicate.”

Henry McCance

2) Support the Visionaries With Top Executive Leadership—Visionaries, and you have heard this before, are great at identifying and pursuing a big view of the world and how it will change, but sometimes they are not so good at going to market. VCs must be able to step in and constructively find executive leadership for a firm that complements the visionary’s strengths. In the case of Genetics Institute, says McCance, “Greylock identified Gabe Schmergel, through a recommendation from another Greylock portfolio company CEO, to become Genetics Institute’s first and only CEO. Gabe was a graduate of Harvard Business School, and a fast-rising executive at Baxter International.”

3) Instill a Culture of Frugality-– “We initiate a culture of frugality” to take “the money as far as we can,” says McCance. This is especially true early on in a startup’s life. “We try to keep the burn rate low in the early years of a venture when the cost of capital is highest. Hopefully, enough milestones or progress will be met with a Series A financing that follow-on rounds of capital can be raised at significantly higher valuations. However, again luck is involved, and market conditions can be favorable (as they were for Genetics Institute, permitting an IPO in 1984) or unfavorable, as they are now.”

4) Dare to be Great—”The fourth and very important things successful VCs and entrepreneurs do is, ‘Dare to be great,’” says McCance. “To me that means that successful new businesses will not …Next Page »

Comments (1) | Reprints | Share:        

aerospace, startups, Transportation Wade Roush wrote:

A future replete with flying cars inched a bit closer today. At the AirVenture air show in Oshkosh, WI, aerospace startup Terrafugia of Woburn, MA, took the wraps off the latest prototype for its Transition “roadable aircraft,” which has folding wings that make the vehicle compact enough to drive right off the tarmac and onto the street.

The new design, a scale model of which was unveiled at AirVenture, moves Terrafugia one step closer to actually manufacturing and selling its radical street-legal airplane. The four-year-old company, which raised $2 million in Series B funding in May, had always described its first aircraft—successfully flight-tested in March 2009—as the proof-of-concept version. The version shown today is a “beta prototype” that incorporates modifications based on lessons learned during last year’s test flights.

The beta version looks similar to the first prototype overall, though it bears distinctive blue racing stripes along the sides and wings. (Click on the images in this story to see larger versions.) The craft has a somewhat narrower wingspan than the proof-of-concept vehicle (26.5 feet as opposed to 27.5 feet) but is slightly heavier (1430 pounds at takeoff, versus 1320 for the original version). Given the extra weight, the new craft will burn 5 gallons of fuel per hour at cruising speed, an increase from the first prototype’s 4.5 gallons per hour.

Perhaps most important, the new design features an “improved wing with an optimized airfoil,” according to the company’s announcement, as well as automotive-style crash safety features such as an impact-absorbing nose structure and a rigid safety cage. There’s a new touch-screen interface in the cockpit, and independent suspension in the wheels for smoother driving.

There’s no word yet on how soon a flyable version of Terrafugia’s beta prototype will be finished, or when it will be tested, or how soon a third, production version of the craft might be ready. Founder and CEO Carl Dietrich said after last year’s maiden flight that the company planned to deliver its first production vehicles in 2011.

The Transition is designed to be flown by pilots with a new class of pilot’s credential known as a Sport Pilot license, obtainable after as little as 20 hours of flight time. Prospective buyers can reserve a Terrafugia vehicle for a refundable deposit of $10,000. As of the March 2009 test flight, more than 40 people had put down deposits.

Comments | Reprints | Share:        

M&A, deals, Biotech Ryan McBride wrote:

Speculation has erupted over the potential outcome of reported M&A talks between the Cambridge, MA-based biotech powerhouse Genzyme (NASDAQ:GENZ) and the French drug giant Sanofi-Aventis (NYSE:SNY). While biotech watchers salivate over the potential sale of Genzyme, we thought it would be interesting to hear from you about what you think the company is worth.

Frenzied trading of Genzyme’s stock last Friday—after the Wall Street Journal reported that Sanofi had made informal overtures to acquire the world’s largest maker of rare disease drugs—pushed Genzyme’s price up about 15 percent for the day. The stock was quoted at $67.07 per share as of 12:01 pm Eastern time today, giving the firm a market cap of just shy of $17.9 billion. If a sale does occur, according to Boston-based investment banking and equities research firm Leerink Swann, Genzyme is likely to fetch a share price somewhere in the mid-$70s range or higher. However, Milwaukee, WI-based investment firm Robert W. Baird & Company said in a note to investors last week that it’s sticking to a previous estimated buyout price in the low-to-mid-$60s per share that it made in February.

There are many factors to consider when estimating Genzyme’s potential value in a buyout. But there are a couple of big considerations. Big Pharma players like Sanofi are hungry for more drugs to sell as their legacy products lose patent protection. As the WSJ reported today, British drug giant GlaxoSmithKline (NYSE:GSK) and New Jersey-based Johnson & Johnson (NYSE:JNJ) are also potential suitors. So there’s a chance that a bidding war among potential buyers could increase the price of Genzyme. Also, Genzyme specializes in making complex therapies for rare illnesses that are more difficult for generic drugmakers to copy than conventional small-molecule drugs.

On the down side, Genzyme has been plagued with manufacturing woes over the past year or so. Its Allston, MA, drug plant shut down last June after a virus was discovered in one of its bioreactors there, causing shortages of its two best-selling drugs. This spring the FDA whacked Genzyme with $175 million fine for deficient operations for filling drug vials in Allston, and the company faces further hefty fines if it doesn’t meet certain deadlines for moving those filling operations from Allston to other facilities. And persistent shortages of its key products made in Allston have caused a dip in sales, prompting Genzyme to forecast its 2010 annual revenue to be $4.4 billion, down from $4.5 billion last year.

Still, Genzyme has more products in its pipeline that could help increase its upside. The company is in late-stage testing of alemtuzumab (Campath) for multiple sclerosis, which the company has characterized as its most important development program. Plus, it’s also got a diverse range of products for the cancer, renal health, and diagnostics markets, to name a few.

So what’s all this worth in your estimation? Give us your best guess of Genzyme’s potential sale price below, and we’ll post later this week to reveal what our readers think the biotech giant would fetch in a buyout deal.

View Survey

Comments (1) | Reprints | Share:        

cleantech, China, startups Jon Karlen wrote:

If we’re not careful…China’s going to eat our lunch in cleantech.

This was the overwhelming feeling I was left mulling over during my return flight from China last week. I had a great trip, visiting Beijing, Tianjin, Suzhou, and Shanghai over five days as I looked at some new investment opportunities. It was a lot of fun—and I was really impressed by the alignment of government policy and startup-driven innovation that have China poised to lead the world in a number of important cleantech markets.

At this point a Tom Friedman-esque rant on U.S. ineptitude comes naturally—but in this blog post I will instead focus on what China is doing really well right now:

Investment in infrastructure. Many of the big cleantech markets of the future—smart grid, vehicle electrification, distributed renewable generation—require big-time infrastructure investment, and the pace of investment in China right now is astounding. Whether it’s the “mag-lev” train to Pudong airport, the state-of-the-art regional technology centers, the Olympic Stadiums (Bird’s Nest, Water Cube), or just simply the hundreds of cranes and bulldozers you see during the course of a morning commute, the government’s capacity to invest in critical infrastructure is mind-boggling. In a world where the developed western world is debt-laden, this is a major advantage, and China’s government has proven its ability to swiftly make bold investment decisions.

Government’s strategic focus and resolve. China is determined to become the world’s leader in energy and clean technology. And unlike a western democracy, when China President Hu Jintao makes up his mind, action follows quickly. I was struck by examples of this routinely on my trip, but two examples really hit home for me:

• Vehicle electrification: China has announced its 20-city electric bus program, whereby 20 leading cities will have 1,000 EV buses on the road by 2012. It turns out this is a very shrewd initiative. The key to the EV market is gaining real-world experience—ie miles logged—with vehicles on the road. Buses average 16 hrs/day and maybe 100 miles/day, versus 20-40 miles/day for a car—and with a bus it is easy to collect the actual drive-cycle data from a single owner/transit authority. Therefore, going “buses first” makes a lot of sense. And it’s not like the China bus market is small: by 2012, buses sold in China could exceed 200-300 MWH of aggregate battery capacity, which is roughly the equivalent of the aggregate battery capacity of Toyota Priuses sold in the U.S. in 2009.

• Carbon trading: Though cap-and-trade legislation passed the U.S. House of Representatives in June 2009, and the Obama administration supports the initiative, just this week the U.S. Senate gave up climate legislation in favor of a narrower energy bill. Meanwhile, China moved swiftly into action following the talks at Copenhagen, and on Friday morning I read the announcement of China’s rollout of a cap-and-trade system. What is amazing is that China took this step even though, as a developing country, China will not be subject to the same stringent carbon emissions caps as developed countries, even if/when an agreement is finally reached at a successor event to the failed Copenhagen summit last December. China’s utilities and heavy industry will be poised to succeed in what will inevitably become a carbon-constrained world in the future.

Culture of entrepreneurship. I had expected to find a layer of bureaucracy and red tape in the way of entrepreneurs in China, whereby startups wait for earmarks and other subsidies to determine a market’s winners and losers. I found just the opposite. I found myself feeling very comfortable in meetings with Chinese entrepreneurs and industry executives, as the ways in which they communicated (even if at times in Mandarin!) were very familiar to me. People were direct and transparent, and there was an informality that any entrepreneur in the U.S. would instantly recognize as an important part of successful startup culture. One of my mentors in the venture business once told me, “I can’t list out all the necessary and sufficient attributes of a great entrepreneurs, but I know it when I see it.” I agree that great entrepreneurs share a certain je ne sais quoi—and I saw more of it in China this week than in any of my trips to Japan or Western Europe.

All in all, it was a fun week in China and I was deeply impressed by the pace and breadth of innovation. There is no doubt that the U.S. remains in a class by itself in terms of fundamental research and “ideation,” but the winners in cleantech will ultimately be those that ride aggressively down the experience curve and deliver the best value over the long-term. The experience curve in cleantech is influenced by government policy in ways to which U.S. entrepreneurs are not accustomed, and this is where China is determined to lead.

[Editor's note: This article also appears, in slightly different form, on Jon Karlen's blog, Venturing Forth.]

Comments | Reprints | Share: