Thursday, April 10, 2008

VU takes company's liquidation in stride

"This is a high-risk business," said Vanderbilt Tech Transfer & Enterprise Development Director Chris McKinney (at left), as he responded to our questions about the ongoing liquidation of one of his VU-portfolio companies. The assets of ActivBiotics Inc., based in Lexington, Mass., went on the auction block soon after the company's prize Refalazil failed in clinical trials to produce benefits for patients with peripheral arterial disease. The company had raised more than $100 million in capital, and 18 months ago had planned an IPO, before the market deteriorated. Last week, a fiduciary announced sale of ActivBiotics' IP for $3.5 million. Fully 21 companies remain active in the VU TTED collection -- including 10 in the Nashville area and 1 each in Knoxville and Memphis. Of the ventures, 15 have direct healthcare or life sciences ties. (TTED's IP licensing generated $8.4 million in FY 2007, after six consecutive years of increase. McKinney would not provide revenue from equity sales, if any, and he was uncertain how many ventures may have exited the portfolio in recent years through failure or sale.) Little is known publicly about most of the portfolio companies. We do know that Pathfinder Therapeutics and Universal Robotics continue to attract investment, and Informatics Corporation of America (ICA) on West End is making steady progress, backed by VU's patient capital. Then there's pesticide engineer TyraTech -- a publicly traded UK company, with virtually all its assets in the U.S. and roughly 23 percent owned by VU -- which seems to be in no trouble, at all, despite losing $16.5 million pre-tax last year. (An earlier TyraTech document is slightly outdated, but interesting.) Note: TyraTech Chief Science Officer Essam Enan is Vanderbilt faculty, and the company is considering, at least casually, Nashville and Research Triangle Park for a possible relocation of its U.S. headquarters, now in Melbourne, Fla. There are, no doubt, many "lessons learned" among VU's portfolio companies -- and the same could be said about the holdings of such VCs as Council Ventures. See their 10 companies here.

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