VENTURE CAPITAL FUNDS ANNUAL REPORT JULY 2002
MARYLANDMARYLAND DEPARTMENT OF BUSINESS AND ECONOMIC DEVELOPMENT TABLE OF CONTENTS
The Year in Review ...... 1
Investment Financing Appropriations ...... 4
Enterprise Investment Fund Description ...... 5 STATE OF MARYLAND Performance ...... 5 Fair Market Value ...... 6 VENTURE CAPITAL FUNDS Company Overviews ...... 8
Challenge Investment Fund Description ...... 47 Performance ...... 48 Program Recipients ...... 49 Annual Report June 30, 2002 Enterprise VCLP Fund ...... 66
Other Initiatives ...... 67
Published by Department of Business and Economic Development THE YEAR IN REVIEW
Director’s Message
As my first full year in the position of Director of the Investment Financing Group comes to an end, I would like to take you through some of the highlights of the many new exciting changes made, challenges faced and goals achieved over this past fiscal year.
Since its formal inception in 1994, an elite, but small group of highly qualified individuals, whose back- grounds are primarily in the private sector, has staffed the IFG. During this fiscal year we were finally able to bring staffing levels up to par with the flow of applications we had been receiving. Thus we were able to provide a greater level of due diligence on business plans and develop a more methodical approach to our decision making process.
Over the past year the IFG invested $8.0 million in 33 separate companies. Roughly half of these compa- nies were representative of the life sciences sector and the other half in information technologies, primarily software companies. Of the 16 Enterprise investments made, four had also received Challenge funding dur- ing the fiscal year. We made Challenge investments in 21 individual companies during the year. (See Page 4)
The Program has now invested in over 170 businesses with proprietary technologies. Of those companies, over 75 percent have remained in business for more than five years. This is truly an exceptional track record given the nature of this type of investing.
2002 Highlights
Some highlights from our portfolio companies for the year are as follows:
October 2001 and March 2002 - MetaMorphix announced and finalized an agreement to purchase the AgGen division of Celera, Inc. in exchange for $30 million in stock. Although no independent third party ver- ification has been made regarding this valuation, DBED believes that this announcement has increased the value of its investment.
October/November 2001 - DBED liquidated its position in Meridian Medical Technologies. The investment, made in fiscal year 1997, yielded a payout of $544,149 on a total investment of $289,930.
November 2001 - Avalon Pharmaceuticals was able to attract $70 million in a B Round of financing. DBED was able to participate in this round and has seen a modest increase in value of its investment.
November 2001 - Deloitte & Touche Technology Fast 500 named Advertising.com, a Rising Star in the ranking of the fastest-growing technology companies in the United States and Canada. Ranked fourth among the 25 Rising Star winners, Advertising.com’s revenues have increased over 74,000 percent since the company's inception in 1998.
December 2001 - Ernst & Young, in conjunction with MdBIO, delivered their report on the state of venture capital investing in the Life Sciences sector. The report bore out already understood characteristics in the
Maryland Department of Business & Economic Development 1 THE YEAR IN REVIEW THE YEAR IN REVIEW
market place that indicate a dearth of private investment in life sciences companies seeking funding in the As of June 30, 2002, DBED’s positions in these investments have become liquid. However, given the current $2 million - $10 million range. The report’s recommendation was for the State to invest monies in a private under-valued status of our positions, we believe that it is in the best interests of the state to hold these venture capital firm focused solely on life sciences companies in Maryland seeking this type of funding. equities until such a time as the markets begin to exhibit strength. Management will review on an ongoing basis and make determinations as to whether to liquidate or retain positions in these companies based on February 2002 and May 2002 – The Investment Financing Group sponsored two investment forums for its market conditions. portfolio companies. The Challenge Investment Forum, held in February, included technology companies seeking additional angel investment. In May, the IFG sponsored its second Annual Early Stage Bio Venture Looking Forward Forum. Biotech companies seeking angel or venture capital funding presented. As in the past, IFG will continue to focus on the earliest of early-stage companies. We remain committed to February 2002 – During budget hearings concerning appropriations for programs within the Department of the essence of the program developed by our predecessors and trust in our abilities to seek out the best Business & Economic Development, Secretary David S. Iannucci recognized the critical role the Investment emerging technology companies in the state of Maryland and invest in them. Financing Program plays in the growth and development of the State’s economy by investing in early-stage technology companies. As always, we will continue to focus on making investments in companies that exhibit strong intellectual capital, as evidenced by patents (or by those pending) and by proprietary positions that pose barriers to March 2002 – Neoreach, a Challenge Investment company, merged with Mobilepro Corp. (OTC-BB-MOBL), entry. We will also continue to evaluate companies based on the following characteristics: creativity, defen- a developer of mobile information solutions for business-to-business communications. The transaction sible markets, liquidity, management, proprietary advantage and scalability. resulted in the exchange of thirteen million shares of the capital stock of Neoreach for thirteen million shares of the common stock of Mobilepro on a one-to-one basis. Neoreach continues to exist and operate as During the next fiscal year it is expected that the year will begin slowly as the private markets exhibit a a wholly owned subsidiary of Mobilepro. seasonal slowdown in the months of July and August. However, after Labor Day, business will return to normal with an influx of business plans and venture capital activity. April 2002 -The Technology Council of Maryland announced 20/20 GeneSystems, Inc. as the recipient of the Bioscience Product of the Year award for its Multi-blot kit for protein gels. Through the balance of the fiscal year, it is our expectation that the quality of business plans will remain high and all of the fiscal year 2003 appropriation will be encumbered and only the most compelling of busi- April 2002 - Cylex received FDA approval for their assay for use in monitoring immune suppression in organ ness models will obtain state investment funding. transplant patients. We will also face the ongoing challenge of marketing companies deserving of funding to the private venture May 2002 - The Mid-Atlantic Venture Association’s, Capital Connections 2002, accepted 15 IFG portfolio capital community. With the migration of private venture capital firms away from seed stage investing, we companies among its 50 presenting companies (30 percent). In this region’s premiere venture capital event will continue to develop relationships with firms that offer not only funding but management expertise and IFG’s programs garnered a tremendous amount of positive publicity. coaching, to guide these embryonic companies through this very challenging economic climate.
June 2002 - The Maryland Incubator of the Year Awards honored seven companies, four of which have And as always, we expect to persevere, and continue to fulfill our mission of seeding the market with some received Challenge investments, with one company also receiving Enterprise funding. The four companies of the best and most exciting technology that Maryland has to offer. It is our hope that the companies we and respective awards are: Reactive Nanotechnologies for Most Promising Tech Transfer; Chesapeake invested in during this past fiscal year will yield some of the best investments made in the history of our PERL for Biotech/Life Science; Agentsmith for Information Technology; and In Vitro Technologies for programs. Graduating Incubator Company. We hope that we can say that again next year as we enter our 10th year as one of the country’s premiere June 2002 - Chesapeake PERL gained national recognition when Fortune Magazine published its Cool state funding programs for seed stage venture capital investing. Companies 2002. Fortune Magazine selected PERL as one the nation’s coolest biotech companies for its pro- tein larvae manufacturing process. Best Regards, Equity Positions Tom Bodnar, Director DBED currently holds equity positions in three publicly traded companies: ID Biomedical, Immersion, Inc. Investment Financing Group and Hoovers. These are successors to HT Medical Systems, Intellivax and Knowledge Link, respectively. Maryland Department of Business & Economic Development
2 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 3 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW INVESTMENT FINANCING APPROPRIATION - FY 2002 Description Enterprise Investment Fund Commitments
Agentsmith Baltimore City $ 300,000 This is truly a State-sponsored venture capital fund, whereby the State/DBED makes equity invest- Aptus Pharmaceuticals Montgomery $ 500,000 ments in early-stage, high technology firms who are seeking initial infusions of private equity, usually Artifact Software Baltimore City $ 200,000 in the $2 million to $10 million ranges. The legislation limits the State’s total equity share in any given Atto Bioscience Montgomery $ 500,000 firm to 25 percent. The Enterprise Investment Fund requires a 3:1 outside investor co-match through a BioSET Prince Georges $ 250,000 sophisticated investor (a proven venture capital firm, a corporate strategic partner and/or a proven angel Bluefire Security Tech Baltimore County $ 400,000 investor). The interpretation of the term “sophisticated” would be at the sole discretion of DBED’s Chesapeake PERL Prince Georges $ 350,000 Investment Financing Group. CodeRyte Montgomery $ 225,000 Functional Genetics Montgomery $ 250,000 MaxCyte Montgomery $ 200,000 The program also provides funds in the amount of $150,000 to $500,000 to be made in any given invest- Navtrak Wicomico $ 350,000 ment. As an independent control mechanism for this investment initiative, an outside Advisory Board Paratek Howard $ 350,000 comprised of nine members has been established to review these investments. The terms of DBED’s Platform Logic Howard $ 500,000 investment are for a maximum of 15 years and DBED requires the firm to retain its principal place of Sequella Montgomery $ 500,000 business within the State of Maryland for a period of five years. In the event the firm moves outside the Sourcefire Howard $ 550,000 State, the agreement states that DBED has a put to the firm that they repay the investment at cost plus Yafo Networks Anne Arundel $ 250,000 10 percent, or fair market value, whichever is higher. Total $5,675,000
Challenge Investment Program Commitments
20/20 GeneSystems (2) Montgomery $ 100,000 Performance Agentsmith (3) Baltimore City $ 125,000 Artifact Software Baltimore City $ 100,000 The Enterprise Investment Fund has completed equity investments into 52 individual firms. The cost bConvergent Montgomery $ 50,000 basis of these investments thus far has been $19.2 million since January 1, 1994. The program gener- BioMat Sciences (2) Montgomery $ 100,000 ated in excess of $47 million as a result of the Visual Networks and Gene Logic stock sales. As of this Bluefire Security Tech Baltimore County $ 50,000 writing, four firms have gone public and five have been acquired by either a publicly traded firm or a Business Devices Howard $ 50,000 larger privately held firm. Additionally, one venture liquidated its assets. DVIP Multimedia Inc. Montgomery $ 100,000 EKA Systems (2) Montgomery $ 100,000 The Investment Financing Group has exited via the sale of held securities in all four public issues and Grey Pilgrim (2) Montgomery $ 150,000 two of the five acquisitions. Through June 30, 2002 DBED has realized $48 million in proceeds to be Harta Instruments Montgomery $ 50,000 reapplied to the Enterprise Investment Fund. Based on general guidelines used by other venture capi- Infinity Pharmaceuticals Montgomery $ 50,000 Ipsil (2) Montgomery $ 150,000 tal firms, the fair market value for the balance of DBED’s holdings is approximately $16 million, bring- LearnScape Prince Georges $ 50,000 ing the total fair market value of the individual company investments to approximately $64 million as Metastatin Montgomery $ 50,000 of June 30, 2002. The internal rate of return for the Enterprise Investment Fund from inception through Netta Systems Howard $ 50,000 June 30, 2002 was 32 percent annually. New Hope Pharmaceuticals Montgomery $ 50,000 Phoenix S&T Technologies (3) Cecil $ 150,000 The following descriptions of the Enterprise Investment Fund recipients were provided by the company. Platform Logic Howard $ 100,000 Plethora Technologies (2) Howard $ 100,000 Reactive NanoTechnologies Baltimore City $ 100,000 SubTotal $1,825,000 Dingman Center for Entrepreneurship Prince Georges $ 500,000 Total $ 2,325,000
Total for Enterprise & Challenge Commitments $ 8,000,000
(#) - Denotes number of investments made during fiscal year.
4 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 5 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
FAIR MARKET VALUE (FMV) SUMMARY, June 30, 2002 FAIR MARKET VALUE (FMV) SUMMARY, June 30, 2002 (con’t) (unless otherwise specified) (unless otherwise specified)
Company Investment Investment Realized Status # of Market Company Investment Investment Realized Status # of Amount of Date ($) Value ($) Employees Capitalization Date ($) Value ($) Employees Capital Investment eVIN, Inc. (formerly VinNet, Inc.) 01/16/97 250,000 36,447 Sold 5 - MetaMorphix, Inc. 12/27/96 500,000 1,050,000 Private 15 32,000,000 Gene Logic, Inc. 4/17/96 500,000 17,169,307 Sold 226 394,400,000 Navtrak 06/30/02 350,000 350,000 Private 32 5,000,000 Guilford Pharmaceuticals, Inc. 05/11/94 250,000 536,092 Sold 254 280,200,000 Neuralstem Biopharmaceuticals 08/14/00 500,000 400,767 Private 4 19,999,998
Hoover’s (aka KnowledgeLink)* 6/23/98 550,000 324,205 Public 268 69,300,000 Nextone Communications* 03/10/99 200,000 85,072 Private 20 17,920,000
Immersion, Inc. (aka HT Medical Systems, Inc.)* 11/15/95 250,000 262,833 Public 162 74,900,000 Osiris Therapeutics, Inc. 09/22/94 500,000 104,160 Private 80 9,258,667
ID Biomedical (aka Intellivax, Inc.)* 02/22/97 300,000 294,808 Public 80 150,100,000 Panacos Pharmaceuticals, Inc. 12/29/00 250,000 250,000 Private 18 8,000,000 Meridian Medical Technologies 02/20/96 289,930 544,149 Sold 339 71,300,000 Paratek Microwave* (1) 03/19/02 575,000 475,893 Private 74 35,000,000
NetBalance, Inc. (formerly NetSolv) 3/26/97 250,000 22,948 Liquidated 0 - PEM Technologies 12/06/01 250,000 250,000 Private 7 2,200,000 NewComm Net 04/16/99 499,999 566,666 Sold 47 - Platform Logic, Inc.* (1) 05/21/02 350,000 350,000 Private 12 2,500,000 Visual Networks, Inc. 11/02/94 250,000 28,133,879 Sold 325 127,500,000 Psychiatric Genomics, Inc. 11/08/01 500,000 500,000 Private 30 22,000,000 Sub Total 3,389,929 47,891,334 1,706 1,167,700,000 QRSI 03/14/97 250,000 - Private 0 6,000,000
RF Technologies, Inc.* 07/29/99 249,990 270,612 Private 5 1,500,000 Advanced Bio Nutrition (ABN - ex-Martek) 10/16/01 250,000 250,000 Private 6 2,000,000 Sequella (1) 03/19/02 500,000 500,000 Private 13 3,000,000 Advertising.com (TeknoSurf.com) 03/06/00 499,991 1,221,005 Private 155 70,000,000 Solution Technology International, Inc.* 03/13/00 350,000 350,000 Private 9 3,500,000 Antaeus Group* 12/10/96 250,000 250,000 Private 14 2,000,000 Sourcefire, Inc. 02/01/02 550,000 550,000 Private 28 7,500,000 Artifact Software* (1) 06/18/02 300,000 300,000 Private 10 3,300,000 The Technology Group 10/22/98 249,999 - Private 0 5,000,000 Atto Biosciences 05/31/02 500,000 500,000 Private 39 4,825,000 Vapotherm, Inc.* 07/20/01 250,000 250,000 Private 10 1,750,000 Avalon Pharmaceuticals 10/15/01 500,001 690,951 Private 57 80,000,000 Wisor Telecom* 03/22/00 400,004 785,187 Private 35 20,000,000 BioSET 05/01/02 250,000 250,000 Private 7 2,990,000 Xspeedium.com, Inc. (Bond Systems)* 03/25/99 250,000 - Private 0 7,500,000 Biosynexus, Inc. 12/29/99 500,000 1,106,250 Private 34 15,000,000 Yafo Networks 04/22/02 250,000 250,000 Private 36 61,000,000 Bluefire Security Technologies*(1) 03/28/02 450,000 450,000 Private 3 7,000,000 Sub Total $ 15,849,990 $ 16,116,376 871 $ 523,528,665 Chesapeake PERL* 11/19/01 500,000 500,000 Private 8 1,750,000 Total $ 19,239,919 $ 64,007,710 2,577 $1,691,228,665 Claragen, Inc. 08/15/00 425,005 425,006 Private 6 4,000,000
CodeRyte (1) 06/18/02 225,000 225,000 Private 7 2,500,000 CyberSystem Technologies, Inc. 02/10/98 250,000 - Private 0 4,000,000 Overall Rate of Return 332.68% Cylex Inc. (Biotechnology Transfer)* 11/26/01 575,000 599,000 Private 18 6,100,000 Annual Rate of Return 32.17% Private 12 1,500,000 CytImmune Sciences, Inc. 03/25/97 300,000 300,000 Leverage Multiple 88.01x FASgen, Inc 12/29/00 500,000 500,000 Private 4 3,000,000 Women/Minority Percentage 25.00% Functional Genetics, Inc. (1) 12/18/00 750,000 750,000 Private 19 10,000,000 * - Graduated from Challenge Program 34.62%
Healthware Solutions International 11/12/94 250,000 - Private 0 10,300,000 Internet Cargo Services, LLC* 07/30/98 550,000 527,473 Private 15 10,000,000 (1) Note - Dates shown indicate date commitment made. Actual closing dates have occurred after the end of the fiscal year end. Intradigm Corporation* 06/11/01 300,000 300,000 Private 13 1,250,000 Lion Pharmaceuticals, Inc. 11/04/97 250,000 - Private 0 5,000,000 MaxCyte 02/28/02 200,000 200,000 Private 16 6,385,000
6 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 7 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
Advanced BioNutrition Corporation www.advancedbionutrition.com Advertising.com www.advertising.com Columbia, MD MD Employees: 14 Baltimore, MD - NewYork, NY - San Francisco, CA - London, UK MD Employees: 155
Management Team Mr. Larry Giessinger Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland Dr. David Kyle Director of Sales $250,000 Scott Ferber Reuters Group PLC $499,991 President and CEO CEO and Co-Founder Al Cunniff America Online, Inc. David Alldredge Director of Corporate John Ferber Communications Current Fair Market Value Current Fair Market Value Chief Operating Officer Chief Internet Officer and Co-Founder WPP Group plc $250,000 Gar Richlin WorldCom Venture Fund $1,221,005 John Piechocki Other Co-Investors Chief Operating Officer Director of Manufacturing Mike Woosley Grotech Capital Group Eastbourne Capital Dr. F.C. Thomas Allnutt Chief Financial Officer New Enterprise Associates Director of AquaBiotechnology Sherbrooke Capital Partners Todd Walderman Chief Technology Officer
History ed by customers. Proven value at Events History approximately 200 campaigns ence: Advertising.com, Phase 2 a competitive cost puts per month. Advertising cam- Media, and Real Media. ABN was spun out from Martek AquaGrow products ahead of the In March 2002, ABN raised an Three years ago, one of the paigns are delivered through an (MATK) in Q4 of 2001 with a mis- competition. Products in this line additional tranche for the Series founders moved into ad serving integrated package of content Events sion to commercialize its science- include AquaGrow DHA, A financing, securing a total of and tracking, with the develop- placement solutions and multi- based aquaculture products. ABN AquaGrow Advantage, $3.6 MM. ment of Click-Tracker a custom- ple delivery channels. The Advertising.com, Inc. acquired in-licensed over 40 issued patents AquaGrow Enhance, AquaGrow designed Web visitor and sales Company’s AdLearn Technology Dayrates, Scandinavia's largest pertaining to MATK’s animal Green, and AquaGrow ARA. ABN opened its European office tracking software. With over 2 is one of the most sophisticated Internet direct marketing products and technology. ABN is ABN’s PROTECTTM product line, May 2002 in Brighton UK billion ads served and $75 mil- commercially available systems company in March 2002. developing its next generation of presently under development, lion in e-commerce sales, the for the targeting of electronic Dayrates will merge with products, and has filed several includes probiotics, immunity In June the company added Click-Tracker software laid the advertisements. Advertising.com's London-based fundamental broad-ranging enhancers, and edible vaccines Daniel R. Glickman, former U.S. foundation for Advertising.com’s subsidiary, Advertising.com patents in the aquaculture dis- designed to eliminate the need for Agriculture Secretary, Dr. present-day marketing Advertising.com uses its deliv- International. The merger will ease control area. antibiotics in agriculture. Charles Arntzen, oral vaccine and production system. Today, ery technology to improve the increase Advertising.com's inter- plant biology expert, and former Advertising.com serves and performance of online marketing national presence substantially Dupont Agriculture executive tracks 3 billion ad impressions campaigns by offering a rich to include Dayrates' offices in Products Competition William F. Kirk to its Board of per month in a variety of elec- portfolio of targeting options. Norway, Sweden, Denmark and Directors. tronic media, and provides other Advertisers benefit from the Germany, in addition to Advanced BioNutrition (ABN) is ABN’s nutritional products are consultative services for Internet ability of the technology plat- Advertising.com's recently the first of a new breed of from microalgae, a sustainable David Alldredge was hired as advertisers. form to “learn” the best ad place- launched operations in France. AquaBiotech companies. It is a plant resource. Competing prod- Chief Operating Officer. ment, and to apply this knowl- science-based, business-driven ucts are based on fish oil, a non- edge in real-time to greatly In November 2001, the Deloitte animal health and nutrition com- sustainable resource whose price Products improve an advertiser’s perform- & Touche Technology Fast 500, pany with existing proprietary is on the rise. In addition, scien- ance. named Advertising.com, Inc. a products and a strong pipeline of tific publications have demon- Advertising.com serves and Rising Star in the ranking of the new products. ABN markets its strated the superiority of ABN’s tracks ads in a variety of elec- fastest-growing technology com- AquaGrow line of nutritional products over these competitive tronic media, including web pub- Competition panies in the United States and enrichment feeds to hatcheries products. There is no direct com- lications, electronic mail, soft- Canada. Ranked fourth among and grow-out facilities through- petition for the disease control ware products, and wireless Public Competitors include the 25 Rising Star winners, out the world. AquaGrow prod- product line under development. devices. Numerous Fortune 100 Doubleclick, L90, Twenty-Four Advertising.com's revenues have ucts have been tested, proven to companies have benefited from Seven Media and Engage. There increased over 74,000% since the be beneficial, and are well accept- Advertising.com’s products and are three private companies in company's inception in 1998. services. The Company fulfills the industry of substantial pres-
8 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 9 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
Antaeus Group www.antaeusgroup.com Artifact Software www.artifactsoftware.com Baltimore, MD MD Employees: 14 Baltimore, MD MD Employees: 10
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland
William D. Norton David Hungerford $250,000 Mark Wesker Confidential $300,000 pending President and CEO President and CEO Ralph Gibson Current Fair Market Value Current Fair Market Value Scott Robuck Jay P. Cook, Jr. Greg Heard Chief Financial Officer CFO/SVP Operations $250,000 $300,000 MD Small Business Development Tim Pickering Financing Agency (MSBDFA) Jasen Fici VP, Marketing & Sales CTO/SVP Marketing Community Development Fund (CDV)
History software modified system ical waste issues. Competition for History Products Competition targeted toward the documenta- medical waste disposal comes pri- Antaeus Group was established tion/media destruction market. marily from the following compet- The principals successfully exited Artifact is an enterprise software Companies such as Logic Library in 1990 by a dentist as a response The Company’s initial product, ing technologies: on-site incinera- their last venture, Sequoia company that has targeted the and Rational provide products to the 1990 Clean Air restrictions. the SSM (Steam Sterilizer tion, waste haulers, and alterna- Software (a developer of products growing market for software that are more service-oriented or As an alternative to traditional Macerator), processes on site red tive treatments such as chemical and services for the portal soft- reuse solutions. The Artifact have a tendency to deal with medical incinerators, the dentist bag medical waste. It emerges as disinfection and heat treatment. ware marketplace), selling that Management Software is a prag- more proprietary solutions. worked with an engineering firm a confetti-like substance that is Competition in the classified company to Citrix in an all-cash matic approach that serves the to develop a device that would non-infectious, non-hazardous, media industry is limited to deal. Several months later, the needs of both of the company’s eliminate emissions of toxic and non-recognizable, satisfying shredding equipment and/or com- chief technical officer devised a targeted constituencies: the Events chemical compounds and sterilize OSHA’s definition for non-regu- panies that have mobilized shred- plan that addresses a need for developer and the development solid waste. The Antaeus Group lated waste. Most hospitals will ders. For electronic media, the developers to streamline their manager. Proven and successful DBED closed on $100,000 of has developed a new technology reduce their medical waste pro- only two technologies that are coding and business processes. concepts are taken from the code Challenge funding in August utilized by the health care indus- cessing cost by 20% – 50%. used with confidence are inciner- sharing Web sites to provide 2002 and expects to close in the try to safely and economically dis- Antaeus also utilizes this technol- ation or degaussing/demagnetiz- developers with a solution that near future on additional pose of infectious medical waste. ogy under the name IBS ing. does not force them to change Enterprise funding as part of a This technology can be trans- Destroyer (Information Bearing their behavior, but makes it easy Series A round involving multiple ferred to other industries for Surface) to target the docu- to leverage software artifacts. To co-investors. destruction of (1) laboratory ment/media destruction market. Events that, the company is adding addi- waste, (2) out-dated pharmaceuti- The IBS Destroyer can destroy tional collaborative and commu- cal products, and (3) sensitive any information-bearing surfaces The company signed a multi- nication capabilities that are crit- documentation stored on infor- such as magnetic tapes, blue- million dollar distribution agree- ical to solving this problem, yet mation bearing surfaces on all prints, CD-ROM, DVD, micro- ment with Hitachi Medical to cannot be fulfilled by a simple types of media including micro- fiche, high density images, photo- supply it with medical waste Web site. film, microfiche, magnetic tapes, graphs and negatives, toner car- destruction equipment. and CDs. tridges, and video tapes. Installed equipment at Johns Hopkins School of Medicine, Products Competition Becton Dickinson, Illinois Dept of Public Health, U.S Air Force, U.S. Antaeus currently has two dis- Increasing; probably about 20 Navy, Red Cross (MD) and Quest tinct product designs, one for the other firms that have developed Diagnostics. medical waste industry and a alternatives for addressing med-
10 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development11 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
Atto Bioscience, Inc. www.atto.com Avalon Pharmaceuticals www.avalonrx.com Rockville, MD MD Employees: 39 Gaithersburg, MD MD Employees: 57
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland
Derek Woods, Ph.D. $500,000 Oxford Bioscience Partners $500,001 CEO Emerging Technology Partners Kenneth Carter CEO Forward Ventures (San Diego) Gary Brooker, Ph.D. Alexandria Equities LLC Current Fair Market Value GIMV (Belgium) Current Fair Market Value CSO and Founder Thomas G. David MdBio Altamira (Canada) Gloria Zak $500,000 General Counsel and $690,951 Chief Financial Officer Director of Operations Gene Fund Ariane Fund Joel Jessee Garry Lessing VP, Research & Development CDP Sofinov Chief Financial Officer Jeffrey Brooker Emerging Technology Partners VP, Operations
History cells and allows for kinetics and Competition History Products Competition ratiometric analysis. The laser- Atto Bioscience (Atto) is a 16- free design of the Pathway HT The Atto product line is either Formerly known as The company intends to identify Other methodologies have been year-old biotechnology company, system allows flexibility in the unmatched by competitors or has Therapeutic Genomics, Avalon candidate tumor suppressor employed to address the suppres- founded by Dr. Gary Brooker and choice of fluorescent tags used in significant price performance Pharmaceuticals was established genes in specific cancers. sion of specific cancers. his son Jeffrey. Atto specializes in biological assays. Pathway is not advantages over current competi- to develop innovative genomic Typically, cell lines will indicate optical instrumentation and rea- limited by laser lines and can be tors. Atto products are currently technologies along with designat- either translocation or deletion of gants for the analysis of reactions used at virtually any wavelength not widely marketed to the cus- ed partners to identify cellular a particular chromosome. Using Events taking place in single living cells. from UV to near IR. The Pathway tomer base and thus the advan- targets for novel cancer drugs. databases consisting of genomic Atto’s patented products are used system allows for simultaneous tages of Atto products are, for the The company, along with two sequences, the company will con- The State of Maryland participat- in basic research, drug discovery, kinetic imaging of multiple most part, not well appreciated by medical institutions, has initially struct a genomic map in the ed in the Series B $70 million toxicology and clinical diagnos- flourescent dyes in individual liv- the general customer base. targeted prostate, colorectal, region in question. This approach investment round which closed tics. The company has a portfolio ing cells. breast and lung cancer as possi- will couple both spectral kary- October 2001. of intellectual property rights ble focal points. otyping (SKY) and fluorescence that include patents developed The CARV module attaches to Events in-situ hybridization (FISH) In the Summer of 2002, the com- through its own research and an microscopes for confocal viewing analysis to define the deletion. pany announced the future relo- exclusive worldwide license with (similar to the concept of a CAT Atto Bioscience has received a Functional cloning may be used cation of its corporate headquar- the University of California for an scan) of fluorescent specimens $600,000 award from the Defense to test for biological activity. ters to Germantown. The new assay technology used extensive- without the use of a laser. This Advanced Research Agency facility will be approximately ly in modern drug discovery system performs confocal (DARPA) to apply its imaging 55,000 square feet in size and will efforts. Currently, there are 5 microscopy with the simplicity of platform and expertise in molecu- be exclusively devoted to Avalon’s issued patents and 6+ pending or standard fluorescence lar and cell biology to develop research and development. in preparation. microscopy. The module is solid olfactory receptor-based biosen- with a software package that sors for real-time detection of allows reconstruction of three- agents of interest to the Products dimensional images of cells. Department of Defense. CARV is the only non-laser full The Pathway HT system was spectrum confocal microscopy designed to overcome the chal- product on the market. Atto can lenges of high throughput live- thus offer greater flexibility and a cell bioimaging. The system pro- significant price advantage over vides high-resolution full spec- the laser confocal systems sold by trum confocal imaging of single several other manufacturers.
12 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 13 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
BioSET www.biosetinc.com Biosynexus College Park, MD MD Employees: 7 Gaithersburg, MD MD Employees: 34
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland William Mavity Gerald W. Fischer, M.D. Boston Scientific $250,000 Hilal Capital Management $500,000 Chairman and CEO President & CEO Tom Roueche The Vertical Group VP, Business Development and Current Fair Market Value James Mond, M.D., Ph.D. Current Fair Market Value General Manager Chief Scientific Officer $250,000 $1,106,250 Paul Zamora, Ph.D Jeff Fischer VP and CSO Chief Financial Officer Linda Finn VP, Finance and Administration
History gularly or in combination, to Medtronic. Many of these compa- History Products Competition achieve a designed outcome. The nies have recently begun human BioSET was formed March 2001 company is focused in the areas of clinical trials. A number of these Biosynexus is a biopharmaceuti- The lead product is known as Antibiotics are generally the only through a “spin out” to capitalize thrombo-resistant heparin coat- same companies are offering cal company focused on prevent- BSYX-A110. It has completed other remedies on the market, on over ten years of research and ings for medical devices, biocom- stent-grafts to address the mar- ing and treating hospital GMP manufacturing. Phase I but staph can become resistant to development in advanced biocom- patible diffusion barriers for con- ket for less invasive repair of acquired infections with a diversi- safety trials in adults have been these drugs after some time. patible coating technologies in the trolled efflux of localized bioactive abdominal aneurysms. These fied portfolio of products and a completed and Phase I/II trials medical device industry. BioSET agents, and tissue engineering products are logical candidates pipeline to sustain continued are currently underway. The was “spun out” by a team of applications to enhance cell for biocompatible coatings and growth. product is a highly specific anti- Events InnerDyne, Inc. management migration and growth attach- BioSET has specific programs body that binds with a single from the merger of Inner Dyne, ment. involving coatings that are aimed antigenic determinant that pro- The State of Maryland participat- Inc. with United States Surgical, at addressing this need. vides protection against the two ed to its maximum level in the a division of Tyco Healthcare most common types of staph bac- Series A and was therefore unable Group, LP. Competition teria. A second product, to participate in further financ- Events Lysostaphin, is ready for GMP ing. Numerous product offerings exist manufacturing and clinical trials Products from suppliers of biocompatible The State of Maryland participat- are anticipated to begin in late Biosynexus entered into a strate- coatings to address lubricity and ed in the company’s Series A 2002/early 2003. Lysostaphin is gic collaboration with Applied BioSET has developed novel and thrombogenicity. These products round of funding which raised an enzyme that kills staph bacte- Molecular Evolution to optimize proprietary methods to chemical- vary in effectiveness, complexity approximately $3MM. ria. In pre-clinical testing it has AMzE’s HU96-110, a treatment ly and mechanically alter surface of manufacture, and cost. been shown to be the most effec- for staphylococcal bacterial infec- properties for siloxane deposition, Competitors include, Baxter Originally located in Sunnyvale, tive treatment for certain severe tion, AME successfully optimized creating molecular attachment Lifesciences, Carmeda, and CA, BioSET moved its headquar- staph infections. Lysostaphin was HU96-110 in 2001. sites and bonding heparin to a Surmodics. The competition for ters to the University of in-licensed in late 2000. variety of common medical device drug delivery on stents for Maryland TAP incubator in the substrates. These processes range restenosis is much more intense Spring of 2002. from simple wet chemistry “dip” with the likes of techniques to gas plasma surface Angiotech/Boston Scientific/Cook, etching and deposition, either sin- Cordis, Guidant, Abbott, and
14 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 15 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
Bluefire Security Technologies www.bluefiresecurity.com Chesapeake PERL, Inc. www.chesapeakeperl.com Towson, MD MD Employees: 3 College Park, MD - Newark, DE MD Employees: 8
Management Team Other Co-Investors Cost to State of Maryland Management Team Dr. William Bentley Cost to State of Maryland Founder Mark Komisky Steve Walker & Associates $450,000 Terry E. Chase $500,000 CEO President Dr. Minh-Quan Pham Maryland Angels Council Dennis Komisky Secretary and Founder Chief Technology Officer J K & B Capital Current Fair Market Value Dr. Nikolai van Beek Current Fair Market Value Chief Scientific Officer Other Co-Investors Will Clemons $450,000 $500,000 David C. Davis Chief Financial Officer American Society of Microbiology Plant Manager
Jeffrey E. Turner Marketing Manager
History nected to the enterprise. For more panies that may attempt to History mediation. Chesapeake PERL the Newark Delaware facility at sophisticated wireless devices, migrate their server or PC-based has initially targeted specific sec- substantially reduced rate. Bluefire Security Technologies is such as PDAs and notebooks, the products, designed to protect cor- A University of Maryland gradu- tors with smaller, more attain- the first company to develop a Bluefire software is a compact porations using the public ate student developed a low cost able non-FDA regulated markets. Cheseapeake PERL completed its next generation smart firewall for firewall for small devices and con- Internet, to wireless PDAs. These manufacturing system for recom- PERL has already demonstrated Series A round of $1.75 MM in mobile wireless devices. Bluefire’s trols all wireless communica- companies include Checkpoint, binant proteins. In 1999 Minh- its manufacturing system and November 2001. proprietary security software is tions. The software provides fine- Symantec, Network Associates, Quan Pham and one of his profes- has isolated specific proteins to designed to operate on every PDA grained, security controls for all Network ICE, and Cisco. sors, William Bentley, partnered further demonstrate flexibility University of Maryland Business (personal digital assistant), data and services, screens out However, their expertise in devel- together to form Chesapeake and cost competitiveness. Plan Competition Award 2001 smartphone, notebook and other attacks, and logs all communica- oping large server-based firewalls PERL to commercialize this new portable electronic device utiliz- tion activity. Bluefire operates based on IP networks will not system. The manufacturing sys- Best Biotechnology Company, ing wireless networking technolo- whenever the device is active, translate well to developing small tem changes simple insect larvae Competition State of Maryland Incubator gy, either as part of an enterprise providing “always-on” protection. efficient filter engines capable of into efficient mini bioreactors Awards 2002 network or peer-to-peer (P2P) The software monitors all service addressing non-IP based commu- that produce recombinant pro- Current processes are highly spe- communications. The smart fire- requests, filters all data packets, nications across multiple devices. teins at high quality while sub- cific – one process yields one prod- Fortune Magazine’s Cool wall uses Bluefire’s patent pend- and applies the security rules stantially reducing costs. The uct. Any change in process condi- Companies 2002 selected PERL ing location sensitive security from the security database. company is headquartered in the tions, raw materials or product as one of the nations Coolest profile system to automatically Events University of Maryland can disrupt production and Biotech Companies. increase or decrease the security Technology Advancement require additional R&D. PERL levels depending on the location Competition Bluefire Security has met all Program. has overcome technical barriers In Q4 2002 Chesapeake PERL of the individual using the device development milestones to pro- of efficient scale-up and harvest- will begin raising its $3.5 MM (at home, in the office, or in pub- Currently no competitor is yet duce a beta version of the soft- ing time to give it a competitive Series B round of Financing. lic spaces). focused on protecting data from ware. That software is undergo- Products advantage. hack attacks at the standalone ing beta-testing at several large, portable device level and Bluefire reference-able clients. Bluefire Chesapeake PERL has developed Products has filed patents that create a sig- Security has closed a Series B a method of “mass customization” Events nificant barrier to entry to any round of financing with JK&B for recombinant (genetically engi- The Bluefire solution requires company attempting to develop Capital and Walker Ventures. neered) protein manufacturing. Chesapeake PERL has licensed a enhancing wireless devices to pro- similar firewall and intrusion This round had a bifurcated close, The company produces proteins fully equipped and operating fac- tect themselves from unfriendly, detection systems on a wireless with $3.5MM closing May 31, using cabbage larvae for thera- tory donated to the University of fraudulent, and hostile connec- device. Potential competitors 2002 and $2.5MM scheduled to peutics, diagnostics, industrial Maryland by DuPont. The com- tions, even when they are not con- include traditional firewall com- close August 31, 2002. enzymes, agriculture and biore- pany has the option to purchase
16 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 17 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
Claragen, Inc www.claragen.com CodeRyte www.coderyte.com Rockville, MD MD Employees: 6 Bethesda, MD MD Employees: 7
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland
Mark Zimmer Venture Management Consultants, $425,005 Richard Toren Solstice Capital $225,000 President and CEO LLC Chairman Washington Tech Partners Current Fair Market Value Andy Kapit Aprile Pilon, Ph.D. MD Healthcare Product Current Fair Market Value CEO & CFO Commons Capital Executive Vice President Development Corp. $425,006 $225,000 Michael Niv, Ph.D. Chief CTO
David Yarowsky, Ph.D. Sr. Software Engineer
History the mucosal host defense pro- Events History each record in fewer than two sec- difficult to scale and adapt. teins. The Company’s most onds or, in batch mode, up to Competition also comes from out- Claragen is a development-stage advanced product is a protein The State of Maryland participat- CodeRyte is a software company 200,000 per server. The output of source coding services which are company formed in 1996. The known as CC10, which is being ed in the Series B round of financ- that uses Natural Language CodeRyte can then be imported staffed by human coders. This company has a license agreement tested in a double-blind, con- ing in September 1998. The com- Processing technology (“NLP”) to into any transaction system used fragmented industry includes and ongoing research relation- trolled clinical trial for the treat- pany also completed a bridge conquer the labor-intensive cod- by the provider. A semi-integrat- mom-and-pop organizations as ship with the National Institute ment of a lung disease affecting round in which the State invested ing of physician and hospital bills. ed product that links CodeRyte to well as divisions of various sized of Health. newborn premature infants. an additional $175K. CodeRyte™ software uses the transaction systems is offered by accounting and consulting firms There is no current treatment for clinical information contained in means of an enterprise software and web-based service bureaus. the condition, which affects about the transcribed patient chart to license. In a fully integrated Products 20,000 infants annually and is determine the appropriate billing installation, CodeRyte generates fatal to about 8,000. codes. The technology also lends the super-bill that then enters the Events Claragen is a biotechnology com- itself to utilization for fraud provider’s transaction system pany developing novel therapeu- detection/compliance by quickly enroute to producing a bill. CodeRyte is in the process of clos- tic products that are based on Competition comparing or facilitating the com- ing a $2.5MM Series A round of recombinant (genetically-engi- parison of transcribed medical financing. neered) forms of naturally occur- Competition for the company’s records to the claims submitted Competition ring human proteins. The initial products varies by clinical indica- by the medical provider. CodeRyte has approximately five focus is on a class of human pro- tion. In asthma, for example, CodeRyte currently has a direct customers and a large sales teins known as mucosal host many pharmaceutical products competitor in A-Life Medical, Inc., pipeline of opportunities. defense proteins, which are are approved and in common use Products which uses a rules-based involved in regulation of inflam- and Claragen will have to partner approach to NLP. Using this mation and immunity at mucosal with a larger pharmaceutical CodeRyte has developed three more primitive version of NLP, A- surfaces such as the lung and gas- company. In chronic neonatal products that appeal to different Life must write millions of rules trointestinal tract. Claragen has lung disease, there are no effec- end-user markets. One product is for each and every grammatical, a research relationship with the tive products and the company delivered in an ASP model. The syntactical, semantic and linguis- National Institutes of Health believes its product will represent customer can submit to the tic event. This is a more cumber- (NIH) and a license from the NIH a major therapeutic advance. engine transcribed records over some, labor-intensive approach to to certain technology relating to the Internet. CodeRyte processes the technology, which makes it
18 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 19 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
Cylex www.cylex.net CytImmune Sciences, Inc. www.cytimmune.com Columbia, MD MD Employees: 18 College Park, MD MD Employees: 12
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland
Judith A. Britz, Ph.D. Early Stage Enterprises $575,000 Lawrence Tamarkin, Ph.D. J. Dorance Trust Entities $300,000 President and CEO The Dinner Club President & CEO Current Fair Market Value EntreMed Current Fair Market Value Peter Sottong Rediscovery Capital Giulio F. Paciotti, Ph.D. VP, Operations Women’s Growth Capital Fund $599,000 VP, Research and Development $300,000 Richard Kowalski, Ph.D. MDBio Manager, Product Development Don Malinowski Foxwood Capital Product Manager
History humans but also has applications Events History for tumor-targeted drug delivery, ers all-at-once much like seeds in the disease management of is tumor necrosis factor (TNF) from a seedpod. In contrast, the Cylex was originally formed as a cancer, autoimmunity, and other The company has received FDA CytImmune is an R&D drug bound to colloidal gold (cAu- colloidal gold drug delivery vector company providing consulting infectious diseases. The company approval for their assay for use in delivery company that is current- TNF). This first cancer therapy is better suited for protein biolog- and contract research services to believes the in vitro CMI assay monitoring immune suppression ly the only company focused on product, which will be ready for a ics as well as small molecule ther- industry and academia. However, provides information about cellu- as of April 4, 2002. This not only the biodelivery potential of col- National Cancer Institute spon- apeutics. Because these mole- in 1998 the company decided to lar immune response in a rapidly includes transplant patients, but loidal gold nanoparticles (col- sored clinical trial in 12-15 cules are bound and carried on focus all efforts on the develop- processed, easy to use form, also the monitoring of other loidal gold has been used safely months, will lead to a family of the surface of the nanoparticle ment of its platform technology which is more amenable to moni- immune-suppressed patients for over 70 years to treat rheuma- cancer therapy products com- they provide both rapid biologic for the assessment of cell-mediat- toring a disease’s course than the with illnesses such as HIV, toid arthritis). The Company’s prised of biologics and chemother- action by binding to cell surface ed immune function, after a antibody measurements alone. Lupus, etc. primary focus is to improve the apeutics, such as taxol, bound to receptors and sustained local patent on T-cell activation was The product’s advantage is that safety and efficacy of systemically colloidal gold for tumor-targeted release as the drug molecules are granted based on preliminary results are delivered quickly since delivered anti-cancer protein bio- delivery. Following FDA approval slowly released from the colloidal work done through an SBIR con- current testing procedures avail- logics and approved chemothera- of this product and future prod- gold surface. tract with the Department of able take a week to perform. pies through tumor targeting. ucts, these new drugs will be sold Defense. The Company is developing col- to treat specific cancers. Events loidal gold as a platform technolo- Competition gy for drug delivery, gene therapy, Two patents were awarded to the Products monoclonal antibody production Competition Company in the third quarter of Competing research assays and vaccine delivery. CytImmune 2001, and 22 other patents are The company has developed a employ radioactive lymphoprolif- is dedicated to producing new for- Major competitive companies still pending in the U.S. and diagnostic tool, called in vitro eration, but these assays are not mulations of drugs to “improve including Alkermes Inc., Alza abroad. CytImmune’s patents CMI, which integrates magnetic available or clinically useful. cancer treatment through Corporation, DOR BioPharma, cover the use of cAu for vaccines, separation of blood cells with bio- Becton Dickinson and R&D improved biodelivery of cancer Elan Corporation, plc, Guilford monoclonal antibody production, luminescent detection for the Systems are among the players in therapies.” Pharmaceuticals, and Shire gene therapy and drug delivery. measurement of immune system this arena. Laboratories are focused on using Issued patents cover the treat- function. Cylex’s immunodiagnos- liposomes or biodegradable poly- ment of cancers with specific con- tic kit measures the level of T cell Products mers for drug delivery. Both tech- jugates, including CytImmune’s activation in blood. It has a major nologies are best suited for carry- lead clinical therapeutic, cAu- application in monitoring AIDS in CytImmune’s first patented clini- ing water insoluble molecules, TNF. cal therapeutic product, a model which are released from the carri-
20 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 21 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
FASgen, Inc. www.fasgen.com Functional Genetics, Inc. www.functional-genetics.com Baltimore, MD MD Employees: 4 Rockville, MD MD Employees: 19
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland
$500,000 $750,000 Albert H. Owens, Jr. , M.D. Emerging Technology Partners Sharon Mates, Ph.D. Scientia Health Group, Inc Chairman and CEO CEO CIP Capital Current Fair Market Value Alafi Capital Current Fair Market Value Eric Stoer Lawrence Hineline, CPA Secretary and Treasurer Chief Financial Officer $500,000 Sanders, Morris, Harris $750,000 Limin Li, M.D, Ph.D. Scientific Director
History have been found to depend on this ing possible vaccine formulations History Products Competition FAS mechanism for growth, the to counter the FAS mechanism. FASgen, Inc. was formed by four resultant small molecules pro- These academic efforts can be Functional Genetics, Inc. was The RHKO technology will Companies such as Rigel, Isis, distinguished Johns Hopkins duced will specifically inhibit the easily commercialized. In the formed to develop and commer- enable gene function to be corre- and Hybridon, among many oth- researchers to develop drugs principal FAS enzyme. FAS weight loss category, many non- cially exploit a proprietary lated in one step with the gene ers, use several related technolo- based on their widely acclaimed inhibitors cause weight loss by medical alternatives currently technology called Random itself. This will allow the discov- gies. FGI’s RHKO approach is discoveries related to the mecha- suppressing appetite via controls exist. Other forms of competition Homozygous Knockout (RHKO) ery of genes that previously were dramatically different in that it nisms and roles of the fatty acid located in the brain stem. This attack the same problem but take that enables the discovery and inaccessible as therapeutic or directly discovers medically biosynthesis (FAS) system. The development was highlighted in other approaches towards a functional analysis of genes that diagnostic targets. The goal of the important genes on the basis of founders have extensive expertise the June 30, 2000 issue of Science favorable end solution. are most relevant to human dis- company is to discover the genes their function and concurrently in the study of FAS and have syn- magazine. FAS inhibitors are also eases. This patented technology and their function most relevant validates those genes as targets thesized over 250 unique small selectively toxic to mycobacteria, is unique in that it enables the to major human diseases. for drug development. FGI’s molecule FAS inhibitors and iden- including multiple drug-resistant Events identification and validation of Functional Genetics, Inc. has par- GeneDisk will compete with the tified several core technologies organisms that cause TB in mammalian cell gene function ticular interest in using this tech- micro-array companies such as stemming from their basic humans and paratuberculosis in FASgen is in the process of clos- using a procedure that simultane- nology to uncover gene function Affymetrix, Incyte, and Hyseq. research on FAS’s role in disease domestic animals; this compound ing its Series B financing round. ously inactivates both copies of in the areas of: cancer diagnostics FGI believes the GeneDisk tech- and health. is furthest along in testing and an genes on a genome-wide basis. and therapeutics, infectious dis- nology has broader applicability IND filing is expected next year. William McIntosh was hired as The scientific founders of the eases, immunological diseases, at a lower cost than its competi- the Chief Business Officer. company and inventors of the neurological disease, cardiovascu- tors’. Products technologies are Drs. Stanley lar disease and pharmacoge- Competition Cohen and Limin Li, two nomics. FGI will sell or license Events Fatty acid biosynthesis is a vital Stanford scientists. Dr. Cohen is information, service, cells, gene process in nearly all existing life Various academic and clinical best known for developing and targets, compounds, and diagnos- Series A financing closed in forms. FASgen has chosen to ini- institutions have performed patenting (along with Dr. Herbert tic tools. Furthermore, they will December 2000. tially focus its effort in three sig- research on the FAS process; for Boyer) recombinant DNA technol- further develop a micro-array nificant areas: cancer, obesity, example, Ohio State has initiated ogy, which has become the corner- technology, the GeneDisk, devel- Functional Genetics has collabo- and tuberculosis. FAS inhibitors a program (funded by the stone of the biotechnology indus- oped and patented by Dr. Li and a rations with Rockefeller selectively destroy common can- National Cancer Institute) to try. Dr. Mates, the business colleague. University and SUNY Stoney cers of the breast, prostate, colon, identify molecules to attack FAS founder of the company, has been Brook. and lung while sparing the nor- associated with brain tumors. involved in financing and build- mal tissues. Since cancer cells Other institutions are research- ing Biotechnology companies for The company initiated its $15- the past 13 years. 20MM Series B round of funding in 2Q 2002.
22 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 23 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
HT Medical Systems (Immersion Corporation) ww.immersion.com Intellivax, Inc. (now ID Biomedical) www.idbiomedical.com Rockville, MD Employees: 162 Baltimore, MD - Ville-St. Laurent, QC, Canada Employees: 80
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland
Gregory Merril Maryland Healthcare Corporation $250,000 Anthony Holler, M.D. Le Fonds de Solidarité $250,000 CEO and President CEO Royal Bank Capital Corporation Current Fair Market Value Current Fair Market Value Todd R. Patrick Biocapital $262,833 President and COO Innovatech Montreal $294,808 George H. Lowell, M.D. Development Bank of Canada CSO Maryland Health Care Product Development Corporation
History of the product lines consists of an nation of characteristics, and its History non-replicating, purified compo- ing an IND for a nasally-delivered ever-expanding menu of software competitors are not currently nents that are inhaled or swal- influenza vaccine following posi- HT Medical Systems, Inc. (previ- modules that take advantage of marketing or testing any prod- Intellivax became a subsidiary of lowed rather than injected. tive results in animals. ously High Techsplanations) a common tactile feedback inter- ucts that include all of the attrib- Intellivax International (Canada) (HTMS) was founded in 1987 by face device. CathSim allows med- utes of the company’s products. in 1998, and DBED’s equity posi- Gregory Merril. In June 2000, ical professionals to practice a Most other simulation develop- tion in the old entity was convert- Products Competition HTMS moved to Gaithersburg wide range of intravenous ment groups are within universi- ed into the new company. (Montgomery County), Maryland, catheterization procedures. The ty settings, a few are small com- Intellivax, Inc. was founded in Intellivax produces intranasal Some intranasal vaccines exist to accommodate the need for PreOp Endoscopy simulator pre- panies, and others are large. 1995 in Baltimore. Intellivax’s and oral sub-unit vaccines against respiratory problems that much larger office space for the pares professionals to perform None of the potential competitors enabling technologies, acquired against shigellosis (bacterial may not attack the same current employees and planned various flexible endoscopic proce- have addressed the market from the Walter Reed Army dysentery). These vaccines are microbes. Other vaccines are company growth. Immersion sub- dures such as bronchoscopy and segments that HTMS has Institute of Research, WHO and US military priorities more invasive (injection) and are sequently acquired HT Medical in sigmoidoscopy. The PreOp engaged, and the competitive Washington, DC provide a broad that have successfully completed the currently favored alternative. August 2000. Endovascular product allows technologies that have been platform to develop a spectrum safety and immunogenicity Phase Treatments for shigella specifical- physicians to practice angioplasty demonstrated are generally more of vaccines and related therapeu- I clinical trials in volunteers. The ly, include rehydration and other and other endovascular tech- expensive and not as realis- tics for safe and effective delivery successful completion of three tri- not-so-guaranteed methods. Products niques through the manipulation tic. via mucosal routes including als using two distinct products of simulated guide wires, sheaths, intranasally. Intellivax product serve as proof of principals that HTMS designs, manufactures, catheters, pacemaker leads, and development strategy is to use its Intellivax vaccine delivery sys- Events and markets computer-based other devices. Events unique technologies to develop tems elicit mucosal and serum medical simulators that allow mucosal vaccines and therapies immune responses in people. ID Biomedical, of Bothell, WA and medical personnel to practice Immersion Corporation, of San that provide mucosal as well as Advanced clinical trials to Vancouver, Canada, acquired medical procedures without plac- Competition Jose, CA, acquired HT Medical in systemic immunity and protect demonstrate protection of volun- Intellivax in May 2001 in a stock ing patients at risk. HTMS has the second half of 2000. DBED against invading microbes before teers against shigellosis after swap. The parent company com- progressed from offering a single At this time, HTMS is the only has accepted stock in the new they cause internal disease. challenge with virulent shigella plements Intellivax’s own busi- product for a single market seg- significant company that has entity subject to lock up provi- Intellivax products have several are underway, and large scale ness - both conduct vaccine ment to engaging eight market developed this line of manufac- sions which have expired. other advantages over conven- Phase 2 safety and immunogenic- research. Lock up provisions segments with three different tured technology. Other organiza- tional vaccine technologies, pro- ity studies are planned at several expired during calendar year simulation product portfolios, tions are pursuing similar ideas, viding benefits to both health care clinical testing sites in Baltimore, 2002. actively sold in North America, but HTMS’s current and planned providers and patients since they Maryland and greater Montreal. Europe, Asia and Australia. Each products possess a unique combi- are designed from non-living, Intellivax is in the process of fil-
24 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 25 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
Internet Cargo Services, Inc. www.ecargo.com Intradigm Corporation www.intradigm.net Silver Spring, MD MD Employees: 15 Rockville, MD MD Employees: 13
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland Dr. Martin Woodle $550,000 $300,000 C.P. Shankar Ruth S. Kahn Estate CEO and President Emerging Technology Partners CEO and President David Strickler Dealy Investment Group Current Fair Market Value VP, Operations and Finance Novartis Venture Fund Current Fair Market Value
John Puente $527,473 Partrick Lu $300,000 Executive VP, Genomics T. Uterburg/Anthony Harris/ Dr. Puthupparampil Scaria C.E. Unterberg Tobin LLC VP, Synthetic Vectors Casimir Eitner Chief Business Officer
History Products Competition History reducing costs and improving the pharmaceutical companies (such success rate. Intradigm does this as GenCell division of Aventis). In Internet Cargo provides demand Internet Cargo Services, Inc. pro- This is the only company using Intradigm was founded in mid- by exploiting its leading expertise addition, a number of academic chain management solutions for vides electronic ordering services technology of this type. Generally 2000 by Ms. Jill Glasspool- in gene delivery in animals to laboratories worldwide are work- high frequency, high volume, for businesses and consumers the companies that offer Internet Malone, Dr. Jim Mixson, and Dr. over-express protein targets ing to develop new technology for repetitive transaction environ- under the name E::CARGO. The sites and catalogues have main- Martin Woodle. Novartis original- and/or to silence them with RNAi polynucleotide delivery and gene ments and enables the capture E::CARGO software enables the tained the status quo with respect ly owned the non-viral gene deliv- directly in animal models of dis- therapy. The in vivo genomics tar- and process of a variety of com- E::PEN to identify purchases by to ordering merchandise. This ery technology, which was devel- ease. Intradigm’s method skips get identification and validation mercial transactions at the “point customers who scan catalogs and product also targets those who oped at Genetic Therapy, Inc., but slow and expensive validation business faces very little competi- of intent” versus the traditional other publications. Ordering would not normally make trans- decided against continuing R&D steps by operating directly in the tion. Most in vivo gene delivery “point of sale.” This patent information is then received from actions by PC, considering the efforts. The license agreement active disease tissues rapidly vector development efforts are pending technology saves time the pen after it has been placed in costs of buying a home computer. transferred contingent on fund- revealing which proteins provide proceeding solely for therapeutic and money for participating mer- a docking station. Orders are One would expect the price points ing from Emerging Technology efficacy. applications. Intradigm is estab- chants and their customers. then dispersed to the respective to tend towards negligible, while Partners and Novartis’ own ven- lishing a business method patent merchants. maintaining some monthly fee to ture fund. for this application to protect it use the software/pen combina- Competition from such competition. tion. Products The competitors to Intradigm include commercial entities and Events Intradigm Corporation is focused academic laboratories. The com- on exploiting its proprietary tar- mercial entities span small to Intradigm closed on its Series A get discovery and validation tech- established Biotech companies round of funding in June 2001. nologies to develop new therapeu- (such as Copernicus in tics for cancer, arthritis and other Cincinnati, Ohio, Targeted Robert Riley was elected to the critical care indications. Genetics Inc. in Seattle, Board of Directors. Intradigm’s approach is unique in Washington, TransGene in that it rapidly discovers and dis- Strasbourg, France, Valentis Intradigm signed an agreement criminates the proteins that con- Inc. in Burlingame, California, with Direct Gene to provide the trol disease as distinguished from Genzyme Inc. in Cambridge, delivery technology to improve those that only correlate with dis- Massachusetts, Cell Genesis in Direct Gene’s product. ease. Disease-control validation Foster City, California, and of targets enables drug develop- Amgen in Thousand Oaks, The company is currently raising ment based on target efficacy California), and divisions of large its Series B round of funding.
26 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 27 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
MaxCyte www.maxcyte.com MetaMorphix, Inc. Rockville, MD MD Employees: 16 Savage, MD - Davis, CA - Saskatoon, Canada MD Employees: 15
Management Team Other Co-Investors Cost to State of Maryland Management Team Linda Yaswen-Corkery, Ph.D. Cost to State of Maryland Director, Business Development Douglas Doerfler VenCap $200,000 Edwin Quattlebaum, Ph.D. $500,000 President & CEO President & CEO MaryEllen DeFrancesco EntreMed, Inc Director, Human and Government Current Fair Market Value Michael R.N. Thomas, F.C.A. Current Fair Market Value Joseph Lehnen Affairs Chief Financial Officer Chief Financial Officer $200,000 $1,050,000 Eric Richman Ronald Stotish, Ph.D. Other Co-Investors VP, Research & Development VP, Corporate Development Genetics Institute
History modification of a wide variety of Competition History Products Events human primary cells (“envoy” MaxCyte, formed in June 1999, is cells) with virtually any molecule In the field of ex-vivo non-viral The company was formed by The company has twelve products The company purchased the a clinical stage biotechnology — safely, effectively, and very rap- gene delivery, MaxCyte has iden- Johns Hopkins and the Genetics under active development based AgGen division of Celera, Inc. company developing and market- idly. Continuous flow—the key tified no direct substitutes or Institute and is involved in the on vaccine, blocker and immuno- resulting in a doubling of staff. ing a platform technology for rap- breakthrough—means rapid competing methods at compara- commercialization of veterinary suppressant technologies to per- The value of the transaction is idly loading bioactive molecules turnaround and allows for bed- ble production or treatment effi- pharmaceuticals based on two mit natural improvement in pro- estimated at $30 million or into human cells for therapeutic side or outpatient treatment. The ciencies. For ErythroMaxTM, broad technology platforms: duction economics for chicken, $17.50/share. applications and gene target vali- technology is protected by five MaxCyte faces potential competi- growth factors and immunophar- turkey, swine, and cattle. dation for drug discovery. U.S. patents issued, and over 35 tion from “Oxygen enhancement” maceuticals. Growth factors are Trademarks include MyoVax, For valuation purposes DBED Through partnerships with the U.S. and international patents and “blood substitute” companies. proteins involved in regulating MyoXtra, OvaMax, NeuterVax has discounted that value by 70% world’s leading biopharmaceuti- pending. Initially, MaxCyte is However, these products are only cell growth and differentiation and Clean. to $5.25/share. cal companies, MaxCyte lever- focused on three application areas effective for short periods, and and offer opportunities for ages its proprietary technology to which create the greatest near- now generally targeted at radia- enhanced livestock production The company graduated from the yield commercially viable thera- term market potential: (1) non- tion therapy in oncology or high- efficiency. The company acquired UMBC Tech Center Incubator peutic products. The company viral gene delivery to enable and blood loss trauma situations, the immunopharmaceutical and is now headquartered in has demonstrated a high degree advance the efforts of numerous respectively. Also, unlike assets of Biostar Inc., a Canadian Savage, MD. of success in the laboratory, and companies developing cell and ErythroMaxTM, blood substitutes based biotechnology company in currently has numerous products gene-based therapeutics, and (2) may pose toxicity problems. August, 2000. The acquisition Two Patents were issued regard- in pre-clinical stage and one ther- cell-based therapeutic delivery provides the company with ing its Myostatin technology. apeutic product in Phase I clinical using platelets for targeted drug enabling carrier protein technolo- trials. MaxCyte is an independ- delivery and red blood cells for Events gy and several mid-stage develop- ent subsidiary of EntreMed. enhanced oxygen delivery ment products. (ErythroMaxTM) and gene-based The State of Maryland participat- target validation for drug discov- ed in the Series B round of fund- Products ery. ing, which closed February 2002.
MaxCyte’s precision-controlled cell loading system enables the
28 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 29 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
Navtrak, Inc. www.navtrak.com NeuralStem Biopharmaceuticals, Ltd. www.neuralstem.com Salisbury, MD MD Employees: 32 Gaithersburg, MD MD Employees: 4
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland
Ron Hodges BaseCamp Ventures $350,000 $500,000 CEO and Founder Richard Garr SJRJ LLC SeaCap Ventures President and CEO Jim Duncan Ruppert Ventures Current Fair Market Value Current Fair Market Value President Dr. Karl K. Johe Margaret Laidlow Kelso $350,000 Chief Scientific Officer $400,767 VP and COO Christopher Palenchar CTO
History Products Competition History for their production in commer- Competition cially significant quantities and Navtrak, Inc. was founded in A Mobile Manager and an anten- There are several competitors in Founded in 1995 and based on under reproducible conditions. A number of companies have 1999. The company is an early- na are installed in each vehicle. the marketplace, but none has the breakthrough Central focused on therapies for neurode- stage wireless communications Additional switches or sensors the combination of distribution Nervous System (CNS) stem cell The Company plans to develop generative diseases such as company that has developed and can also be installed in the vehi- channel and technology that technology invented by Dr. Karl and commercialize several cell- Parkinson’s, Huntington’s and is marketing a web-enabled serv- cle. The Mobile Manager receives Navtrak possesses. The list of Johe, NeuralStem was created to based genetic therapy products Alzheimer’s – several companies ice providing operators of com- signals transmitted from Global competitors includes @Road, Inc., capitalize upon the commercial- for intractable neurodegenerative have been involved in stem cell mercial fleets with real-time Positioning System satellites to Teletrac, Inc. and TracerNet. ization of this patented platform disorders such as Parkinson's dis- research. access to their vehicles. The solu- determine the location and veloc- technology. ease, Huntington's and tion also reports the location and ity of the vehicle. These data and Alzheimer's and spinal cord activities of each vehicle at a any switch or sensor data are Events injuries. Second, through a com- Events given time. Navtrak has an exclu- transmitted over a wireless Products bination of joint venture, co- sive distribution, marketing and modem in the Mobile Manager to Navtrak closed an initial tranche development deals and/or manu- NeuralStem received a $2.5 mil- fulfillment alliance with TESSCO Navtrak’s Network Operations of $2.95 million in its Series A NeuralStem has developed and facturing and distribution agree- lion DARPA award (phase 1, over Technologies, Inc. This relation- Center, a network of secure round. Navtrak has expanded the wholly owns the CNS stem cell ments function-based live human 18 months) with eligibility for ship provides Navtrak with exclu- servers. Customers can then round to a total of $5 million, with technology, a key technology for cell assays will be applied to another $7.5 million for phase 2. sive access to a network of inde- retrieve the information from the existing investors committing genetic therapies and drug dis- screen libraries of synthetic and pendent sales organizations that web site using an Internet brows- $1.1 million of the remaining $2 covery. The Company has devel- natural compounds. Neuroactive The company will launch its first will be difficult for others to repli- er. With upgraded service, cus- million not yet funded. oped and filed patent claims on compounds with the potential to “neurochip” product this fall in a cate. Each already has an estab- tomers are able to send and this technology where stem cells treat disorders such as depres- joint venture with Mertigenix. lished buying relationship, credit receive messages to and from a Navtrak has approximately 80 from the rodent and/or human sion, mania, anxiety, schizophre- These are theme based microflu- terms and return policies with vehicle as well as among vehicles. independent dealers in seven fetal brain and spinal cord areas nia and epilepsy will be found. idics chips with gene content TESSCO, making it "easy" to buy regions, 230 customers, 3,250 can be isolated, propagated, and Third, NeuralStem intends to derived from experiments done through TESSCO. vehicles under 3-year monitoring efficiently differentiated to capitalize on its unique cell based with NeuralStem’s cells for the contracts, and a 90-day sales generate large numbers of neu- expertise to create genomics data- Gene Logic Database. pipeline of another 5,000 vehicles. rons. For the very first time this bases of gene expression patterns technology not only allows for the seen during neurogenesis and in creation of the many different drug screening assays. kinds of neurons which are found in the human CNS, it also allows
30 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 31 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
NexTone Communications, Inc. www.nextone.com Osiris Therapeutics www.osiristx.com Rockville, MD MD Employees: 20 Baltimore, MD MD Employees: 71
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland
Raj Sharma Safeguard Scientifics $200,000 William Pursley Friedli Corporate Financial $500,000 CEO and President President & CEO Riggs Capital Partners Cambrex Current Fair Market Value Donald Fallon Current Fair Market Value Ravi Narayan Blue Rock Capital Vice President, Finance & CFO Co-founder and COO $85,072 Novartis $104,160 Mid-Atlantic Ventures Mark Pittenger, Ph.D. Sridhar Ramachandran VP, Research Co-founder and CTO Core Capital Kerry Atkinson, M.D. VP, Clinical Affairs
History Products Competition History developing hMSC products that (acquired by Genzyme). The will not require an immunological Company believes the competi- NexTone Communications was Nextone sells three products Other companies are seeking Osiris Therapeutics, Inc. began match between the adult bone tion in the area of meniscal repair founded in February 1998 to designed to take advantage of entry points as next generation operations in December 1992 and marrow donor and the patient. is limited to only two biological design and develop hardware and communications via the Internet. service providers. These is located in the Fells Point area This approach represents true products: Cryograft (Cryolife), software for the transmission of The NexTone Multiprotocol providers would use any of the of Baltimore. The Company is pri- “off-the-shelf” or Universal Cell and Collagen Meniscus Implant data and voice over the Internet. Signaling Switch (MSW) solves major broadband access technolo- marily engaged in the research products. Process development is (ReGen Biologics’), refined from Analog connections would trans- these issues by enabling carriers gies to deliver new value added and development of novel thera- currently underway to manufac- bovine Achilles tendon. Both have mit via digital media and not and other service providers to services such as IP Centrex, peutics for regeneration and func- ture hundreds to thousands of failed to win broad market cause a company to rewire its directly interconnect their net- voice/data Virtual Private tional restoration of damaged or doses of final product from one acceptance. facility. As carriers implement works with other SIP- and H.323- Networks (VPN), unified messag- diseased tissue. single bone marrow aspirate. VoIP networks, they are faced based networks via IP. The ing and teleconferencing. with a number of technical issues NexTone Core Proxy (CPX) is a Events including network security, sig- carrier class SIP proxy that func- Products Competition naling interworking and multi- tions as a centralized route server Events 2001 - Osiris and Howmedica vendor interoperability. for VoIP networks. iView is a Osiris Therapeutics, Inc. is a Osiris believes that its powerful Osteonics, a Stryker company, XML based GUI that allows net- In June/July 2002, a Series A-1 product-focused, privately-held proprietary technological plat- entered into a two-year pre-clini- work operators to graphically round of $3.5 million was com- biotechnology company engaged form combined with an ability to cal research project to evaluate view and configure NexTone and pleted and included Core Capital. in the research, development and supply commercial quantities of the use of hMSCs with orthopedic commercialization of adult its products in a cost effective implants. associated third party products. human mesenchymal stem cells manner will have an important from bone marrow. The current impact on its competitive posi- 2002 - Osiris received two DARPA product development focus is pri- tion. In the area of cord blood awards. One is a continuation of a marily for the regeneration of transplantation support, Osiris is previous project for approximate- bone marrow stroma, heart mus- unaware of any products for graft ly $800,000 and the second proj- cle, and meniscus that are dam- versus host disease (“GVHD”) ect was awarded for approximate- aged by injury, aging and/or dis- prophylaxis, although there are a ly $2 million. Both are two year ease or disease intervention. variety of marketed products for projects. Osiris scientists have proven the treatment of GVHD. The feasibility of its hMSC approach Company is aware that in the 2002 - Osiris received an award of in several large animal models. area of cardiac muscle repair, it $ 2 million from NIST to fund a Osiris has developed a compre- faces competition from academic study on regeneration of the cen- hensive intellectual property research groups and public and tral nervous system with mes- portfolio from its early entry into private companies such as enchymal stem cells. the adult stem cell field. Osiris is Diacrin, BioHeart and Myosix 32 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 33 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
Panacos Pharmaceuticals, Inc. www.panacos.com Paratek Microwave www.paratek.com Gaithersburg, MD MD Employees: 18 Columbia, MD MD Employees: 74
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland
Dr. Graham Allaway A.M. Pappas and Associates $250,000 Ali Pourtaheri Morganthaler Ventures $575,000 President and CEO CEO and President Novak Biddle Venture Partners Ampersand Ventures Current Fair Market Value Current Fair Market Value Dr. Carl Wild Louise Sengupta Investor AB Chief Scientific Officer Founder, CTO $250,000 DB Capital Venture Partners $475,893 David Martin, Pharm. D VP, Drug Development Somnath Sengupta One Motorola Ventures Co-founder and VP, Government Donald A. Zelm Sales Chief Financial Officer
History tify novel, orally available drug small number of companies History deployment (PCS, MMDS & Events candidates. The last step in the including Panacos are developing LMDS). Paratek invented a revo- Panacos Pharmaceuticals Inc. virus life cycle is Budding of Virus drugs with novel mechanisms of Paratek Microwave, Inc. is a lutionary new class of materials, Paratek raised $17 million in new originally incorporated in 1999 as from the infected cell, which action. Panacos’ strategy is to privately held company estab- ParascanTM, from which their financing in late April 2002, a subsidiary of a public diagnostic results in the production of new identify orally available, small lished to develop, manufacture fast tuning, passive ETRFTM bringing the company's total cap- company, Boston Biomedica, viral particles that spread the molecule drug candidates with and commercialize Electronically components and DRWiNTM elec- italization to $53 million. The (NASDAQ:BBII). Panacos spun infection around the body. novel mechanisms of action that Tunable RF (ETRFTM) compo- tronically scanning antennas are capital raised will be used to fur- out to become an independent pri- Inhibition of budding is a new are active against the vast major- nents and Dynamically fabricated. This would enable ther enhance the commercializa- vate company in November 2000. approach for antiviral drug devel- ity of HIV strains, including those Panacos became a fully independ- opment that is generating consid- resistant to approved drugs. Reconfigurable Wireless broadband wireless communica- tion of Paratek's product portfo- ent company with the completion erable interest within the indus- These characteristics will put Networks (DRWiNTM) electroni- tions solutions to be made avail- lio. of the Series B round, in which try. Panacos’ lead HIV inhibitor, Panacos’ compounds in the cally scanning antennas for the able to everyone. the State participated. PA-457, is the first in a new class strongest competitive position. wireless telecommunications of HIV drug candidates that act industry. The technology was at this stage in the virus life cycle. originally developed by the Competition Products With an innovative lead com- Events founders while working at the pound poised for clinical develop- Army Research Labs in Paratek's core materials technol- Panacos Pharmaceuticals is ment, a powerful drug discovery During Q4, 2001, the manage- Aberdeen, MD. ogy ParascanTM competes with developing the next generation of program and a management ment team was completed with ferrite and MMIC based antiviral drugs for the treatment team with proven drug develop- the hire of Mr. Zelm as CFO and approaches, neither of which of Human Immunodeficiency ment experience, Panacos is well Dr. Martin as Vice President, Products have Paratek's performance and Virus (HIV) infection and other positioned to become a major Drug Development. The cost advantage. No direct compe- major viral diseases. The Company has grown to a total of player in the antiviral arena. Currently, ETRFTM component tition currently exists for tunable Company’s proprietary discovery 18 employees. products include tunable filters, components or electronically technologies focus on novel tar- gets in the virus life cycle, includ- Competition In December, 2001 Panacos oscillators and delay lines operat- scanning antennas with ing the first and last steps of virus moved into its own facility - ing at frequencies between 30 Paratek's price point and per- infection. The first step in infec- While several companies are 10,000 sq. ft. of laboratory and MHz and 40 GHz. DRWiNTM formance characteristics. tion is Virus Fusion to a human developing new HIV drugs, most office space that will be sufficient electronically scanning antennas cell, an important new target for of these are in the same classes as for the Company’s operations are focused on L-, X-, Ku- and Ka- drug development. Panacos has a currently approved drugs over several years. band systems for terrestrial leading position in this area (reverse transcriptase [RT] or In January, 2002, Panacos closed based on its scientists’ proven protease inhibitors) and cross- a $5MM round of financing with expertise in fusion inhibitor dis- resistance often occurs with drugs AM Pappas and Ampersand. covery, combined with a powerful that have the same molecular tar- drug discovery technology to iden- get. To overcome this problem a 34 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 35 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
PEM Technologies, Inc. www.pemtechnologies.com Platform Logic www.openforcesoftware.com Bethesda, MD MD Employees: 7 Glenwood, MD MD Employees: 12
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland Peter Bianco Confidential Maryland Angels Council $250,000 $350,000 pending Dr. Irving Weinberg Chairman Founder, President & CSO Current Fair Market Value TJ Tajalli Current Fair Market Value Dr. Michael Strauss President and CEO CEO $250,000 $350,000 Steve Rice Steve Yarnell VP, Engineering VP, Product Development
History Products Competition History Platform Logic makes it easy to companies that are emerging to adapt policies for environmental- provide solutions that secure the The fundamental principles of the Patent protected, the PEM Current imaging devices cannot The company is developing a ly unique requirements. AppFire way programs access each other platform technology were invent- devices employ biochemical imag- provide the physician with real- suite of application firewall soft- then allows each application to and the back-end systems they ed by Dr. Irving Weinberg, who ing. With this approach, cancer time information about the loca- ware products, called AppFire, execute in its own confined are linked to are Sanctum, left the National Institutes of cells metabolize the radio-phar- tion and extent of cancer. which secure high-value web and domain having access to only the Entercept, and Okena. Health (NIH) in 1995 to found the maceuticals (i.e., the drugs used corporate applications hosted on resources that it needs to perform company. PEM devices are small with PET scanners) faster than servers and deployed on desktops. its intended function in the cus- and easy-to-use versions of normal tissue. The PEM device Events The company will provide an tomer’s environment and nothing Events positron emission tomography recognizes this difference in order enterprise-wide product suite more. The domain paradigm is (“PET”) scanners. to provide clear images of cancer PEM Technologies closed their that is easy to deploy and man- implemented at the kernel level The company is on schedule to location and extent. The $2.2 MM Series A round on age, has predefined policies for and cannot be bypassed by any begin beta testing in Q3 of this Company’s lead product is a note- December 6, 2001. popular applications, makes it application, including those that year. Platform Logic has verbal book-sized, whole-breast PET easy to adapt policies, plug-ins to are considered privileged by the agreements to conduct beta test- scanner (“PEM scanner”) that fits existing infrastructure, and sup- host operating system. The prod- ing at State Farm, JP Morgan into the existing installed base of ports any Windows (only versions uct will have extensive and scala- Chase, Mercantile B&T, and the over twenty thousand x-ray mam- that are based on NT i.e. XP), ble remote management, moni- NSA. mography units. The PEM scan- UNIX and Linux application toring, auditing, alarm mecha- ner will improve biopsy precision nisms, and utilize popular enter- and allow a surgeon to perform a prise management consoles, lumpectomy with the minimum Products which will make it suitable for possible excision of normal tis- wide deployment in any size sue. The company is developing a Platform Logic adds policy speci- enterprise. similar device for imaging pros- fication and enforcement mecha- trate cancer and plans to develop nisms to each target application, device applications for other types server or end user workstation Competition of cancer. and then actively monitors that policy to ensure compliance with The application security market application-firewall policies. can be segmented into two com- Predefined policy templates will ponents, authorization security be available for applications, and and application security. The
36 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 37 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
Powerize.com (now Hoover’s) www.powerize.com Psychiatric Genomics, Inc. www.psygenomics.com Linthicum, MD Employees: 268 Gaithersburg, MD MD Employees: 30
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland
Edwin Addison Sevenson Environmental Services $550,000 Richard Chipkin Oxford Bioscience Partners $500,000 Chairman CEO Current Fair Market Value Emerging Technology Partners Current Fair Market Value Mark Gaertner Michael Palfreyman, Ph.D. President $324,205 President $500,000
History enterprise partners - free access Events History gets for drug discovery, combining neuro-degenerative disorders to premium content that has cell-based assays with normal (such as ALS) or neuro-develop- Founded in January 1997 as never before been available to In July 2000 Hoovers.com, from Psychiatric Genomics, Inc. (PGI) human neuronal populations mental disorders (such as autism) KnowledgeLink, Powerize.com them for free in one place on Austin, TX, completed its acquisi- is a newly formed genomics-based with genomic gene expression are not well funded by large phar- was the leading provider of con- the Internet. Powerize.com’s net- tion of Powerize.com. Terms of drug discovery company focused assays. Since human neurons are maceutical companies. tent integration services for work of high-traffic affiliate the deal combined stock and cash. on providing breakthrough thera- the true substrate of psychiatric enterprise information portals Websites includes CNBC.com, Under the terms, DBED’s entire pies for a wide variety of psychi- diseases where one can recognize (EIPs) and high-traffic Websites. Fox Marketwire, and Netscape equity position is no longer sub- atric diseases through partner- possible therapuetic effects, these Events Powerize.com’s unique technology Netcenter, among others. ject to any lock up provisions. ships with pharmaceutical com- assays assess the molecular sig- integrates content from any num- Powerize.com also offers a soft- panies and using an integrated natures of a disease and enable ReNeuron Holdings plc and ber of Internet- or intranet-based ware package that betters the platform of genomics-based tech- PGI to rationally discover new Psychiatric Genomics Inc. have information sources with its own standard Web search engines cur- nologies. Psychiatric diseases and therapeutics for unknown mecha- announced an alliance that will vast collection of 10,000+ newspa- rently available. other mental health disorders are nisms of action and yield break- exploit neural stem cells as a drug pers, journals, and other sources. the second largest worldwide throughs in treatment. discovery platform in the field of Hoover’s, a business information market with significant unmet mental disorders. ReNeuron has service, integrated this technolo- Competition medical need and thus represent granted Psychiatric Genomics a gy into their Website and has a tremendous opportunity for the Competition world-wide exclusive license to since acquired Powerize.com. Sites that integrate content must development of new therapeutics. use specific cell lines within the rely on multiple partnerships and Pharmaceutical companies main- field of the agreement in on proprietary search engine ly focus on the following CNS dis- exchange for an initial cash pay- technologies to maintain a Web Products orders (in descending order): ment and warrants over Products presence. Numerous parties have depression, Alzheimer’s, anxiety, Psychiatric Genomic’s equity developed their own approaches PGI intends to produce innova- schizophrenia, substance abuse, which become exercisable upon Through a patent-pending busi- to consolidating data into one tive drugs for psychiatric disor- and eating disorders. Other con- the achievement of certain mile- ness model, Powerize.com is able site. ders by employing a signature- ditions such as Parkinson’s, stones. to offer its members – and the based drug discovery process, as epilepsy, bipolar disorder, behav- customers of its affiliates and opposed to the traditional method ioral (ADHD), and post-traumatic of target-based discovery. PGI’s stress disorder, obtain relatively strategy is to screen multiple tar- less research funding. Still other
38 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 39 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
RF Technologies, Inc. www.rfvalve.com Sequella, Inc. www.sequella.com Jessup, MD MD Employees: 5 Rockville, MD MD Employees: 13
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland
Esko Riikonen Denis Seynhaeve $249,990 Carol Nacy, PhD Confidential $500,000 pending Chairman and CEO Founder and CEO Calvert World Value Fund Current Fair Market Value Current Fair Market Value Eric Feldmann Leo Einck, PhD President GCI Ventures $270,612 Founder and President $500,000 Michael Vermehren Venture Management Consultants Maria Marmarinos Vice President Executive Vice President of Business Development
History market in 1994. The RF Valve Events History skin test is unable to distinguish Therapeutic TB DNA Vaccine has several unique features that between active TB disease and RF Technologies Inc. is a private- solve problems associated with The State of Maryland invested Sequella, Inc., founded in 1997, is vaccination or exposure. The Drug Compliance Monitor. ly held U.S. corporation, with a traditional pinch valves. The RF $250,000 in the company’s Series a vertically integrated biophar- Patch detects infectious patients wholly owned subsidiary in Valve patented design includes A equity offering. However, at maceutical company whose initial that must be treated. Market: 2 Finland. Production is in both the an elastomer tube that allows the this time, the Challenge invest- efforts are focused on diagnosis billion people are infected with M. Competition U.S. and in Finland. RF tube to flex, not stretch, when ment has not been converted into and treatment of TB. Sequella’s Tuberculosis. US market is esti- Technologies serves the global closing, thus optimizing elas- shares. Since the company gener- technologies address unmet mated at $330 million; global New product development for TB market, with sales facilities in tomeric resistance to wear ensur- ates in excess of $500,000 in needs of the marketplace to pro- market estimated at over $700 has been at a virtual halt for the North and South America, ing longer life as well as higher annual revenues, the State does vide diagnostics that accurately million. last 30 years, with few exceptions. Europe, Australia and the Pacific number of cycles. In addition, the receive 2% royalties on revenues detect the presence of TB disease Molecular TB diagnostics were Rim. Customers belong to the elastomer tube contains a wear above the $500,000 level. (latent or active), and therapeu- Bronx Box for Antibiotic introduced in the 1990’s, but were pulp & paper, mineral processing, monitoring system that provides tics that can be efficiently and Susceptibility Testing not registered as primary diag- industrial intermediates, chemi- an alert of tube wear prior to fail- The company expanded its inter- effectively administered. Sequella A device to confirm TB diagnosis nostics; they are used to confirm cal, mining, power generation, ure. national market to include will work with global healthcare and determine drug sensitivity of TB diagnosed by antiquated, 100- and waste treatment industries. Australia. agencies to introduce its products the patient isolate. Status: year old methods of sputum into all markets. All five of Phase I clinical trials are expect- smear or culture. No TB vaccines Competition Sequella’s front-line technologies ed to begin 2002. Competitive have been introduced since the Products have been supported by one or Advantage: Current tests take 2- BCG vaccine. RF competes with all types of more grants, totaling more than 6 weeks to determine drug resist- RF Technologies manufactures a valves offered in the marketplace, $7.9 million. ance; this product can determine full line of On/Off and Control but its line of RF Valve and antibiotic sensitivity in less than Events valves for slurry and bulk solids aiRFlex products can better with- 2 days. Market: The estimated handling services. They solve stand the rigors of abrasive, cor- Products global market for this device is Tentative closing for Series A valve problems related to abra- rosive, and scaling flow media. over $300 million. round to occur in Oct 2002. sive, scaling, plugging and corro- Transdermal Patch for Active TB sive services. The RF Valve, the Skin test that detects active TB Other products in earlier stages of latest high performance valve disease. Status: Phase I/II clini- development: design, was introduced to the cal trials complete. Phase III scheduled for Q4 2002/Q1 2003. New chemical entity (NCE) from Competitive Advantage: PPD Ethambutol (EMB)
40 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 41 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
Solution Technology International www.stius.com Sourcefire, Inc. www.sourcefire.com Frederick, MD - McHenry, MD MD Employees: 9 Columbia, MD MD Employees: 28
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Cost to State of Maryland Dan Jonson Wayne Jackson SQL Star International, Inc. $350,000 Sierra Ventures $550,000 President & CEO CEO Inflection Point Ventures Randle Rodeheaver Key Management Group, Inc. Current Fair Market Value Marty Roesch Current Fair Market Value Chief Financial Officer Founder and CTO Core Capital $350,000 $550,000 Urban Jonson SVP Systems Dev. & Operations
Salvatore Mastellone Sr. VP, Program Management
History Competition Events History remote, distributed sensors. The Events products can accommodate very Solution Technology In addition to in-house develop- In 2001 STI was awarded a con- Marty Roesch developed an intru- high data throughput. The company completed an initial International, Inc. (STI) is based ment, which is the preferred tract to develop an enterprise sion detection software product $2 million round of funding in in Frederick County, MD and has avenue by the top 200 insurance solution for the Swiss Pool for called Snort. The user community February 2002 and has since been in operation since November companies, there are a number of Aviation Insurance, Zurich, has helped to refine the open Competition closed on an additional $5.5 mil- 1996. STI commenced as a spe- consulting firms and technology Switzerland. The pool consists of source product over the last three lion. The proceeds will support cialized software development companies that are offering some 21 insurance companies and 4 years to the point where the soft- This field is saturated with many significant staffing increases, par- service provider to partly fund combination of the Internet, busi- reinsurance companies. This sys- ware has become the foundation established and emerging compa- ticularly in sales and marketing, design and development of its ness-to-business and business-to- tem is based on STI's SurSITE™ for an enterprise version intended nies. Considering that Snort has as well as continued product business-to-business-to-con- consumer application solutions Enterprise Platform. for larger corporate customers. been well received by trade mag- research and development. sumer, e-commerce solution for that enable e-commerce. STI’s azines and other sources that rate the insurance industry. management team believes that the product versus commercial The company established a most of these solution providers Products products, the enterprise versions System Development and Web currently suffer from at least one, should be even more robust. Hosting center in Frederick, Products and frequently several of the fol- The current product portfolio con- Internet Security Systems repre- Maryland. lowing common problems: (i) hav- sists of elements for monitoring sents the largest pure competitive STI is building Web-based scala- ing a poor back office capability and analyzing network traffic threat, with annual revenues of ble e-commerce solutions for for e-commerce, (ii) not providing and alerting when suspicious approximately $200 million. domestic and international insur- the full spectrum of Web-enabled activity is detected. The Network Many other intrusion detection ance providers. SurSITE® modules to support the entire life Sensor provides the most effective packages are but one offering (B2B2C) solution components tie cycle of insurance processing, (iii) network intrusion detection sys- from larger parent companies, traditionally separated front-end not being scalable and (iv) high tem by enhancing the proven such as Silent Runner from applications and back-office lega- maintenance overhead. Snort technology and adding an Raytheon, Cisco’s own offering, cy systems into cost reducing easy to use interface, optimized and Network Associates’ version straight-through-processing hardware, powerful data analy- of the Haystack software. Small framework. SurSITE® turnkey sis, policy management and company threats include NFR solutions have three components: forensic capabilities. The Security, also located in a multi-year SurSITE® Licensing Management Console provides Maryland. Agreement, a Help Desk, and a centralized management of Web-hosting Agreement.
42 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 43 ENTERPRISE INVESTMENT FUND OVERVIEW ENTERPRISE INVESTMENT FUND OVERVIEW
Vapotherm, Inc. www.vtherm.com Wisor Telecom www.wisor.com Annapolis, MD MD Employees: 10 Rockville, MD MD Employees: 35
Management Team Other Co-Investors Cost to State of Maryland Management Team Other Co-Investors Early Stage Enterprises SAIC Venture Capital Robert Storey Dr. William Cirksena $250,000 Mark Mendes Keystone Venture Capital CEO and President President and CEO Boston Ventures Caradyne, Ltd. Cost to State of Maryland Current Fair Market Value Vaikunth Gupta Riggs Capital Partners William Niland Chairman Megunticook Management $400,004 Chairman and Director, New $250,000 Business Development Robert Long TDF - Telecommunications SVP, Sales and Marketing Development Fund Current Fair Market Value Mid-Atlantic Venture Funds Hickory Venture Group $785,187
History Products Competition History Products Competition
Vapotherm’s high flow air device Vapotherm, Inc. has developed a Competitors, such as Respironics, Operational support systems and The Wisor Service Management Larger companies provide simi- was originally constructed as a high flow therapy system that produce lines of equipment that service order management are Solution (SMS) Suite enhances lar products but are more UNIX- much larger piece that was can deliver breathing gas at flow include multiple humidifiers and major issues for local exchange the operational support systems based, have significantly higher applied to animal markets. The rates of 5-40 lpm via a variety of masks that can be interchanged, carriers and enterprise cus- (OSS) so that the processes for price points, or require extensive current management realized its patient interfaces including nasal depending on the patient’s needs, tomers. The company was started ordering, provisioning, mainte- customization or migration. potential for the human markets cannula. Before, Vapotherm, effectively driving continuous air to address these issues and keep nance, repair, etc. are accurately and thus licensed the basic tech- nasal cannula flow was limited to flows to the patient. the customer from having to coordinated and performed. The nology and modified units for hos- a maximum of 6-8 lpm due to develop this function from SMS Suite is a solution for any Events pitals and other institutions. The extreme discomfort to the patient scratch, or perform it manually. telecom service offering, using product also received FDA’s at high flows. The patented Events any network technology. Large Mark Mendes, formerly Chief 501(k) approval to market the Vapotherm membrane technology enterprises and communications Operating Officer at Net2000 product. delivers molecular vapor with The intial Challenge investment carriers can manage and control Communications, assumed the nearly 100% relative humidity at of $100,000 converted into equity service by ensuring accurate President and CEO roles. body temperature. This warmth and an additional $150,000 was ordering and monitoring of serv- Furthermore, the sales focus has and humidity allows high flows to added through the Enterprise ice delivery across the entire shifted from the traditional carri- be comfortably tolerated by the Investment Fund in July 2001. order fulfillment lifecycle. ers and Competitive Local patient. The Vapotherm 2000i is a Exchange Carriers in favor of safe, convenient, easy to use, and sales to enterprise customers. affordable respiratory therapy device that may reduce costs and improve patient outcomes. The warm vapor has many clinical applications within today’s healthcare market including hos- pitals, long term care, physician offices, hospices, and home care.
44 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 45 ENTERPRISE INVESTMENT FUND OVERVIEW THE CHALLENGE INVESTMENT FUND
Yafo Networks www.yafonet.com Description Hanover, MD MD Employees: 36 The Challenge Investment Program (CIP) is a seed program that was designed to invest modest dollars ($50,000) in pure high technology start-up firms. The program was initiated as a grant program in fiscal Management Team Other Co-Investors Cost to State of Maryland year 1989 and modified to an investment program as of January 1, 1994. Richard Backus US Venture Partners $250,000 CEO New Enterprise Associates During fiscal year 1996, and with the increase of additional staff to the Investment Financing Group, the Boulder Ventures CIP became more dynamic, responding to the immediate demands of the start-up firms, as opposed to a Frank Moody Current Fair Market Value VP, Engineering Mellon Ventures semi-annual award system. The CIP requires that the firm retain its principal place of business with Wheatley Partners $250,000 Maryland for a period of three years. It further adopted a criterion that a Challenge recipient firm should David Korotkin WorldCom Venture Fund nominally have the potential to be an Enterprise Investment consideration or an attractive equity invest- VP, Finance ment within a two-year period.
All Challenge Investments are 10-year legal agreements having a royalty repayment schedule. Assuming an initial investment, the State is entitled to 2 percent of product sales in excess of $500,000 a year for a maximum repayment of three times the investment over the life of the agreement. The agreement also reflects that in the event that the Challenge recipient receives outside equity funding, the company must History Products Events repay DBED 1 percent of the equity raised in excess of $500,000, again to a maximum repayment of three times the investment. Total exposure of the recipient’s repayment responsibility would be six times the Henry Yaffe, founder of the com- Yafo Networks’ real-time adaptive The company recently raised $22 investment over the life of the agreement. pany, once worked with Anne solutions enable optical system million in a third round of financ- Arundel County firm Ciena. He vendors and service providers to ing, bringing the cumulative The total of a Challenge Investment was increased during fiscal year 1997 to $100,000 maximum. Initially, has since developed a product line overcome PMD, one of the most amount of funding to $61 million. $50,000 is invested in a seed stage firm based on the successful review of a submitted business plan followed of polarization mode dispersion difficult problems facing the by a verbal presentation by the principal(s). This investment is further increased in increments of $25,000 (PMD) products for the optical deployment of high-speed optical The Yafo40, Yafo Networks’ com- based on the achievement of mutually accepted milestones, that would enhance the firm’s attractiveness to fiber market. PMD is a “blurring” networks on today’s fiber plant. pensator for 40 Gigabit per sec- the private sector investment community. of the light signal inside optical PMD is a critical stumbling block ond (Gbps) networks will undergo fiber caused by the tendency of for the deployment of 10 Gigabit trials by Deutsche Telekom in a The repayment obligation would also reflect these incremental increases in the CIP investment. It has now the two planes of light to travel at per second (Gbps) networks on test of 40 Gbps optical transmis- been adopted, that for an unusually compelling situation, an additional $50,000 be invested in a Challenge differing speeds due to stress on legacy fiber, and for the deploy- sion systems. The tests will the fiber or deviation from perfect ment of 40 Gbps networks on vir- include a laboratory trial on a recipient with the approval of the Challenge Advisory Committee, with a maximum of $150,000 invested in circularity. PMD becomes a sig- tually any fiber. testbed with PMD generated by any one recipient. This increase in funding was initiated to further ‘bridge’ the gap between the ‘seed stage’ nificant problem in high-speed Yafo’s higher-order emulator and funding program (Challenge) and the equity program (Enterprise); hence truly fulfilling a financial conti- optical networks, especially at traditional PMD emulators, as nuity regarding DBED’s investment strategy. Total exposure of the recipient’s repayment responsibility speeds of 10 Gigabits per second Competition well as a field trial in the DT net- would subsequently be $900,000, or three times the maximum investment amount applied to royalties on or above. PMD also accumulates work at Nuremberg. revenue and outside equity financing. over distance, making it a greater Companies such as Phaethon and challenge over long optical links. NovaPhase represent more direct The repayment obligation was further modified that in the event that the recipient received an outside or competition. Companies such as private sector equity investment during the effective term of the agreement, DBED would reserve the option Big Bear are applying algorithms to convert the indebtedness of the Challenge recipient to equity. The value of this equity investment would to the PMD issue as a substitute be on the same terms and conditions as determined by the initial outside or private sector investor. It is also for a physical compensator. the intent to do this equity conversion along with an additional investment through the Enterprise Fund, hence fulfilling DBED’s goal of offering a continuum for an early stage investment initiative.
46 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 47 THE CHALLENGE INVESTMENT FUND THE CHALLENGE INVESTMENT FUND
Performance DATE ENTERED COMPANY AMOUNT DESCRIPTION STATUS INTO INVESTED The Challenge Investment Program has made over 160 investments since fiscal year 1993, resulting in a PROGRAM total investment of over $7.9 million. Due to the high risks of start-up financing, an impressive 75 percent of the recipient firms are still in business and a modest number of firms have achieved revenues resulting in repayments. Since a more rigorous initial investment criteria have been placed on Challenge recipients, Agentsmith was founded in mid 2001. Its mission is to provide software and services that manage and ana- 18 firms have qualified as investments for the Enterprise Investment Fund. lyze revenues, forecast demand, segment customers and set prices for sellers of advertising in the media $ 125,000 industry. Agentsmith currently offers the first two prod- To highlight the effectiveness of the Challenge Program, three companies, started with minimum invest- ucts in its suite. The first product, Analyzer, integrates ments of $50,000, graduated to the Enterprise Investment Fund and were eventually merged into larger, Agentsmith $300,000 all revenue related data, improving a manager’s abili- 11/26/01 Active publicly traded companies. Today the companies employ over 510 individuals and have a combined market www.asmithinc.com Enterprise ty to make pricing and inventory decisions. The Investment Maximizer, a station-policy driven tool that optimizes capitalization in excess of $290,000,000. Pending and simplifies inventory management, reduces the cost of selling and managing spots. The third product, Rate Manager, is a powerful price management solu- The other 13 graduated to the Enterprise Investment Fund currently employ over 250 highly compensated tion that accurately predicts the optimum pricing for a individuals and have a cumulative post valuation of over $100,000,000. media outlet’s inventory. All current products are offered through an ASP.
Note: On the following pages, companies in bold indicate graduation to the Enterprise Investment Fund.
A.L.Tech Biomedical, Inc. is an international biomed- ical research and development company dedicated to developing innovative technologies and products that will improve diagnosis and treatment of patients suf- fering from genetic-based diseases including can- cers. The Company expects to become the first-to- market and sole-provider of a revolutionary technique to test for cancer using a patent protected technology A.L. Tech Biomedical 3/12/01 $ 50,000 called Solution Hybridization (SH). Using ten exclu- Active www.altechnologies.com sive licenses to the patent protected Solution Hybridization (SH) technique, ALTech will enable a significantly more accurate and sensitive cancer detection. ALTech recently successfully completed SBIR Phase I grant with the Dept of Defense.
AMBA Biosciences, based in Gaithersburg, Md., develops gene transfer, stem cell, and human cell modification technologies. AMBA is focused primarily on the development of gene-based and cell-based therapies, the discovery of novel cytokines, cytokine production, and toxicology testing. AMBA has developed platform gene transfer and stem cell technologies, including a functional bone marrow Subsidiary of microenvironment capable of ex-vivo maintenance AMBA Biosciences, LLC 6/25/97 $ 50,000 Clonexpress, Inc. and amplification of human stem cells. These stem cells retain their ability to differentiate into different myeloid lineages, such as dendritic cells and macrophages. The company has used these differentiated cells to produce high levels of alpha interferon. In addition, AMBA's dendritic cell technology can be used in cancer and AIDS drug development and in the identification of clinically relevant cytokines.
48 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 49 CHALLENGE INVESTMENT FUND OVERVIEW CHALLENGE INVESTMENT FUND OVERVIEW
DATE DATE ENTERED ENTERED COMPANY AMOUNT DESCRIPTION STATUS COMPANY AMOUNT DESCRIPTION STATUS INTO INVESTED INTO INVESTED PROGRAM PROGRAM
America Tomorrow, Inc. offers consulting and online bConvergent's unique technology solutions, provided services in the use of multimedia and to small offices nationwide as web-hosted applica- telecommunications technologies in learning. tions, provide customers with all the functionality of an Education and corporate clients receive computer- integrated voice-mail, e-mail and wireless paging sys- based information, communications, training and tem, without having to purchase or maintain tradition- al phone and computer system hardware that often applications. The company's products and services bConvergent, Inc. 3/9/01 $ 150,000 costs tens of thousands of dollars. This has resulted Active are delivered via the World Wide Web on the Internet, www.bConvergent.net America Tomorrow 7/15/95 $ 50,000 and include: America Tomorrow, an upbeat informa- Active in significant savings for small offices, not to mention www.america-tomorrow.com tion service containing reports on the good things the advantages of having a single integrated, mainte- happening in education and training; EdCentral, an nance-free communication system for everything "electronic meeting place" where education from wireless text pages to voicemail, has led to professionals can keep up to date with education bConvergent's rapid ascendancy on the national level news and explore other education-related information as an "industry creator." resources; and customized online and Web consulting.
Patent pending on mass spectrometry proteomics differential display technology, teamed with Johns Hopkins, an Australian organization, eV corporation The company sells the SSM 150, a device that grinds (detection), and Bio-Rad Corporation (equipment). BioArray Technologies, Inc. $ 75,000 and sterilizes medical waste so that the end product 1/5/99 Additional patents pending of protein labeling and Active can actually be deposited with regular trash. The Graduated to separation on proteomics chip. Inquiries for DNA Antaeus Group 5/11/93 $ 50,000 waste is superheated and ground before fluids and Enterprise microarray custom synthesis/services/partnerships www.anteusgroup.com solids are separated by a filter. Although the "box" is Investment Fund grow. priced around $200,000, it will reduce the costs of hauling medical waste by a factor of 30.
Biological Mimetics, Inc. is a vaccine development company whose focus is on developing vaccines, Biological Mimetics, Inc. 3/31/97 $ 50,000 Active Artifact is targeting the growing market for software diagnostics, and therapeutics against a broad array of development applications that empower companies human and nonhuman pathogens. to effectively manage and utilize software artifacts. Software artifacts are any technical asset, such as specifications, design models, source code, compo- Graduated to Artifact Software 6/13/02 $ 100,000 nents, and documentation, deemed necessary for Enterprise www.artifactsoftware.com implementing or updating an application. By leverag- Investment Fund BioMat Sciences develops and commercializes pro- ing existing software artifacts, organizations can prietary materials technologies for the oral health better allocate and utilize development resources and marketplace. It is poised to launch Primagen®, an BioMat Sciences adhesive that strongly bonds materials to teeth. Its more effectively control the spiraling costs and poor 4/30/01 $ 150,000 Active visibility of development projects. www.biomatsciences.com other technologies include an advanced composite to replace mercury-containing amalgam, and a system for rapidly manufacturing high-performance materials for tooth reconstruction.
Audit Systems patented EASY 1 DEX system tracks merchandise sold and money collected from vending machines. ASC’s Navigator Software is an ASP/ BPP was created by scientists at Johns Hopkins sequel server based package that helps manage the University School of Medicine to ensure that products Audit Systems Company 7/15/95 $ 50,000 entire operations of vending companies, so that Active made from plants that provide the anticancer phyto- www.auditsystems.com customers can visit their vending machines over the chemical sulforaphane (SGS(tm)) are developed and internet. Vending machines are remotely monitored Brassica Protection made available to the public under rigorous and stan- with ASC’s EASYNET Wireless, which is a private Products, LLC 10/3/97 $ 50,000 dardized scientific conditions following strict food Active packet switching network to be installed throughout www.brassica.com safety standards. BPP markets BroccoSprouts® the country. fresh broccoli spouts in supermarkets in the U.S., Japan and New Zealand and recently launched into Colorado, Brassica Teas, containing measured levels of SGS.
50 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 51 CHALLENGE INVESTMENT FUND OVERVIEW CHALLENGE INVESTMENT FUND OVERVIEW
DATE DATE ENTERED ENTERED COMPANY AMOUNT DESCRIPTION STATUS COMPANY AMOUNT DESCRIPTION STATUS INTO INVESTED INTO INVESTED PROGRAM PROGRAM
The company’s solutions enable corporations to mon- The company has developed a diagnostic tool, called itor real time events in the supply chain from devices in vitro CMI, which integrates magnetic separation of such as bar code readers, RFID sensors, satellite blood cells with bioluminescent detection for the location sensors, process instrumentation and inven- measurement of immune system function. Cylex’s tory tracking units. Linking these devices with enter- immunodiagnostic kit measures the level of T cell acti- prise applications such as ERP, Supply Chain and vation in blood. It has a major application in monitor- Business Devices CRM provides immediate, programmatic insight into 7/22/02 $ 50,000 Active ing AIDS in humans but also has applications in the www.businessdevices.com the location, condition, status and security of invento- Cylex, Inc. Graduated to (formerly Biotechnology disease management of cancer, autoimmunity, and ry, products, assets, and orders. Lowering the cost, $ 75,000 Enterprise 4/2/96 other infectious diseases. The company believes the time to deploy, and critical skills required to implement Transfer) Investment Fund in vitro CMI assay provides information about cellular this capability provides companies with new levels of www.cylex.net immune response in a rapidly processed, easy to use competitive advantage, thus enabling streamlined form, which is more amenable to monitoring a dis- supply chain business processes and new levels of ease’s course than the antibody measurements customer service. alone. The product’s advantage is that results are delivered quickly since current testing procedures available take a week to perform.
Established in 1993 in Jessup, Maryland, this woman- owned and operated manufacturer produces a line of advanced rehydration and vaccine delivery products that are sold both in the United States and in Central America and Europe. Its key product, CeraLyte, is Chesapeake PERL offers an improved process of proven more effective in reducing symptoms of diar- recombinant (genetically engineered) protein rhea and dehydration as it restores fluid, electrolyte manufacturing. Current processes are highly specific Cera Products, Inc. 4/2/96 $ 100,000 and cell balance, to shorten length of illness and help Active - one process yields one product. Any change in raw www.ceralyte.com shorten hospitalizations. All the Company's products materials, process conditions, or product can disrupt have been developed and tested with the assistance the entire operation and require much additional R&D. of medical experts at major medical centers, including Chesapeake PERL's manufacturing procedure, how- physicians at Johns Hopkins, and are registered on ever, can make virtually any protein product without the National Supply System and available from dis- disrupting the process and without requiring further Graduated to Chesapeake PERL tributors nationally as well as from the company 3/16/00 $ 150,000 R&D. The system is easily customized to produce Enterprise directly. www.chesapeakeperl.com almost any recombinant protein, automati- Investment Fund cally, at high yield and low cost, with superior quality and biological activity. The company wants to produce recombinant proteins using cabbage lar- vae or other living hosts. The color-tagged lar- The company's facility will use biochemical technolo- vae will act as mini-bioreactors via the insertion of an gy from UMBI Center for Agricultural Biotechnology insect virus into the host or larvae. The low cost pro- (CAB) to produce a special grade of chitosan from duction allows Chesapeake PERL to enter markets chitin, the substance that gives crab shells structure where the high cost of recombinant protein produc- and strength. A Maryland composting company and a tion is prohibitive. Louisiana oil and gas production firm have teamed up to convert crab shells to a special grade of chitosan for oil and gas field drilling. The facility has the capac- Chitin Works ity to store 25 tons of crab wastes at a time. The plant (formerly New Earth 8/26/96 $ 150,000 can handle 3,000 tons of crab waste per year. The Active D-Fusion is a leading provider of web mining infra- Services Inc.) company sold out its entire production in the first two structure tools. Its AlertWorks workstation provides years and projects the same for this year even with information analysts and researchers a powerful increased production. The product has now been workstation for managing near real-time updates from proven to perform exceptionally well in the field in the content anywhere on the web. AlertWorks allows an initial application. There are twelve other potential information analyst to subscribe to customized applications in the oil and gas drilling industry. The updates from any web page found on the Internet. company, through Venture Chemicals, received SBIR D-Fusion, Inc. 11/21/00 $ 100,000 AlertWorks returns the focus to the analysis of content Active funding to research specific enzymes to modify large www.d-fusion.net and removes the inefficiencies in monitoring and look- molecules or polymers of chitosan. ing for content updates. D-Fusion’s AlertStream plat- form provides web content discovery and monitoring services through a powerful and scalable platform. Web mining applications in a variety of sectors take advantage of AlertStream for rapid application devel- opment and scalability. Both its tools and platform are in use in a number of leading industry sectors.
52 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 53 CHALLENGE INVESTMENT FUND OVERVIEW CHALLENGE INVESTMENT FUND OVERVIEW
DATE DATE ENTERED ENTERED COMPANY AMOUNT DESCRIPTION STATUS COMPANY AMOUNT DESCRIPTION STATUS INTO INVESTED INTO INVESTED PROGRAM PROGRAM
The company, recently relocated from a midwestern GetIntegrated provides proactive human resource DVIP Multimedia, Inc. $ 100,000 state, is working to provide real-time image resolution Active solutions to small and medium-sized businesses in www.dvipmm.com 7/1/02 solutions in a number of different industry verticals. every phase of the business cycle, to help them more effectively attract, retain, and manage human capital. By streamlining their administrative processes and using one of two, unique solutions-- iComp and iFlex- - we allow managers/employers to focus on the core GetIntegrated.com competencies and strategic challenges of their 9/11/00 $ 100,000 Active Eka Systems’ mission is to be the premier global www.getintegrated.com businesses -- the revenue - generating aspects. provider of reliable, low-cost, internet-enabled, GetIntegrated's HR professionals deliver value to embedded wireless networks for monitoring, control, clients via onsite, call center and online support and and automation applications. Towards this goal, Eka communication. GetIntegrated began as a bricks- has developed a distributed wireless network technol- and-mortar HR outsourcing business in 1998, and ogy platform, EkaNet™ that is uniquely positioned to has now web-enabled all of its services, so clients EKA Systems profit from these rapidly expanding markets. Eka and their employees will have access to personal HR www.ekasystems.com 11/15/01 $ 100,000 Active Systems is unique because it can vertically integrate data 24x7x365 through customized, corporate por- this technology into customer-focused solutions tals. where EkaNetTM provides a distinct competitive advantage. The solutions are comprised of both Eka’s growing line of products and products and services from our strategic partners. Harta Instruments is a multi-disciplined, full service, ISO 9001 compliant, electronics engineering compa- ny located in Gaithersburg, Maryland. Using the com- Harta Instuments, Inc. pany’s patented technologies, they have designed, 4/2/96 $ 150,000 Active In its fully equipped clean room facility, Epitaxial www.hartacorporation.com manufactured, and marketed their line of Microplate Technologies manufactures compound semiconduc- Luminometers and Luminometer Reference Plates. tors and value-added wafer products for the wireless Harta’s products are available as OEM. Harta and optoelectronic industries. Epitaxial Technologies Instruments is also a contract manufacturer of bio- Epitaxial Technologies 3/5/97 $ 150,000 offers a low cost foundry service as well as value- Active medical instruments and other electronics devices. added semiconductor materials and wafer products. The company also provides a capability to grow high- ly challenging material structures on GaAs, InP, GaSb and InAs.
HTMS designs, manufactures, and markets comput- er-based medical simulators that allow medical per- sonnel to practice medical procedures without placing E.V.A. Corporation is a startup medical device com- patients at risk. HTMS has progressed from offering a pany dedicated to designing and building devices single product for a single market segment to engag- EVA Corporation 3/11/99 $ 50,000 intended to be used in the endovascular treatment of Active ing eight market segments with three different simu- abdominal aortic aneurysms. The Company is cur- lation product portfolios, actively sold in North rently in the research and development phase. America, Europe, Asia and Australia. Each of the product lines consists of an ever-expanding menu of Graduated into HT Medical Systems, Inc. software modules that take advantage of a common 11/15/95 $ 50,000 Enterprise www.immersion.com tactile feedback interface device. CathSim allows medical professionals to practice a wide range of Investment Fund intravenous catheterization procedures. The PreOp Endoscopy simulator prepares professionals to per- form various flexible endoscopic procedures such as bronchoscopy and sigmoidoscopy. The PreOp Endovascular product allows physicians to practice angioplasty and other endovascular techniques through the manipulation of simulated guide wires, sheaths, catheters, pacemaker leads, and other devices.
54 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 55 CHALLENGE INVESTMENT FUND OVERVIEW CHALLENGE INVESTMENT FUND OVERVIEW
DATE DATE ENTERED ENTERED AMOUNT COMPANY AMOUNT DESCRIPTION STATUS COMPANY DESCRIPTION STATUS INTO INVESTED INTO INVESTED PROGRAM PROGRAM
IncenSoft offers a full-spectrum of incentive compen- Intradigm Corporation is focused on exploiting its pro- prietary target discovery and validation technologies IncenSoft 6/5/00 $ 150,000 sation and business performance management soft- Active to develop new therapeutics for cancer, arthritis and www.incensoft.com ware designed to motivate employees, boost morale, enhance employee loyalty and improve productivity. other critical care indications. Intradigm’s approach is Its flagship product, IncentPower Enterprise, can be unique in that it rapidly discovers and discriminates implemented throughout an entire organization or at the proteins that control disease as distinguished the divisional level. from those that only correlate with disease. Disease- control validation of targets enables drug develop- Graduated into Intradigm 9/22/00 $ 50,000 ment based on target efficacy reducing costs and Enterprise www.intradigm.net improving the success rate. Intradigm does this by Investment Fund exploiting its leading expertise in gene delivery in ani- mals to over-express protein targets and/or to silence Infinity Pharmaceuticals, Inc. is a functional genomics them with RNAi directly in animal models of disease. company that applies protemic technologies to drug Intradigm’s method skips slow and expensive valida- target validation and drug discovery.The company will tion steps by operating directly in the active disease commercialize the target-validation processes, the tissues rapidly revealing which proteins provide effi- discovered drug targets and ultimately, thera- cacy. peutic candidates. The business model that the com- pany will follow is that of a biotechnology company Infinity Pharmaceuticals 10/12/01 $ 50,000 that leverages discoveries from platform technology Active in order to later become a biopharmaceutical compa- ny. The mission of the company is to discover new protein and antibody therapeutics for cancer by using Intralytix was founded in 1998 to address growing target-driven interaction protemics technology and problems in the control and treatment of disease coupling it with state-of-the-art high throughput drug causing bacteria. These problems are presently com- screening. pounded by public and governmental reluctance to employ new and potentially hazardous chemical agents or solutions born of recombinant technology. Intralytix is using its core bacteriophage technology to Intralytix 4/18/01 $ 100,000 develop novel natural products for use in food pro- Active www.intralytix.com cessing, environmental clean up, sanitation, con- sumer products, and problems of antibiotic resistance Intellivax produces intranasal and oral sub-unit in human therapy. In June 2002 Intralytix received an vaccines against shigellosis (bacterial dysentery). Experimental Use Permit from the US Environmental These vaccines are WHO and US military priorities Protection Agency for the first in a line of products that have successfully completed safety and designed to prevent bacterial contamination of food immunogenicity Phase I clinical trials in volunteers. and food processing plants. The successful completion of three trials using two distinct products serve as proof of principals that Graduated into Intellivax International, 6/5/00 $ 150,000 Intellivax vaccine delivery systems elicit mucosal and Enterprise Inc. serum immune responses in people. Advanced Investment Fund www.idbiomedical.com clinical trials to demonstrate protection of volunteers against shigellosis after challenge with virulent Ipsil, Incorporated has developed and patented an shigella and large scale Phase 2 safety and extremely compact and high performance (line- immunogenicity studies are planned at several clin- speed) implementation of a TCP/IP controller. This ical testing sites in Baltimore, Maryland and greater device integrates a TCP/IP stack along with several Montreal. commonly used "application layer" services such as a Ipsil 11/8/01 $ 150,000 web server, DHCP, FTP, and TELNET. This allows for Active www.ipsil.com the direct connection of sensors, actuators, and other such devices to the Internet without the need for any additional processor/controller/network interfaces. Company provides electronic ordering services for Ipsil is marketing to industrial control, automation and businesses and consumers. The E::CARGO software embedded systems manufacturers. The company is enables the E::PEN to identify purchases by cus- Graduated into currently seeking its Series A round of financing. Internet Cargo Services, 10/30/97 $ 50,000 tomers who scan catalogs and other publications. Enterprise LLC Ordering information is then received from the pen Investment Fund after it has been placed in a docking station. Orders are then dispersed to the respective merchants.
56 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 57 CHALLENGE INVESTMENT FUND OVERVIEW CHALLENGE INVESTMENT FUND OVERVIEW
DATE DATE ENTERED ENTERED COMPANY AMOUNT DESCRIPTION STATUS COMPANY AMOUNT DESCRIPTION STATUS INTO INVESTED INTO INVESTED PROGRAM PROGRAM
Powerize.com is the leading provider of content Metastatin Pharmaceuticals is a biopharmaceutical integration services for enterprise information portals research and development company in the field of (EIPs) and high-traffic Web sites. Offers free, sub- cancer, specializing in the development of new ther- scription, and fee-based information services. apuetic agents for controlling cancer metastasis and Revenues are also derived from royalties for sub- angiogenesis. The Company's initial efforts are scriptions to other publications. Powerize.com’s focused on the human protein "Uteroglobin" (UG), unique technology integrates content from any num- which research suggests may have potent ber of Internet- or intranet-based information sources cytostatic anti-metastatic and anti-angiogenic activity. Knowledge Link, LLC with its own vast collection of 10,000+ newspapers, Graduated into Research has shown that recominant human (Powerize.com) 4/25/97 $ 50,000 journals, and other sources. By also providing robust Enterprise Uteroglobin very markedly prevents cancer cells from www.hoovers.com Investment Fund invading through their local environment -- which is billing and customer-management services, Metastatin Pharmaceuticals 11/13/00 $ 150,000 Active one of the first steps in the sequence of events lead- Powerize.com has become the "instant information www.metastatin.com infrastructure" for a growing number of high-traffic ing to the spread of cancer, known as metastasis. Websites and enterprise portals. Powerize.com’s Furthermore, research has shown that as prostate own fast-growing Website is a showcase for the serv- cells change from early into later stages of cancer, ices that the company offers to its affiliates and busi- there is a progressive loss of Uteroglobin and its ness partners. Powerize.com offers its 500,000+ potential protective action against metastasis. Thus, members free, unlimited access to content from more Metastatin intends to develop a set of diagnostic than 2,400 of its premium sources. and/or prognostic tests based upon measurements of the amount of Uteroglobin in cells and tissues, which may aid in the prediction of tumor aggressiveness and metastatic potential.
LearnScape is a profitable education technology company that provides technology based training pro- grams for adult learners in companies, job-training MicroEnergy Systems was founded in 1988. The programs, welfare to work programs, community col- company relies on combustion of activated carbon for leges, and correctional institutions. LearnScape pro- DOD and chemical/biological warfare disposal. It vides the skillsCOMPASS family of reading, math and implements microcoal technology that can be used in LearnScape Corporation work habits programs to prepare individuals to enter Active 10/3/97 $ 150,000 modular and portable power plants, plus operates www.learnscape.com the workplace or to advance on-the-job. MicroEnergy Systems more efficiently. Certain military agencies cannot SkillsCOMPASS offers 163 contextual, workplace ori- Active 6/26/96 $ 50,000 process conventional coal to dispose of chemical ented lessons with English and Spanish audio in LAN (formerly TCS, Inc.) weapons, thus the one application. Some utility plants and Internet versions to allow training anywhere and www.microenergysystems.com are already employing this technology to produce anytime. Xerox Corporation, Ocean Spray electricity. Additionally, it has a manufacturing Corporation and Aerostructures Corporation are relationship with Beitzel Corporation of Grantsville, some of LearnScapes customers. MD.
Maxion Technologies, Inc. develops semiconductor Minerva Pharmaceuticals is a biopharmaceutical lasers specifically designed to enable reliable, broad- product development company dedicated to detecting band, wireless optical communications; the company and eliminating cancer before clinical symptoms Maxion Technologies also develops lasers supporting products for chemical 4/11/02 $ 100,000 Active occur. Minerva’s patented intellectual property is the www.maxion.com sensing systems and industrial process controls. discovery that some components of the DNA replicat- Based on research commercialized from two institu- ing machinery function differently and exist in unique tions, the lasers are able to transmit over free space Minerva Pharmaceuticals forms in cancer cells and alterations from the normal 4/26/99 $ 50,000 Active while preventing components from overheating. www.minervapharmaceuticals.com to the cancer-specific form is the first signal of cancer. The Company is currently developing a family of early and accurate laboratory diagnostic products. In addi- tion, an understanding of how the switch occurs should lead to the identification of new targets for the development of cancer specific therapeutic and pro- phylactic drugs based on Minerva’s technology.
58 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 59 CHALLENGE INVESTMENT FUND OVERVIEW CHALLENGE INVESTMENT FUND OVERVIEW
DATE DATE ENTERED ENTERED COMPANY AMOUNT DESCRIPTION STATUS COMPANY AMOUNT DESCRIPTION STATUS INTO INVESTED INTO INVESTED PROGRAM PROGRAM
Neoreach, Inc., a subsidary of the publicly traded NexTone Communications is a leading provider of Mobilepro Corp. (OTC BB MOBL), is an advanced Voice over Internet Protocol (VolP) infrastructure for communications semiconductor company focused on service providers and carriers. NexTone’s solution, 3G modems ASICs and RF CMOS. Neoreach’s lead- known as the Virtual Central Office, enables these Neoreach, Inc. ing edge designs have given it a distinct competitive providers and carriers to interconnect their voice net- 3/2/01 $ 100,000 Active www.neoreach.com advantage in the 3G-modem marketplace. As the new NexTone works in the most simple and cost effective way, 3G networks are rolled out globally, Neoreach is posi- Communications, Inc. 10/7/98 $ 50,000 allowing them to bridge between existing (H.323 stan- Graduated to tioned to be both the leading modem supplier to (formerly Netoids, Inc.) dards) networks and emerging next generation net- Enterprise handset manufacturers and supplier of Pico Base www.nextone.com works that employ Session Initiation Protocol (SIP)- Investment Fund Station modems. based softswitches, media gateways and application servers. Their main product, the NexTone Multiprotocol Signaling Switch, unifies the various core elements of the network, such as softswitches and application servers. Netta Systems is developing a true, multi-level secu- rity solution. This proprietary solution has the poten- tial to provide information security throughout an Netta Systems entire system and its associated networks. This com- 10/19/01 $ 50,000 Active www.nettasystems.com plex software architecture, combines mandatory The company developes a device that can be access control, encryption and a proprietary technol- installed in airplane cockpits and can assist pilots dur- ing landings, especially in adverse weather conditions ogy that work closely with the operating system to Norris Electric Optical 3/14/95 $ 50,000 such as fog. The company also produces a runway Active provide the trust not inherent to a computer system. Systems incursion device, placed on the side of a runway to avoid potential collisions on the ground between air- craft.
Specializes in the diagnosis and treatment of Alzheimer's disease and related neurodegenerative disorders of the elderly. The company believes that Provides a complete IDMS solution for the PC Moved to Illinois NuBase Systems, Inc. 6/17/97 $ 50,000 Active the presence of tau protein in the formation of environment. Neuronautics, Inc. 8/13/98 $ 50,000 neurofibrillary tangles indicates some progression towards Alzheimer's. As a result, it hopes to market a drug screening product and eventually find an agent that will slow down or suppress the Alzheimer's disease altogether. The company was founded in 1994. The Company has been issued three U.S. patents on its proprietary OncoImmunin, Inc. 7/15/95 $ 50,000 design for protease inhibitors and fluorogenic Active substrates. Three PCT applications have now entered into national phases in Japan and Europe. Neurotrophic Research Corp. is developing ther- NeuroTrophic Research Moved to 2/27/97 $ 75,000 apeutic neurotrophic factors and cell therapy for the Corp. Canada treatment of Parkinson's disease.
Currently, Electronically Tunable RF (ETRF) com- ponent products include tunable filters, phase shifters New Hope Pharmaceuticals, Inc. (NHP) has devel- and delay lines operating at frequencies between 30 oped certain cell-based response technologies that MHz and 35 GHz. Electronically Steered Antenna identify which, of the FDA approved anti-cancer (ESA) system work is focused on L-, X-, Ku- and Ka- drugs, are likely to work on each individual patient --- band systems for terrestrial deployment (PCS, MMDS Graduated to permitting pre-treatment, response-based, personal- Paratek Microwave 7/21/98 $ 75,000 & LMDS). Paratek invented a revolutionary Enterprise ization of therapy. It will allow drug discovery at the www.paratek.com new class of materials, ParascanTM, from which our Investment Fund New Hope Pharmaceuticals 10/23/00 $ 150,000 cellular level rather than at the molecular level. Active fast tuning, passive ETRF components and Finally, since new diagnostic categories are being electronically steered antennas are fabricated. This defined on the basis of differential drug response, would enable broadband wireless communications individual genetics and the company’s proprietary solutions to be made available to everyone. gene expression mapping, new knowledge and tar- get gene information is being created on which NHP and its partners can base their design of new drugs.
60 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 61 CHALLENGE INVESTMENT FUND OVERVIEW CHALLENGE INVESTMENT FUND OVERVIEW
DATE DATE ENTERED ENTERED COMPANY AMOUNT DESCRIPTION STATUS COMPANY AMOUNT DESCRIPTION STATUS INTO INVESTED INTO INVESTED PROGRAM PROGRAM
Phoenix S&T, Inc. (PST) is an early-stage startup The company has developed a reactive multi-layer foil developing microscale, low-cost and disposable poly- that once ignited, provides enough heat to melt solder mer tools for protein profiling, a major sector of the or braze without damaging the components to be proteomics market. The Company’s eight patent joined. This joining method is unique in that the foil applications cover microfluidic architecture and provides all the energy needed to melt the solder or microinjection molding techniques. With this platform, braze, eliminating the need to heat the components the Company creates microfluidic arrays for the mass with a furnace, torch, or laser. This simplifies and spectrometry and multidimensional separation analy- speeds the joining process, in many cases cutting the Reactive NanoTechnologies ses of proteins that represent a colossal step change 6/26/02 $ 100,000 cost of joints in half or possibly more. Additionally, Active Phoenix S&T www.reactivenanotech.com 2/11/02 $ 150,000 from existing tools. The Company’s first product, the Active damage is prevented to temperature-sensitive com- www.phoenix-st.com mass spectrometer use-once disposable interface, ponents such as microelectronic devices or polymers, enables the mass spectrometer to produce more because heating is localized to the interface being definitive results than existing technology by reducing joined. This technology covers new applications in the background and improving ion-forming efficiency. areas of metal-to-ceramic joining and the fabrication This device can be retrofitted to any existing mass of laminated magnetic materials. RNT closed its $2 spectrometers of different makes. The mid-term prod- million Series A round of financing in July 2002. uct is a multidimensional separation device that aims to replace the cumbersome and often irreproducible 2-D gel separation for proteins.
RF Technologies manufactures a full line of On/Off Graduated into Minor activity; and Control pinch valves for slurry and bulk solids company moved to RF Technologies, Inc. 3/17/95 $ 50,000 Enterprise handling services. They solve valve problems related Investment Fund Plan It!, LLC 10/3/97 $ 50,000 GIS for economic development Ohio, but has to abrasive, scaling, plugging and corrosive services. some work per- formed in MD.
Royer currently has one product on the market, The company is developing a suite of application fire- Silvadex SR, a paste used to treat hoof injuries in wall software products, called AppFire, which secure Royer Biomedical horses, and will soon be releasing its new equine high-value web and corporate applications hosted on (formerly Buford 4/24/97 $ 100,000 Active dewormer, Iverdex Equine. The company also has a servers and deployed on desktops. The company will Biomedical, Inc.) Graduated into deep pipeline of products focused on its proprietary Platform Logic provide an enterprise-wide product suite that is easy 5/28/02 $ 100,000 Enterprise controlled release technology, Matrix III, which is a www.platformlogic.com to deploy and manage, has predefined policies for Investment Fund resorbable inorganic/biopolymer composite used for popular applications, makes it easy to adapt policies, drug delivery. plugs-into existing infrastructure, and supports any Windows (only versions that are based on NT i.e. XP), UNIX and Linux application.
Study of genetic toxicology. SITEK Research Laboratories has been providing high quality testing The company provides innovative remote access and services for safety evaluation of chemicals and collaboration software. Secure Virtual Workspace, pharmaceuticals for regulatory submissions for more Plethora's flagship product, delivers an integrated Sitek Research Lab 2/27/97 $ 50,000 than fifteen years. SITEK is a fully compliant GLP Active Plethora Technology enterprise security architecture (firewall and VPN) Active laboratory having JMAFF certification and AAALAC www.plethoratech.com 2/7/02 $ 100,000 with built in user productivity features such as pres- accredited animal facilities. Their study reports are ence-based text and voice conferencing, file access submitted to regulatory agencies worldwide and have and exchange, and real-time collaboration. never had a study rejected.
Projected Reality Corporation was established to commercialize patented technology owned by NASA The company has developed a coating for ships and Projected Reality Goddard and licensed to the Company. The patent is power plants that will effectively ward off zebra 1/10/00 $ 150,000 Active Smart Surfaces, LLC 4/28/00 $ 50,000 Active Corporation for large flat panel displays using cathode ray tech- mussels and like creatures from adhering to their nology which the company intends to market to air- surfaces. ports, sports complexes, etc.
62 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 63 CHALLENGE INVESTMENT FUND OVERVIEW CHALLENGE INVESTMENT FUND OVERVIEW
DATE DATE ENTERED ENTERED COMPANY AMOUNT DESCRIPTION STATUS COMPANY AMOUNT DESCRIPTION STATUS INTO INVESTED INTO INVESTED PROGRAM PROGRAM
STI is involved in the building and development of a VOTARA is automating business processes using Web-based process infrastructure for insurance Speech Recognition technology. It has delivered Votara (Formerly Software providers that ties traditionally separated front-end these platforms to companies such as Verizon and Solutions Group) 9/20/99 $ 150,000 Active applications and back-office legacy systems into Utz Quality Foods. The company is currently in its Solution Technology Graduated into www.votara.com cost-reducing straight-through-processing modules. growth phase with a focus on the food services verti- International, Inc. 10/3/97 $ 150,000 Enterprise cal. VOTARA is currently delivering the platform to www.stius.com Termed DirectINSURE by STI, these modules help Investment Fund consumers understand and purchase insurance medium sized and multi-billion a year companies. products and services as well as manage them after purchase. Initial focus will be on aviation and general automotive segments. Ware On Earth Software to enable communications between PC and (formerly Hyperspace 2/27/98 $ 100,000 Active Communications, Inc.) PC, bypassing the server.
Tri-Kor develops and commercializes novel, ultra-high strength aluminum alloys. The alloys are innovated and then sold to OEM's in the sports equipment and Tri-Kor Alloys (formerly 4/13/98 $ 75,000 Active The company provides an end-to end- wireless field Valkor, LLC) transportation industries. Alloys are sold in various service solution that provides a highly functional, fully semi-finished product forms as well as in fabricated configurable and completely integrated wireless appli- components. cation platform to keep mobile workers connected in Wireless Internet Solutions real-time. This allows for closed loop scheduling, Corporation 3/2/01 $ 50,000 instant dispatch with acknowledgement and remote Active www.winternetsolutions.com order completion. Dynamic digital mapping informa- tion is also integrated. This enables real time or his- 20/20 GeneSystems’ product is a proprietary layered torical geospatial functionality such as the ability to proteomics technology. 20/20’s technique is among see the geographic deployment of a workforce, dis- the first for simultaneously analyzing the quantities, tances, travel times and routing. "on/off" status, and locations of an entire pathway of proteins from a single tissue sample at the same time. 20/20 began selling its first product in September 2001 after extensive beta testing at over 50 inde- 20/20 GeneSystems pendent biomedical laboratories throughout the U.S. The Wisdom Builder product is intended to process $ 100,000 Active www.2020gene.com 4/16/02 Now sold as a biomedical research tool, the company through data culled from multiple sources and convert has identified needed applications of this platform in it into a well packaged and useful set of information. diagnostics, drug development, toxicology, bio-terror- Data can originate from the Internet, through other online sources, and from a repository maintained by ism defense, forensics, agriculture and food testing. Revenues Wisdom Builder Wisdom Builder. Such an intelligent product can help 20/20 has begun using its technology in collaboration 10/3/97 $ 75,000 below www.wisdombuilder.com to describe a company's target market, for instance. with a pharmaceutical company to identify differential threshold proteomes of responders vs. non-responders of their Wisdom Builder can be run off various computer drug candidate. platforms and employs query capabilities and other features that allow a user or enterprise to effectively exploit information for competitive advantage. One targeted market is law enforcement.
Vapotherm, Inc. has developed a high flow therapy system that can deliver breathing gas at flow rates of Operational support systems compatibility is a major 5-40 lpm via a variety of patient interfaces including issue as carriers and enterprise customers competing nasal cannula. Before Vapotherm, nasal cannula flow in the Bell territories try to interpret data resulting was limited to a maximum of 6-8 lpm due to extreme from telephone and data traffic originating and termi- discomfort to the patient at high flows. The patented nating at different points. The company was formed to Vapotherm membrane technology delivers molecular address this issue and keep firms from having to Graduated into vapor with nearly 100% relative humidity at body tem- Wisor Telecom, LLC Graduated into 4/28/98 $ 50,000 develop this function from scratch. Previous experi- Enterprise Vapotherm, Inc. perature. This warmth and humidity allows high flows www.wisor.com 1/5/01 $ 100,000 Enterprise ence base in technology and in marketing product for Investment Fund to be comfortably tolerated by the patient. The www.vtherm.com Investment Fund sale. The Validator software product beefs up the Vapotherm 2000i is a safe, convenient, easy to use, operational support systems (OSS) so that the report- and affordable respiratory therapy device that may ing for billing, ordering, maintenance, repair, etc. can reduce costs and improve patient outcomes. The be accurately reported through existing Bell networks warm vapor has many clinical applications within and enterprise customers. today’s healthcare market including hospitals, long term care, physician offices, hospices, and home care.
64 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 65 ENTERPRISE VCLP FUND OTHER INITIATIVES
History Technology Development Corporation (TEDCO)
DBED’s initial foray into investing as a limited partner began in fiscal year 1995 when two $500,000 During the 1998 legislative session the General Assembly passed House Bill 7 (Chapter 661, Acts of 1998) investments were made in Anthem Capital LLC and Churchill Investment Partners. These private establishing the Maryland Science, Engineering, and Technology Development Corporation, now known funds emphasized investing in early stage, high technology companies and offered to invest in compa- as the Maryland Technology Development Corporation, or TEDCO. This organization was formed to nies located in Maryland as part of their agreement with DBED. This complemented the Enterprise assist in transferring to the private sector and commercializing the results and products of scientific Investment Fund’s existing initiatives, improved the flow of information between public and private research and development conducted by colleges and universities of the State of Maryland; assist in the sectors and provided opportunities to co-invest. commercialization of technology developed in the private sector; and foster the commercialization of research and development to create and sustain businesses throughout all regions of the State. During fiscal year 1998, a portion of DBED was spun off to create a minority private sector fund known as the Meridian Management Group (MMG). DBED provided a $5 million investment to MMG to invest in minority businesses and in economically challenged portions of the state. No funds were provided at the time the corporation was created; however, TEDCO received a grant of $642,000 from the Enterprise Fund to provide start-up funding for staff and operations during fiscal year On the heels of the two major exits in Gene Logic and Visual Networks (which yielded a windfall of $45 2000. The fiscal year 2001 budget provided a total of $7 million from the Enterprise Fund, including a million in 1999), the state set aside certain monies for the Maryland Technology Development $2.0 million operating grant to TEDCO. Corporation (TEDCO), “E-Initiatives” (see next page) and investments in additional private venture capital firms. Four Maryland firms were identified for investment (Boulder Ventures, Grotech Partners, The fiscal 2001 budget also provided $5.0 million from the Enterprise Fund to establish a capital fund Inflection Point Ventures and Steve Walker & Associates) and each firm received a commitment of $1.5 for investments identified by TEDCO. TEDCO has established two programs using the DBED million. Enterprise Funds: a Technology Development Investment Fund utilizing $4 million of the appropriated monies to promote the commercialization of technologies developed primarily in partnership with feder- As a result of the TEDCO legislation, an eighth venture capital firm, Toucan Capital, received a al research laboratories and Maryland universities, through seed stage investment; and a University commitment of $4 million to primarily invest in the life sciences and biotechnology industries. Toucan Technology Transfer Support Program to establish a revolving loan program that provides direct support issued a capital call in August 2001 resulting in a initial funding of $1 million. of university technology support projects, using the remaining $1 million. TEDCO received several proposals from qualified venture capital firms to manage the seed stage investment and subsequently Performance selected Toucan Capital, from Bethesda, MD, as the firm of choice. Toucan is receiving additional match- ing funds through the Small Business Investment Companies (SBIC) program and is committing at least Performance in all funds to date has been severely impacted by the economic downturn of 2001. $12 million to Maryland-based companies. Virtually every firm took overly pessimistic write downs on assets resulting in negative internal rates of return as of calendar year end 2001. Noted exceptions to this are those firms that made little or no investments in 2000 and 2001. The table below has been prepared outlining the various limited part- E-Initiatives nerships and their performance as of December 31, 2001. Fiscal 2001 budget amendment number 001-01 appropriated $9.8 million from the Enterprise Fund for marketing of technology-based industries and initiation of the E-Maryland and E-Marketing initiatives Company Fiscal Investment Fair Market Focus Total Year ($) Value ($) Fund Size established by Chapter 5, Acts of 2000. An “Internet Project Plan” was drafted for the Secretary of Budget and Management and the Office for Information Technology. Anthem Capital 1995 475,433 1,131,150 IT $ 42MM CIP Capital, LP 1995 500,000 841,650 General $ 20MM Boulder Ventures 1998 1,387,500 883,657 Optics/Biotech $ 85MM Grotech Partners V, LP 2000 1,158,615 611,697 General $ 300MM Steve Walker & Associates 2000 900,000 533,216 IT $ 40MM Inflection Point Ventures 2000 282,166 282,166 IT $ 56MM Toucan Capital 2002 1,000,000 1,000,000 Biotech/IT $ 108MM Total 5,703,714 5,283,536
66 Maryland Department of Business & Economic Development Maryland Department of Business & Economic Development 67 Department of Business & Economic Development
217 East Redwood Street Baltimore, Maryland 21202 1-888-CHOOSE-MD www.choosemaryland.org
Robert L. Ehrlich, Jr., Governor Michael S. Steele, Lt. Governor Aris Melissaratos, Secretary Vernon J. Thompson, Deputy Secretary