December 17th, 2012
Mom taught him to program at age 11. Now creating simple dashboards for complex databases.
30 Under 30: Forbes Announces Young Pioneers In Technology
This is our second annual listing of technology pioneers under the age of 30.
In many ways, this was a harder list to compile than our inaugural one. Word traveled far and wide this time, and we were inundated with possible candidates. It turns out the technology industry has a wealth of entrepreneurs in their twenties trying to shake things up, and finding success at it. What a wonderful thing.
Fortunately, we also had the wisdom and sharp eyes of our three judges to make the big calls. Marc Benioff is the ultimate disruptor himself, having co-founded Salesforce and taken on not only the giants of enterprise software, but the very business model the industry thrives on. Angel investor Pejman Nozad served as our most direct link to young entrepreneurs. He is surely enterprising himself, having parlayed a job selling rugs to tech’s stars to investing in their companies. He spends his days meeting with fresh-faced innovators and has amassed stakes in Dropbox and Lending Club, among many others. Then we had our technical visionary, Stephen Hoover, who runs the famous Xerox Parc in Palo Alto. With the three of them as our guide, we aimed to highlight a diverse group of talented, very young individuals.
We hope this is an energizing glimpse into the future of technology, and do let us know who we missed for next year’s list.
Pacira Pharmaceuticals, Inc. and Aratana Therapeutics Inc. Enter into Global Licensing Agreement for Development and Commercialization of Bupivacaine Liposome Injectable Suspension for Animal Health Indications
December 6th, 2012
PARSIPPANY, N.J. and KANSAS CITY, Kan., December 6, 2012 – Pacira Pharmaceuticals, Inc
Bupivacaine liposome injectable suspension is approved for human use in the United States for the management of postsurgical pain and is currently marketed by Pacira under the name EXPAREL®. EXPAREL is a non-opioid local anesthetic, which was approved by the U.S. Food and Drug Administration (FDA) in October 2011 for administration into the surgical site to produce postsurgical analgesia. EXPAREL utilizes DepoFoam®, a proprietary delivery technology utilized in several Pacira products approved for human use. Veterinary development of the product may address the estimated 33 million surgical procedures performed each year on companion animals in the U.S.1
Steven St. Peter, M.D., chief executive officer of Aratana Therapeutics, stated, “Given the rapid and widespread implementation of EXPAREL by surgeons performing human procedures, we are confident that adoption of this innovative product by veterinary surgeons will be equally impressive. The global companion animal health market remains significantly underserved despite the more than 150 million companion animals in the U.S.2 – many of whom will undergo surgical procedures. We believe this product fits nicely into our growing portfolio of companion animal therapeutics and will be welcomed by veterinarians committed to providing their patients with the best care available.”
“The management of postsurgical pain in animal health settings represents a large and growing market for our EXPAREL product,” said David Stack, president and chief executive officer of Pacira. “We continue to see EXPAREL adoption in a wide range of surgical settings, the generation of positive Phase 4 data and considerable sales growth during our launch year. We also have recently completed the installation of our expanded manufacturing suite – these milestones all strongly position the program for a strategic partnership. Given the Aratana team’s combined decades of veterinary drug development experience, we believe Aratana is the ideal partner for maximizing the product’s value in the companion animal health market.”
Under the agreement, Aratana made a one-time payment to Pacira of $1 million and will pay additional development and commercial milestones totaling up to $42.5 million. In addition, upon approval of the product by the FDA, Aratana will pay Pacira a double-digit royalty on net sales of the product. Should Aratana sublicense the product to a third party, Aratana and Pacira will share the proceeds by a predetermined formula (after Aratana has recovered certain direct development costs). Pacira will be responsible for all product manufacturing, and Pacira and Aratana will form a joint committee to oversee commercialization and development activities.
Pacira Pharmaceuticals, Inc. (NASDAQ: PCRX) is an emerging specialty pharmaceutical company focused on the clinical and commercial development of new products that meet the needs of acute care practitioners and their patients. The company’s current emphasis is the development of non-opioid products for postsurgical pain control, and its lead product, EXPAREL® (bupivacaine liposome injectable suspension), was commercially launched in the United States in April 2012. EXPAREL and two other products have utilized the Pacira proprietary product delivery technology DepoFoam®, a unique platform that encapsulates drugs without altering their molecular structure and then releases them over a desired period of time. Additional information about Pacira is available at http://www.pacira.com
About Aratana Therapeutics
Aratana Therapeutics is a biopharmaceutical company positioned to deliver high quality new medicines that address significant therapeutic needs for cats and dogs (companion animals). Aratana licenses and develops proprietary, patent-protected compounds acquired from human pharmaceutical and biotechnology companies and then maximizes the value of the programs for the animal health market. For more information, please visit www.aratanatherapeutics.com.
Forward Looking Statements
Any statements in this press release about our future expectations, plans and prospects, including statements about our plans to develop and commercialize a bupivacaine liposome injectable suspension product for animal health indications, the size of the market for such a product and the level and rate of adoption for such a product and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including risks relating to: the attainment of all necessary regulatory approvals for the marketing of any product developed under the Aratana license agreement; the success of our sales and manufacturing efforts in support of the commercialization of EXPAREL; the rate and degree of market acceptance of EXPAREL; the size and growth of the potential markets for EXPAREL and our ability to serve those markets; our commercialization and marketing capabilities; and other factors discussed in the “Risk Factors” of our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2011, our most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, and in other filings that we periodically make with the SEC. In addition, the forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
Kaltura Powers Video for Leading Universities in Holland: Vrije Universiteit Amsterdam and Hanze University of Applied Sciences, Groningen
November 13th, 2012
Two Leading Educational Institutions in The Netherlands to Leverage Kaltura’s Market-Leading Education Video Platform to Enhance Teaching and Learning, and Enrich Marketing Programs
LONDON, Nov 13, 2012 (MARKETWIRE via COMTEX) — Kaltura, the leading open source video platform ( www.kaltura.com ), announced today that it has been selected to power video for two of Holland’s leading educational institutions: Vrije Universiteit Amsterdam and Hanze University of Applied Sciences, Groningen. Both universities are part of the SURFmarket organization for higher education in Holland. SURFmarket and Kaltura are currently in the process of forming a strategic partnership for all SURFmarket members. An agreement is intended to be made in 2012, so together SURFmarket and Kaltura can make these offerings available for the Dutch educational market. (more…)
October 30th, 2012
If there is good news to be had in private equity these days, it is that limited partners seem to want to put new money to work.
Several recent studies have pointed in this direction, including one from Preqin, which found that a large number of endowments, public pensions, family offices, sovereign wealth funds and foundations want to invest in the coming year.
The top area of interest is buyouts. Second on the list is venture capital. Almost half of potential investors name venture as an asset class they will consider, Preqin says in a report issued this month.
This is welcome news to the industry. That’s because there is no shortage of funds out looking for cash. Preqin, in its study, finds 372 venture capital funds on the road, or nearly a fifth of all private equity funds on the fundraising trail. Together they seek $47.2 billion in commitments.
Many GPs will argue that consistency is their forte. But only some can truly make that claim, the study finds. Preqin assembled a list of the most consistent performers in venture based on IRR, fund year, strategy and geography. Only active managers that have three or more funds with a similar strategy are included and still formative 2010, 2011 and 2012 funds are not included.
Tied at the top of the list are Benchmark Capital, GGV Capital, Pittsford Ventures Management and Sequoia Capital, with the strongest record of top quartile funds. The list from the report is reprinted below.
(Editors note: The average quartile rank in the table is determined by scoring each fund. A top quartile fund gets a “1” and a second quartile fund gets a “2,” etc. The ranking is an average. Photo above courtesy of Shutterstock.)
October 11th, 2012
6 Fast-Growing Tech Companies
Ilya Pozin, Contributor
As the United States struggles with an unemployment rate over 8 percent, the blossoming tech industry has taken on an even greater importance in the American workplace. Technology job opportunities are predicted to grow by up to 22 percent over the next 10 years, making it the fastest growing industry in our economy.
Already, hundreds of tech companies are making their mark on the industry, with impressive investments and growth rates. I’ve put together a list of six fast-growing, innovative and exciting companies that will help the tech industry become America’s most valued — not just for their ideas, but their ability to put the country back to work. (more…)
October 9th, 2012
By Russ Garland
The venture capital fundraising picture in the U.S. didn’t change in the third quarter as most money continued to flow to a handful of funds.
Thirty-seven funds held closings, down from 46 in last year’s third period, but they raised $4.73 billion versus $2.45 billion a year ago, the latest data from Dow Jones LP Source show.
Fundraising for the first nine months of the year is running well ahead of last–$17.51 billion versus $12.68 billion–but only a few more funds have had closings–120 compared with 110 a year earlier. (LP Source is a service of VentureWire publisher Dow Jones & Co.)
Of this quarter’s $4.73 billion, $2.73 billion went to five firms, all of which raised funds well north of $300 million. Sequoia Capital raised the most, rounding up $950 million for its fifth growth fund. New Enterprise Associates, which wrapped up the final installment of its $2.6 billion fourteenth fund, was among the top five. The others were GGV Capital, Tenaya Capital and Mayfield Fund.
Two backers of Zynga Inc. ZNGA -2.02%, an online gaming company that staged a closely watched IPO last year but whose stock price has since tumbled, also raised substantial amounts during the third quarter. Foundry Group closed its third fund at $225 million and Avalon Ventures raised $201.6 million toward its tenth fund, which has a cap of $250 million.
Health-care specialist Burrill & Co. rounded up $192 million, the final piece of its $505 million fourth fund.
Last’s year’s fourth quarter was much stronger than the third, but the outlook for the remaining three months of this year is uncertain. Exit prospects for most VCs are iffy with acquisitions slow and the IPO market volatile, a situation that isn’t going to ignite limited-partner interest in the asset class. While recent LP Source data showed 330 open U.S. venture funds looking to raise about $26 billion, 2012′s final total likely will be determined by how many more heavy hitters decide to shop for fund commitments before the holidays.
October 3rd, 2012
October 3rd, 2012
SAN FRANCISCO, CA–(Marketwire – Oct 2, 2012) – Cloudant, Inc., developer and operator of the Cloudant Data Layer as a service, has selected monitoring software from Boundary and Splunk to ensure users receive maximum service. The Cloudant cloud database service infrastructure comprises hundreds of database servers connected across a global network of data centers, and manages data for thousands of web and mobile app developers.
Boundary maps the performance of the Cloudant system every second, while Splunk® software collects and indexes machine-generated big data coming from the Cloudant infrastructure. The combination allows Cloudant to monitor and correct system issues before they create performance or availability problems for Cloudant customers.
Delivering 100% up time and scalable cloud database performance to thousands of developers, including Samsung, Hothead Games, Monsanto and DHL, is critical to Cloudant’s success. Cloudant was using open source tools to measure network traffic at 10-second intervals, but realized that having real-time data would allow it to improve infrastructure operations and client service. Cloudant deployed Boundary for its ability to analyze and report data at one-second intervals from Cloudant’s global, distributed network of database servers.
The combination of Boundary and Splunk enables Cloudant to gain real-time visibility and insight from Splunk software in context with the Boundary real-time application performance graphs. Together, these tools enable users to rapidly cut through huge volumes of infrastructure data and understand the root cause of problems.
“We’ve built distributed clusters of database servers to support our customers, so the more we can understand about the network and the flow of data between those servers, the better off we are,” explains Adam Kocoloski, co-founder and CTO at Cloudant. “There is a world of difference between 10-second and 1-second monitoring. We can see big traffic spikes that last over a few seconds, which may indicate an overloaded switch or other problems. We also are able to identify outliers better. If some machines are chattier than others, we can quickly rebalance the workload.”
Unlike traditional IT monitoring tools that assume a fixed infrastructure, Boundary is ideal for dynamic environments that experience change on a massive and continuous scale including public and private clouds, fixed networks, data centers, highly-agile application development environments, SQL or NoSQL clusters and Big Data application stacks.
“Customers and partners consistently amaze us with ways of using our software, and this solution with Boundary is no exception,” said Bill Gaylord, senior vice president of business development, Splunk. “Cloudant reports that combining Boundary’s real-time application performance monitoring with Splunk’s analytics delivers real-time monitoring across the entire infrastructure. This allows customers like Cloudant to predict problems before they arise and resolve issues and slowdowns much faster.”
“We’re thrilled to have Cloudant as a customer,” said Gary Read, CEO at Boundary. “Their need for an always-on environment performing at high speeds is exactly the scenario where Boundary helps most. We’re proud to be part of the infrastructure environment for a company that’s powering massively popular web and mobile apps.”
Splunk Inc. ( NASDAQ : SPLK ) provides the engine for machine data™. Splunk® software collects, indexes and harnesses the machine-generated big data coming from the websites, applications, servers, networks and mobile devices that power business. More than 4,400 enterprises, universities, government agencies and service providers in over 80 countries use Splunk Enterprise to gain operational intelligence that deepens business and customer understanding, improves service and uptime, reduces cost and mitigates cyber-security risk. To learn more, please visit www.splunk.com/company.
Splunk and the engine for machine data are registered trademarks or trademarks of Splunk Inc. and/or its subsidiaries and/or affiliates in the United States and/or other jurisdictions.
Boundary provides a new kind of application monitoring for new IT architectures: one-second app visualization, cloud-compatible, and only a few minutes from setup to results. Boundary is a privately-held company based in San Francisco, California with venture funding from Lightspeed Venture Partners and Scale Venture Partners. Boundary’s fast growing list of customers includes GitHub, Canonical, Urban Airship, and Cloudant.
For more information on Boundary visit us on the web at http://www.boundary.com or on http://www.twitter.com/boundary.
October 1st, 2012
Even though data is more important than ever—whole businesses are built around collecting it, analyzing it, and repackaging it—you don’t see a lot of CEOs boasting that their companies are “data driven” anymore. That would be like saying that your car is “road based” or that your refrigerator is “cold driven.” It’s so obvious that it goes without saying.
But what’s remarkable is that so many people whose jobs depend on managing and analyzing big data still have clunky or expensive tools for doing so. Take Dreamhost, a Brea, CA-based Web hosting company that’s home to more than a million domains. Co-founder Josh Jones says that to get basic data about business performance—for example, how quickly customer support requests were being resolved—“we would always make these one-off graphs of things…We are a pretty technical company so a lot of people knew how to do this a little bit, but [the graphs] were all disorganized in different places, and it wouldn’t be clear what each graph was of. People were reinventing the wheel.”
That’s the home-brew approach, which has obvious disadvantages. At the opposite extreme are complex business intelligence platforms from companies like IBM, Microsoft, SAP, and Oracle that can cost hundreds of thousands of dollars per year and require full-time data analysts to manage.
Both types of tools are built around the idea that a business’s core databases are complex, fragile, and inaccessible, and that querying them is a challenge akin to divination. Hence the whole industry of “data warehousing,” the premise of which is that information from an operational database must be copied, cleaned, and catalogued before managers can even start asking questions about it.
But there’s a startup in San Francisco called Chartio that hopes to throw this whole creaky model out the window. (Which might cause a bit of a traffic jam on the street below, given that their window overlooks a noisy eastbound on-ramp to the Bay Bridge.) Chartio founder and CEO Dave Fowler says getting actionable information from a database shouldn’t take a data warehouse or a priesthood of data scientists.
“Our vision is that there are only two interfaces that a database needs,” Fowler says (he’s second from left in the team photo above). “One is the application itself. If you are Facebook, then you see Facebook. The other is the administrative and analytics interface, where you can see how many signups you’re getting, how many sales you’re making, et cetera.”
At most Web-based companies, in other words, the public should see the public interface, employees should see the administrative interface, and that’s that. It’s a setup that will sound familiar to anyone who runs a social media or e-commerce site or publishes a blog. But until recently, getting a basic administrative dashboard really did mean either building it yourself, relying on the rudimentary tools available from sources like Google Analytics, or investing millions in an enterprise business intelligence suite like IBM’s Cognos or SAP’s Business Objects.
But those approaches don’t work anymore, Fowler argues. “Today it’s a different time. People are collecting exponentially more data, and even younger companies need to see this kind of data—companies that don’t have $10 million budgets for this.”
To suit the new times, Chartio, which emerged from the Y Combinator startup accelerator in the summer of 2010, has a different approach. For one thing, its tools are simple: even non-technical employees can use Chart.io’s drag-and-drop interface to build charts and graphs, easily specifying which values they’d like to see on each axis. (Under the hood, Chartio translates those actions into SQL queries and runs them against the specified database.)
For another, it works on operational databases directly, with no data warehouse in between. “We skip the data warehousing part, because whenever you upload your database and try to munge the data together you lose the timeliness of it—it’s always three days old, and to us that means it’s dead,” Fowler says.
Chartio is also vendor-agnostic. Unlike Cognos, which works best on an IBM DB2 database, or Oracle’s business intelligence tools, which are obviously specialized to work on Oracle databases, Chartio can draw from any MySQL or PostgreSQL database. It can also connect to Google Analytics and to databases hosted on Heroku, Rackspace, Amazon’s Relational Database Service, and other cloud services.
Fowler, a Minnesota native and former IBMer who went through Y Combinator twice (his first, failed startup was called Socialbrowse) says the big-data business has been dominated so far by companies that want to get rich filling up corporate data centers with servers and storage devices, then charge again for the databases, data warehousing, and business intelligence software needed to make it all work. “We’re saying that what people have missed out on is making a great interface that is easy for people to use.”
Dreamhost has been using Chartio’s Web-based data visualization service since it was in early beta testing. “It wasn’t really our business” to spend lots of time making graphs, Jones says. “I came across Chart.io, and it was exactly what I was thinking would be useful as a generic service.”
Dreamhost uses Chartio to track things like revenue per user, the progress of its monthly billing process, the supply of IP addresses it can hand out to new customers, and the alacrity with which tech-support staff resolve complaints. “There was one case where we found a huge spike in customers leaving,” Jones says. “We actually saw it on a graph before anyone had heard about it in tech support, and it turned out that there was a bug that was disabling customers. We looked into it before it got worse and before all these people started writing in. When you have the visuals and you are watching the data, you see these things.”
Chartio’s basic selling point is that creating a new chart is so easy. Once you’ve connected Chartio to your company’s database, it understands which values are stored in which tables, and lets you specify which dimensions should appear on a chart’s axes by dragging and dropping from a list. Once a graph has been rendered, users can control what range of data shows up using simple filtering tools.
There’s plenty of depth for the veteran database administrator, but creating or modifying a chart or graph is so easy that beginners can learn what types of visualizations are actually useful through experimentation. “We want people to make mistakes and play around with it,” Fowler says. “That’s the way you discover things and have insights.”
It’s impossible to break anything, since Chartio isn’t copying or hosting its customer’s databases (that’s the old-school approach). For each visualization, it establishes a secure “tunnel” between a database and its own servers, pulling in live data as needed to complete specific queries. The hard work at the seven-employee company revolves around creating the visual chart-building tools, along with the code that translates their parameters into SQL queries that make sense to specific databases and hosting services.
A typical Chartio customer settles on a selection of important charts and graphs and assembles them into live dashboards for each functional team, Fowler says. “A company typically has about 17 dashboards,” he says. “One for their ops team, one for tech support, one for marketing, one for sales, and so on. So the people responsible [for each function] have the data they need and can create the questions they need to ask.”
Chartio offers tiered pricing based on the number of dashboards in use, the number of employees accessing them, and the number of databases connected to them; the service costs $85 per month on the low end and $485 per month on the high end. The startup’s private beta period ended in March, and since then its user base has been growing at 30 percent each month, Fowler says. (He wouldn’t share the raw numbers.) “I would like to grow faster, but it’s a pretty good rate,” he says.
Chartio has raised about $4.4 million in venture backing, most of it in the form of a Series A round last year led by Avalon Ventures and Bullpen Capital. Fowler says he doesn’t feel that the startup is in competition with the big business intelligence providers, but rather with engineers who might otherwise build specific queries and charts themselves, not realizing that there’s an affordable alternative that saves time and facilitates collaboration.
“Our philosophy is that if someone isn’t using Chartio, the reason is that they haven’t heard of Chartio,” Fowler says. “We feel like we’ve reached product-market fit. The huge shift now is getting the word out.”
September 27th, 2012
By Brian Gormley | Kansas City, Kan.
Aratana Therapeutics Inc. wants to be dogs’ best friend.
Looking to profit fromconsumers’ willingness to spend on their pets’ medical care, Aratana plans next year to launch clinical trials of two animal-health drugs that could earn U.S. regulatory approval in 2015. Clinical studies of an osteoarthritis drug fordogs and an appetite-stimulating medicine for canines will begin next year,said Linda Rhodes, Aratana’s chief scientific officer.
Americans will spend $52.8 billion on their pets this year, according to an estimate by the American Pet Products Association. That includes $13.5 billion for veterinary care and $12.5 billion for supplies and over-the-counter medicine, according to the association.
Aratana, whose investors include MPM Capital and Avalon Ventures, is one of a few venture-backed start-ups looking to cash in on this market. Others include Putney Inc., ofPortland, Maine, which has raised capital from Safeguard Scientifics Inc. and NewSpring Capital to develop generics used in pets. Another, Rapid Diagnostek Inc., is developing a handheld diagnostic to detect bacteria, viruses and biomarkers. Investors in the Hudson, Wis., company include NEW Capital Fund.
Dogs and cats get many of the same diseases that humans do, but often there’s no drug for their condition, said Aratana’s Dr. Rhodes, who is also a veterinarian. For example, human treatments for anemia have been available for many years, but there’s no equivalent for dogs and cats, she said. Instead of developing treatments for pets, animal-health companies historically have concentrated more on “production animals,” such as cattle, she said.
That’s changing as consumers have begun to treat pets more like family members, according to Aratana. At one time, dogs and cats spent most of their time outside, but increasingly, they’re living indoors which is boosting their life expectancy, according to Aratana’s newly appointed chief executive, former MPM Managing Director Steven St. Peter.
Instead of euthanizingpets when they get sick, consumers are paying thousands of dollars for medical treatments or procedures. It’s not uncommon for pet owners to spend $4,000 or $5,000 to repair the knee of a dog that needs anterior cruciate ligament surgery, according to Dr. Rhodes.
Unlike human pharmaceuticals, which are covered by medical insurance, animal-health products aren’t likely to be blockbusters, according to Dr. Rhodes. But animal-health drugs will be far less costly to develop, she said. The U.S. osteoarthritismarket for dogs is worth roughly $200 million today, she said. Aratana aims to claim a piece of that market.
Private-pay markets, like animal health, appeal because there are no concerns about the ability of a company to persuade Medicare or insurance companies to reimburse for a product, according to Dr. St. Peter.
Aratana sources drugs by licensing animal-health rights to products that are being developing for human use. It licensed animal-health rights to its osteoarthritis drug, an EP4 receptor antagonist, from Japanese company RaQualia Pharma Inc., for example. There’s also opportunity to acquire assets that animal-health concerns havechosen not to develop themselves, Dr. St. Peter said.
Aratana’s second product is a drug that mimics the ghrelin hormone to stimulate eating. It’s difficult to give intravenous nutrition to pets or to get sick animals to eat, said Dr. Rhodes. Aratana’s product could help pets with cancer and other conditions that rob them of their appetites, she said.
Aratana has been adding to its team as it gears up for pivotal clinical studies. In addition to Dr. St. Peter, it has named Louise Mawhinney its chief financial officer, a newly created position for Aratana, which formed in 2010. Ms. Mawhinney previously held the same title with life sciences companies such as Ikonisys Inc., Helicos BioSciences Corp. and ArQule Inc.
Aratana, based in Kansas City, Kan., plans to acquire additional drugs and to raise additional financing as needed, according to Dr. St. Peter. The company, which has raised a total of $30.5 million, rounded up a $15.5 million Series B round in November of 2011, bringing in new investors to join previous backers Avalon, MPM and Cultivian Ventures. The new investors included Middleland Capital, Kauffman Foundation and Hall Family Foundation, Dr. St. Peter said.
September 27th, 2012
Bruce V. Bigelow
As a man of many talents, Avalon Ventures’ Kevin Kinsella has a tendency to apply a term from one of his fields of interests in a conversation about another.
Kinsella’s career as a biotech venture investor has spanned nearly 30 years and more than 100 financings. These include early stage bets on San Francisco-based Onyx Pharmaceuticals and Aurora Biosciences (now Cambridge, MA-based Vertex Pharmaceuticals) that produced the billion-dollar drugs sorafenib (Nexavar) for treating kidney cancer and telaprevir (Incivek) for hepatitis C.
He’s also had a lifelong love for Broadway theater and is now a Broadway League member (and Tony Awards voter). Kinsella and his wife Tamara were the biggest individual investors in the hit Broadway musical Jersey Boys. They also are among the Jesus Christ Superstar producers who were nominated in May for a 2012 Tony for Best Revival of a Musical.
I’m pleased to note that on October 4, a week from today at the Apella event space at Alexandria Center, the San Diego Xconomist will be taking a star turn at Xconomy’s next big event in New York: Reinventing Biotech’s Business Model for the Big Apple. So when I checked in recently for an update of Kinsella’s showstopper critique of Big Pharma business practices, I was half-expecting him to take a metaphorical detour through Manhattan’s theater district.
Instead, he asked me if I knew what véraison means.
It’s a French viticulture term, and refers to the changing color of grapes as they begin to ripen. As the proud owner of a 12-acre winery in Sonoma County (a purchase made possible by the Kinsellas’ successful investment in Jersey Boys), Kinsella said véraison came to mind because the ideas he expounded last year on overcoming the difficult climate for building biotech companies are now ripening. What that means, he says, is that Big Pharma is finally listening.
“The pharma companies have in unison realized that their actions have jointly and severally done a lot to destroy the VC ecosystem where they’ve lived for the past 20 to 30 years,” Kinsella says.
The VC laid out the specifics of his grievances with Big Pharma for me in early 2011—provoking an industry debate that continues today. He has argued that pharmaceutical companies are driving life sciences VCs to the brink of extinction by their buyout tactics, which in his opinion include bad-faith negotiations, lowball buyout offers, and partnership deals that load all the risk on the startup and its VC backers.
Now Kinsella says the effects of what he calls Big Pharma’s “predatory business practices” can be seen on a variety of fronts, as venture firms decide against raising new funds, turn away from further investing in the life sciences, or simply go out of business.
Some examples from the public record include Palo Alto, CA-based Prospect Venture Partners, a life sciences firm that is now tending to its existing portfolio companies after it was unable to raise enough cash to execute its strategy for a fourth fund. Menlo Park, CA-based Versant Ventures significantly downsized its operations and is expected to raise a fifth fund that will be half the size of its previous $500-million fund. Foster City, CA-based Scale Venture Partners decided last year to make no more healthcare investments from its third fund, and as Luke has reported, the Column Group is in a holding pattern on new life sciences investments until the San Francisco-based firm can demonstrate what partner Peter Svennilson called “a couple of spectacular exits.”
Kinsella contends there are many more examples of life sciences venture firms that are in denial—meaning they won’t admit they have ceased making new life sciences or biomedical investments. “They might pretend they’re still in the business, but in effect they’ve retired from the playing field,” Kinsella says. “My gut sense is that two-thirds, at least, of the healthcare venture funds have gone out of business.”
With the flow of venture capital drying up and the overall ecosystem for drug development dramatically downsizing, Kinsella says pharmaceutical companies are beginning to realize, “Hey, there aren’t any decent Phase 2 drugs to look at.” So now, he says, the pharmas are “running around, trying to find ersatz solutions” to the dearth of new drug candidates. Kinsella says that’s why Big Pharmas are now organizing new corporate venture funds, creating incubator spaces for biotech startups, and trying to strike new types of partnership deals with venture firms.
To Kinsella, such moves are signs that Big Pharma recognizes there is now a problem in developing new drug candidates and in creating new biotech startups—and is trying to do something about it. Still, he says he’s skeptical about such initiatives. “I consider these all to be artificial solutions, with one exception—and that is backing a venture fund that has an established track record of success.”
Kinsella considers Avalon’s fifth fund, which flourished from 1991 to 1997, as the epitome of success—with an 11x return on venture investments in 13 startups, including Neurocrine Biosciences and Aurora Biosciences. Sandoz, led by CEO Max Link, provided the entire $18 million for that fund—and as Kinsella puts it, “We all got rich.” Three of the companies funded through Avalon V were acquired, and eight went public through IPOs. In addition to its management fees, Avalon got 50 percent of the carry—the fund’s overall investment return.
But Sandoz merged with Ceba-Geigy in 1996 to form Novartis, and Kinsella says he never learned why the combined company never sought to repeat the success of Avalon V. Instead, when Novartis CEO Daniel Vasella created the Novartis BioVenture Fund a few years later, he named former licensing and technology acquisition manager Peter Bissinger to lead the corporate venture fund.
Kinsella concedes that the ‘90s were part of a golden era for biotech investors. As he told an MIT alumni group in the Bay Area earlier this year, “You could take a company public or sell it within three years and you could make 10 to 100 times your money when your molecule, if you even had one, had never even seen the inside of a rodent.”
Now, following a wave of industry consolidations, big biotech and drug companies have been making some dramatic cuts in their own in-house R&D. As they look to resupply their drug development pipelines, Kinsella says they are faced with a limited pool of startups to partner with—and they are running out of options. “I doubt there’s a Phase 2 [drug] asset out there that hasn’t already been committed to a [corporate] partner,” Kinsella says.
The San Diego investor has drawn widespread attention by singling out “Big Pharma’s bad behavior” as the target for his ire. Still, there are surely larger economic forces at work, as there is plenty of evidence that the life sciences venture industry as a whole has not fared well lately.
For example, at an annual “State of Biomedical Innovation” Conference in June, Jonathan Leff of Warburg Pincus painted a dismal picture of the returns generated by life sciences investors in the previous decade. (A pdf file of all the conference slides is here.) For 24 life sciences funds (including Essex Woodlands, TPG Biotech, Sofinnova, and Frazier), Leff says the average return was 1.4 percent from 2000 through 2008—and the average return on investment multiple was 1x, or, in other words, just breaking even.
What’s more, the latest MoneyTree report for the quarter that ended in June shows that venture investing in the life sciences (biotechnology and medical devices) continued to decline for the second consecutive quarter, with nearly $1.4 billion invested in a total of 174 startups. That was also a nearly 40 percent drop in dollars and a 22 percent slide in deals from the $2.3 billion that VCs invested in 223 deals during the same quarter of 2011.
In the biotech sector alone, the $697 million invested in 90 deals during the second quarter was the lowest total the biotech industry has seen in more than nine years.
As Intersouth Partners general partner Jimmy Rosen recently put it, “As economic uncertainty continues and fewer venture investors remain, VCs are less willing to commit to companies in which capital requirements continue to increase, timelines extend, and regulatory guidance is unclear.”
So what now, in Kinsella’s view?
“The pharmaceutical companies need to go back to the old days, where the companies that get the most benefit from billion-dollar drugs shoulder the most risk,” he says. To get out of their straits, Kinsella says the pharmaceutical companies need to strike deals with the surviving biotech venture funds—“the clever VCs who know how to organize a biotech startup, and how to hire a discovery team, and how to staff it for drug development.”
Ideally, he adds, such deals would be structured like the one that Avalon cut with Sandoz/Novartis for Avalon V.
September 27th, 2012
By Sarah E. Needleman
The Wall Street Journal
Entrepreneur Ben Huh has raised more than $32 million in investor capital for his five-year-old media company, Cheezburger Inc., and the business will soon star in a reality show on the Bravo TV network.
Its hit product?
A network of humor websites featuring user-submitted images and goofy captions, such as a photo of a dog playing with yarn and the words, “Testing string theory is sooo exhausting!” (more…)
September 17th, 2012
August 8th, 2012
Continues advancement of AnaptysBio’s product pipeline using SHM-XEL platform
SAN DIEGO, Calif. – AnaptysBio, Inc., a privately held therapeutic antibody company, today announced the addition of Andrew J. McKnight, Ph.D. as Senior Director, Target Biology. Dr. McKnight comes to AnaptysBio with extensive experience in the design and development of novel therapeutic antibodies across a variety of therapeutic areas. Working together with David J. King, Ph.D., AnaptysBio’s chief scientific officer, Dr. McKnight will be leading the advancement of AnaptysBio’s current and future internal pipeline programs.
AnaptysBio’s primary objective is the advancement of novel therapeutic antibody programs generated using the Company’s proprietary SHM-XEL platform. As the first company to replicate somatic hypermutation (SHM) in vitro for antibody discovery, AnaptysBio’s SHM-XEL platform is uniquely positioned to generate therapeutic antibodies with unique functionality. The Company is currently pursuing differentiated programs in cancer immunotherapy, inflammation, muscle wasting disorders and antibody-drug conjugate applications. AnaptysBio’s internal programs are independent of the Company’s partnerships with Merck, Roche, Novartis, Celgene, Gilead and DARPA.
Dr. McKnight comes to AnaptysBio most recently from Pfizer’s Biotherapeutics group, where he directed numerous internal and partnered antibody development projects. Prior to Pfizer, Dr. McKnight led antibody projects at UCB-Celltech. Dr. McKnight received his doctorate from University of Oxford and was a postdoctoral fellow at Harvard Medical School.
“We are delighted to add Andrew’s target biology experience to AnaptysBio’s research and development team,” said Hamza Suria, AnaptysBio’s president and chief executive officer. “The unique strengths of our SHM-XEL platform provide AnaptysBio with distinct advantages in the design and discovery of novel therapeutic antibodies.”
Founded in 2005, AnaptysBio, Inc. is a privately-held company focused on the generation of antibody therapeutics, and the leader in the use of somatic hypermutation (SHM) for antibody discovery and optimization. SHM is the body’s natural process for generating potent antibodies. AnaptysBio’s proprietary SHM-XEL platform, which couples fully human antibody libraries with in vitro somatic hypermutation (SHM) in mammalian cells to generate high affinity lead candidates, replicates key features of the human immune system and overcomes limitations of prior antibody technologies. By harnessing the natural mechanism of antibody maturation under controlled conditions, SHM-XEL allows for the selection of optimal antibody properties such as high affinity, functionality, cross-reactivity and epitope diversity. AnaptysBio has established broad intellectual property around the use of SHM and is currently building a pipeline of novel therapeutic antibody product candidates. The Company has previously announced pharma partnerships with Merck, Roche, Novartis, Celgene and Gilead. Major investors in AnaptysBio include founding investor Avalon Ventures, as well as Alloy Ventures, Frazier Healthcare Ventures, and Novo A/S. For more information, visit www.anaptysbio.com.
August 6th, 2012
WALTHAM, Mass., June 2, 2011 /PRNewswire/ — Syndax Pharmaceuticals, a clinical-stage epigenetics oncology company, today announced allowance by the United States Patent and Trademark Office of Patent Application Serial No. 12/549458 entitled: ” N-(2-AMINOPHENYL)-4[N-(PYRIDINE-3-YL)- METHOXYCARBONYL—AMINOMETHYL]-BENZAMINE (MS-275) POLYMORPH B.” This follows the UK issuance which was granted in October of 2010 adding to the extensive patent estate.
The patent covers the novel polymorph form B of the oral histone deacetylase inhibitor, entinostat, being developed by Syndax for combination therapy with aromatase inhibitors for metastatic breast cancer and erlotinib for advanced non-small cell lung cancer.
“This U.S. allowance comes at a strategic time for Syndax and the development of entinostat since we now have the results of our randomized Phase 2 placebo-controlled study in metastatic breast cancer in hand and we are advancing entinostat in to Phase 3 studies,” said Joanna Horobin, president and chief executive officer of Syndax. ” We believe entinostat may help address the significant need to improve outcomes for the thousands of women in the United States living with metastatic breast cancer by extending the benefit of hormone therapy and delaying initiation of chemotherapy. With patent life extending through 2029, we are looking forward to maximizing the opportunities to develop entinostat in multiple indications.”
Entinostat is an orally bioavailable, highly selective, class I histone deacetylase (HDAC) inhibitor with a long half-life that allows for weekly or every-other-week dosing. Entinostat was tested in patients with advanced breast cancer in combination with aromatase inhibitors in a randomized, placebo-controlled phase 2 trial. The results will be presented at a scientific conference later this year and the Company is planning to move into pivotal trials at the beginning of next year. In December 2010, results were presented from a randomized, placebo controlled Phase 2 study showing a four-month survival advantage when entinostat was added to erlotinib in a subset of patients with non-small cell lung cancers expressing high levels of E-cadherin. Syndax also has several studies of entinostat ongoing under a cooperative research and development agreement with the National Cancer Institute including trials in combination with azacitidine in patients with advanced non-small cell lung cancer and advanced colorectal cancer.
Research has shown that HDACs are involved in the expression of various genes, such as the estrogen receptor, that regulate cell growth, differentiation and apoptosis. Such genes are frequently silenced in cancer cells through the over-expression of enzymes including HDACs. HDACs are therefore recognized as promising targets for cancer treatment. Further, studies have demonstrated that HDAC inhibition can significantly enhance anti-cancer activity when used in combination with a broad range of anti-cancer agents. The potential therefore exists to overcome tumor resistance to targeted agents.
Syndax Pharmaceuticals, Inc. is a Waltham, MA-based, oncology-focused pharmaceutical company. Syndax is building a portfolio of new oncology products to extend and improve the lives of patients by developing and commercializing novel cancer therapies in optimized, mechanistically driven combination regimens. Formed in 2005, the company’s intellectual property is based on work from scientific founder Ronald Evans, Ph.D., recipient of the 2004 Albert Lasker Prize for Basic Medical Research, a Member of the National Academy of Sciences, a professor at the Salk Institute for Biological Studies and a Howard Hughes Medical Institute Investigator. Syndax has worldwide rights to develop and commercialize entinostat and is backed by top-tier Venture Capital firms: Domain Associates, MPM Capital, Avalon, Pappas and Forward Ventures. For more information please visit www.syndax.com.
August 3rd, 2012
#53 Rich Levandov
July 27th, 2012
by Josh Constine
Investors demand more revenue from Facebook, and Sheryl’s got just the APIs to give it to them. Over the last two days, three major ads tech partners have revamped their products with recently released Facebook APIs that allow brands to track and optimize for on-site conversions including app installs, buy home page ads and logout page takeovers, and target ads specifically to mobile. (more…)
July 24th, 2012
Gregory T. Huang
Big science and big technology work hand in hand. Without the World Wide Web, an idea conceived by scientists at CERN (the European Center for Nuclear Research), we wouldn’t have technologies people use every day, like social media, e-commerce, or Internet cat videos. And, as my colleague Wade argued, without the Web, scientists probably wouldn’t have garnered the necessary support for CERN’s Large Hadron Collider, the gigantic facility at which the Higgs particle’s existence was more or less confirmed this month (no, I’m not going to explain what it is, but you can see more about it here).
Now a Boston-based startup could represent the next phase of technology advancement. Cloudant, which also has significant operations in Seattle, provides what it calls “database as a service.” The company talks about building a distributed “data layer” around the globe. None of that quite does justice to what it is doing, however.
The connection to big science here is that Cloudant’s three founders are particle physicists from MIT. Alan Hoffman and Adam Kocoloski did research at Brookhaven National Laboratory, and Mike Miller worked there and at the Large Hadron Collider. These guys were cranking on “big data” before that was even a term. In 2008, they started Cloudant to commercialize database technologies inspired by their experience wrangling some of the biggest datasets in the world.
“We spent too much of our time on managing analysis jobs, finding the data, data provenance, bookkeeping, and overhead,” says Hoffman, who served as Cloudant’s CEO until late last year. “We were experts, but still having trouble keeping track of information. The tools were not very good.”
Along their path to starting the company (and finding its focus), the Cloudant team gained admission to the Y Combinator accelerator program in the summer of 2008, in Boston. (There is some confusion on the Web with another YC company, SlapVid, which changed its name to Cloudant in 2007 but is unrelated.) Hoffman says he took away one piece of advice in particular from Paul Graham, the program’s head: Be unkillable, like a corporate cockroach.
Fast forward to today, and the company has 22 employees—10 in Boston, five in Seattle (including co-founder and chief scientist Miller, who was also a research professor at the University of Washington), and the rest distributed. Cloudant has raised a total of $4 million from Avalon Ventures and Y Combinator. Last November, it brought in Derek Schoettle, formerly an executive at Boston-area data analytics firm Vertica Systems (now part of HP), as CEO.
Database companies, by their nature, are pretty technical beasts. Without going into mind-numbing detail, what Cloudant does is provide a data management network for developers of Web and mobile software. Cloudant’s product is based on an open-source project called Apache CouchDB, and it’s “built specifically for the distributed nature of the cloud,” says Hoffman. That means it has to be fast, reliable, and able to scale up from handling data from one server to hundreds of servers. To that end, Cloudant runs a network of sites from the U.S. to Europe to Asia. “We shrink-wrap a data layer around the globe and you tap into it,” he says.
Cloudant competes with Amazon’s DynamoDB product (part of Amazon Web Services), as well as any number of smaller companies offering scalable, cloud-based database services. But the startup is really part of a larger movement of companies looking to disrupt entrenched database giants like Oracle and Microsoft. Another way to slice it: what Akamai did for Web pages and static content, Cloudant wants to do for “dynamic data,” Hoffman says.
Hoffman wouldn’t divulge any company revenue stats, except to say the past three quarters have been “really exciting,” and that the market has come around to Cloudant’s point of view. He adds that the company has more than 8,000 small to mid-sized customers (who pay $500 or less a month) and about 50 large customers who pay much more than that.
Cloudant seems to have found a niche across developers of Web, mobile, and tablet apps, and across analytics and gaming software from small startups to big enterprises. But the team is wary of being stretched too far, too soon.
“We’re trying not to be all things for all people,” Hoffman says. “We’re very focused on that thin but vital layer that is the data.”
July 17th, 2012
|LOS ANGELES, Calif., – July 17, 2012 – In order to recognize the fastest growing technology companies in Colorado, Lead411 is proud to announce the release of its “Hottest Companies in Colorado” award.
July 13th, 2012
Communication Solution Meets Stringent Information Assurance Standards Required for Department of Defense Use
SAN JOSE, Calif., July 12, 2012 /PRNewswire/ — Vocera Communications, Inc. (NYSE: VCRA), a provider of mobile communication solutions focused on addressing critical communication challenges facing hospitals, announced that a military-specific configuration of the Vocera Communications System, including the B2000 Communication Badge, has received Joint Interoperability Test Command (JITC) certification. The Vocera Communications System has met the stringent Information Assurance (IA) requirements of the Department of Defense (DoD).
“Achieving JITC certification demonstrates Vocera’s ongoing commitment to assisting DoD healthcare facilities in their goal of providing the highest standard of care for active and retired military personnel and their families,” said Gregg Young, vice president, Health Systems for Vocera Communications. “The Vocera system streamlines processes to allow care teams to provide the best patient experience which is critical to positive patient outcomes.”
The Vocera Communications System is currently deployed in eleven DoD medical facilities. The Vocera System allows hospital staff to connect with critical hospital personnel and resources through voice commands, reducing time wasted looking up names or phone numbers or waiting for a response to a call for help.
Vocera’s initial certification is valid through June 2015 (subject to the discretion generally reserved by JITC to identify issues that Vocera would have to address in the future). Vocera expects to apply for new JITC certifications in the future for new products and major releases.
Vocera provides mobile communication solutions addressing critical communication challenges facing hospitals today. We help our customers improve patient safety and satisfaction, and increase hospital efficiency and productivity through our Voice Communication solution, Secure Messaging applications, and Care Transition solutions. Exclusively endorsed by the American Hospital Association, the Vocera solutions are installed in more than 800 hospitals and healthcare facilities worldwide. The company is headquartered in San Jose, Calif., with offices in Tennessee, Canada, and the United Kingdom. For more information, visit www.vocera.com.
What does it take to raise that next round? Founders of Kinvey and Backupify, which just collected $14 million in total, weigh in
July 12th, 2012
By Scott Kirsner, Globe Columnist
Getting that first few million dollars from investors is tough enough. But convincing them to keep funneling money into a startup that hasn’t yet hit the big time can be even harder.
So I asked two Cambridge entrepreneurs what they thought the critical factors were in raising their most recent round. Both Sravish Sridhar of Kinvey (pictured at right) and Rob May of Backupify announced new funding today: $5 million for Sridhar’s company, and $9 million for May’s. Sridhar’s new money comes from Avalon Ventures and Atlas Venture, both with offices in Cambridge, and May’s includes Symantec, the security software biggie, as well as Avalon, General Catalyst, and Lowercase Capital.
Setting goals and hitting them is crucial, says Sridhar. His 14-person company, Kinvey, handles much of the back-end infrastructure required by mobile app developers, offering it as a subscription service.
“After our seed round last August, one goal was getting our first 2,000 users,” he says. “We beat that by three months earlier this year. Another was creating partnerships with companies like Adobe, Urban Airship, and Microsoft. Despite not having a vice president of business development, we got them to sign up to work with us.” A third milestone was making the Kinvey service available to any user — not just beta-testers. Finally, he says, investors wanted to see that the company could bring on board technical folks who had experience scaling up complex systems — and Kinvey managed to hire veterans of Akamai, Raytheon, Brightcove, and Fidelity. One of the company’s investors, Rich Levandov of Avalon, told Sridhar that he though the founder’s sense of humor was helpful in building the team: “He said being funny and charismatic could help our company hire just about anyone.” He also invited the company’s early investors to just about any significant company meeting, to keep abreast of Kinvey’s progress.
Kinvey’s $5 million in funding today is considered the company’s A round, following last summer’s $2 million in seed investment. The company participated in the 2011 TechStars Boston program.
At Backupify, which helps companies and individuals make backup copies of the data they create with various online services like Google Apps or Salesforce.com, May says one obvious thing investors like to see is metrics heading in the right direction. “We pulled into the low single-digit millions, in terms of revenues,” he says, “and we crossed 5,000 paying business customers.” But he also says that demonstrating that a company has figured out how to effectively sign up profitable customers is vital: “I think we showed that we could take money, hire sales reps, do advertising and grow our monthly recurring revenues.” When sales reps talk with prospective customers and demonstrate the Backupify service, May says, “they have close rates of 40 to 50 percent.” The company has 30 employees, and is now “mostly hiring salespeople, but also some engineers,” says May. Backupify’s latest $9 million in VC money represents the company’s third round of funding; the company has raised almost $20 million so far.
PowerPoint presentations and promising prototypes may help entrepreneurs raise their initial capital, but clearly metrics and momentum are what matter when it comes to keeping the money flowing.
July 12th, 2012
Kinvey, the TechStars startup out of Boston that provides a unique backend as a service (BaaS), has closed $5 million in a new Series-A round of financing, led by Avalon Ventures with Atlas Venture following on. Kinvey previously raised a $2 million seed round in August last year.
Kinvey wants to be the company that provides the glue that fits the solutions of old with the service of this new age of IT. To do that, the company is today bringing out of beta a service that does much of the backend work that is often the bane of an organization as it seeks to bridge new and old systems.
Kinvey surfaces this funny issue with enterprise IT. The legacy players have old, client/server environments that uses services oriented architectures, making integration with next generation apps a certain challenge for the developer trying to unlock data behind firewalls and integrating such silo environments such as RedHat JBOSS, SAP Netweaver or an Oracle environment.
The new generation of enterprise service providers use any number of APIS. They are elegant when up and running but the same backend work needs to get done each time a developer integrates a new API. This can be especially complicated for the enterprise that is trying to modernize its infrastructure and trying to make sense of how to fit different loosely coupled environments into systems that me by five, ten or even 15 years old. It can be a monumental task to integrate social, location and push features in such environments. Mobile APIs are often all you get from the likes of Google Places, foursquare or automatic push environments such as Urban Airship. Softwares from infrastructure as a service providers like Amazon Web Services and existing offerings from PaaS providers only provide you with APIs and libraries that let you use their features. If you want a feature they don’t’ provide you with, you have to build it yourself.
All of this can cost them months of work and hundreds of thousands of dollars in costs.
Kinvey has developed a backend environment that glues these different fragmented environments together. It’s a unified process between the client and the cloud with a unified API and software libraries. It also includes a back-end data store for images and videos.
“We are your back end dev team,” said Sravish Sridhar, Kinvey’s CEO and Founder.
This is a major task. It means being everything to everybody. Sridhar said they have spent the last year developing the core data service to move information back and forth between apps and backend systms. It can now handle about 80% of what backend developer might see. They are picking off the remainder one by one.
Kinvey will use a good part of its funding to build a worldwide developer community. They are open-sourcing what they call “service links,” that will connect the back end environments. The goal is to get developers to build their own and open-sourcing them for others to use.
July 2nd, 2012
By Steve Chapple Special to the U-T
Saturday, June 23, 2012
La Jolla venture capitalist Kevin Kinsella: he’s happy, he’s not happy, he’s realistic.
He’s happy because Avalon Ventures, which he founded in 1983, has just turned a $5.3 million investment in Zynga, the game company that sits on the Facebook platform, into a $350 million profit.
He’s not happy because he feels the salad days of biotech — when you could take a promising therapeutic protein, and then build a company around it, and IPO that company, or hold on to it all the way to the bank — those days may be over. And Kinsella has an informed opinion on the matter because over the past 34 years he’s helped to bring 100-plus biotech and pharma companies to market, including Vertex and Onyx Pharmaceuticals along with several billion-dollar drugs for cancer and hepatitis.
Kinsella waxes realistic as well.
“I’m very skeptical of personalized medicine. We’re already bumping up against the physical age limits of homo sapiens. What more can you do to extend life? Most of the things that you can do, that far outweigh what you might get from a pill, are lifestyle, watching what you eat, getting enough sleep, enough exercise and avoiding stress.
“Yet people still smoke, and they drink to excess. They consume too many fats, too much sugar. Getting your complete genome sequenced, to find genotypic traits that are going to tell you more about your health? It won’t do us much good, and, frankly, I don’t think people really care. If they did, wouldn’t they just change their lifestyle?”
In 1978, Kinsella got in his Ford Pinto and drove out from Boston to San Diego. After graduating from MIT with a major in management and minors in electrical engineering and political science, he got a job at Solar Turbines, eventually handling all international joint ventures, the last time he worked for someone else.
“San Diego had a more interesting climate, a more interesting entrepreneurial community, less parochial than the East Coast,” he explains.
Why San Diego rather than Silicon Valley?
“I’d rather be a big fish in a small pond.”
Of course, less humbly, in America’s VC triangle of Menlo Park, La Jolla and Cambridge, Kinsella and Avalon are best seen as the bluefin tunas — fast, smart and tasty. Big fish, indeed.
Time for a tour of the offices, which are not like most offices. The walls are covered with one of the world’s finest collections of California plein-air, or landscape, art. The great room holds two Yamaha grand pianos — one, candy apple red, formerly owned by Elton John, and another, black, nine-foot, Disklavier (high-tech player), concert piano.
Upstairs is a trophy room dedicated to the musical “Jersey Boys,” which was launched from the La Jolla Playhouse. Kinsella was the lead investor.
That shouldn’t come as a surprise. Kinsella’s father was the Broadway and TV actor Walter Kinsella, a regular on “Alfred Hitchcock Presents” and “The Honeymooners.” Downstairs is the screening room (103-inch thin-screen Panasonic).
Across the hall is a 9,000-bottle wine cellar, temperature-controlled at 58 degrees. Kinsella Estates Winery makes a 95-point rated cabernet sauvignon, $100 a bottle (get it at Pamplemousse), and he’s flying up to Healdsburg in Sonoma County for a tasting later in the week, before Madrid, for the art, and London, to check on a new musical “Matilda,” back through New York, more shows. He’s a Tony voter.
The building used to be the Copley Library. Now it’s the Kinsella Library, and some might view this as a changing of the guard, from media empire to the new riches of biotech and social networking. The entrance foyer is still the same, floored with bricks from the Springfield railway station where Abraham Lincoln first boarded the train to Washington for his 1861 inaugural.
I ask how picking a future hit musical is like picking a winning startup. Kinsella has been answering this question most of his life. “For a variety of reasons, liking a musical is different than liking a social network company,” he says, “but at the end of the day it’s just your gut decision whether or not, at this point in time, are all the threads coming together and resonating with you? Is this something that you’re going to risk your money on or not?”
How do you compare biotech and tech investing?
“Nothing could be more expensive than getting a drug approved. Nothing could be cheaper than to start an Internet company. If you’re talking about therapeutics-based biotech, since that’s where all the money is, then every idea is a big idea.
“If you can cure even an orphan disease, like Meniere’s, Lou Gehrig’s or the lysosomal storage diseases, then there’s hundreds of millions, if not billions of dollars, of market value in solving the problem.
“If you’re talking the Internet, every idea is a small idea until proven otherwise,” and you scale from tens of thousands of users to tens of millions of users, “which must be done in an economically sensible way” — not like Groupon, he points out.
The life span of an average venture capital fund is 10 years. In the aggregate, Avalon’s several current funds hold $700 million.
“We invest, as soon as we close. We put all our money in the ground by three years and then by five or six years, we have to start looking for exits. We obviously need to return capital to our partners who are looking for an above-average multiple on their capital.
“So it’s a short time frame to accomplish things, and even if it’s a great idea, if we don’t think we can get significant inflection point of value appreciation within some limited period of time, let’s say, five years, with an investment of no more than $10 million to $15 million on our part, we are reluctant,” to invest.
Do you agree with the locals who say there’s a shortage of investment money in San Diego?
“People who have bad ideas, who can’t get funded, they think there’s a lack of capital. But if they’re truly insanely great ideas, they’ll get funded.”
Kinsella finishes the tour. “That’s my humble little abode.”
But then he pulls down an old gray picture, which may be the most impressive memento of all, to Kinsella. There he is, a 20-year-old kid suspended 3 feet off the ground, wearing an MIT jersey, the hoop 10 feet away, as the kid crashes in the basket.
The picture shows finesse and confidence, a nuanced aggression — and whoever thought of MIT as a basketball powerhouse?
“The three things I’m collaterally proud of about MIT,” says Kinsella, an alum and still a solid 6 feet 4 inches, are “no athletic scholarships, no honorary degrees and your daddy can’t buy you in. That was the last time we beat Harvard — my last game — 20 points and eight rebounds,” he says, smiling with satisfied finality.
Steve Chapple’s Intellectual Capital covers game-changing people, ideas and perspectives. He can be reached at email@example.com
June 28th, 2012
About an hour north of Boston, in a city by the sea, there’s a project underway to reinvent the marine industry. More specifically, the marine defense industry.
Imagine a boat that moves through the water differently from any other boat in existence. It uses “supercavitation”—the creation of a gaseous bubble layer around the hull to reduce friction underwater—to reach very high speeds at relatively low fuel cost. Its speed and shape means it can evade detection by sonar or ship radar. It can outrun torpedoes. Its fuel efficiency means it has greater range and can run longer missions than conventional boats and helicopters.
Now imagine that this vessel has already been built and tested. It “flies” through the water more or less the way it was designed to—like a high-tech torpedo, except part of the craft is above water—and it can be maneuvered like a fighter plane. “It’s almost as much an aircraft as it is a boat,” says its inventor, Gregory Sancoff, the founder and CEO of Juliet Marine Systems, a private company in Portsmouth, NH.
The vehicle, dubbed the “Ghost,” is the first of its kind and is garnering attention from organizations like the U.S. Navy, Coast Guard, defense contractors, and foreign governments—as well as hackers in foreign countries, who are presumably trying to figure out how it works. Juliet Marine Systems has received about $10 million in total funding, about half of which comes from its founder and private investors. The startup’s institutional investor is Avalon Ventures, a VC firm with offices in the San Diego and Boston areas.
Until recently, the project was kept under wraps because of secrecy orders from the federal government. But this summer, Sancoff says, the Ghost—which looks like something out of Star Trek (see photos)—will be ready for prime-time deployment. His team of 16 employees is working on integrating weapons and sensors for military missions. “We have a fully functional, basically go-to-war boat right now,” Sancoff says.
The question is, does it really work? And, more to the point, can it be used for missions safely, reliably, and effectively? If the answer is yes—and that’s a big if, from an outside perspective—one could imagine a squadron of Ghosts being deployed to the Persian Gulf, say, to defend warships and other interests against “swarm” attacks by small boats, Sancoff says. The vessel also could be used against pirate attacks, for Coast Guard rescue missions, or to transport workers to and from oil platforms. The technology might have much broader uses, too—in global cargo shipping, for example, to reduce fuel costs, or for commercial jet skis. (Wacky as it is, the concept is not as far-fetched as, say, a submarine that can also fly.)
But to get a better sense of the ship’s real prospects—and the company’s—let’s consider the whole story.
From Medical to Marine Tech
Sancoff, 55, is a prolific inventor and serial entrepreneur who, I’m told, takes engineering magazines to bed. He grew up in a military family and went to high school in Lawrence, MA. As a kid, he lived on Army bases and says he remembers saluting the flag when he got out of the car. Sancoff never served in the military, but that’s probably because he was too busy inventing stuff.
He started his first company when he was 18—a machine shop for doing rapid device-prototyping for other businesses. He sold that and headed west to San Diego in 1982, at age 25. As a consultant, he became an expert in medical devices, including systems for delivering intravenous fluids, collecting health data, and other applications. He started a new company, Block Medical, and sold it for $80 million in 1991. His next company, River Medical, was based around a new kind of drug-delivery device for hospitals. River acquired IVAC, a medical-device firm divested from Eli Lilly, and ended up being sold to Advanced Medical (IMED) for $400 million in 1995.
Sancoff’s next big project was to start Onux Medical, a surgical tech company based in New Hampshire. It was there, in 2000, that he first got inspiration for Juliet Marine and the Ghost ship. Sancoff was sitting in a conference room when he heard the U.S.S. Cole had been attacked off the coast of Yemen by a small boat loaded with explosives. Seventeen U.S. sailors had been killed and many more wounded. He sat there in disbelief as he realized a billion-dollar warship had nearly been sunk by a couple of guys in a raft.
Juliet Marine would derive its name from a U.S. Navy “war games” exercise held in 2002. At $250 million, it was the most expensive exercise in Naval history. “Fleet Battle Experiment—Juliet” involved warships parked off the coast of California and a series of simulated small-boat attacks. The results of the simulation were grim: more than 20,000 deaths and massive losses to the fleet, in a Persian Gulf scenario. Yet, Sancoff says, the Navy hasn’t done anything in the past 10 years to guard against such attacks, other than work on targeted rocket systems.
“When you’re an entrepreneur, there has to be an overwhelming reason why you do it,” Sancoff says. “That was it for me.”
He saw a big opportunity—if only he could design a ship fast enough and maneuverable enough to intercept attackers before they could get close to big ships or shorelines. He had raced hydroplanes as a teenager—probably could bulls-eye womp rats, too (sorry, Star Wars joke)—so he had an intuitive feel for what it might take.
Which brings us to supercavitation. It’s an old idea. During the Cold War, the Russians developed a torpedo called the Shkval (“squall”) that could go more than 200 mph—five times as fast as a conventional torpedo—using a rocket engine and air ejected in front to produce a gaseous bubble completely enveloping the projectile. That reduces the friction between the hull and its surroundings by a factor of about 900, enabling superfast travel. Yet rocket-propelled torpedoes have downsides in performance and reliability; the sinking of the Russian submarine Kursk in 2000 is rumored to have been caused by a malfunctioning Shkval.
Meanwhile, the U.S. Navy and others reportedly have been working on a next-generation supercavitating torpedo since at least the 1990s. And in recent years, the Defense Advanced Research Projects Agency (DARPA) ran a program, called Underwater Express, to design a supercavitating submarine. There is also interest in using the concept to improve fuel efficiency for oil tankers, ferries, and other large ships, typically by creating air bubbles at the front of the hull. As of yet, however, nobody has publicly demonstrated a successful supercavitating craft.
To that end, after leaving Onux (which was bought by Bard in 2004), Sancoff spent several years doing research on his own and incorporated Juliet Marine in 2008. By June of last year, using $5 million of mostly his own money, his team had built a fully functioning prototype—Sancoff prefers the term “pre-production” vehicle. And earlier this year, he secured an additional $5 million from Avalon Ventures, the VC firm that invested in his last two companies.
At a Bay Area event in March, Kevin Kinsella, the Avalon partner on the deal, spoke glowingly of River Medical in particular. “We got 10x [return] in 18 months, and I only had to go to four meetings. An ROI of 2.5x per board meeting is fantastic,” he said. (Onux didn’t cash out quite as well, but it still worked out fine.)
After seeing firsthand what Juliet Marine built with $5 million, Kinsella said, “If you were taken around by a handler from Lockheed or Grumman or Northrop or any of them, and they told you, ‘We developed this on $150 million,’ you wouldn’t bat an eye.” He told the story of a meeting with Avalon and its fund investors. Someone asked Sancoff, “How did you get to be so capital efficient in your company?” Kinsella relays, “He leaned on the podium and said, ‘Because it was my money.’”
Not Your Grandfather’s Boat
OK, so here’s how it works, according to a patent filing (see diagram, below). The main compartment of the Ghost vessel, which houses the cockpit and controls, sits above the water in between two torpedo-shaped pontoons or “foils,” which are submerged and create all the buoyancy and propulsion for the craft. The angle of the struts that connect the foils to the command module is adjustable—so the craft can ride high in choppy seas and at high speeds (so waves don’t hit the middle part), and low in calm water and at lower speeds.
“We’re basically riding on two supercavitating torpedoes. And we’ve put a boat on top of it,” Sancoff says.
At the front of each foil is a special propeller system that pulls the craft forward. The propellers are powered by a modified gas turbine—a jet engine—housed in each foil; the air intake and exhaust ports for the engines are in the struts. As the ship moves through the water, the motion of the propellers creates a thin layer of bubbly water vapor that surrounds each foil from front to back, helped along by the presence of “air trap fins” that keep the vapor in contact with the hull (and keep liquid away from the hull). The vapor is what constitutes the supercavitation, so the foils can glide effortlessly through the bubbles.
“The key is the propulsion. You have to have a lot of power at the right location in this vessel,” Sancoff says. Exactly how this is done is a trade secret. But the propulsion system, which he says generates 30 percent more thrust than any other propeller-based system, essentially “boils water underwater and generates steam vapor.” (I take this to mean the pressure directly behind the propeller blades is so low that the liquid water there “boils” off and becomes a gas—hence the bubbles.)
After doing some digging in the literature, I asked Sancoff whether what’s in the patent filing is really how it works—in terms of how the Ghost creates its mysterious supercavitation. His answer: “No.” (OK, so there’s more to the story here. But you know when you’re supercavitating, he says, because the engine efficiency actually improves as you go faster.)
In any case, the overall design makes the craft go fast, but Sancoff isn’t making any public claims yet about exactly how fast. “We don’t talk about speed, how many weapons [it can carry], or how far we can go,” he says. Yet its rumored speed is at least 80-100 knots—over 100 mph. That’s not going to challenge the top speedboat records—there have been hydroplane efforts (riding on the water surface) that have exceeded 200 mph (174 knots) and even 300 mph (261 knots), some with fatal results—but the Ghost is faster than any previous underwater vehicle, Sancoff says.
What’s more, he says, the Ghost provides a much smoother ride than what Navy SEALs are used to; many of them blow out their backs from the bumpiness of their boats, he says. “Our boat does not have impact from the waves. We cut through the wave,” Sancoff says. “That is critical science.”
Hydrodynamics experts I’ve talked to say the main challenges of such a craft are controlling it, stabilizing it, and making it quiet. Going superfast in a straight line might be doable, they say, but any sort of turning or maneuvering must be done very carefully, because if the bubble layer distorts or breaks down at high speeds, tremendous water forces will come to bear on the foils, which can be catastrophic.
To steer itself through the water and maintain stability, the Ghost uses four movable flaps on the front of each foil and four on the back of each foil, for a total of 16 flaps. (The flaps reach through the thin bubble layer into the surrounding water.) The struts are adjusted to keep the command module out of the water, and the foils stay submerged, so waves at the water surface should only hit the struts, which have a small cross-section.
“It’s computer controlled, like a modern F-18,” Sancoff says. “We’re boring what looks like two wormholes underwater, and we’re flying through foam.” Sancoff himself has been test-driving the ship over the past couple of years. “I have been learning an entirely new craft since then. It’s a totally new experience,” he says. “Just because you drive Grandpa’s boat, you’re not going to drive this one. It’s more like a helicopter.”
As for the craft’s audio profile, Sancoff is proud of its “silent propulsion” system that includes a sophisticated muffler system for the engines. You can’t hear it from 50 feet away, he says.
Coming Out of the Night
With any grand invention like this, some outside experts are going to be skeptical. “I wouldn’t say it’s not going to work. But I have concerns,” says Gary Balas, head of the department of aerospace engineering and mechanics at the University of Minnesota. Balas is an expert in flight and underwater control systems, but his main objection is that the propulsion system of the Ghost, with its forward propellers, is very unusual for a supercavitating craft. The typical approach, as in the Russian torpedo, is to propel the craft from behind and eject gas and/or use a blunt shape in the front to create an air cavity around the craft. “I don’t see how they’ll achieve what they expect to achieve,” Balas says. “And I don’t see how they’ll control the altitude and the yaw of the vehicle.”
His colleague, Roger Arndt, also a professor at the University of Minnesota, is an expert in fluid flow and cavitation. He has doubts about the Ghost propulsion method as well. In fact, cavitation bubbles are normally bad for propellers and can cause serious damage. But there is a type of propeller, with wedge-shaped blades, that produces supercavitation in high-speed racing boats; presumably this is similar to Ghost’s propellers. But in this case, Arndt says, “I am dubious about the application of supercavitating propellers.” (To be fair, Sancoff said that what’s in the patent filing isn’t quite how it works.)
Other experts on supercavitation declined to comment for this article. Sancoff emphasizes that the project has a lot of sensitive aspects to it, in terms of national security, so people who know about it aren’t talking. And he claims that Juliet Marine’s website is getting “attacked” 350 times a month by hackers, mostly in foreign countries.
In any case, the current vehicle—which resides under tight security at Portsmouth Naval Shipyard (“a great asset” for a startup to be able to rent space in, he says)—holds 18 people and weighs some 60,000 pounds fully loaded; the underwater part of the vessel is 62 feet long. Sancoff says it can be launched from any beach. “A group of these boats coming out of the night in the Persian Gulf, armed with torpedoes, would be undetectable to large ships,” he says. “Ghost cannot be hit by a torpedo. You would have to shoot it with a gun.”
Not surprisingly, Sancoff sees an urgent military need for his craft. The Navy loses sleep about swarm attacks and security in the Strait of Hormuz (which runs between Iran, United Arab Emirates, and Oman) and other strategic waterways, he says. Yet it hasn’t moved quickly enough to do anything about the threats. “We talk with the Navy weekly,” he says. “We believe the U.S. could use a hundred of these boats right away.” At a price of $20 million per boat—fully loaded with electronics, radar, and so forth—that “provides us with a billion-dollar market opportunity for coastal and fleet protection,” he says.
Meanwhile, the U.S. State Department has granted Juliet Marine permission to talk with the governments of Israel and UAE, which both have marine security concerns. The company says it is currently building a manufacturing facility near Portsmouth, in anticipation of ramping up to sell Ghost ships to customers. Sancoff adds that Juliet Marine is planning to build two more versions of the ship this fall, using what he calls “the final configuration.”
And while the startup strives to gain full acceptance from the U.S. Navy and other potential defense customers, it is “working on weaponizing” the craft, says Sancoff. “The vehicle’s done. Now it’s time to get mission modules complete.” That means mounting torpedoes, machine guns, radar, mine-detection systems, and other sensors onto the craft—and making sure it all works the way it’s supposed to.
That remains to be seen, of course. But if it performs as advertised, Juliet Marine could end up playing a vital role in global security on the high seas. “That’s the beautiful thing about being an entrepreneur,” says Sancoff. “You take a risk with it.”
May 2nd, 2012
AnaptysBio is on a partnership roll: its agreement with Gilead Sciences, announcing on 1 May is its fourth new partnership in 2012 for the discovery of novel antibodies for partners.
AnaptysBio, a private firm based in San Diego disclosed neither the financial terms nor the disease areas of its Gilead deal, but AnaptysBio president and CEO Hamza Suria said the partnership would focus on areas in which Gilead has pipeline interest. Gilead is best known for its portfolio of antiviral drugs for HIV/AIDS and its development programs in hepatitis C therapies. It also has several therapeutics approved and in clinical development for cardiovascular, metabolic and respiratory conditions; cancer and inflammation; and liver disease.
May 1st, 2012
SHM-XEL platform to generate novel therapeutic antibodies
SAN DIEGO, Calif. – AnaptysBio, Inc., a privately-held therapeutic antibody company, today announced an antibody discovery partnership with Gilead Sciences, Inc. to develop novel antibody therapeutics. (more…)
April 21st, 2012
By Mike “Mish” Shedlock
A close friend of mine since high school frequently writes for Foreign Affairs Magazine, the Small Wars Journal, and places like Janes’s Defence Weekly.
His latest article in the Small Wars Journal highlights compelling reasons that bigger, more expensive, weapons systems “borrowed from the end of World War II or the Cold War” are far too costly and are not even what is needed in today’s world. (more…)
March 22nd, 2012
By Wade Rush
Current and former MIT students gathered at the Computer History Museum in Mountain View, CA, Tuesday night to hear one of San Diego’s most renowned venture investors, Avalon Ventures founder Kevin Kinsella, share insights from a long and adventurous career.
February 16th, 2012
by Rodney Brown
Mass High Tech
Juliet Marine Systems Inc., Portsmouth, N.H., developer of the GHOST stealth littoral defense ship, has taken in $9.67 million in the company’s first institutional funding round, according to an SEC filing. (more…)
January 6th, 2012
SAN DIEGO, Calif. – AnaptysBio, Inc., a privately-held therapeutic antibody company, today announced the initiation of new strategic alliances with two partners: Novartis and an undisclosed second pharmaceutical company. The strategic alliance announced today with Novartis is AnaptysBio’s second collaboration with the Swiss-based pharmaceutical company and follows an initial partnership where AnaptysBio successfully delivered antibody candidates for Novartis’ development pipeline. (more…)