06 Nov Investors Pick Favorites at Life Science Conference
MADISON, WI – Companies from nine different states staked their territory Tuesday and Wednesday in an exhibit hall and gave brief presentations in hopes of catching the eye of venture and angel investors at the Wisconsin Life Sciences & Venture Conference at Monona Terrace, Madison.
According to industry insiders in attendance, many of the companies – representing not only life sciences but the energy, medical device and other industries – were so early in the development process that they would require a hands-on investor willing to help erect a management structure and devise a business plan. But some companies were further along, and were close to having viable products to market.
The conference featured 20 companies chosen to give brief presentations on their technology; with others simply manning information booths in a small exhibit area.
Among companies picked as ripe for investment by industry insiders was MR Instruments Inc., Minneapolis. According to Patricia Buffo, venture capital attorney for Davis & Kelthau, Milwaukee, the company’s Magnetic Resonance Imaging (MRI) technology not only appears to deliver real market benefits, but it is relatively far-along towards having a viable product to market.
“They have developed a way to use an MRI for cancer treatment – which normally you don’t associate with cancer,” Buffo said after seeing the company’s presentation. “And unlike most early stage companies, they actually have purchasers for their product, albeit research hospitals and universities.”
MR Instrument CEO Kevin Sundquist explained how the company’s MRI coils allow more powerful and detailed MRI imaging – without the use of dyes that can cause negative reactions in some patients. As you try to crank the magnetic power of an MRI beyond three Tesla, there are risks to the patient.
“There is the issue of heat,” Sundquist said. “It has been known to burn patients. With our technology, at three Tesla, we use half the power a conventional MRI uses, and we are already approved for up to seven Tesla.”
The benefits of a more powerful MRI? Shorter times spent in the magnet – down from 45 minutes to five minutes, according to Sundquist. This alone could save lives in time-sensitive emergency situations. The more powerful MRI can also not only scan the size and structure of a tumor, but also identify chemical agents that can signal how active the tumor is. The higher-Tesla scan has also been tested in the area of functional psychiatry, according to Sundquist, displaying which parts of the brain are stimulated by various activities.
Vodka power, variety of investments
Meanwhile, Deron Curliss, a partner with the accounting firm Grant Thornton LLP pointed to Virent Energy Systems LLC, Madison. The company is developing a process to produce hydrogen and/or hydrocarbon fuel gas from waste streams, waste biomass, and energy dedicated biomass crops using liquid phase reforming. At the conference, the company ran a display illustrating how the carbohydrates in vodka can be used to generate electricity.
“Virent just got a $2 million Advanced Technology Program grant from the US Department of Commerce,” Curliss said. “That helps validate the technology. Not many Wisconsin companies have gotten those.”
Lane Brostrom, managing director with TS Early Ventures Fund, suggested that a few companies exhibiting at the conference were more mature investments, while others would require a lot of hand-holding by an individual with management expertise and seed capital to invest.
“There are a lot of good investment opportunities here,” Brostrom said. “But this is not the public market. Investors at this stage need to be professional investors, support the management team and create a corporate structure. This isn’t where you read a ticker symbol and place a buy.
“But it spans the range,” said Brostrom, whose organization was created by academic institutions in southeast Wisconsin to support early stage technology companies in Wisconsin. “NeoClone is probably more of a seed stage company. But Nimblegen is probably a mezzanine-level investment.”
NeoClone produces monoclonal antibody products for the biotechnology and research markets, while Nimblegen Systems, Inc. NimbleGen’s technology facilitates microarrays of genome sequences. Both companies are based in Madison.
The fact that many companies made the trip to the conference from outside of the state was not lost on participants, who mostly saw it as a positive sign about the importance of the conference as opposed to an indicator of a lackluster research and technology environment in Wisconsin.
“I think the more you expand your market, the better,” Buffo said. “Certainly regional expansion and regional publicity might open the eyes of venture capitalists that there is a market here.”
“There are different angel investors and angel networks over here,” Sundquist said. “There are a lot of venture conferences in Minneapolis and Chicago that don’t attract many people from out of town. But here we are seeing a lot of new faces.”
Chuck Rathmann is a freelance writer and contributor to Wisconsin Technology Network. He can be reached at firstname.lastname@example.org.