06 Feb Wisconsin won't get Georgia biotech without a fight
Madison, Wis. – Wisconsin officials and investors who are trying to come up with the financing that will enable a Georgia life science firm to relocate here have a fight on their hands.
And that’s because Georgia is not simply willing to let go of Aruna Biomedical, an Athens, Ga. business that produces neural stem cell kits for researchers and is seeking to move from research to production.
Last week, the brother of the firm’s key scientist and founder confirmed that Aruna would relocate to Wisconsin if it can find additional investors here. That news got back to Athens, where the company was spun out of research at the University of Georgia by professor Steven Stice.
Georgia investors have expressed an interest in keeping Aruna in the state, and other regions could get into the bidding.
Margaret Wagner Dahl, director of business an economic development for the University of Georgia, declined to discuss financial and business arrangements related to local attempts to retain Aruna Biomedical, but she emphasized that the university is prepared to ensure that Aruna has every opportunity to continue growing in Georgia.
The company is housed in a business incubator on the Georgia campus, and retaining it is considered a priority.
“We value the company in terms of the fact it originated from UGA-based research activities, it has been nurtured through state-based, early-stage venture activities since its inception,” Wagner Dahl said. “And most of all, we very much value Dr. Stice’s commitment to pragmatic outcomes from his research involvements.”
Stice, who uses stem cell lines owned by the Wisconsin Alumni Research Foundation, has developed a method to derive neural progenitor cells from human embryonic stem cells, enabling Aruna to produce kits containing neural progenitors and the reagents needed to both proliferate and differentiate them into cultures of neural cells. The cells and proliferation media are used by biomedical researchers looking to develop therapies for neurological diseases and spinal cord injuries.
One of the reasons the company would relocate to Wisconsin is to take advantage of synergies from stem cell research at the University of Wisconsin-Madison. Stice, director of the university’s Regenerative Bioscience Center, has indicated he would remain in Georgia even if the company relocates.
Wisconsin Investment Partners, a Madison-based network of angel investors, has offered Aruna financing. Although the specific amount has not been divulged, Dick Leazer, a principal in Wisconsin Investment Partners, said the firm usually gives about $250,000 to the companies it funds.
The offer is not contingent on the firm moving here, but any move is contingent on Aruna attracting additional investment in Wisconsin. The company has not said how much more it wants to raise.
Jim Stice, the brother of Steven Stice and a medical device executive in the Twin Cities, said the Wisconsin Department of Commerce has committed to a package of grant-and-loan provisions.
If it comes down to a bidding war, Georgia is better armed in terms of investment capital. Georgia companies attract more venture capital in one quarter than Wisconsin does in an entire year.
Case in point: the third quarter of 2006. In that three-month period, Georgia companies raised $125.9 million in equity financing in 21 deals, according to PriceWaterhouseCoopers.
In contrast, Wisconsin companies raised a total of $58.47 million in venture capital in all of 2006, with 12 deals overall, according to a recent report from Ernst & Young, LLP and Dow Jones Venture CapitalOne. Wisconsin also raised $19 million in angel investments in 2005, according to NorthStar Economics, Inc.
Both state governments have funding programs to help start-up companies in need of capital.
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• WARF will ease stem cell licensing restrictions
• CellCura could start an invasion of stem cell firms
• Early-stage executives hear from investors
• State tracks more angel investment, at least $19M last year
• Start-ups, angels can connect on new state Web site