20 Feb New angel capital centered on GenTel agreement with big pharma
Madison, Wis. – GenTel BioSciences, a privately-held biotechnology company, has completed what it calls “a critical round of financing activity” by raising an additional $500,000 to pursue a new partnership with a large pharmaceutical company.
Alex Vodenlich, president and CEO of GenTel, said the identity of the pharma company would not be announced until next month during an open house for shareholders at GenTel’s new facility in the Fitchburg Technology Campus.
Some observers believe that collaboration between large pharmaceutical organizations and early-stage biotechnology companies will become more common, due in part to the global product distribution systems that “Big Pharma” can offer.
“The deal has been signed,” Vodenlich said. “It’s a deal with a large pharma company, but that’s about all I want to say at this point.”
The commitment brings to $2 million the total amount of funding GenTel has raised, the bulk of it coming from two Wisconsin-based investor organizations.
GenTel had sought to raise $1.5 million in equity financing for the continuing development and commercialization of a protein chip or assay used by researchers to process more samples in less time. However, the latest opportunity to partner with a larger organization required additional cash resources, Vodenlich said.
Among the different ways the GenTel assay is being used is in biochemical research into certain forms of cancer. This research has focused on disease-related changes in the protein composition of blood, and could help scientists determine how cancer cells invade healthy cells, and then divide and spread.
Providing the bulk of the funding were the Appleton-based NEW Capital Fund, which targets high-growth companies certified under Act 255, the state’s investment tax credit program, and Wisconsin Investment Partners, a Madison-based angel investment network that emphasizes life-science investments.
“They [GenTel] have had good marketplace acceptance and nice sales growth, albeit for a young company,” said Dick Leazer, a principal in Wisconsin Investment Partners. “They are getting good traction in their relationships with other companies, and with their suppliers and users.”
GenTel, which was founded in the year 2000, is the 15th company to receive seed-round funding from Wisconsin Investment Partners. In addition to the two investor organizations, several individuals contributed to the funding.
Investors also cited GenTel’s potential for growth, which is linked to the research tool that could distinguish it in the market, and to its forthcoming collaboration. “We always like to be investing ahead of very positive news,” said Charlie Goff, general partner of NEW Capital Fund. “We were able to verify that this transaction is imminent. This has real upside as to how they will be able to deploy their immunoassay slide in the marketplace.”
Goff also said GenTel is at the point where it has a good chance to “be able to cash flow from here.”
“It’s always attractive for investors to fund that last round before positive cash flow,” he said. “It means the chances are good that its stock will not be further diluted.”
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