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New San Antonio venture fund: Targeted technology fund I, LP Announces First Investment
July 17, 2009

 

(San Antonio, TX) – Targeted Technology Fund I, LP announced today that it has closed its first round of funding and has made its first investment in San Antonio-based Vidacare.  Targeted Technology Fund is a San Antonio-based venture capital fund formed to capitalize on the growth of the biomedical device sector in Texas, Alabama, Colorado and Georgia and the rapidly expanding investment opportunities in these regions.

Established in 2001, Vidacare Corporation’s award-winning technology platform incorporates patented power-driver and needle technology to provide a safe and effective method to access the intraosseous space (inside the bone).  Vidacare has established new standards of clinical excellence in the safe, rapid performance of medical procedures using the intraosseous space.

Vidacare’s first product, the EZ-IO® Vascular Access System provides immediate vascular access for the delivery of essential drugs and fluids and has been inserted in over 300,000 patients worldwide.  Vidacare’s OnControlä Bone Marrow System will provide the first advancement to bone marrow biopsies and aspirations in more than 50 years, offering patients and clinicians a vastly improved procedure option.  In addition, the OnControlä Bone Access System has received FDA 510(k) clearance for use in spinal surgical procedures such as vertebroplasty and is scheduled to commercially launch in 2010.  Headquartered in San Antonio, TX, Vidacare products are marketed in over 50 countries worldwide.

“The bioscience industry is the largest in San Antonio with a $16 billion impact and is expected to increase dramatically with the military’s investment in our healthcare industry,” said Lukin Gilliland, Jr., a partner of the Fund.  “It only makes sense that San Antonians reap the financial benefits from the biomedical advancements being produced right here in our own research institutions and companies.”

Founders Alan Dean, Paul Castella, and Christopher E. Banas decided to form the Fund last
year with the intention of identifying and advancing those industry-transforming innovations that have the potential for exceptional financial returns for investors.

One of the significant investors in the new Fund is the Texas Research & Technology Foundation, which is comprised of multiple organizations whose work involves various stages of the very complicated drug development process. Graham Weston, Chairman of the Board of Rackspace; Bruce Barshop, a founder of Barshop Ventures LLC; and David Spencer, who is president of Texas Intrepid Ventures, a San Antonio-based investment firm, are also included in the pool of individual investors who share the Fund’s vision. 

“This is such a great investment,” said Spencer.  “These partners have a real talent for finding and creating value in the medical space.”

BioMed SA Chair and former San Antonio Mayor Henry Cisneros also openly encourages the Fund’s creation, citing the industry’s strong growth potential.  “San Antonio has a track record of developing lifesaving medical devices, such as the Palmaz® Stent, Titanium Rib, and Vidacare’s EZ-I0®,” said Cisneros. “The city’s four pillars of biomedical excellence – clinical care, medical education, biomedical research, and bioscience firms – provide the foundation for continued growth in this sector.”
“The recent decision by Medtronic (NYSE:MDT) to locate a large facility here, employing 1,400 people, underscores how San Antonio’s strong biomedical infrastructure is translating into economic momentum,” Cisneros added. 
“Maintaining this growing momentum will require capital in various forms to spur private investment in San Antonio’s emerging bioscience companies and the commercialization of new medical products,” noted BioMed SA President Ann Stevens.  “One critical piece of the puzzle that has been missing is venture capital,” she said. 
“Without this sorely needed growth capital, it will be difficult for San Antonio to retain startup companies, which may reap the benefit of research conducted here and then follow the capital to other cities,” Stevens continued.  “The initial capitalization of Targeted Technology Fund I by an experienced team of locally-based entrepreneurs represents an important step forward for San Antonio’s biomedical industry.”
“The State of Texas has benefited from the Emerging Technology Fund (ETF), an initiative conceived and implemented by Governor Rick Perry, a strong advocate for technology commercialization,” explained Alan Dean, a Managing Director of the Fund.

“San Antonio has a strong legacy of entrepreneurial achievement and life science innovation.  SATAI has been a critical factor in the city in moving technologies through the commercialization process,” Dean added. “A missing ingredient, until now, has been a directed source of capital that can be deployed by fund managers who have insight into this very challenging field,” Dean said.

In the absence of local venture capital, SATAI has helped fill the void by organizing local angel investors and by managing the regional review and selection process for the ETF, and in this capacity has enjoyed considerable success in attracting state funds to companies in South Texas. SATAI was instrumental in obtaining funding for CardioSpectra, which is the ETF’s first successful exit to date.

“The ETF serves a pivotal role in providing the bridge for technology companies in the valley of death that exists between angel investors and venture capital firms,” says Jim Poage, CEO of SATAI.  “The formation of the Targeted Technology Fund, especially given its early stage focus, provides the missing link in this chain of financing, and will be a tremendous resource for companies seeking to take their growth to the next stage.”

                                                                                         
About Targeted Technology Fund I

Managing Director Alan Dean has over 25 years experience in the technology development industry with experience in venture capital and technology transfer, both in the private and non-profit sectors.   Dean is the former director of the University of Texas Health Science Center’s Office of Technology Ventures, where he was instrumental in the success of a number of local San Antonio medical technology companies, including Advanced Bio Prosthetic Surfaces Ltd (ABPS Ltd), OsteoBiologics, CardioSpectra and Vidacare.  Prior to his University of Texas Office of Technology Ventures experience, Dean led the technology commercialization effort at the prestigious Southern Research Institute where he was responsible for licensing Institute inventions and forming technology spin-offs.  He co-founded the drug delivery company Southern BioSystems, Inc, which was later acquired by Durect Corp (NASDAQ: DRRX). Dean is currently the Chairman of Aeon Bioscience Inc, a joint venture with Surmodics (NASDAQ: SRDX) developing new drug-eluting polymers for use in the next generation of medical implants such as drug eluting stents (DES).  Dean is also a managing partner of fund operations for Greer Capital Advisors, LLC with whom the founders of the Fund have a long-standing partnership.

Managing Director, Dr. Paul Castella, is experienced in the evaluation, financing, licensing, formation and operation of biotechnology and medical technology companies, including CardioSpectra, BiO2 Medical and Aeon Bioscience.  Castella is the co-founder and CEO of ViroXis which is developing an anti-viral treatment that recently completed an FDA IND  phase IIb study.  He previously co-founded and was the president and CEO of Xenotope Diagnostics, which developed the only FDA approved rapid test for Trichomonas – the world’s most prevalent non-viral sexually transmitted disease. The test was developed and obtained FDA approval in under 18 months and then licensed to Genzyme (NASDAQ: GENZ), a multi-national biotech company.  Previously Castella was a senior biotechnology consultant and project manager for a Palo Alto consulting firm, where he was focused on strategic planning decisions in complex diseases, new markets and new technologies for global biotechnology and pharmaceutical clients. Castella received his PhD in molecular biology and genetics from Cornell University Medical College, where he was the first-ever recipient of the Weill Graduate School award of excellence, and his MBA from the University of Texas.

Managing Director Christopher E. Banas is a medical device industry veteran with over thirty years of extensive leadership experience in cardiovascular company start-up, financing and management. Banas has held various engineering and executive management positions at medical device companies such as W.L. Gore, Guidant/ACS and IMPRA/C.R. Bard.  Banas holds 33 U.S. patents in the fields of cardiovascular medicine and nanotechnology. Intellectual property portfolios developed by Banas have, in part, resulted in deals valued in excess of $250 million, not including the value of future royalty income.  Along with Dr. Julio Palmaz, the inventor of the balloon expandable stent, Banas co-founded and held the position of CEO and President in ABPS, a San Antonio based medical device company which has subsequently licensed all its technology to Cordis, a Johnson and Johnson Company (NYSE: JNJ). Banas, along with Castella, then co-founded CardioSpectra where Banas held the position of Chairman and CEO and Castella held the position of CFO and President. CardioSpectra was awarded funds from Governor Perry’s Emerging Technology

Fund (ETF) and subsequently sold to Volcano Corporation (NASDAQ: VOLC) for $63M including future milestones. Currently, Banas holds the position of CEO for BiO2 Medical, another recipient of ETF funds.

Fund Partner Lukin T. Gilliland, Jr. has over twenty years experience as a director, officer and shareholder in various real estate, health care, ranching and restaurant businesses including 29 Black Eyed Pea restaurants in four states, the landmark Broadway 50-50 Bar & Grill in San Antonio and two Elway’s restaurants in Denver, CO.  A native San Antonian, Gilliland serves as chairman of the San Antonio Development Board of the Nature Conservancy, is a member of the Advisory Board of the Cibolo Nature Center, the Former Texas Ranger’s Association, the Board of Visitors of the McDonald Observatory and the Board of Directors of the San Antonio Library Foundation.

Statements in this press release that relate to future results and events (including statements about our future financial and operating performance) are forward-looking statements based on our current expectations. Actual results and events in future periods could differ materially from those projected in these forward-looking statements because of a number of risks and uncertainties, including: general economic, business and industry conditions; our ability to identify and invest in companies that provide a return on our investments; our investors timely complying with capital calls; our ability to compete with other venture capital firms and others investing in the medical and life science industry; the ability of our portfolio companies to protect their intellectual property; changes in governmental regulations relating to the healthcare industry and third party reimbursement policies; changes in tax laws and regulations; unfavorable results of legal proceedings; our ability to attract, retain and motivate key personnel; and our ability to establish and maintain relationships with advisors and academic and research institutions. 

 

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