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Two Sources Swell NC's Life Science Coin

Two key state funding programs are proving to be a great match to get new North Carolina life science companies off the ground.

Life science entrepreneurs routinely turn to the loan options available from the North Carolina Biotechnology Center after tapping friends, family and credit cards. But many of those same NCBiotech portfolio companies also get much-needed early survival lifelines in the form of grants from the One North Carolina Small Business Fund, managed by the state Department of Commerce’s N.C. Office of Science, Technology and Innovation.

Photos courtesy of AskBio

Starting a life science company is a high-risk venture, even though it can also produce great rewards in many ways. Because of the up-front risk and specialized knowledge required to vet such borrowers, banks don't play in that sandbox. In fact, public funding has proven to be the only way to carry a growing life science entrepreneurial sector across the dreaded “valley of death” that awaits those without adequate and timely resources.

Many other states, and countries, are spending billions to get into the game. They want life science entrepreneurs to set up shop in their neighborhoods. Great jobs, great corporate fallout. Yet they're hitting unimagined obstacles, usually because business gravitates to relative certainty. And California, Massachusetts and North Carolina have been leading the bioscience charge for over three decades.

Nobody in the life science "bidness" sees North Carolina challenging California or Massachusetts in dollar terms. That'd be crazy, if for no other reason than costs of doing bidness in the three states don't come close. It's a no-brainer that all the numbers are bigger where the costs are bigger. And despite the prevalence of instant communication and increasing access to non-stop air access, venture money still clumps in extreme coastal U.S. Southwestern and Northeastern clusters.

North Carolina, however, continues to grow its cluster of 600-plus life science companies, in large part because of a strangely hard-to-define, yet immeasurably important, capacity for collaboration. Partnership. Cooperation. A fundamental belief that each success lifts all boats.

Symbiosis in North Carolina’s historically successful startup funding programs was demonstrated in three of the 11 innovation grants announced last week by Gov. Pat McCrory and state Commerce Secretary John Skvarla III. Those three grants went to life science companies that had also successfully landed low-interest loans from NCBiotech.

Sharing the $544,967 awarded in the latest round of One North Carolina Small Business Fund grants were NCBiotech portfolio companies Affinergy, Camras Vision; and Zen-Bio. The companies are all in Durham and all got the maximum available $50,000 awards. Another of the Durham grant recipients, Edison Agrosciences, is exploring the loan possibilities at the Biotech Center. Edison’s grant was $45,000 to develop a new DNA transfer method for easier, cheaper gene manipulation of plants.

Here's the breakdown

NCBiotech helped bootstrap Affinergy with a $125,000 Small Business Research Loan (SRL) in 2004, shortly after the company’s founders spun it out of Duke University research labs. Since then, the company has received some $44 million in other funding, including $5 million in seed and venture investments and tens of millions in federal funding.

The company’s recent grant was one of several from the state program. This one was for a test measuring the hormone hepcidin responsible for regulating iron concentration levels in blood, thereby helping to diagnose renal disease, cancer, inflammatory diseases, and heart disease.

Camras Vision got a $74,000 SRL from NCBiotech in 2014 which led, earlier this year, to a $150,000 federal SBIR grant. The new state grant is to help it develop an adjustable pressure control device that is inserted into the eye to reduce harmful eye pressure in glaucoma patients.

NCBiotech supported Zen-Bio’s early work with $235,000 in financing, which was followed by some $12 million, mostly in federal grant funding. The latest Zen-Bio award from the Commerce program supports the company’s work on using adult “brown fat,” technically called brown adipoxyte tissue, to manipulate metabolism as a way to fight obesity and related diseases.

Match means no free lunch

A One North Carolina Small Business Fund grant isn't a cakewalk to easy money. It's 50 grand max. And to get that, a company needs to pass muster by landing one of the highly competitive federal Small Business Innovation Research or  Small Business Technology Transfer awards.

Federal agencies involved in awards for this round of grantees include the National Institutes of Health, the National Science Foundation, the Special Operations Command (Department of Defense) and the U.S. Army. The state matches up to half the federal money, with a $50,000 maximum per grant. The state budget for this 9-year-old program is $2.5 million for fiscal year 2015.

“North Carolina faces tremendous competition from other states who want our budding high-growth, high-wage companies,” said McCrory. “These grants help keep North Carolina in the race for our next home-grown success story.”

Besides the life science companies mentioned above, the other recent grant recipients are:

  • Akoustis, Inc. of Cornelius: $50,000 for the development of more efficient and effective components for mobile devices.
  • Corvid Technologies, LLC of Mooresville: $50,000 for new military vehicle armor that is stronger, cheaper, less conspicuous and lighter.
  •  Kepley Biosystems, Inc. of Greensboro: $50,000 for a commercial non-fish crab and lobster lure, thereby saving fish stocks, the source of existing lures.
  • Keranetics, LLC of Winston Salem: $49,967 to create local application of pain medicine to combat burns, freeing soldiers from current oral, addicting pain killers.
  • TriboFilm Research, Inc. of Raleigh: $50,000 for an improved silicone lubrication system for pre-filled syringes, reducing silicone contamination during medicine delivery.
  • Xintek Inc. of Durham: $50,000 for a high-resolution three-dimensional dental X-ray imaging system with low ray dose and cost.
  • Roundtable Analytics, LLC of Durham: $50,000 to develop decision-support software that improves emergency department performance.

 “North Carolina is a great place to grow technology companies," said Skvarla. “These small businesses will advance the technology in the fields of health care, defense and agriculture. These small businesses will someday become big businesses employing many people.”

Other NCBiotech portfolio companies that have also received One North Carolina grants include:

  • Advanced Liquid Logic
  • Agile Sciences
  • Alderon Biosciences
  • Appealing Products
  • ArrayXpress
  • Asklepios BioPharmaceutical
  • BioMarck Pharmaceuticals
  • BioMedomics
  • Bioptigen
  • Cell Microsystems
  • Cognosci
  • Dignify Therapeutics
  • Endacea
  • Ensolve Biosystems
  • Eppin Pharma
  • Ercole Biotech
  • G1 Therapeutics
  • Galaxy Diagnostics
  • GrassRoots Biotechnology
  • Humacyte
  • Inanovate
  • LaamScience
  • NIRvana Sciences
  • NovaTarg
  • PhaseBio Pharmaceuticals
  • Provagen
  • Qualiber
  • Ridge Diagnostics
  • Sirga Advanced Biopharma
  • X-In8 Biologicals

For more information about the One North Carolina Small Business Fund and how to apply and qualify for the grants, visit the N.C. Board of Science and Technology’s website here.

(Photo courtesy of Asklepios BioPharmaceutical)

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