RESEARCH TRIANGLE PARK, N.C., April 7, 1998 - The North Carolina Biotechnology Center has selected a Durham company to help it organize and manage the Center's new Bioscience Investment Fund and has obtained a commitment from NationsBank to invest in the Fund.
The Center chose Eno River Capital, LLC, to set up and manage the Fund, which will invest in new biotechnology and bioscience companies in the state. Charlotte-based NationsBank will invest up to $5 million in the Fund.
"Having a strong management team and sophisticated co-investors is essential to this seed fund and our goals of developing new bioscience technologies, creating jobs and expanding North Carolina's economy," said Dr. Charles Hamner, president of the Center. "We have now reached a major milestone."
The Center conceived the Fund last year to stimulate the creation and growth of new biotechnology and bioscience companies in North Carolina. The state's traditional shortage of venture capital for biotechnology entrepreneurs is the single greatest obstacle to the industry's growth here, concluded a 1996 report commissioned by the Council for Entrepreneurial Development (CED).
About 85 biotechnology and related bioscience companies generate more than $1 billion in annual product sales and employ about 20,000 people in North Carolina, placing the state first in the South and among the top 10 states nationally in commercial biotechnology. Given sufficient operating capital, the industry in North Carolina could grow 10- to 15-fold in the next 20 years, generating $15 billion in annual product sales and employing as many as 100,000 people.
The state's General Assembly appropriated $7.5 million for the Fund in August 1997, and the Center is working to raise an additional $22.5 million from the state and from private investors for a Fund totaling at least $30 million. NationsBank is the first private investor to commit to the Fund.
"We are working closely with a number of very successful biotechnology companies and feel this investment will prove a catalyst to this rapidly expanding industry," said Sam Sloan, who is responsible for economic development for NationsBank in North Carolina. "Dr. Hamner feels that biotechnology is currently in the same stage of development that the computer industry was in during the early 1960's. We agree and are glad to join with the State of North Carolina in supporting this highly focused and well managed entrepreneurial effort."
The Fund is expected to begin operations by late summer or early fall. Its investments will range from $500,000 to $2 million per company in most cases, said Tom Laundon, vice president of business and technology development at the Center.
Early stage bioscience companies require substantial, risk-oriented investment over several years because product development and regulatory approval are slow and costly in the medical, agricultural and environmental industries. The Fund will be positioned to help young companies meet product-development milestones that will enable them to attract even larger capital investments from other sources, Laundon said.
The Fund will be organized as a limited-liability company overseen by a board of directors. It is expected to operate for 10 to 12 years.
Eno River Capital was formed in 1997 by managing members Paul Jones and Daniel Egger along with Bruce Boehm, a special limited member.
Jones, an attorney in the Research Triangle Park office of Womble Carlyle Sandridge & Rice, has been active in the state's high-tech business community as an investor, counselor and manager since moving here from California's Silicon Valley in 1990. He was co-founder and president of Macronex Inc., was a founding director of the North Carolina Biosciences Organization, and is president-elect and a director of the CED.
Egger was founder and chief executive officer of North Carolina-based Site Technologies Inc. of Durham, the Internet quality-control software company. He has also advised and invested in several information technology companies and is on the executive committee of the CED.
Boehm was a general partner with U.S. Venture Partners, a highly successful venture capital fund in California, and has served on the board of directors of 18 technology companies since 1983.
Lisa London, a certified public accountant, will handle Eno's finances and run its office. Before joining the company, she was director of finance at Qualex in Durham and a senior auditor for Deloitte Haskins & Sells.
"We are honored to have been selected by the Center to manage this fund," Egger said. "We believe North Carolina's outstanding life sciences research base, combined with a relative lack of early-stage capital, represents a compelling venture investment opportunity. We are very excited to be working with the Center on this project and are delighted to have NationsBank as our lead private investor."
The North Carolina Biotechnology Center is a private, non-profit corporation funded by the state's General Assembly. Its mission is to provide long-term economic benefit to North Carolina through support of biotechnology research, development and commercialization statewide.
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Contact: North Carolina Biotechnology Center, 919-541-9366; or Eno River Capital, 919-419-1284.
