OTC News Archive
McCombs investing in biotech fund
by L.A. Lorek, San Antonio Express-News
May 6, 2007
San Antonio businessman Red McCombs has invested in a new biotech fund aimed at taking technology out of the University of Texas labs and into the marketplace.
Emergent Technologies Inc. in Austin today announced the formation of the $27.1 million Emergent Technologies Fund IV, with 70 percent of the funding coming from San Antonio investors.
“I’ve always felt like there should be a better way for products to get to market,” McCombs said.
This is McCombs’s first investment in a biotechnology-focused fund. He invested with Emergent because they have a track record of success, he said.
In addition to McCombs, other San Antonio investors include John Kerr, president of the Southwest Foundation for Biomedical Research; Dan Parman, Stone Oak’s developer; and Pete Selig, an active angel investor.
The fund invests in early stage companies spun out of technology licensed from the University of Texas’ 15 institutions. The fund invests in nanotechnology, biotechnology, medical devices, dental products, biomaterials and drugs.
“Every one of these technologies has an opportunity to serve mankind and lengthen life,” McCombs said.
The fund already has invested in two companies, Mimetic Solutions and Beacon Sciences in Austin. Mimetic Solutions makes “smart” chemistry devices that trigger the release of a drug. Beacon Sciences develops chemistry with applications in medical diagnostics, environmental testing and biodefense.
The fund also looks for technology in the university system that already has received at least $5 million in federal grant monies, said David Lee, Fund IV president. It then forms a company and eventually sells or licenses the technology to an industry partner such as Johnson & Johnson.
“The essence of our model isn’t to go build a traditional company,” Lee said.
The goal is to enter into a partnership within 18 months, Lee said.
The fund has enough money to commercialize up to 30 different technology applications, Lee said. The fund is working with researchers at the University of Texas at San Antonio and the University of Texas Health Science Center at San Antonio. They hope to have a San Antonio deal soon, Lee said.
The opportunities for commercialization are great, Lee said. The University of Texas system received more than 117 U.S. patents and had 655 invention disclosures last year, he said. The Milken Institute ranked the University of Texas System as No. 1 in the world for the biotech patents filed.
The new fund is a neat model and will help commercialize technology coming out of San Antonio institutions, said David Spencer, chairman of the advisory committee for the Texas Emerging Technology Fund.
“I think Emergent’s success will spill out and give San Antonio investors more reason to do something in San Antonio,” Spencer said.
Emergent’s first two funds were with the University of Oklahoma and its third fund was with Texas Tech University Health Science Center, said Thomas A. Harlan, Emergent’s CEO and founder.
“I think people think of biotech as very high-risk and very long-term types of investment,” Harlan said. “The way we’re doing it, it isn’t true. Companies like Emergent are acting like catalytic engines to create early successes in the UT system.”