Spinoff Company's Sale Hailed as Coup for Texas, San Antonio Biotech
18-Dec-2007 4:00 PM EST
Newswise — The sale of San Antonio's CardioSpectra Inc. to the Volcano Corp. for $25 million in cash—and an additional $38 million if milestones are reached—is being called a major return on investment for the state's Emerging Technology Fund (ETF) and another step forward for San Antonio's blossoming biotech sector.
CardioSpectra is a biotech company based on technology conceptualized at The University of Texas Health Science Center at San Antonio and UT Austin. The company is developing light-based diagnostics technology called optical coherence tomography (OCT) for viewing the thickness and topography of arterial plaques and determining their risk of rupture.
"Investing in these ground-breaking technologies is higher risk, but it is also higher reward," Texas Gov. Rick Perry said. "Today we are seeing the rewards of our investment with CardioSpectra, and I believe this is the first of many. CardioSpectra's success is proof that the Emerging Technology Fund is ushering potentially life-changing ideas from the university classroom into the marketplace where they can make a difference."
In May 2006, CardioSpectra received $1.35 million from the ETF, a $200 million fund established by the Texas Legislature in 2005 at the request of Gov. Perry. The ETF's purpose is to invest in Texas companies that will create bioscience jobs in the state.
Marc D. Feldman, M.D., professor of medicine at the UT Health Science Center, co-founded CardioSpectra in 2005 with Thomas Milner, Ph.D., professor of biomedical engineering at UT Austin. Dr. Feldman also is director of the cardiac catheterization laboratory at University Hospital, one of the UT Health Science Center's teaching hospitals.
Drs. Feldman and Milner also found a new benefit of OCT—cardiologists can use it to identify which patients who have received medicated stents will suffer acute vessel closure and heart attacks, a feared complication of medicated stents that has been in the news during the past year. The OCT system has the ability to see which medicated stents have not been coated with healthy blood vessel wall components, leaving the recipients at risk for heart attacks.
San Diego-based Volcano Corp. announced the sale Dec. 10, including plans to keep CardioSpectra in San Antonio and increase the spinoff's current workforce of 20 employees. "CardioSpectra was one of the first companies to gain support from the Emerging Technology Fund, and now, just two-and-a-half years after the company was established, more funding is coming to San Antonio to create jobs in the biotech industry," Dr. Feldman said.
Dr. Feldman praised Christopher Banas, chief executive officer of CardioSpectra, and Paul Castella, Ph.D., chief operating operator, for the "incredible" job they did to develop CardioSpectra's business potential in such a short period of time. "Chris Banas is the most successful biotech individual in San Antonio," Dr. Feldman said. "Just two years ago, the company he previously headed, Advanced Bio Prosthetic Surfaces, sold for $20 million to Cordis Corp., a Johnson & Johnson company. He has repeated his success in two years, which is remarkable since only 3 percent of biotech companies develop successful products for sale. Chris Banas is now two for two."
Dr. Castella was the first San Antonio person to recognize the value of the technology being developed by CardioSpectra, and not only organized the original financing but also oversaw the finances of the company for the past 2Â½ years, Dr. Feldman said.
The entire San Antonio biotech community, including Health Science Center President Francisco G. Cigarroa, M.D., and Brian Herman, Ph.D., vice president for research, supported CardioSpectra from the beginning and deserves credit, Dr. Feldman added.
"It takes three critical groups to produce the success we had with CardioSpectra," said Kenneth Porter, Ph.D., MBA, assistant vice president for technology transfer and director of the Office of Technology Ventures operated jointly by the UT Health Science Center at San Antonio and The University of Texas at San Antonio. "First, it takes visionary administrators to allow patents to move outside the university system. Second, it takes experienced biotech leaders in the San Antonio business community who have the perseverance to move concepts into products, and third, it takes faculty members whose research generates the initial patent applications that are the starting point for these companies."
San Antonio shares similarities with San Diego in terms of a large military impact, a medical school and proximity to the Mexican border. Now the Alamo City's goal is to be as large a player in the biotech field as its California counterpart, Dr. Porter said.
The University of Texas Health Science Center at San Antonio is the leading research institution in South Texas and one of the major health sciences universities in the world. With an operating budget of $576 million, the Health Science Center is the chief catalyst for the $15.3 billion biosciences and health care sector in San Antonio's economy. The Health Science Center has had an estimated $35 billion impact on the region since inception and has expanded to seven campuses in San Antonio, Laredo, Harlingen and Edinburg. More than 22,000 graduates (physicians, dentists, nurses, scientists and allied health professionals) serve in their fields, including many in Texas. Health Science Center faculty are international leaders in cancer, cardiovascular disease, diabetes, aging, stroke prevention, kidney disease, orthopaedics, research imaging, transplant surgery, psychiatry and clinical neurosciences, pain management, genetics, nursing, allied health, dentistry and many other fields.