Ercole? Oh yeah, I'm going to get in line to invest in a Duncan company. Not.
Clean slate after funds controversy
David Ranii, Staff Writer
Biotechnology company Entegrion is counting on new leadership, a new strategy and a new type of bandage to boost its fortunes following a tense few months that divided shareholders of the privately held company.
The Research Triangle Park company is banking it will be able to begin selling a substitute for gauze called AlphaBandage to the military in the second half of next year after winning regulatory approval. That would be the four-year-old company's first product.
Entegrion, which licenses some of its technology from the University of North Carolina at Chapel Hill and East Carolina University, recently restructured while it gears up to introduce AlphaBandage.
Among the developments:
* CEO Clayton Duncan resigned, and the company installed a new board of directors. Duncan -- former CEO of several Triangle biotech companies, including Incara Pharmaceuticals and Sphinx Pharmaceuticals -- is succeeded by co-founder Stan Eskridge. Eskridge continues to hold the title of president.
* Entegrion has eliminated two full-time positions and two part-time jobs, leaving it with six full-time employees and one part-timer. The goal is conserving cash until the company starts selling AlphaBandage.
* Entegrion, which negotiated a $15 million venture capital deal in the summer only to see it fall through, has abandoned plans to raise a boatload of financing. Instead, it expects to raise another $2 million in the next six months.
"We're no longer focused on being a well-heeled, venture-backed company," Eskridge said. "We're going to build a company from the ground up."
That cash infusion, Eskridge said, should be sufficient to keep the four-year-old company running at least until AlphaBandage hits the market.
Duncan said he supports the new direction the company is taking, but chose to resign because of it. "My skills at fundraising ... really weren't needed," he said. "And I had something else I wanted to do."
Duncan has joined Ercole Biotech, a four-year-old RTP drug discovery company, as CEO. He previously was the company's chairman.
In the summer, Entegrion arranged for $15 million in financing from a Boston venture capital firm. But the deal was contingent on Entegrion merging with a European company -- a union that ultimately fell through. Entegrion has raised $5.1 million to date, including $1.4 million earlier this year.
Divisive funding
Even before the $15 million financing collapsed, it was controversial among the company's 90 private shareholders.
Some supported the deal, including Duncan. Others didn't like it for several reasons, including the fact that the venture capitalists would have gained control of Entegrion and that the terms placed a lower value on the company than prior financings.
The venture capital firm also didn't want to finance the development of Stasix, an experimental blood-clotting medication. Stasix was the raison d'etre for Entegrion.
"We were like two mule teams pulling in [different] directions rather than pulling together," said co-founder Arthur Bode, a research scientist at ECU.
Duncan, however, said he no longer believes the company needs to raise a ton of money. He said his perspective changed because, after the $15 million venture deal was negotiated, the AlphaBandage test data came in and was unexpectedly strong.
"With 20-20 hindsight," Duncan continued, "I'm glad we didn't do the deal. At the time, I was in favor of it, and it made sense."
Aligned for future
Eskridge is optimistic that the internal turmoil is a thing of the past. "I think everybody has rallied around the flag," he said. "We had a shareholders' meeting right before Christmas, and there was very enthusiastic support."
The AlphaBandage is made from a weave of rayon-like fibers and glass fibers. It would be much more expensive than gauze but much less expensive than "the other high-tech alternatives out there" used for severe injuries, Eskridge said.
He said AlphaBandage would cost less than $20 per application, compared with other alternatives made from biological materials such as potato starch that start at $100 per application.
Eskridge believes testing will show that AlphaBandage has other advantages in addition to reducing blood loss.
Entegrion has found a distributor that will handle sales to the military, and manufacturing will be outsourced. The company also is seeking a deal with a nonmilitary distributor.
With the aid of government grants, Entegrion also is continuing to develop Stasix, which hasn't yet been tested in humans and is years away from seeking regulatory approval. |
