Skip to main content
Premium Trial:

Request an Annual Quote

University of Michigan Startups NanoBio and Accuri Nab Additional Private Investment


By Ben Butkus

A pair of Ann Arbor-based University of Michigan biomedical startups said recently that they have netted some $26 million in private investment between them.

The first company, NanoBio, said last week that it has closed a $22 million Series B financing round after securing a $10 million investment from majority shareholder Perseus, based in New York; and Venture Investors of Ann Arbor and Madison, Wisc.

The $10 million is in addition to a $12 million Series B funding announced by the company in February. To date, NanoBio said that it has received more than $90 million in equity and grant funding to support development of its anti-infective products and nanoemulsion-based vaccines.

The second company, Accuri Cytometers, said this week that it has received $4 million in Series D financing from previous investors Fidelity Biosciences, Flagship Ventures, Baird Venture Partners, and Arboretum Ventures; and new backer InvestMichigan!, a program co-managed by Credit Suisse.

Accuri, which last raised $13 million in Series C financing in July 2008, said it will use the funds to manufacture and market its low-cost, benchtop flow cytometer, the C6, as well as the CSampler product for automating the C6.

NanoBio was founded in 2000 by James Baker, director of the Michigan Nanotechnology Institute for Medicine and Biological Sciences, or M-NIMBS, and a professor at UM, to commercialize nanoemulsion technology developed by Baker as a topical anti-infective for cold sores, and nail fungus.

But the company also wants to adapt the technology for use in a variety of vaccines, including for influenza, hepatitis, and pathogens associated with bioterrorism.

In February 2008, NanoBio announced that UM had been awarded a key patent that covered applications of the nanoemulsion technology to vaccines (see BTW, 2/6/2008). NanoBio holds a worldwide, exclusive license to the patent and four others on which Baker is the primary inventor.

Since it spun out of the university, NanoBio and Baker’s lab at M-NIMBS have garnered several rounds of public and private funding to develop applications for the technology, including a $3.2 million contract from the US Department of Defense awarded in 2003 for antimicrobial applications; a $6.3 million Grand Challenges in Global Health Initiative grant awarded in 2005 to M-NIMBS primarily from the Bill and Melinda Gates Foundation; and a $30 million private-equity investment in NanoBio in 2006 by VC management company Perseus.

Most of that money enabled NanoBio to conduct phase 2 clinical trials on its two lead products, topical lotions NB-001 for cold sores and NB-002 for nail fungus; and to conduct extensive animal studies on nasal vaccines against influenza, hepatitis B, and several additional undisclosed pathogens.

In April, the US Food and Drug Administration approved the NanoBio’s Investigational New Drug application for a Phase 1 clinical study of NB-1008, an intranasally delivered seasonal influenza vaccine.

Now, with the new funding in hand, NanoBio said it can support its clinical trials and company operations through early 2011.

"This investment round secures our ability to independently fund the next two years of our operations," Baker, who is also CEO of the company, said in a statement. "Our investors see the tremendous value of our platform technology from both a medical and commercial perspective. There is a clear need for novel topical anti-infective therapies and new vaccine-adjuvant approaches that offer safety, ease of use, and enhanced efficacy."

[ pagebreak ]

Supporting Market Acceptance

Meantime, Accuri said it would use the proceeds from its Series D financing to provide additional working and growth capital to support the market acceptance of its C6 Flow Cytometer system, which the company officially launched last year and is positioning as an inexpensive benchtop alternative to traditional flow cytometers.

Harry Wilcox, a partner at Flagship Ventures and a director at Accuri, said in a statement that "customer response in the Accuri C6 Flow Cytometer’s first year on the market has exceeded our expectations. Current investors welcomed the opportunity to provide additional capital to help fuel the company's accelerating growth, and we are pleased that a new investor, the InvestMichigan! Program, participated in the financing."

The InvestMichigan! program uses some $300 million in capital from the state's retirement system to assist Michigan companies, attract outside investment in existing Michigan companies, and encourage investors to locate their portfolio companies to the state, according to the group's website.

Accuri debuted in 2006 when it introduced the C6 at the American Society for Cell Biology annual meeting in San Diego. Although Accuri was founded on technology originally developed at UM, it is not technically a spinout of the university. Instead, the company was "inspired by technology developed at UM," Accuri CEO Jennifer Baird told BTW this week.

"When we started, our co-founder, [chief technology officer Collin Rich], approached UM looking for a technology that we could turn into a company," Baird said. "UM researchers had a concept related to affordable flow cytometry, and we eventually took a license to that and received support from the university."

However, as Accuri's flow cytometry product and business model evolved, Baird said, the company moved in a different direction. Thus, it no longer has a license to the original IP and doesn't use the technology in its product; and UM has no ownership stake in Accuri.

Instead, Accuri's technology is now protected by three US patents assigned directly by the company, as well as a number of pending patents in various countries. All of the IP covers technology that is "completely different" from the original UM IP, Baird said.

Nevertheless, Baird said she considers Accuri "part of the UM family," and said the company has benefitted greatly from the many business relationships it has formed through its close ties to the university. "The company wouldn't exist if the university and its tech-transfer office hadn't existed," Baird said.

When the company introduced the C6, it claimed that it would provide the same if not better performance as larger, high-priced flow cytometers such as those sold by flow cytometry stalwarts Beckman Coulter and Becton Dickinson, as well as other startup firms such as Guava Technologies (now a part of Millipore), for a fraction of the price.

Specifically, in 2006 Accuri said the cytometer would sell for less than $30,000 (see BTW, 12/15/1006). According to its website, that price has inched up to around $40,000 — not including its optional autosampler technology — which is still much less than most commercial flow cytometry systems.

Accuri's last financing round, a $13 million Series C closed in 2008, was also intended to expand commercialization activities for the C6, specifically in the wake of the company's April 2008 launch of the product.

The company also raised $5 million in a 2007 Series B led by Baird Partners, and in 2006 received a $2 million award from Michigan economic development agency 21st Century Jobs Fund.

The Scan

Review of Approval Process

Stat News reports the Department for Health and Human Services' Office of the Inspector General is to investigate FDA's approval of Biogen's Alzheimer's disease drug.

Not Quite Right

A new analysis has found hundreds of studies with incorrect nucleotide sequences reported in their methods, according to Nature News.

CRISPR and mRNA Together

Time magazine reports on the use of mRNA to deliver CRISPR machinery.

Nature Papers Present Smartphone Platform for DNA Diagnosis of Malaria, Mouse Lines for Epigenomic Editing

In Nature this week: a low-cost tool to detect infectious diseases like malaria, and more.