Just one year after it was founded, Pittsburgh-based bioinformatics incubator LaunchCyte may have an early bloomer on its hands as it gears up for its first launch.
CEO Tom Petzinger told BioInform that LaunchCyte’s first portfolio company, Morewood Molecular Sciences, “is exceeding our expectations in terms of the pace of commercialization.”
LaunchCyte just closed on $700,000 of interim financing from a small number of individuals, of which $500,000 has been set aside to accelerate the commercialization of Morewood.
The funds, which bring Pittsburgh-based LaunchCyte’s total capitalization to $2.7 million, were raised in a debt offering that will convert to equity upon the closing of LaunchCyte’s next funding round, expected to take place by the fall.
Morewood, which has developed microarray technology for assaying enzymatic activity, also received $100,000 at the end of July from the InnovationWorks program, a regional development company that supports early-stage technology companies in the Pittsburgh area.
Petzinger said that Morewood currently has three employees and that a CEO for the company “has been identified” but the company is not yet ready to announce who it is. The launch date of the company will depend in part on the judgment of the new CEO, Petzinger said.
“There is work to be done still, but we’re well ahead of schedule in terms of [Morewood’s] entry into the marketplace,” he said.
In addition to its microarray technology, which Petzinger described as “quite a bit different than your run-of-the-mill protein chip,” Morewood is also developing bioinformatics tools for reading and interpreting the chips. “We define bioinformatics pretty broadly — as the extraction of information from biological systems,” said Petzinger. “Even if there’s a little bit of wet chemistry on your way to that knowledge, that doesn’t rule it out as a bioinformatics technology.”
The remainder of this round of funding will be devoted to LaunchCyte’s working capital as it seeks to support two other fledgling projects and search for additional new technologies. Petzinger said the company is still living off the $2 million it raised from angel investors last October.
“At our current burn rate we’re very comfortable well through the fall,” Petzinger said. “So we can’t dilly-dally too long on raising funds but neither do we feel any panic.” The company has “strong prospects” in the pipeline for its next institutional round of funding, he said.
“The funding environment right now is very challenging, particularly for small, early-stage opportunities,” said Petzinger. “The fact that we enlisted the high quality of individual investor that we did in this round validates that we’re in the right space, we’ve got the right team, and we’re in the right geographical location to do this work.”
In addition to Morewood, LaunchCyte is nurturing the growth of gene expression analysis company Geniac as well as a project dubbed “Immunetrics,” based on an option LaunchCyte holds to technology from the University of Pittsburgh for modeling inflammation. LaunchCyte is currently sponsoring animal studies to validate this technology and is developing a business model for it.