Wednesday, May 6, 2009

Entra: The Stealthy New Start-Up from Yet-Ming Chiang and Michael Cima

I kept hearing that A123 Systems founder Yet-Ming Chiang was up to something new, so I've spent a few days putting together the pieces.

Turns out he has launched a new company, Entra Pharmaceuticals, to commercialize some drug delivery technology that he and fellow MIT prof Michael Cima cooked up a couple years ago. But they're not just creating an inexpensive, disposable new device that Cima refers to as a "patch pump" -- they're also working on a new drug, too. "The strategy is to make a product with the drug on board," Cima says. "Instead of a $5000 pump, this is a transformational technology that's less expensive, smaller, and less complex."

Unlike a passive nicotine patch, Chiang says their device does involve electronics. "A good way to describe it is 'smart' and 'active,'" he said during our game of Twenty Questions this afternoon. Neither founder wants to be specific about the disease they're addressing, though Cima says it won't be diabetes.

Both Chiang and Cima are board members and consultants to Entra, visiting the company one day a week for a technology update. They've hired Frank Bobe as chief executive, who was formerly chief business officer at Alseres Pharmaceuticals. (Alseres is a 17-year old company that has yet to get a drug approved, and was [updated] just de-listed from Nasdaq.) Heading up business development is Shobana Albrecht, previously at BG Medicine and Baxter. Rick Gyory is VP of product design and development; he earlier worked at Transform Pharmaceuticals and ALZA Corp.

Interestingly, Entra is now located at the BU Photonics Center near Kenmore Square -- the very same building where A123, Chiang's last company, was hatched. (Battery-maker A123 raised $69 million earlier this year, as it remains in a holding pattern waiting to go public.)

Here's the key patent MIT has licensed to Entra, which seems like a hybrid of a transdermal skin patch and a wearable infusion pump.

"Many new drugs have short half-lives," Cima explains. "They're metabolized quickly. So to get the right exposure, you have to hook yourself up to an IV for continuous administration, or if you do a bolus dose, you have to go really high, and a lot of the time the side effects you get are associated with that high concentration. With a device you can wear, you can achieve a long half life" without having to do either of those things, and without having to redesign the molecular structure of the drug itself. "That's the value that we bring, at a high level," Cima says.

This is the first life sciences start-up for Chiang. He told me that the science behind Entra was initially funded by a DARPA grant, and then by MIT's Deshpande Center. "The idea behind Deshpande is to help new technologies get through the 'valley of death,'" Chiang said, when they're not raw research any more, but they're also not yet a commercializable product. "That really worked in this case."

Up to now, the only real known info on Entra was a PEHub report last December noting that Flybridge Capital Partners and North Bridge Venture Partners had put $4.2 million into the company in an A round -- and will increase that amount to $12.5 million if the company hits certain milestones this year. The board member representing Flybridge is Michael Greeley; Jeffrey McCarthy represents North Bridge. This is the fourth Cima-related start-up that Greeley has been involved with.

(Another recent collaboration between Cima and Greeley is Certus Biomedical, which will soon change its name because of some trademark conflicts. Very little is known about that company, either, although its backers are Flybridge, Ed Kania at Flagship Ventures, and Kevin Bitterman at Polaris Venture Partners.)

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Friday, August 8, 2008

Delivered: A123's IPO Papers Arrive at the SEC


InnoEco told you back in April that an IPO for A123 Systems was on the way... and I actually assumed that since three months had elapsed with no news, the company had put it on ice, waiting for market conditions to improve.

But they just filed this morning, likely hoping to take advantage of the public interest in cleantech, and anything (like the company's plug-in hybrid car conversion business) that can combat high gas prices. A graphic included in the company's S-1 filing says, "Our world is warming up... to a new generation of energy storage solutions enabled by nanotechnology."

(I just checked... no, Al Gore is not on their board of directors, despite that "Inconvenient Truth"-style messaging.)

Some key info from the filing:

    We design, develop, manufacture and sell advanced, rechargeable lithium-ion batteries and battery systems. Our batteries and battery systems provide a combination of power, safety and life that we believe no other commercially available battery provides. We believe that lithium-ion batteries will play an increasingly important role in facilitating a shift toward cleaner forms of energy. Using our innovative approach to materials science and battery engineering and our systems integration and manufacturing capabilities, we have developed a broad family of high-power, lithium-ion batteries and battery systems. This family of products, combined with our strategic partner relationships in the transportation, electric grid services and portable power markets, position us well to address these markets for next-generation energy storage solutions.

    In our largest target market, the transportation industry, we are currently working with major North American and European automotive manufacturers and major automotive, or tier 1, suppliers to develop batteries and battery systems for hybrid electric vehicles, or HEVs, plug-in hybrid electric vehicles, or PHEVs, and electric vehicles, or EVs. For example, we are engaged in design and development efforts with several passenger vehicle manufacturers and tier 1 suppliers, including General Motors Corporation, or General Motors, and Think Global AS, or Think Global, relating to the design and development of batteries and battery systems for eleven passenger vehicle power train programs that can be applied to 19 vehicle models. We estimate that the number of HEV, PHEV and EV models with an annual production run of at least 20,000 vehicles will grow from ten models in 2008 to over 100 models in 2012. The advanced battery market for HEVs, PHEVs and EVs is currently a $700 million market. We estimate this market could grow to at least $5 billion by 2012.

    ...We began selling our first products commercially in the first quarter of 2006. We have over 1,100 employees worldwide. Since our inception through March 31, 2008, we have generated $87.1 million in revenue, consisting of $72.6 million from battery and battery system sales and $14.5 million from research and development services. Our revenue has grown from $34.3 million for the year ended December 31, 2006 to $41.3 million for the year ended December 31, 2007, and from $8.1 million for the three months ended March 31, 2007 to $10.3 million for the three months ended March 31, 2008.


Like a lot of start-ups, they're still losing money: $31 million in 2007, up from $15.8 million in 2006. Revenues were $41.3 million last year, up from $34.3 in 2006.

[ Update: Dan Primack has a post noting that A123 also disclosed in the filing that they raised an additional $102 million this year, bringing their total funding to $230 million. ]

As I'd reported earlier, the biggest A123 shareholders to this point are North Bridge Venture Partners (13.6 percent), Desh Deshpande (12.7 percent), GE (10.4 percent), and Qualcomm and Motorola, both with about eight percent. CEO David Vieau holds 2.4 percent of the stock. No word on how much founders Yet-Ming Chiang and Ric Fulop hold. Another beneficiary of a successful IPO will be MIT, which licensed some of the original IP developed there to A123.

In June, I wrote a column about A123's early history -- and produced a video about the company.

How excited are people about this IPO? I've gotten about a dozen e-mails over the last three months asking me whether I knew when A123 would file...

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