Author: Bruce V. Bigelow

Bruce V. Bigelow wrote:

It was a great week for innovation in San Diego, with Fallbrook Technologies filing for an IPO and Sony Electronics previewing its 3D strategy (along with some new products) after opening the doors of its new $160-million North American headquarters.

—Sony Electronics showed off its new 11-story North American headquarters building in San Diego during an open house that included a press briefing and demonstrations of the new Sony Dash, a personal Internet appliance, and other consumer electronics products. Sony also plans to make a big marketing push for 3D television and related technologies later this year.

—San Diego’s Fallbrook Technologies intends to raise $50 million through an initial public offering, according to a regulatory filing. Fallbrook is a cleantech venture developing a proprietary transmission that offers improved efficiency for a variety of vehicles.

—Tao Venture Partners of San Diego is leading the first round of institutional investment in ecoATM, a local startup that has developed an automated kiosk for recycling consumer electronics. Coinstar founder Jens Molbak also joined in the round, the value of which was undisclosed, and has joined ecoATM’s board. Co-founder Mark Bowles also told us why he thinks ecoATM is a hot startup deal.

—San Diego-based Qualcomm (NASDAQ: QCOM) revealed plans to roll out a variety of new applications that enable certain features of its Flo-TV technology to run on netbooks equipped with Qualcomm’s Snapdragon processor. Qualcomm previewed its concept last week in Barcelona at the industry’s Mobile World Congress.

—San Diego telecom startup TelCentris announced the debut of a universal translator service for e-mail, text messaging, Internet chat, and certain social networking messages. The translation service has been integrated into its VoxOx VoIP messaging software.

—Cleantech investor Jim McDermott, a co-founder of U.S. Renewables Group, told a San Diego audience that a lot of innovation remains to be done in wind power technologies.

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Bruce V. Bigelow wrote:

San Diego drug developer Hollis-Eden Pharmaceuticals says it has changed its name to Harbor BioSciences, nearly a year after the company fired Richard Hollis, the biotech’s namesake founder and CEO, for cause unknown. Harbor BioSciences also changed its ticker symbol to (NASDAQ: HRBR), saying that shares would begin trading under the new ticker today. The biotech says it is continuing to develop a new steroid analog that stimulates apoptosis, or programmed cell death, in hormone-dependent prostate tumors.

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Bruce V. Bigelow wrote:

You could say I blew into the wind power event that Cleantech San Diego organized here last week. The canapés were gone by the time I arrived, but the show was just getting started. I got there in time to hear keynote speaker Jim McDermott of energy investment fund U.S. Renewables Group describe a somewhat stormy outlook for renewable energy companies developing wind projects.

In surveying the windswept landscape, McDermott sees plenty of opportunities for wind energy developers. “There’s a huge amount of class 3 wind out there,” he says, referring to the basic level of wind energy required if providers want to pour power into the electrical grid. “There’s even still some class 4 and 5 out there, particularly in the offshore markets.”

In the United States, McDermott says about 300 megawatts of wind power were under development in 2008—which dwarfs the amount of biomass, geothermal, solar, and every other type of renewable energy under development. But with the collapse of the capital markets and the massive downturn, McDermott says there’s also been a tremendous amount of carnage.

About one-third of the projects under development—representing about 100 megawatts of renewable energy—were effectively wiped out. “Not that these were bad projects,” McDermott says. “There was just no money. For about six months, there was no money for any project at any price.” He estimates that major utilities stepped in to acquire another 100 megawatts of project assets—at cost.

Wind developers have little choice because the number of major financial firms willing to finance such projects has plunged by two-thirds, the amount of capital available has substantially shrunk, and financing terms have become much more stringent. McDermott says USRG sees what’s left as an investment opportunity because project valuations have fallen dramatically.

Nevertheless, wind power remains the dominant renewable energy technology. McDermott says 75 percent of all renewable energy assets that are built in the United States are wind-powered. In short, the market is ripe for innovation.

“There is a lot of innovation that remains to be done in terms of the blades, turbines, gear boxes, and everything else,” McDermott says. As an example of …Next Page »

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Bruce V. Bigelow wrote:

A $4.95 million grant from the federal stimulus package will be used to boost education, training, and placement services for people who are seeking jobs in San Diego’s life sciences and health care professions, according to local biotech and education leaders.

The grant is part of more than $225 million in stimulus funds awarded by the U.S. Department of Labor to create jobs in health care and related high growth industries. About $100 million is intended to help train health care workers throughout California, according to a statement issued by California Gov. Arnold Schwarzenegger. In addition to providing training and certification, the governor says the funding is intended to help health care providers adopt and expand the use of health information technology.

In a statement, Schwarzenegger says, “The health IT grants will help California build a world class system to promote and expand the way information is shared, protecting medical privacy, promoting efficiency, and will ultimately help reduce health care costs.”

The three-year grant allotted for the San Diego region will be used to boost a collaborative education and training program for more than 1,000 incumbent and unemployed workers in the life sciences, according to an announcement issued by San Diego State University, Biocom, the San Diego Workforce Partnership, and the Southern California Biotechnology Center at Miramar College.

Known as the BRIDGE, (Biotechnology Readiness, Immersion, Certification, and Degrees for Gainful Employment), the collaborative education and training program is focused on the critical need for clinical laboratory scientists, medical laboratory technicians, medical physicists, and scientists. The program also is intended to help military veterans find employment opportunities in the life sciences and health care.

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Bruce V. Bigelow wrote:

The big news last week came from venture-backed Veoh Networks, which is filing for bankruptcy liquidation. Founder Dmitry Shapiro told me Veoh was the biggest Internet company that San Diego has ever seen (see below).

—San Diego’s Veoh Networks, a video streaming website, was officially launched in 2005. It raised $70 million in venture capital, grew to 23 million unique visitors a month, and was generating about $1 million in advertising revenue every month. But Veoh Networks pulled the plug last week, and founder Dmitry Shapiro told me a copyright infringement lawsuit sounded its death knell (even though it won a summary judgment in the case).

—Connect, the San Diego non-profit that supports local technology and entrepreneurship, has decided to hire a lobbyist and set up an office in Washington DC, at an estimated cost of $400,000.

—Envision Solar, a privately-held solar development firm founded by San Diego architect (and Xconomist) Robert Noble, will soon become a public company following a reverse merger with a dormant public company. Noble told me Envision Solar needs capital to expand its capabilities in developing solar-integrated infrastructure and building systems.

—Wind turbine technologies startup Viryd Technologies, which was spun out last May by San Diego’s Fallbrook Technologies, just raised $5 million from existing angel investors and China’s Ningbo Shentong Auto Decorations.

—There will be lots of wireless news coming out this week from Barcelona, where the GSMA Mobile World Congress began yesterday. Novatel Wireless (NASDAQ: NVTL), for example, last week claimed it had made the first data transmission call using Long Term Evolution (LTE) 4G technology.

—At a time when people spend spend more and more of their lives on the Internet, why does online advertising represent only a fraction of the total amount of advertising? Russ Mann, the CEO of San Diego-based Covario, said the answer could be that the Gen-Xers, who are more comfortable using the Internet, social networking sites, and computers, will have to assume command of corporate marketing departments before we’ll see widespread change.

—San Diego-based Leap Wireless was the subject of fresh merger rumors earlier this month, after The Wall Street Journal reported that Leap has hired investment bankers to advise the company. Now rumors are also circulating about a Leap rival, Dallas-based MetroPCS, after Reuters reported last week that MetroPCS has hired investment banking firms JPMorgan Chase & Co. and Credit Suisse Group AG. Leap and MetroPCS were in a merger deal that fell apart in 2007 after the two low-cost wireless carriers failed to agree on a price.

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Bruce V. Bigelow wrote:

In the beginning, San Diego’s Veoh Networks had the support of several prominent VCs, and some of the biggest names in the media business. Venture firms like Boston’s Spark Capital, and names like Michael Eisner, the former Disney titan. After five years, founder Dmitry Shapiro tells me the site had 23 million unique visitors a month, and was by far the largest Internet company that San Diego has ever seen.

But it all came to an end. Veoh Networks pulled the plug this week, even though it kept growing its advertising base and had a run rate of $1 million a month, Shapiro says. All this despite the fact that Shapiro had cut costs—and had been running Veoh with a skeleton crew of less than 20 employees since last April, when he replaced CEO Steve Mitgang as CEO.

“We had good backers,” says Shapiro, who served as Veoh’s chief innovation officer during the growth years, when the Web-based video streaming company had 120 employees in San Diego and Los Angeles. “We all had big appetites for what we were trying to do, which was create a multi-billion dollar Internet media company.”

Dmitry Shapiro

Shapiro, who is one of San Diego’s most-visible techies, started the company in late 2004. Veoh officially launched its business in 2005, and raised close to $70 million in the ensuing years. But the business laid off its remaining 18 employees on Wednesday, and now faces a Chapter 7 liquidation in federal bankruptcy court.

Shapiro says he’s not even sure whether the paperwork will be filed in San Diego or Los Angeles. “It doesn’t matter,” he says.

Shaprio says he also doesn’t know what will happen with the millions of videos that have been uploaded to Veoh’s website from users around the world. A trustee who will be appointed by the bankruptcy court to oversee the liquidation will have to decide whether or not to maintain the vidos and keep the website operating.

In addition to Spark Capital and Eisner’s Tornante Co., the investors that will be writing off their bet on Veoh include …Next Page »

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Bruce V. Bigelow wrote:

Carlsbad, CA-based Verdezyne, an industrial biotechnology company developing methods for using yeast to make industrial chemicals, has raised $9 million in an ongoing $15.2 million venture round, according to spokeswoman Risa Goldman Burgess. She said today the funding is being used to validate technology, which Verdezyne recently disclosed, for making adipic acid, a key feedstock chemical used to make nylon. Verdezyne’s existing investors include Monitor Ventures, OVP Venture Partners, the Tech Coast Angels, and the Life Sciences Angels.

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Bruce V. Bigelow wrote:

The lights are on, but is anybody left at Veoh Networks?

We’re seeing multiple accounts of sweeping layoffs at Veoh, the San Diego-based Internet TV service, with several citing a report by Media Memo’s Peter Kafka, who says a Chapter 7 bankruptcy liquidation is expected soon.

I sent a quick e-mail to Veoh CEO Dmitry Shapiro, asking if he could discuss reports of Veoh’s bankruptcy filing. He replied: “Not yet… stay tuned.”

Veoh’s website is still accessible, but the venture was pronounced dead in a tweet today by Veoh board member Todd Dagres of Spark Capital, a Boston VC firm that invested in Veoh Networks. Dagres tweeted, “Veoh is dead. Universal Music lawsuit was the main killer. Veoh won resoundingly but was mortally wounded by the senseless suit. Next.”

Dagres was referring to a copyright suit filed that Universal Music Group filed against Veoh, arguing that Veoh didn’t work hard enough to keep Universal’s copyrighted material from being uploaded illegally to Veoh’s website. A federal judge ruled last September that Veoh was protected from Universal’s infringement claims.

Veoh had raised more than $67 million in venture funding from backers that included Spark, Shelter Capital Partners, Goldman Sachs, Adobe Systems, Intel Capital, and Time Warner Investments.

As Shapiro says, stay tuned…

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Bruce V. Bigelow wrote:

San Diego-based Sequenom (NASDAQ: SQNM) says it has obtained rights to develop and commercialize a diagnostic test from New Haven, CT-based Optherion to predict a patient’s genetic predisposition to late-stage, age-related macular degeneration, a progressive eye disorder that can lead to a loss of central vision. Financial terms of the licensing agreement were not disclosed. Once the test is developed, Sequenom says it plans to market the new test next year under its SensiGene brand for genetic tests.

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Bruce V. Bigelow wrote:

Connect, the San Diego non-profit that supports local technology and entrepreneurship, says it is opening an office in Washington D.C. “to be part of the process,” and to represent the interests of San Diego’s innovation community.

Establishing a lobbyist in Washington was a key part of an initiative that Connect CEO Duane Roth unveiled last summer that was intended spur San Diego’s innovation economy. Roth’s plan primarily called for increasing federal funding for research and development in San Diego, and for encouraging the formation of more elite research institutions here.

In a statement e-mailed this evening, Roth says Connect’s new advocate will focus in five areas:  intellectual property (including trade and anti-trust); funding for basic research; regulatory issues; investment capital; and workforce development (i.e. foreign worker visas).

Connect says Roth has been working with a search committee to recruit a full-time advocate for the office, which will be at the University of California’s 11-story complex in northwest Washington. It was unclear how the position will be funded. In its statement, Connect says only that its board of directors supported “the establishment of a Washington office to provide a consistent presence and close relationships with legislative offices and Administration officials.”

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Bruce V. Bigelow wrote:

NexMed (NASDAQ: NEXM), a New Jersey life sciences company that moved to San Diego following its acquisition three months ago of Bio-Quant, a San Diego contract research organization (CRO), says today it has raised $2.3 million in promissory notes from two investors. NexMed says it intends to use the proceeds for general corporate purposes, and to advance its transdermal drug delivery technology, which is intended to enhance the absorption of an active drug through the skin. NexMed says it also is developing topical drugs for treating a fungal infection that affects fingernails and toenails, erectile dysfunction, and female sexual arousal disorder.

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Bruce V. Bigelow wrote:

San Diego-based Tragara Pharmaceuticals, which has focused its current drug development on two compounds for treating tumors, has raised $5 million of a targeted $10 million venture round, according to a recent regulatory filing. The company raised $40 million in its Series A round in 2007. Tragara’s filing did not identify the investors in its current round, but the company’s website identifies its existing investors as Domain Associates, Mitsubishi, Morgenthaler Ventures, Oxford Bioscience Partners, and ProQuest Investments.

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