Memphis Business Journal
Apr 17, 2009
By Toby Sells
A year and a half after MemphisED breathed financial life into Innova, the technology incubator has invested in five companies and has just opened six wet labs for research entrepreneurs.
In January, Innova completed its latest investment with Cagenix. The Memphis-based company makes the frameworks needed to make dental implants.
Innova president Ken Woody says he looked at the company for more than a year before making the investment. Woody declined to disclose the amount, but says Cagenix's product is based on innovative but solid science and is one that will play well in the $1 billion dental implant market.
Cagenix signed a distribution agreement this week with a national partner that will bring its product to 33 markets across the U.S. CEO Daryl Newman says the company will have 100-200 sales representatives in the next three months. He says Cagenix will hire some of its own sales staff and will contract the remainder of reps with independents.
The company started in 2005, funded by friends and family, Newman says. Innova's investment gave credibility to the company and allowed it to recently complete a second round of investor funding.
"The second round has allowed us move from a primarily research and development organization to an operating organization," Newman says. "We are going to market now with true sales and marketing initiatives. But in the beginning it was tentative because we were challenged with simply not having enough cash."
The funding also allowed Cagenix to hire Newman as its CEO. He's been on the company's payroll now for three weeks.
Innova also made a second investment in orthopedic firm QFx late last year.
The first investment went to support the company's clamp for external fixation devices used in treatment for broken bones. That product is now under review by the Food and Drug Administration and is expected to be released into the $300 million external fixation marketplace in three or four months, Woody says.
The second investment will support three products in the company's pipeline.
QFx was the third company Innova has invested in since it began in October 2007. The incubator also invested in Memphis-based drug commercializer arGentis Pharmaceuticals LLC as well as Vaxent, which has developed a strep throat vaccine.
Woody says Innova is now in talks to invest in a fifth company. While the first investments were in life sciences companies, the latest company targeted is a technology firm, Woody says.
Innova has also just opened six new wet labs in 6,000 square feet in the Memphis Bioworks Foundation building on Dudley. Woody says this move was to counter a "travesty."
"I found that Tennessee was dead last among all states in getting Small Business Innovation Research grants," he says.
Most researchers work strictly on a college campus, Woody says, which makes them ineligible for the grants doled out by the U.S. Small Business Administration.
"We thought we could have a significant advantage if we could build a bioscience incubator with office and lab research space just down the street from U.T. and St. Jude."
Renovations to the space began eight months ago.
Bioworks got $11.5 million from MemphisED in 2007 for Innova. The money was to be spent over the next five years.
Innova
Technology business incubator
President: Ken Woody
Address: 20 S. Dudley
Phone: (901) 448-2440
Web site: www.innovamemphis.com
