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Fledgling Internet, Mobile Device, Software Firms Led Startups

Surveys rank San Diego County as one of the top five centers for life sciences in the nation.

But a recent analysis of data undertaken by private networking group Connect found that just 14 percent of tech-based firms launched here are in the biotech or pharmaceutical sectors.

Connect studied the number of companies starting up between July 1, 2005, and June 30, 2006, and found that 45 percent of businesses launched in the 12-month period were communications technology firms, such as Internet-related businesses or mobile device companies.

Software companies comprised 30 percent of the startups for the period.

Connect, which matches entrepreneurs with investors, said it will begin releasing such economic indicator data each quarter at its Web site, www.connect.org.

To be called Connect-Dex, the index will feature data that will be compiled quarterly to evaluate economic progress and potential here. Connect is compiling the data in partnership with the San Diego Institute for Policy Research and Roth Capital Partners.

Details of the project were disclosed last week at a news conference sponsored by the three survey participants.

In the first Connect-Dex report, the remainder of the startup mix was split among biomedical firms, computer and electronics, defense and transportation, environment and technology and recreational goods and manufacturing.

Tyler Orion, former chief operating officer of Connect and head of the Connect-Dex project, said until now, only anecdotal evidence had been available to quantify innovation and the number of startups here.

“Those of us who work with the technology and life science companies have a deep appreciation for the vitality and innovation which they bring to our community,” Orion said. “The Connect-Dex demonstrates that there is a remarkable amount of new startup activity in our region.”

Information for the index is gathered from research firms InfoUSA and Dunn & Bradstreet.

These firms gather data from such records as transferred property deeds, new business filings at courthouses and electricity hookups at utility companies.

The first report showed there was a slowdown in the number of startups formed during the second quarter of 2006.

Connect Chief Executive Officer Duane Roth said the slowing could be attributed to seasonal effects, such as the school calendar or the tax season.

“San Diego’s economy has become increasingly more dependent on the high value, high wage jobs created by technology and life science firms, which allow our region to compete in the global economy,” Roth said at the news conference announcing the index. “The index provides quantitative validation nationally that San Diego is one of the leading tech centers in the country.”

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Micromet Stock Jumps On Tracon Deal:

Micromet, which acquired the former CancerVax last year, recently signed a $100 million deal with San Diego’s Tracon Pharmaceuticals.

Micromet’s stock jumped 28 percent March 16, the day of the announcement, to close at $4.75. Trading volume was 2.2 million shares per day, with the average being 94,000. The company is based in Munich, Germany, but has a handful of employees in Carlsbad, its U.S. headquarters.

Tracon will take on worldwide rights to Micromet’s therapy to treat cancer and eye diseases caused by age or diabetes. Tracon will develop and commercialize the therapy, known as the D93 antibody.

The next market day following the announcement, March 17, stock had leveled off, but was still up in midday trading 7 percent at $2.95.

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Desert Plant-Derived Catheters:

Carlsbad’s Yulex Corp., which makes a non-latex rubber from the guayule desert plant, has signed an agreement to make catheter products with Massachusetts medical device company TechDevice Corp.

The privately held companies declined to disclose the value of the deal, said a spokeswoman for Yulex, Betsy Brottlund.

The deal allows TechDevice to make balloon-catheter-based products using Yulex latex, which is the world’s only nature-derived, commercial source of latex safe for people with type 1 latex allergy, said Yulex.

Catheters are essentially tubes used in medical procedures such as retrieving kidney stones or heart procedures.

Yulex said that its natural latex substitute is stronger and more elastic than synthetic rubber latex.

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Zogenix Bets Big On Headaches:

San Diego-based Zogenix has received $3.5 million of a $10 million loan from General Electric Healthcare Financial Services and will use the money to launch its first product, sumatriptan intraject, to treat migraine headaches.

Zogenix, with offices in San Diego and Emeryville, hopes to garner a piece of the $2.5 billion triptan segment of the migraine market.

Intraject is a needle-free, single-use disposable injector. Pressure from a nitrogen gas chamber breaks a small glass nozzle, which forces the medication through the skin. The pain is about the same as using a needle, Zogenix Chief Executive Officer Roger Hawley has said.

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Stem Cell Grants Multiply:

California’s stem cell institute has announced $75.7 million more in grants for state scientists who want to conduct research involving human embryonic stem cells.

San Diego research agencies received $17 million of the total. UC San Diego received more than $7.5 million, the Burnham Institute for Medical Research received $6 million and the Salk Institute for Biological Studies received $3 million.

Scientists named as recipients include UCSD’s Larry Goldstein, director of the university’s stem cell research program; Fred Gage, a professor at Salk; and Stuart Lipton, director of the Del E. Webb Center for Neurosciences and Aging at Burnham.

The Independent Citizens Oversight Committee of the San Francisco-based California Institute for Regenerative Medicine announced the most recent grants March 16. The ICOC also said it was handing out $45 million in grants earlier this month.


Contact Katie Weeks with biotechnology news at kweeks@sdbj.com, or call her at (858) 277-6359.

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