27 local firms raise $154.3 million

A University City firm working on a way to diagnose Alzheimer's and Parkinson's diseases long before they present symptoms was the region's top magnet for venture capital during the second quarter.

The firm, Avid Radiopharmaceuticals Inc., raised $26 million, according to the quarterly MoneyTree Survey released yesterday by PricewaterhouseCoopers and the National Venture Capital Association.

"They have a deep understanding of the neurology segment and also the ability to apply their technology to other diseases, including diabetes," said Mike Pellini, vice president of the life-sciences group at Safeguard Scientifics Inc., of Wayne, which invested $7.3 million in Avid during the second quarter.

CRI Worldwide, of Clementon in Camden County, a group of medical professionals that does research, clinical trials and data management for pharmaceutical companies and others, ranked second, with $15.7 million.

In the Philadelphia region, $154.3 million was invested in 27 firms, the report said. Nationally, $7.1 billion was invested in 977 deals, raising the possibility that 2007 would reach a six-year high.

In New Jersey, $213.7 million was invested in 30 deals; in Pennsylvania, $197.9 million in 30 deals. The two states lagged far behind the national leaders - California at $3.5 billion, Massachusetts at $785.3 million, and Texas at $347.4 million.

Avid Radiopharmaceuticals is the outgrowth of 10 years of research at the University of Pennsylvania, and the company continues to work with Penn scientists to develop radioactive compounds that bind to amyloid plaque in the brain.

This allows the plaque, which could be an early sign of Alzheimer's, to be detected during brain scans. Among other things, this allows physicians to differentiate it from other neurodegenerative diseases that diminish memory and must be treated differently.

Avid is also working on a compound that binds to neurons in the brain, the loss of which could provide an early signal of Parkinson's disease.

Hank Kung, a University of Pennsylvania chemist, who worked with Penn neuropathologist Daniel Skovronsky, is Avid's chief scientific adviser. Skovronsky left Penn in 2005 to be chief executive officer of the new firm.

The Avid investors last quarter included AllianceBernstein L.P.; Lilly Ventures, the venture-capital group of Eli Lilly & Co.; Pfizer Strategic Investments Group; RK Ventures; and BioAdvance.

Safeguard's Pellini called Avid founder Skovronsky "a very dynamic chief executive who, in the last two years, has been able to put together a grade-A management team to build the company."

The firm's work has been validated, Pellini said, by investments and partnerships from major players in the pharmaceutical industry.

With 5.1 million Americans diagnosed with Alzheimer's, Avid is working in a potentially lucrative field. "And they have a rich portfolio of additional opportunities, including diseases like diabetes," Pellini said.

The MoneyTree report, based on data compiled by Thomson Financial, tracks 17 industry sectors. In the second quarter, 14 sectors saw an increase nationwide in the number of deals, compared with the first quarter. But in 10 of the sectors, the number of dollars invested declined.

Software regained its ranking as the nation's largest sector, attracting $1.5 billion in 248 deals, its strongest quarter since 2001.

Biotechnology received the most dollars in three previous quarters.

Five sectors posted increases in total dollars and number of deals - consumer products and services; networking and equipment; semiconductors; industrial/energy; and computers/peripherals.

The PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree Survey tracks investments in some local companies by venture-capital firms. Only companies with $200,000 or more investment are shown.