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U Of Texas Takes Start-Up Equity For Technology License
By Bob
Sechler
05/18/2000
Dow Jones News Service
(Copyright (c)
2000, Dow Jones & Company, Inc.)
(This
repeats a story originally published late Wednesday.)
AUSTIN,
Texas -(Dow Jones)- The University of Texas at Austin will take an equity stake
in Florida-based start-up Labnetics Inc. in exchange for a licensing agreement
for technology developed by its researchers.
University
officials said the deal marks the first time the university has agreed to be
compensated solely through equity for technology developed at the Austin campus.
In the past, compensation has come primarily from royalties.
"In this
case ... we're sharing the risk with the company," said Juan Sanchez, vice
president for research at UT Austin . "If the company is successful, we
benefit."
Sanchez
declined to reveal the terms of the agreement, except to say it stipulates that
UT's ownership stake won't be diluted below 5%.
Labnetics
is being launched by XL Vision Inc., a business incubator in Sebastian,
Fla. Investment firm Safeguard Scientifics Inc. (SFE) owns 43% of XL Vision
. Venture capital firm TL Ventures, which has a substantial presence in
Austin, also owns a stake in XL Vision .
The new
company intends to commercialize medical diagnostic technology developed by UT
researchers. It will open a research facility in Austin.
UT and
XL Vision representatives say their technology allows relatively
inexpensive, on-site diagnostics for many medical conditions without running
samples through laboratories. Labnetics plans to target markets for human and
animal diagnostics.
Mike
Otworth of XL Vision , who is acting as interim Labnetics chief
executive, said the company's first commercial product for animal diagnostics
should be available in late 2001. Products for human use likely won't be
launched until 2002, pending regulatory approval, he said.
Otworth
declined to reveal a precise timetable for an initial public offering of
Labnetics shares, except to say XL Vision 's goal for all of the
companies it launches is an IPO within three years. Among others, XL Vision
launched Emerge Interactive Inc. (EMRG) and ChromaVision Medical Systems
Inc. (CVSN).
UT's
Sanchez said school officials agreed to the equity deal with XL Vision
because they like its credentials and business plan for Labnetics, and
because they think the time is right to commercialize the medical diagnostic
technology.
UT has
received equity in "a handful" of other companies in exchange for technology
developed at the Austin campus, Sanchez said, but the stakes have been very
small because compensation in those deals came mostly through royalties.
"We'll
see how it works out," Sanchez said of the Labnetics deal. He said it could be a
model for future equity deals involving UT-developed technology.
- Bob Sechler; Dow Jones Newswires; 512-236-9637