Start-ups: In search of venture capital

To secure elusive funding, entrepreneurs must understand the financial landscape and the motivations of investing firms.

Somewhere between borrowing money from friends and family and maxing out their personal credit cards, many scientists and researchers trying to take their discoveries from the lab to the marketplace decide to seek the counsel and financial support of a venture-capital firm. Such firms have long had a key role in establishing legal structures and marketing strategies for start-up companies, as well as in providing them with the funding to stay afloat until they are robust enough to secure a commercial bank loan, be purchased by a larger competitor or achieve sales that signal long-term success.

A. RUGGIERI/ILLUSTRATION WORKS/CORBIS

Yet, like insurance-claims adjusters, venture-capital firms are often the kind of friends that scientists might not want. That doesn't mean that they aren't highly valued partners, but the relationship frequently starts out on an unequal and problematic footing. “It's not just about money, it's about chemistry,” says Ellen Rudnick, executive director of the Michael P. Polsky Center for Entrepreneurship at the University of Chicago in Illinois. “You want somebody there whom you trust and who really understands your business. You have to think of them as a marriage partner.”

Scientists can improve their odds of success in securing capital by knowing their options and responsibilities. The likelihood of achieving victory and avoiding pitfalls, such as surrendering one's fledgling company, increases if researchers know their goals from the outset, put a plan into motion to achieve them, recruit established hands to support their pursuit and go into the search with realistic expectations.

Devising a game plan

Firms aren't drawn to great ideas alone; they're attracted to great ideas that have the promise of financial success. It's a painful truth that many astonishing innovations won't ever win the favour of venture-capital firms, because they lack a market. “You need to ask yourself from a purely scientific standpoint: is this idea differentiated in the eyes of my peers? Is there something unique scientifically about my idea?” says Robert Nelsen, co-founder and managing director of ARCH Venture Partners in Seattle, Washington. “We're looking for the revolutionary rather than the evolutionary.”

For scientists working in universities or government labs, the vetting process starts with technology-transfer offices, which protect, manage and license research. Scientists who receive university or federal grants need to work out any potential licensing sticking points before embarking on a venture-capital search. Firms want to ensure that scientists are free to develop the discovery, and will need to determine whether the licensing of the technology is exclusive to one company, and for how long. When working with university-based scientists, the firm will also want to know whether the institute receives equity in the new company and whether the licence reverts back to the university if the start-up does not meet certain milestones or financial requirements.

A good technology-transfer office will employ business experts with experience in developing pitches and building management teams for start-ups. They can help in protecting discoveries, filing patent applications and outlining and resolving the researcher's licensing concerns.

But the challenges don't end there. Eva Harth, a chemist at Vanderbilt University in Nashville, Tennessee, who is trying to market a degradable nanosponge for the treatment of cancer and eye diseases, says that her search for the right firm to optimize her invention's commercial potential has been a struggle. “Getting from the science to putting it into the hands of physicians has been challenging, especially since I'm not an expert in business or finance,” says Harth. “If you don't have the connections and don't know how the system works, you're just lost.”

Venture collapse

Ellen Rudnick: "It's not just about money, it's about chemistry."

To get a handle on the current financial landscape, scientists need to understand the impact of the global economic crisis. The financial collapse of 2008 not only shrank the size and availability of investment capital, but also reduced the number of venture-capital firms. In the United States alone, the number dropped from 996 in 2007 to about 791 in 2010, and the threat of closures continues.

The largest impact on venture-backed companies may have come from the declining initial-public-offering market, says Emily Mendell, vice-president of communications for the National Venture Capital Association (NVCA) in Arlington, Virginia, the trade group for US venture-capital firms. Companies that had been in a position to go public were forced to wait, says Mendell, so firms had to invest more money and time than they had planned to keep promising companies afloat while the market righted itself. “There will be firms that will not be able to raise follow-on funds,” says Mendell. “We are seeing a shrinking industry going forward.” She notes, however, that the venture-capital industry in the United States, although smaller than it was, is not moribund. That was demonstrated in 2010, which saw the first year-on-year rise in investments since 2007. Venture-capital firms invested US$21.8 billion in 3,277 deals last year: a 19% boost in dollars compared with 2009 and a 12% increase in the number of deals, according to the 2010 MoneyTree Report by the NVCA and PricewaterhouseCoopers, a financial-services firm based in London.

Still, the current status of the industry helps to explain why many scientists feel that firms are increasingly reluctant to fund projects without a guaranteed return on their investment. “Venture implies that they take risk, but I think many of these firms take no risk at all,” says Harth. “They are looking for guarantees only.”

The United States and Europe are important centres for innovation and investment, and look set to remain so. But emerging markets are expected to drive the industry over the next five years, according to the 2010 Global Venture Capital Survey by the NVCA and Deloitte of New York. The survey, which measures the opinions of more than 500 venture capitalists worldwide, found that 92% in the United States think that the number of venture-capital firms in the country will decline in the next five years, a view echoed in France, Israel and the United Kingdom. Meanwhile, 99% of venture capitalists in China, 97% in Brazil and 85% in India expected to see an increase in numbers of local venture-capital firms.

The upshot: scientists in less-developed countries will probably see rising investment opportunities through private entities. But there are some caveats attached to the boom. Venture capitalists in emerging markets may be inexperienced — leaving scientists ceding control to firms not familiar with regulations — or ill-prepared to raise the large amounts of capital required for biotechnology and other health-related investments. With so much at stake, it is essential that scientists exercise due diligence in selecting a venture-capital firm.

Knocking on doors

Before selection begins, experts say, scientists should avoid trading away pieces of their company to less-experienced individual entrepreneurs and angel-fund investors for early investment funds before approaching venture-capital firms. If scientists have already signed binding agreements with other funders or licence holders, firms will see only unappealing prospects: limited profitability and months of legal negotiations. “The biggest mistake faculty members make is to partner with entrepreneurs who are not of the quality or experience that venture investors will accept,” says Nelsen. And it is often best to secure only the investment needed for the next 12–18 months, rather than seek funding for an extended period of time. To win more-substantial, long-term funding for a smaller, less-established company often means trading away more of the enterprise than it would once the company has recruited its first client or validated its first innovation.

Once that concern is dodged, the capital–start-up relationship must be considered. If it's akin to marriage, then the first step in establishing it is finding and courting a firm that fits the personality of the technology or discovery at the heart of the fledgling company. By studying a firm's track record, scientists can learn about the type of company that they support and the successes and failures they've had in the past. It helps to call a few colleagues or university entrepreneurship officers to gauge a firm's reputation among scientists in the field, because word travels fast about flawed and failing venture-capital firms.

More importantly, researchers should look for that vital link, person or connection that can open the door. Firms say that for every 100 proposals they receive from researchers and entrepreneurs, they will fund only a single start-up. Being taken seriously as a prospect often starts with a good reference from a colleague or department chair who has the credentials to attract high-powered investment. “In any university or national lab, find the person who has had success in creating a start-up, and they most likely can introduce you to someone,” says Nick Galakatos, managing director of Clarus Ventures in Cambridge, Massachusetts.

Once they have a foot in the door, researchers need to make a compelling case. They must explain what need their product fulfils, and how they intend to market and sell it. These preliminary conversations, which must be both aspirational and grounded in reality, help the firm to understand the level of risk involved in the prospective investment. They also provide early opportunities to assess the business acumen of the scientists on the project.

The best firms treat entrepreneurs as important customers and add tremendous value to a start-up in terms of recruiting, strategy, coaching and connections. But they are not doing so out of the goodness of their hearts, says serial entrepreneur Steve Blank, a lecturer in entrepreneurship at the University of California, Berkeley, and author of a blog for start-ups (http://steveblank.com). “Entrepreneurs need to understand that VCs are simply a sophisticated form of financial investors who in turn need to satisfy their own investors,” he wrote on his blog this year. Some investors acknowledge that there are bad actors in the field, who mistreat scientists and want to wrest companies away from their founders. But scientists' general lack of business experience makes them ill-suited to run multi-million-dollar companies in competitive environments for themselves. Furthermore, any firm willing to invest heavily in a start-up will expect to guide and manage that company's future.

Ultimately, scientists should take heart in the market forces that drive venture-capital firms. Those firms that fail to invest robustly in science, or that treat scientists unfairly, only damage their own reputations and undermine their own success. “Our business is to make people money, and that includes entrepreneurs and scientists,” says Nelsen. “If we make a huge company that is quite successful and the scientist doesn't make money, and the university doesn't make money, that's a huge failure for us. We want people to keep coming back to us again and again with their discoveries — so we all make money.”

n vitro assembly of cubic RNA-based scaffolds designed in silico

The organization of biological materials into versatile three-dimensional assemblies could be used to build multifunctional therapeutic scaffolds for use in nanomedicine. Here, we report a strategy to design three-dimensional nanoscale scaffolds that can be self-assembled from RNA with precise control over their shape, size and composition. These cubic nanoscaffolds are only ~13 nm in diameter and are composed of short oligonucleotides, making them amenable to chemical synthesis, point modifications and further functionalization. Nanocube assembly is verified by gel assays, dynamic light scattering and cryogenic electron microscopy. Formation of functional RNA nanocubes is also demonstrated by incorporation of a light-up fluorescent RNA aptamer that is optimally active only upon full RNA assembly. Moreover, we show that the RNA nanoscaffolds can self-assemble in isothermal conditions (37 °C) during in vitro transcription, which opens a route towards the construction of sensors, programmable packaging and cargo delivery systems for biomedical applications.

Nanoparticles boost cancer treatment

U.S. researchers say combining nanoparticles with a scorpion venom compound can cut the spread of cancerous brain tumor cells by 98 percent.

The University of Washington said the nanoparticles more than double the effectiveness of chlorotoxin, a small peptide isolated from scorpion venom.

"People talk about the treatment being more effective with nanoparticles but they don't know how much, maybe 5 percent or 10 percent," Miqin Zhang, professor of materials science and engineering, said Friday in a release. "This was quite a surprise to us."

Researchers said adding nanoparticles can improve a therapy by increasing the length of time the combination lasts in the body. Nanoparticles also boost effectiveness of treatment compounds because therapeutic molecules tend to clump around each nanoparticle, the report said.

Nanoparticles guide genes through the bloodstream

Scientists from University of Bonn in Germany have designed a technique that allows them to repair damaged arteries’ tissue. The technique is based on sending genes and healthy cells through the bloodstream to the place that needs to be repaired.

Earlier, the “problem” was that it was unknown what quantity of healthy cells to send in order to repair the tissue. Small magnetic nanoparticles which are situated on the planted gene or on the planted cell can with the aid of an external magnetic field be specifically directed to the location of the damage.

German researchers have discovered that the gene-based transfer is way more successful than non-gene-based one. Magnetic nanoparticles can support or even enable gene transfer under clinically relevant experimental conditions.

What is nanomedicine

Nanomedicine is a subfield of nanotechnology. It is often defined as the repair, construction and control of human biological systems using devices built upon nanotechnology standards. Basically, nanomedicine is the medical application of nanotechnology. Nanostructured materials, engineered enzymes and many other products of biotechnology will be very useful in the future. Of course, the full potential of nanomedicine is unlikely to arrive until after complex, high-sofisticated, medically programmable nanomachines and nanorobots are developed. When that happens, every medical doctor’s dream will become reality. Having robots fabricated to nanometer precision (1 nanometer = 1 bilionth of a meter) will allow medical doctors to approach the human body at the cellular and molecular levels. Interventions such as repairing damaged tissues (bone, muscle, nerve) will be possible.

We all know that the mankind is still fighting against many complex illnesses like cancer, multiple sclerosis, cardiovascular diseases, Alzheimer’s and Parkinson’s diseases, diabetes as well as some inflammatory or infectious diseases (i.e. HIV). Nanotechnology raises hopes and expectations for millions of patients that suffer from those diseases. For example, it is expected that doctors will be able to destroy the very first cancer cells and so stop the disease from growing.

Nanomedicine is a huge industry. Sales reached 6.8 billion dollars in 2004. Significant amounts of money are being invested in research – USA and European Union are investing billions of dollars and plan to invest more in the future.

NIH established eight nanomedicine development centers which are staffed by multidisciplinary research teams including biologists, physicians, mathematicians, engineers and computer scientists. The intial phase of their program is directed towards gathering extensive information about the properties of nanoscale biological elements. This is very important and will help scientists to correct defects in unhealthy cells. The second phase has been approved recently and is directed towards applying the knowledge from the first phase in treating diseases.

European Technology Platform is a platforum formed by 53 European stakeholders. Their first task the group had was to write a vision document on nanotechnology in which experts describe the extrapolation of needs until 2020.

There are three key priorities in the future: nanotechnology-based diagnostics and imaging, targeted drug delivery and release and regenerative medicine.

According to the journal „Nature Materials“, there are over 130 nanotech-based drugs and delivery systems developed worldwide. Nanomedicine industry is expected continue to grow and have a significant impact on the economy.

Colon cancer warning signs

A lot of patients suffering from colon cancer might well present no symptoms or signs during the earliest stages of the condition. When symptoms do eventually present, they can be many and varied, and can very much depend upon the size of the affliction, how far it has spread and also its actual location. It might be that some symptoms that present are as a result of a condition other than cancer itself, ranging from irritable bowel syndrome (IBS), inflammatory bowel disease (IBD) and occasionally diverticulosis. Also, such problems as abdominal pain or swelling can be symptomatic of colon problems and may well require further investigation.

You may also notice that, upon going to the lavatory, you have some blood in your stools, and this can be a symptom of cancer. It can, however, also be indicative of other conditions and problems. For example, the kind of bright red blood that you may see on your toilet tissue could be as a result of hemorrhoids or anal fissures. It should also be remembered that various food items can also result in red-colored stools, and these include beetroot and red liquorice. Some medications can also be culprits, and some can also turn the stools black-including iron supplements. Irrespective, any sign of blood or change in your stools should prompt you to seek advice from your GP, as it is always best to be sure that it is not a sign of a more serious condition, and with any cancer,early detection and treatment is essential to a successful recovery.

You should also note-if you are currently concerned-any change in the regularity of your stools-including whether or not they are more thin or irregular than usual-especially over a period of several weeks. Also, be mindful if you have diarrhea for several days in a row or, conversely, constipation.

You might also experience pain in your lower abdomen-including a feeling of hardness. You may also experience persistent pain or discomfort in your abdominal region, and this can include wind and cramps. You may also get the sensation that, when evacuating your bowels, that the bowel doesn’t empty fully. Also, if you have an iron deficiency (or anemia), it may be an indication that there is bleeding in your colon. Also, as in most cases and types of cancer, you should seek medical advice immediately if you experience any sudden and unexpected or unexplained weight loss, as this is one of the principal red flags. Also be aware of more vague, seemingly incidental symptoms, such as fatigue. IF you have a couple of symptoms and also feel fatigued for days in a row inexplicably, then this is also another warning sign and you should seek medical advice. It is important not to panic, but just to be aware of what might be going on.

Remember, cases of colon cancer account for around 90% of all cases of intestinal cancers, and also account for more deaths every year of men and women from cancer. Early treatment is an absolute must.

Colon cancer warning signs

A lot of patients suffering from colon cancer might well present no symptoms or signs during the earliest stages of the condition. When symptoms do eventually present, they can be many and varied, and can very much depend upon the size of the affliction, how far it has spread and also its actual location. It might be that some symptoms that present are as a result of a condition other than cancer itself, ranging from irritable bowel syndrome (IBS), inflammatory bowel disease (IBD) and occasionally diverticulosis. Also, such problems as abdominal pain or swelling can be symptomatic of colon problems and may well require further investigation.

You may also notice that, upon going to the lavatory, you have some blood in your stools, and this can be a symptom of cancer. It can, however, also be indicative of other conditions and problems. For example, the kind of bright red blood that you may see on your toilet tissue could be as a result of hemorrhoids or anal fissures. It should also be remembered that various food items can also result in red-colored stools, and these include beetroot and red liquorice. Some medications can also be culprits, and some can also turn the stools black-including iron supplements. Irrespective, any sign of blood or change in your stools should prompt you to seek advice from your GP, as it is always best to be sure that it is not a sign of a more serious condition, and with any cancer,early detection and treatment is essential to a successful recovery.

You should also note-if you are currently concerned-any change in the regularity of your stools-including whether or not they are more thin or irregular than usual-especially over a period of several weeks. Also, be mindful if you have diarrhea for several days in a row or, conversely, constipation.

You might also experience pain in your lower abdomen-including a feeling of hardness. You may also experience persistent pain or discomfort in your abdominal region, and this can include wind and cramps. You may also get the sensation that, when evacuating your bowels, that the bowel doesn’t empty fully. Also, if you have an iron deficiency (or anemia), it may be an indication that there is bleeding in your colon. Also, as in most cases and types of cancer, you should seek medical advice immediately if you experience any sudden and unexpected or unexplained weight loss, as this is one of the principal red flags. Also be aware of more vague, seemingly incidental symptoms, such as fatigue. IF you have a couple of symptoms and also feel fatigued for days in a row inexplicably, then this is also another warning sign and you should seek medical advice. It is important not to panic, but just to be aware of what might be going on.

Remember, cases of colon cancer account for around 90% of all cases of intestinal cancers, and also account for more deaths every year of men and women from cancer. Early treatment is an absolute must.

Men of Honor

New killer virus found in Africa

Scientists discover disease that causes Ebola-like bleeding

Scientists have identified a lethal new virus in Africa that causes bleeding like the dreaded Ebola virus.

The so-called "Lujo" virus infected five people in Zambia and South Africa last fall. Four of them died, but a fifth survived, perhaps helped by a medicine recommended by the scientists.

It's not clear how the first person became infected, but the bug comes from a family of viruses found in rodents, said Dr. Ian Lipkin, a Columbia University epidemiologist involved in the discovery.

"This one is really, really aggressive," he said of the virus.

A paper on the virus by Lipkin and his collaborators was published online Thursday on in PLoS Pathogens.

The outbreak started in September, when a female travel agent who lives on the outskirts of Lusaka, Zambia, became ill with a fever-like illness that quickly grew much worse.

She was airlifted to Johannesburg, South Africa, where she died.

A paramedic in Lusaka who treated her also became sick, was transported to Johannesburg and died. The three others infected were health care workers in Johannesburg.

Investigators believe the virus spread from person to person through contact with infected body fluids.

"It's not a kind of virus like the flu that can spread widely," said Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, which helped fund the research.

The name given to the virus — "Lujo" — stems from Lusaka and Johannesburg, the cities where it was first identified.

Investigators in Africa thought the illness might be Ebola, because some of the patients had bleeding in the gums and around needle injection sites, said Stuart Nichol, chief of the molecular biology lab in the CDC's Special Pathogens Branch. Other symptoms include include fever, shock, coma and organ failure.

Samples of blood and liver from the victims were sent to the United States, where they were tested at Columbia University in New York and at CDC in Atlanta. Tests determined it belonged to the arenavirus family, and that it is distantly related to Lassa fever, another disease found in Africa.

The drug ribavirin, which is given to Lassa victims, was given to the fifth Lujo virus patient — a Johannesburg nurse. It's not clear if the medicine made a difference or if she just had a milder case of the disease, but she fully recovered, Nichol said.

The research is a startling example of how quickly scientists can now identify new viruses, Fauci said. Using genetic sequencing techniques, the virus was identified in a matter of a few days — a process that used to take weeks or longer.

Along with Fauci's institute, the National Heart, Lung, and Blood Institute and Google also helped fund the research.

Aspirin cuts death risk for colon cancer patients

Score another win for the humble aspirin. A study suggests colon cancer patients who took the dirt-cheap wonder drug reduced their risk of death from the disease by nearly 30 percent.

Aspirin already is recommended for preventing heart attacks and strokes, along with its traditional use for relief of minor aches and pains. Its merit in colon cancer prevention has been tempered by its side effects, bleeding from irritation of the stomach or intestines.

The new study suggests patients who already have colon cancer may benefit from taking aspirin along with surgery and chemotherapy. In a separate analysis of a subgroup of patients, only those with the most common type of tumor, those that overproduce the Cox-2 enzyme, saw a benefit.

“The paper is absolutely incredible, and I don’t gush normally,” said Dr. Alfred Neugut of Columbia University Medical Center in New York who has done similar research but was not involved in the new study. In an accompanying editorial, Neugut wrote that the study “comes as close as it can to offering patients a way to help themselves.”

Test yourself Test your colon cancer knowledge

“This is certainly something patients would want to discuss with their doctors,” said Dr. Andrew Chan of Harvard Medical School in Boston, who led the study, which appears in Wednesday’s Journal of the American Medical Association.

It’s too early for an across-the-board recommendation however, both Chan and Neugut said. The results should be confirmed in an experiment where patients would be randomly assigned to take aspirin or a dummy pill. A study based in Singapore that’s now recruiting patients may verify aspirin’s benefit.

Chan’s study was observational, meaning researchers merely observed what patients were already doing, such as taking aspirin regularly for headaches. It’s possible that factors other than aspirin accounted for the difference in cancer deaths.

Colorectal cancer is the second leading cause of cancer death in the United States after lung cancer. The National Cancer Institute estimates that nearly 50,000 Americans will die from it this year.

The researchers analyzed data from two large ongoing studies, the Nurses’ Health Study and the Health Professionals Follow-up Study.

They looked at nearly 1,300 people with colorectal cancer who’d been followed for an average of 12 years. All the patients in the study had surgery for colon cancer and many also had chemotherapy.

Among the 549 participants who used aspirin regularly after their diagnosis, 81 died from colorectal cancer (about 15 percent). In contrast, among the 730 people who didn’t use aspirin, 141 died of the disease (about 19 percent).

Heat can help chemotherapy work better

Cancer patients whose tumors are targeted with heat treatment as well as chemotherapy are more likely to stay alive and cancer-free for longer than those who receive only chemotherapy, researchers said on Tuesday.

The finding suggests it may be possible to cut the dose of chemotherapy drugs by using heat, although more research is needed to establish this, they said.

German researchers looking at cancers in soft tissues such as muscle, fat and tissue around the joints, found that heat treatment more than doubled the proportion of patients whose tumors responded to chemotherapy.

mportantly, the process did not increase the harmful effects of chemotherapy treatment.

"We expect our findings will encourage other researchers to test the approach in other locally advanced cancers," said Rolf Issels, a professor of medical oncology at the University of Munich in Germany.

"Targeted heat therapy has already shown promise in recurrent breast and locally advanced cervical cancer in combination with radiation, and studies combining it with chemotherapy in other localized tumors such as those in the pancreas and rectum are ongoing."

Heat therapy for cancer involves a technique known as regional hyperthermia, which uses focused electromagnetic energy to warm the tissue in and around the tumor to between 40 and 43 degrees Celsius (104 to 109.4 degrees Fahrenheit).

The heat not only kills cancer cells, but also seems to make chemotherapy work better by making cancer cells more sensitive, Issels said. It also improves blood flow, allowing chemotherapy to be more effective.

Issels said his findings, presented at the ECCO-ESMO European cancer congress in Berlin, showed that soft tissue sarcoma patients receiving the targeted heat therapy plus chemotherapy "fared better on all outcome measurements."

"Almost three years after starting treatment, they were 42 percent less likely to experience a recurrence of their cancer at the same site or to die than those who were getting chemotherapy alone," he said.

The average length of time that patients remained disease free was 32 months in the group that got both treatments, compared with 18 months in the group that got chemotherapy alone — an improvement of 30 percent.

Issels said the equipment and specialist knowledge to be able to offer such heat therapies is only currently available in a handful of clinics and hospitals in Germany, the Netherlands, Switzerland, Norway and the United States.

But he urged cancer doctors to take note.

"The clear results of this trial show that the field has now matured to the point where we must step up efforts to explore its potential to offer an entirely new way of treating locally advanced disease in several major cancers," he said.

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Anthrax investigation still yielding findings

Chemical composition of spores doesn't match suspect flask.

The deadly bacterial spores mailed to victims in the US anthrax attacks, scientists say, share a chemical 'fingerprint' that is not found in bacteria from the flask linked to Bruce Ivins, the biodefence researcher implicated in the crime.

The Federal Bureau of Investigation (FBI) alleges that Ivins, who committed suicide last July, was the person responsible for mailing letters laden with Bacillus anthracis to news media and congressional offices in 2001, killing five people and sickening 17. The FBI used genetic analyses to trace the mailed spores back to a flask called RMR-1029, which Ivins could access in his laboratory at the US Army Medical Research Institute of Infectious Diseases (USAMRIID) in Fort Detrick, Maryland.

Investigators used genetic analyses to track down the particular strain of Bacillus anthracis used in the attacks.

At a biodefence meeting on 24 February, Joseph Michael, a materials scientist at Sandia National Laboratories in Albuquerque, New Mexico, presented analyses of three letters sent to the New York Post and to the offices of Senators Tom Daschle and Patrick Leahy. Spores from two of those show a distinct chemical signature that includes silicon, oxygen, iron, and tin; the third letter had silicon, oxygen, iron and possibly also tin, says Michael. Bacteria from Ivins' RMR-1029 flask did not contain any of those four elements.

Two cultures of the same anthrax strain grown using similar processes — one from Ivins' lab, the other from a US Army facility in Utah — showed the silicon-oxygen signature but did not contain tin or iron. Michael presented the analyses at the American Society for Microbiology's Biodefense and Emerging Diseases Research Meeting in Baltimore, Maryland.

The chemical mismatch doesn't necessarily mean that deadly spores used in the attacks did not originate from Ivins' RMR-1029 flask, says Jason Bannan, a microbiologist and forensic examiner at the FBI's Chemical Biological Sciences Unit in Quantico, Virginia. The RMR-1029 culture was created in 1997, and the mailed spores could have been taken out of that flask and grown under different conditions, resulting in varying chemical contents. "It doesn't surprise me that it would be different," he says.

The data suggest that spores for the three letters were grown using the same process, says Michael. It is not clear how tin and iron made their way into the culture, he says. Bannan suggests that the growth medium may have contained iron and tin may have come from a water source.

Hard to tell apart

The meeting offered scientists who collaborated with the FBI during the investigation an opportunity to share detailed data. The analyses will eventually be published in peer-reviewed journals, the FBI has said.

Jacques Ravel, a genomics scientist at the University of Maryland School of Medicine in Baltimore, described his team's efforts to find genetic differences between various cultures of the Ames strain, the B. anthracis strain identified in the anthrax letters. At first, the team was surprised to find that the DNA sequences of a reference Ames strain and Ames samples from the investigation, such as bacteria isolated from the spinal fluid of the first victim, were exactly the same. "It was kind of a shock," says Ravel.

For help, the researchers turned to variants found by a team at USAMRIID. Patricia Worsham and her colleagues had noticed differences in shape, colour and rate of spore formation even within a single anthrax culture. Ravel's team identified the genetic mutations associated with four variants and developed an assay for one of them, called Morph E. Researchers at Commonwealth Biotechnologies in Richmond, Virginia, and the Midwest Research Institute's Florida Division in Palm Bay created assays for three other variants.

The FBI then used that arsenal of tests to pin down the origins of the anthrax letters, matching the mix of genetic variants in the mailed spores to Ivins' RMR-1029 flask. "It has the genetic signatures that identify it as the most likely source of the growth," says Bannan.

Ravel also sequenced the genome of a Bacillus subtilis strain that was found in one of the letters. That sample did not match a B. subtilis strain found in Ivins' lab, says Bannan, but the bacterial contamination still could have come from somewhere else in Ivins' institution.

The FBI has asked the National Academy of Sciences (NAS) to convene an independent panel of experts to review the anthrax investigation data. The academy is still in the process of drawing up a contract with the FBI that lays out an agreement to perform the study, says NAS spokeswoman Christine Stencel.

Thomas DeGonia, Ivins' lawyer at Venable LLP in Rockville, Maryland, maintains Ivins' innocence.

Scientists reverse brain birth defects in animal models

Prof Joseph Yanai and his associates at the Hebrew University were able to overcome neural and behavioral birth defects in mice by using mouse embryonic neural stem cells. These cells migrate in the brain, search for the deficiency that caused the defect, and then differentiate into becoming the cells needed to repair the damage.

Neural and behavioral birth defects, such as learning disabilities, are said to be particularly difficult to treat, compared to defects with known cause factors such as Parkinson’s or Alzheimer’s disease, because the prenatal teratogen — the substances that cause the abnormalities — act diffusely in the fetal brain, resulting in multiple defects.

In the animal model, researchers were able to reverse learning deficits in the offspring of pregnant mice who were exposed to organophosphate (a pesticide) and heroin. This was done by direct neural stem cell transplantation into the brains of the offspring. According to the scientists, the recovery was almost 100 percent, as proved in behavioral tests in which the treated animals improved to normal behavior and learning scores after the transplantation. On the molecular level, brain chemistry of the treated animals was also restored to normal.

However, the researchers have also discovered that the neural stem cells succeed before they die in inducing the host brain itself to produce large number of stem cells, which repair the damage. This discovery was published earlier this year in one of the leading journals in the field, Molecular Psychiatry.

The scientists are now in the midst of developing procedures for the least invasive method for administering the neural stem cells, which is probably via blood vessels, thus making the therapy practical and clinically feasible.

The research on the project was supported by the US National Institutes of Health, the US-Israel Bi-national Science Foundation and the Israel anti-drug authorities.

Foreign VC funds get mixed reception in India

Matrix Capital Management LLC (Matrix; Waltham, MA, USA) announced on March 19 its plans to invest between $300–$600 million in late-stage funding in Indian biotech and pharmaceutical companies this year—the largest amount ever allotted for this sector by a single foreign investor. But Indian startup companies, which are accustomed to a dearth of venture capital (VC) in the country, are skeptical that overseas funds will benefit the industry.

"We are looking at India because Indian human capital is arguably the highest in the world and it is a country where one can get high returns at low cost [of investment]," says David Goel, managing general partner at Matrix. Teams that manage $1 billion in funds from Matrix and its sister company Matrix Venture Capital Investments (Waltham, MA, USA) were in India in March scouting for what Goel describes as "high-quality pharma and biotech companies to invest [in]."

But Matrix is not alone. At the BioAsia-2004 meeting held in Hyderabad February 26–28, Andreas Wicki, CEO of VC firm HBM Bioventures (Baar, Switzerland), announced plans to commit $10–$20 million annually for Indian biotech companies. And Michael Alder, managing director of VC company Redmont Venture Partners (Birmingham, AL, USA), talked about the possibility of his firm joining an Indian coinvestor to create a $20 million fund for early-stage biotech firms.

"We think overseas venture funding will give a big push to our nascent biotech industry, whose main problem is finances," says Bhim Sain Bajaj, a senior official at the All India Biotechnology Association (AIBA, New Delhi). "Last month we were talking to HBM Bioventures and now Matrix is here. As the word spreads, more [overseas VC] will come to give our companies a boost," says Bibhu Prasad Acharya, secretary of Industries and Commerce for the state of Andhra Pradesh.

But not everyone agrees with Bajaj. Ashok Kumar Sadhukhan, managing director of Transgene Biotek (Hyderabad, India), welcomes the Matrix move to invest in the country, but does not think startup firms are going to benefit. "Why would the foreign investors take risks when our own venture funds are shying away?" he wonders.

Peter Boelhouwer, a Matrix team member, admits that for its first venture in India—which is also its first foray into the biotechnology field—the main strategy of his company is to buy stocks in Indian public companies already making profits. Wicki also makes it clear that his company's focus "is on mature companies including spinoffs and, in some instances, early-stage companies."

Sarath Naru, managing director of APIDC-Venture Capital (APIDC-VCL; Hyderabad), which funds only biotech startups, is not surprised at the dilemma of overseas investors. "Traditionally they are used to funding early-stage companies in their backyards," he says. "Not many of them are coming to India because it is difficult for them to operate unless they tie up with a local venture partner."

But potential local VC partners are few and far between. The total amount annually invested into Indian biotech is about $500 million, according to AIBI. But other than APIDC-VCL, none of the approximately 25 Indian VC funds is dedicated to biotechnology. Last year, the Indian Department of Biotechnology (DBT) proposed to raise and manage a $12 million fund, but the Finance Ministry stalled the initiative because it felt the funds should be raised and managed by private firms and the DBT's role should be limited to providing matching loans. The only other Indian fund dedicated to local biotech firms is a $45 fund that is still under discussion by the Association of Biotechnology Led Enterprises (Bangalore, India).

According to Naru, Indian VCs have been staying away from early-stage biotech companies since the dot-com bust in 2000. The long gestation period of biotech projects is another reason, says Renuka Ramnath, CEO of VC firm i-Venture (Mumbai, India). Against this backdrop, Naru says that overseas funding will definitely be helpful, but "what we want in India is early-stage funding by foreign VCs with handholding fund managers in India, [a situation that would] add value locally and overseas."

Lufthansa-CNBC TV18 - All for this one moment. Interview with Kiran Mazumdar Shaw

Lufthansa-CNBC TV18 - All for this one moment. Interview with Kiran Mazumdar Shaw