NJTC Venture Capital Fund

Corrections or additions?

This article by Barbara Fox was prepared for the September 10,

2003 issue of U.S. 1 Newspaper. All rights reserved.

Epigenesis Investors: Care Capital

Epigenesis is alive today in part because of the

considerable

clout that Care Capital brings to the funding table. Among the

founding

partners is Jan Leschly, former CEO of SmithKline Beecham, and Jerry

Karabelas, former CEO of Worldwide Pharmaceuticals at Novartis has

joined the firm.

"Companies look for us where Jan Leschly’s and Jerry Karabelas’

experience could be helpful," says David Ramsay, a Care Capital

partner.

Epigenesis’s money comes from the $130 million collected so far in

Care Capital’s second funding round. Care Capital’s first round

brought

$100 million, divided among five or six investments that are doing

well.

"We helped the company reinvent itself," says Ramsay.

"That

involved focusing less on a discovery platform and long term, blue

sky investment and more on very specific product development. The

approach we took reflected the realities of a very difficult financing

environment."

"It was a fair amount of work — to narrow down the business

focus to the most important product and raise the funds to develop

that to proof of concept and bring in a management team whose

expertise

was relevant to that strategy," he says.

"We have a lot of portfolio companies with productive and

aggressive

scientists who come up with a lot of ideas, and we help them

concentrate

on those with the most commercial potential."

Care Capital LLC, 47 Hulfish Street, Suite 310,

Princeton 08540. Jan Leschly, chairman/CEO. 609-683-8300; fax,

609-683-5787.

Home page: www.carecapital.com

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NJTC Venture Capital Fund

Jim Gunton, a partner with the New Jersey Technology

Council Venture Capital Fund, says the imprimatur of Care Capital

helped the partners at the fund decide to invest in Epigenesis.

Founded in December, 2000, the NJTC Venture Fund has a proprietary

affiliation with the New Jersey Technology Council, the business

networking

organization. Limited partners include the NJ Economic Development

Authority, Commerce Bank, Merrill Lynch, and Kemper Insurance.

Designated as an SBIC fund, it can get up to $50 million from the

Small Business Administration, which makes it the largest early stage

fund focusing on the New Jersey market.

Its first funding round was $80 million. Epigenesis is one of its

first investments, along with Incurrent Solutions, KidBiz, Management

Dynamics, Netilla Networks, Quantiva, Telelogue, and Teltier

Technologies.

The fund seeks to invest in companies ranging from very early seed

stage through those with annual revenues of $5 million.

"We invested in Epigenesis for a few reasons," says Gunton.

"They had an experienced team that knew the industry and knew

how to grow a small company, and a world class scientist had put

together

the technology.

"Second, because of some ups and downs the company was suffering

through,

the valuation was at a bargain price despite having had millions of

dollars poured into it from international pharmaceutical

companies."

Of great importance was the leadership of Care Capital, which promised

to put its own money in and round up other monies to get the company

through expensive clinical trial crisis.

"And among the smaller benefits," says Gunton, " is that one of

the people on our healthcare advisory board for NJTC, Zola Horowitz,

happens to be on the board of directors for this company, so we had

special insight."

Says Gunton: "The short version is that when you are a startup

you need to have some kind of differentiator, either a unique domain

and expertise or a set of customer relationships to drive early

growth.

It is difficult to convince the skeptical investor that you can

differentiate

from the other 10,000 startups."

— Barbara Fox

NJTC Venture Fund, 1001 Briggs Road, Suite 280,

Mount Laurel 08054. Jim Gunton, general partner. 856-273-6800; fax,

856-787-9800. Home page: www.njtcvc.com


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