Hawaii Biotech attracts $7.8 million investment
Two national business figures will join the company's board
WINNING a vote of confidence in the company's prospects, Hawaii Biotech Inc. has obtained a $7.8 million equity investment and added two new directors from the upper echelon of U.S. business.
The new financing, which was raised from private investors, will be used to finance development of Hawaii Biotech's anti-inflammatory cardiovascular drug, Cardax, said David Watumull, Hawaii Biotech's chief executive.
It is the largest single round of investment that the company has obtained and represents about a third of the $24 million it has raised to date, Watumull said. The $16 million that Hawaii Biotech previously had raised came from multiple rounds of investment.
Watumull said he was pleased to have landed the new financing round, which he said was no small feat for a biotech startup in a state not known as a biotech center. However, Watumull also said the company's work was far from done.
"It is hard to do, but to do it, and have it happen in Hawaii, we're very pleased," he said of obtaining the investment. "But I don't want to underestimate the amount of work we have left."
Helping to secure the financing were the additions of two new members on the company's board of directors, which Hawaii Biotech also announced yesterday. Joining the board are Dick Foster, founder of the health-care practice of McKinsey & Co. and a 22-year veteran of the firm, and Frank Herringer, chairman and former chief executive of Transamerica Corp., who also serves as a director of biotech giant Amgen Inc. and Charles Schwab & Co.
Herringer said Hawaii Biotech's research programs were "quite promising" and he intended to play an active role on the board.
In addition to anti-inflammatory drugs, Hawaii Biotech is developing vaccines for the West Nile virus and dengue fever. The company believes that if its approach to creating the vaccines can earn regulatory approval, then Hawaii Biotech will be able to employ it to produce a range of vaccines.
With the company exploring two distinct research areas -- vaccines and anti-inflammatories -- Watumull said Hawaii Biotech has considered splitting into two separate companies, each of which would pursue one of the two types of research. A split would allow each company to be a pure investment play in a slightly different biotech area, and thus be better positioned to attract more money, Watumull said.
"We certainly are considering it," he said of the split. "The markets like a more focused play right now."