TeraView seeking to provide an exit for investors within two years
Imaging company TeraView, which has just closed a $6m financing round, has revealed that it is seeking to provide an exit for investors within two years.CEO Don Arnone told Business Weekly that the company’s refocusing on the pharmaceutical market, at the expense of security and health screening applications, had been so successful that an IPO was still on the radar for the Cambridge company.
Eyebrows were raised within the city’s technology cluster when TeraView appeared to change tack around four years into its business plan, but the company appears to be making important in-roads.
Arnone told us: “The company currently has a focused plan that seeks to build our core pharma business over the next two years, with contributions from blue-chip customers in select high values segments of the materials development and quality inspection market.
“One of the targets of our plan is to demonstrate consistent quarterly order intake, which is a challenge in a large but conservative market like pharma where high value solutions are being sold.
“The plan aims to achieve this over the next couple years and position the company for exit in that time-frame.
“Given our first to market advantage and relationships with key pharma customers, backed up by an IP portfolio which covers both the technology and pharma applications, we believe that the size of the potential market makes acquisition or IPO both possible.”
TeraView was formed in 2001 as a spin-out from Toshiba’s research labs in Cambridge to exploit research on terahertz radiation. Terahertz radiation lies in a unique region of the spectrum between microwaves and infrared, and was billed as the last unexploited region of the light and radio wave spectrum.
The recent funding round, led by San Jose-based KT Venture Group, the corporate investment arm of $2bn semiconductor inspection market leader, KLA-Tencor is an important endorsement of the company’s pharma focus as well as an important milestone in the company’s road to success in the market, according to Arnone.
He said: “An important goal was to bring in a strategic corporate investor which could help the company both in terms of its approach to the core pharma market, as well as other high value applications in industrial inspection and quality control. “
The company also focussed on securing a US investor as a means of supporting our efforts to build the US market.
Arnone said that the company had recently concluded a large deal with a major pharma company, although the full details are not being disclosed at the moment.
US regulator, the FDA is also being won over on the merits of the technology, recently presenting results from its terahertz imaging studies of tablets on the market at a recent industry trade show.
The usefulness of TeraView’s technology was brought into focus by a recent warning that ingesting crushed tablets can be hazardous, reportedly because active ingredients are absorbed into the bloodstream too quickly.
The market segment that the company is addressing is controlled or sustained release tablets, in which the active ingredient dissolves into the system over a period of time.
Such drugs currently account for 15 per cent or £20bn of the industry’s annual revenues and rising.
The problem for the industry, and this is where TeraView’s imaging technology comes in, is that such drugs are notoriously difficult to design and manufacture.