Why Texas is #1 in Business: Local BioTech Company Expands DiFUSION Secures $9.3 Million in Financing; City of Georgetown Grants $92K for Lab Expansion
GEORGETOWN, Texas, Sept. 5, 2012 /PRNewswire/ -- DiFUSION Technologies, Inc. announced today that it has secured $9.3 million in private and public financing: $4.2 million in convertible debt and $5 million in equity financing all from private non institutional investors. In addition to the corporate financing, the company has announced a grant from the City of Georgetown Economic Development Corporation for $92,000 for the purchase of highly specialized lab equipment. In return DiFUSION has signed a performance agreement to create 10 jobs over three years.
Founded in 2008, DiFUSION Technologies is an advanced biomaterials manufacturer located in Georgetown, Texas. DiFUSION has developed multiple patented MITA Technologies (Metallic Ion Therapeutic Agents) for antimicrobial, cellular repair, tissue regeneration, bone growth, scaffold construction, and increased angiogenesis. DiFUSION's first product, CleanFuze™*, was developed as an antimicrobial load-bearing biomaterial for orthopaedic applications and has proven highly successful in animal testing. CleanFuze™ is currently being scaled up for regulatory approval and commercialization. DiFUSION is dedicated to leveraging these breakthroughs across multiple healthcare channels.
Just three short months after DiFUSION's incorporation in July 2008, the U.S. and worldwide economies collapsed, causing venture capital opportunities to evaporate overnight and a host of potential innovations to be put on hold. Knowing their new, antimicrobial technology for orthopedic implants posed a solution to one of the most common and expensive problems in the medical arena (SSIs), DiFUSION decided to "bootstrap" their finances, moving forward with research and development - but not without sacrifice. While $4.2 million was raised through private investors (industry colleagues) over a four year period in order to hit the necessary "A round" milestones on the path to the revenue stage, the DiFUSION team was largely going without pay.
Their dedication certainly paid off as they launched their first commercialized product, Xiphos™ Posterior Spinal Fusion System, last October, creating a steady revenue stream that allowed their "A round" financing to convert to equity. Additionally, DiFUSION recently secured another $5 million in private investments for "B round" support – all from private investors who notably benefitted from Bush Administration capital gains exclusions. The total $9.2 million, raised since DiFUSION's inception in 2008, is not comprised of any venture capital or bank funding and has assisted in the creation of ten high paying tech jobs so far (including four PhD and two Masters level), all the while pumping millions into the local Georgetown and Greater Austin economies.
"We are very excited as to DiFUSION's potential to revolutionize the industry with the technology that we are developing," comments Nad Verjee, who represents the "B-round" investors. "The structure and incentives that the TLCC has put in place enables technology companies to cultivate and develop during the critical start-up phase. This is very important to ensure the survivability of start-up companies like DiFUSION. We owe our gratitude to the TLCC and in particular to Mr. Russ Peterman and Mark Thomas for enabling DiFUSION to make it through this critical phase."
Along with the success of their Xiphos™ launch and the expansion of their finances, DiFUSION has received a capital equipment grant to help facilitate their rapid expansion. The City of Georgetown in conjunction with the Georgetown Economic Development Corporation has granted those funds for the purchase of an ICP Plasma Spectrometer – a necessity for DiFUSION to proceed with testing. DiFUSION is also hosting a ribbon cutting ceremony for their new state of the art 3,000 square foot web lab facility on September 20th.
"DiFUSION Technologies is a role model for post-incubation recruitment in my opinion," claims Russ Peterman, the Director of TLCC and Chairman of the recently formed Texas Bio Corridor Alliance. As Peterman sees it, the company was past early stage development when he recruited them from Austin, but their potential was unlimited. "We did what we could to facilitate, but in the end it was their innovative technology, targeted collaborations, and the determination of their CEO that has led to their success. I believe his military experience and focused approach with investors was the deciding factor in making this company roll."
The TLCC is a non-profit organization, based in Georgetown, Texas that has been focused on enabling the development of potential biotechnology advancements to the point of successful commercialization since 2007. The Texas Bio Corridor has a similar focus, but acts as a collective group of innovative life science companies that are located all along the Interstate 35 stretch from Dallas/Fort Worth all the way to San Antonio.
According to Mark Thomas of GEDCO, "DiFUSION Technologies is a valued addition to the Texas Life Sciences Collaboration Center. Recently the Georgetown Economic Development Corporation and Georgetown City Council unanimously voted to grant $92,000 to DiFUSION, so that they could purchase an ICP Spectromenter which will allow the company to expand and add jobs. The City of Georgetown Economic Development Department is working hard to create biotechnology jobs in Georgetown to diversify the economy, and this grant to DiFUSION is an important part of that initiative."
DiFUSION's founder and CEO, Derrick Johns offers sincere thanks to Russ Peterman and Mel Penland from TLCC as well as Mark Thomas of GEDCO, claiming that DiFUSION's "success is largely based on the TLCC facility, our newly expanded lab space, and the capital equipment grant from the City of Georgetown." According to Johns (a native of Connecticut), "such enormous opportunities for start-ups simply don't exist in the Northeast – which is why Texas businesses and the economy are thriving here more than anywhere else."
About DiFUSION Technologies
Founded in 2008 in Austin, Texas, DiFUSION Technologies, Inc. is a medical device company focused on reducing the rising incidence of surgical site infections in orthopedic and spine surgery through the development of a suite of patented antimicrobial orthobiologic polymeric implants. Initially focusing on the multi-billion dollar spinal implant market, the company has developed a technology with applicability across a variety of orthopedic segments using well characterized implants with benefits for the patient, surgeon., hospital and payer. For more information about DiFUSION Technologies, visit www.difusiontech.com.
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SOURCE DiFUSION Technologies, Inc.