Charlottesville startup gets $8.5 million via Tech/Carilion venture group, Russian company

By Jacob Demmitt jacob.demmitt@roanoke.com 381-8621  Dec 7, 2017 

TearSolutions, a Charlottesville-based biotechnology startup just received an $8.5 million shot in the arm, courtesy of the VTC Innovation Fund and Pharmstandard International, one of Russia’s largest pharmaceutical companies.

The investment is designed to power TearSolutions through its ongoing phase I and II clinical trials for Lacripep, a new therapy for dry eye disease.

Carilion Clinic is participating in the trial through its relationship with Roanoke-based Vistar Eye Center.

The company is built around Lacritin, a protein that company co-founder and University of Virginia researcher Gordon Laurie discovered in 2001.

He found the protein lacking in patients with dry eye, so he isolated the active ingredient into an eye drop medication called Lacripep. The company spun out of UVa in 2013.

Patients apply the drops, replacing the missing protein and — in theory —returning the eye to normal so it can produce its own tears. After multiple daily doses, the company has observed improved tearing up one week later, according to TearSolution’s website.

The investment marks the first to be publicly announced by the VTC Innovation Fund, a $15 million venture capital group formed by Virginia Tech and Carilion earlier this year.

The proportional allocation of the $8.5 million to TearSolutions between the VTC fund and the Russian company was not disclosed.

When it launched, fund managers James Ramey and Scott Horner, of Washington, D.C.-based Middleland Capital, said showing a return on investment would be their top priority.

But, they said the money could also help boost the local startup ecosystem .

They pledged to make about 60 percent of investments in the life sciences industry, mostly to Virginia-based companies. Some tie to either Tech or Carilion would be required for out-of-state prospects.

For TearSolutions’ series B funding round, not only did the VTC Innovation Fund invest, but it also pulled in money and expertise from Russia.

“TearSolutions is poised to make a significant impact in the lives of dry eye patients,” Ramey said in a news release announcing the investment.

Virginia Tech and Carilion first got into the venture capital world with the NewVa Capital Partners fund in 2004.

The group placed an early bet on Intrexon Corp. and turned a major profit when the company grew into a billion-dollar juggernaut .

The partners came back together to form Valleys’ Ventures in 2013, but that fund went dormant after just two investments.

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