Team of investors optimistic about company's inhaler technology
Triangle Business Journal - by Frank Vinluan

RESEARCH TRIANGLE PARK – NOVEMBER 19, 2007 - Oriel Therapeutics has raised more than $23 million in a third round of venture financing to speed up the development of a multidose inhaler intended to deliver a slate of new medicines now in various pipelines.

The round is being led by New Leaf Ventures, a New York venture capital firm. With its commitment, New Leaf is taking the executive reins of the company, with Managing Director James Niedel becoming chairman. "We are very hopeful (Oriel) will develop the next generation dry powder inhaler," Niedel says.

In its federal filings, the company reports that the bulk of the fundraising - about $21 million - will be used as "working capital," a ubiquitous phrase in such filings. In Oriel's case, the investors are betting that the new money will help the company take the next step in commercializing the product. The remainder of the raised money will go into conversion of some existing debt and payment to some officers and directors of the company. Previously, the company had raised about $5 million in two rounds.

Dr. Eric Aguiar, a partner with Minneapolis venture capital firm Thomas, McNerney & Partners, which joined in Oriel's series C round, believes the company's inhalers will find their place in the market.

"We really believed in the team that is moving this company forward," Aguiar says, adding that Oriel's product could be better than most available in the market - a market that is in the billions of dollars. "We thought the device they're working on is novel," Aguiar says. "There's a large unmet need in the area of asthma and respiratory diseases."

Other than New Leaf and Thomas McNerney, at least two other investment groups - Healthcare Ventures and CHL Medical Partners - have joined the existing investors in keeping alive the vision of the company co-founders Paul Atkins and Anthony Hickey. Atkins
and Hickey could not be reached for comment.

The pedigree of other investors is impressive for Oriel, lending credence to the company's technology. Among the investors is Fred Eshelman, who built Wilmington-based PPD from scratch into a $4.9 billion clinical research organization. Also investing is Trudell Medical International, a Canadian company that develops and manufacturers aerosol drug delivery devices for humans and animals. Trudell President Mitchell Baran is listed as one of Oriel's directors. Trudell has invested in earlier rounds.

Oriel, founded in 2001, is a spinoff of technology developed at the University of North Carolina at Chapel Hill. The company's chief executive, Atkins, is the former director of respiratory delivery systems at GlaxoSmithKline.

Niedel is a former colleague of Atkins at GlaxoSmithKline. Before joining New Leaf Ventures, Niedel was GlaxoSmithKline's chief science and technology officer. Typical inhalers use a patient's ability to draw a breath as the way to deliver the drug to the lungs. But Oriel says inhalation alone may not provide the proper dosage, particularly for children and older patients. Oriel's technology applies an electronic signal to drive the delivery of the powder into the lungs. Niedel says a number of drugs currently in development will be inhalable, meaning there's good market potential for the company's products.

Oriel has four U.S. patents on its technology. It has developed a device that delivers a single dose of a drug. A device that would deliver multiple doses is currently in development. A multidose device holds greater prospects for the market, Niedel says.

Reporter e-mail: fvinluan@bizjournals.com.
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