Success Story - Sphinx Pharmaceuticals
Although today it is recognized as a leading region for biotechnology development, the Research Triangle had few life science success stories to point to in the late 1980s. Local universities were just becoming comfortable with the idea that technology transfer could work in North Carolina and few investors were able to provide critical funding for capital-intensive bio companies. In addition, the region was just beginning to nurture an entrepreneurial climate leaving the comfort and security of academia or a big corporation for a high-risk venture just wasn't done.
The regions current industry prominence owes much to Sphinx Pharmaceuticals. Created with technology spun out of Duke University (the university's first biotechnology tech transfer), Sphinx founders Dr. Bob Bell and Dr. Carson Loomis were introduced to Intersouth and received extra assistance from the firm. Intersouth provided seed funding for the company and incubated Sphinx in the Intersouth office. Intersouth partner Dennis Dougherty assisted the company with its business plan, helping the scientific founders translate science to business.
After finishing the business plan, the company was able to secure a first round of institutional funding, led by Intersouth, who remained the single largest investor up to the company's exit. The company continued to grow through 1991 and soon realized that its window of opportunity for a successful exit via initial public offering could be closing. The company filed for its IPO in 1992 the first public offering of a biotechnology company in North Carolina and the largest public offering of any company in North Carolina and any biotechnology company in the United States up to that point. Sphinx hit the window at an optimal time, allowing it to raise more money at a higher price than expected a public offering of $75 million at $15 per share.
More importantly, the company created a culture of entrepreneurship among its founders and at its founding institution. Sphinx founders subsequently went on to help found other North Carolina companies, including Norak Bioscience, InterCardia (NASDAQ: ICRA), Nuada Pharmaceuticals, Pozen (NASDAQ: POZN) , Inspire Pharmaceuticals (NASDAQ: POZN) and SARCO (NASDAQ: PPDI). To date, almost 30 North Carolina biotechnology companies have been founded out of relationships created by Sphinx Pharmaceuticals.
Scientific founder Bob Bell believes that working at Sphinx gave him an opportunity to learn about the business side of science. "Learning about business and sitting on the board of Sphinx gave me the courage to go off to Glaxo," said Bell, who left Sphinx when it was acquired by Eli Lilly and Company in 1994, and served as Vice President of Research at Glaxo Wellcome. "It's very gratifying to know that the Research Triangle is among the top five places in the world for biotechnology largely because of Sphinx and Intersouth Partners."