Report: R.I. 33rd in nation for venture-capital investment in 1Q, IlluminOss received $5M

MANNY AVILA is president and CEO of IlluminOss Medical, the developer of a first-of-its-kind repair system for bones that uses a light-cured polymer to fill gaps and give much faster strength to broken bones than traditional methods of repair. IlluminOss received $5 million in venture capital investment in the first quarter, according to The MoneyTree Report.  / COURTESY ILLUMINOSS MEDICAL
MANNY AVILA is president and CEO of IlluminOss Medical, the developer of a first-of-its-kind repair system for bones that uses a light-cured polymer to fill gaps and give much faster strength to broken bones than traditional methods of repair. IlluminOss received $5 million in venture capital investment in the first quarter, according to The MoneyTree Report. / COURTESY ILLUMINOSS MEDICAL

EAST PROVIDENCE – Rhode Island ranked 33rd in the nation for venture-capital investment in the first quarter, which featured only one deal – $5 million to IlluminOss Medical Inc.
The state also ranked 36th for its number of deals, according to The MoneyTree Report from PriceWaterhouseCoopers LLP and the National Venture Capital Association released Friday.
IlluminOss, a later-stage medical-device company, has raised in excess of $50 million to date, according to Richard G. Horan, managing director of the Slater Technology Fund, which has invested $500,000 in the company.
Horan described IlluminOss as “one of Rhode Island’s most promising companies in the biotech sector.”

Manny Avila, president and CEO of IlluminOss, said the $5 million will be used to continue the company’s clinical trial efforts, proceed with U.S. approval of its IlluminOss System, and advance its commercialization efforts in Europe, where the IlluminOss system is already approved for patient use.

While The MoneyTree Report said the investors were undisclosed, a Securities and Exchange Commission filing showed that the company authorized an offering of up to $25 million of its series AA shares, and that approximately $5 million was issued to existing investors, such as Tekla Capital Investment, Life Sciences Partners BV and Sr One Ltd. Horan said Slater also was one of the investors.

The company said in September that its first patient at Rhode Island Hospital was successfully treated as part of its Lightfix clinical trial.
“The first U.S. clinical trial is proceeding as expected so far and we anticipate a limited U.S. launch in early 2017, assuming we stay on the current trajectory,” Avila said.
The IlluminOss system allows surgeons to create a first-of-its-kind patient-conforming implant that provides almost instant internal support of bones affected by cancer. Fractures are repaired utilizing a light-curable polymer, contained within a balloon catheter, the company explained.
Using data provided by Thomson Reuters, the first quarter report showed that nationwide, $12.1 billion in venture capital was invested in 969 deals.
The report said that compared with first quarter 2015, dollars and deals are each down 11 percent. However, first quarter 2016 marked the ninth consecutive quarter where more than $10 billion in venture capital was invested in a single quarter.

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“The first quarter appears to tell us that investors still have faith in the venture ecosystem,” Tom Ciccolella, U.S. Venture Capital Market Leader at PwC, said in a statement. “However, the increase in expansion and later-stage financing, combined with the drop in first-time financing, suggests a shift towards relatively mature startups.”
Ciccolella, in a telephone interview, said it is not unusual for Rhode Island to have only one venture-capital deal during a quarter.
According to the report, California held the top spot in terms of venture-capital deals and investment, while New York was second for deals, and Massachusetts was second for investment. Massachusetts was third for deals and New York was third for investment.
The software industry continues to receive the highest level of funding of all industries, receiving $5.1 billion for 376 deals in the quarter. Half of the top 10 megadeals – investments of $100 million or more – were in the software industry. The biotechnology industry received the second-largest amount of venture capital for the quarter, with $118 million going into 118 deals.

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