| LOS ANGELES, April 24
LOS ANGELES, April 24 The swine flu outbreak is
likely to benefit one of the most prolific and successful
venture capital firms in the United States: Kleiner Perkins
Caufield & Byers, Thomson Reuters Private Equity Week reported
Shares of the two public companies in the firm's portfolio
of eight Pandemic and Bio Defense companies -- BioCryst
Pharmaceuticals (BCRX.O) and Novavax (NVAX.O) -- jumped Friday
on news that the swine flu killed a reported 60 people in
Mexico and has infected people in the United States.
The World Health Organization said the virus appears to be
susceptible to Roche's ROG.VX flu drug Tamiflu, also known as
oseltamivir, but not to older flu drugs such as amantadine.
Shares of Swiss drugmaker Roche Holding AG closed up 3.48
percent after falling sharply earlier in the week on a cancer
drug disappointment, while shares of U.S. biotechnology company
Gilead Sciences Inc (GILD.O), which gets royalties from Roche
on Tamiflu sales, slipped 10 cents to $45.80 on Friday.
But BioCryst, a maker of drugs that block key enzymes in
viral diseases, jumped more than 26 percent on Friday to $2.21
per share. Viral vaccine maker Novavax rose more than 75
percent to $1.42 per share.
BioCryst CEO John Stonehouse said his company does not
anticipate the use of its technology in treating this episode
of swine flu.
"We're in clinical trials right now and not on the market,"
Still, the companies will have to go even higher for
Kleiner Perkins to make its investment back. Both BioCryst and
Novavax experienced long drops from price peaks in 2006, when
reports of avian flu dominated headlines.
BioCryst is down nearly 90 percent from its 2006 high of
$20.75 per share and Novavax is down more than 85 percent from
a high of $7.98 per share.
Kleiner Perkins invested $30 million in BioCryst in
December 2005 alongside Fort Worth, Texas-based buyout firm
TPG. The two firms invested again in August 2007, picking up
$65 million worth of shares and warrants. The investors bought
shares in BioCryst at $13.46 and then $7.80.
Kleiner Perkins put $20 million in Novavax in February 2006
alongside Palo Alto, Calif.-based Prospect Venture Partners.
The two firms picked up the shares at $4.35.
Novavax can produce a vaccine from an emergent strain of
flu virus in 12 weeks, according to CEO Rahul Singhvi. The
company has contacted the U.S. Centers for Disease Control and
Prevention to offer help and is trying to contact the Ministry
of Health in Mexico, Singhvi said.
The company uses genetic information and "recombinant,
virus-like particle technology" to rapidly engineer a vaccine.
Its technology has been proven to work in humans during Phase
II trials, Singhvi said, and it might be used in the case of an
"There is an emergency authorization avenue that is
available that would allow us to use the vaccine in an
emergency without further testing," said Singhvi.
Kleiner Perkins typically only invests in early stage
start-up technologies. It is best known for its investments in
Netscape, Amazon.com (AMZN.O), Google (GOOG.O) and Genentech
The Menlo Park, California-based VC firm launched a $200
million Pandemic Bio Defense fund in 2006 to invest in
technology companies working on drugs, diagnostics and
inoculations against flu-like diseases.
"We will invest to accelerate innovation, and we're in a
hurry," Investor John Doerr said at the time. "We hope even a
mild pandemic never recurs."
Investors at Kleiner Perkins were not immediately available
The firm's other Pandemic Bio Defense investments include:
* San Francisco-based Anza Therapeutics, which is working on
therapeutic vaccines for treating certain types of cancer and
* Fremont, Calif.-based Breathe Technologies, which is working
on lightweight respiratory ventilator systems.
* Emeryville, Calif.-based HX Diagnostics, which is working to
make diagnostic tools for seasonal and emerging diseases.
* Pleasanton, Calif.-based Juvaris BioTherapeutics Inc., which
is working on vaccines and immunotherapeutics to treat
infectious disease and cancer.
* San Diego-based Trius Therapeutics, which is developing drugs
to fight resistant-strains of bacteria.
* Marlborough, Mass.-based Xcellerex Inc., which has developed
tools and manufacturing processes to speed the deployment of