Biotech company back in business

Nearly two years after shutting its doors, Santa Rosa biotech company TriVascular was back in business Monday, thanks to a $65 million infusion of venture capital.

"The good news is we have significant backing now," said Michael Chobotov, one of the company's founders. "We have a long-term horizon."

TriVascular had about 270 employees in Santa Rosa when parent company Boston Scientific Corp. shut it down in a cost-cutting move in June 2006.

TriVascular was developing next-generation technology for repairing abdominal aortic aneurysms, weak spots in arteries that can burst, causing internal bleeding and death. Ruptured aneurysms are a leading cause of death among people over 65.

On Monday, a group of venture capital funds said it was buying TriVascular's technology from Boston Scientific for $30 million and reopening the business at its former headquarters near Charles M. Schulz-Sonoma County Airport.

The investors will pump an additional $35 million into the company to finish developing TriVascular's stent graft system, a process that should take two or three years, according to MPM Capital and New Enterprise Associates Inc., the two venture funds that led the deal.

The investors have reserved another $30 million to pay for clinical trials needed for approval by the U.S. Food and Drug Administration.

The new company will be called TriVascular2. Boston Scientific will retain a minority stake in the business.

The venture funds were attracted to TriVascular's technology because it is an improvement over stent grafts now used to repair aneurysms, said Jim Scopa, managing partner at MPM Capital, which has offices in Boston and South San Francisco.

TriVascular's stent graft is smaller and easier to implant than devices now on the market, so it can be used on a larger number of patients, company officials said.

The market for such technology is expected to top $1 billion by 2010.

"It's one of the larger markets in the medical device space," said Scopa. "We think there's an opportunity for the TriVascular product to penetrate it."

TriVascular also is working on a stent graft to repair thoracic aneurysms.

TriVascular's manufacturing site and equipment already are in place, making the deal even more attractive, Scopa said. The equipment has been wrapped in plastic and crated for almost two years in the vacant building on Brickway Boulevard.

"It wouldn't have been economical to build that facility from ground zero," he said.

There's also a pool of available talent from the North Bay's growing cluster of biotech companies, he said.

Chobotov, the president and CEO, said he expects to have 80 employees by the end of 2008. Two other ex-TriVascular executives, Robert Whirley and Joseph Humphrey, also will return.

"This is a hugely important deal for the county," said Steve Weiss, a Healdsburg biotech investor who served as chairman at TriVascular before it was acquired by Boston Scientific. Biotech companies provide high-paying scientific, engineering, regulatory, marketing and administrative jobs, he said.

TriVascular was Sonoma County's second-largest biotech employer -- after Medtronic -- when it closed in 2006. "They'll eventually grow back to where they were," Weiss said. "They have the potential to be a very significant company."

TriVascular was founded in Sonoma County in 1998 by a group of scientists, engineers and physicians. The company completed its first human implant in 2002.

Boston Scientific, one of the world's largest device makers, paid $45 million for an option to purchase TriVascular in 2002 and acquired it in 2005 for $65 million.

In all, Boston Scientific invested $130 million in TriVascular before closing the Santa Rosa device maker in 2006.

Boston Scientific was forced to trim costs after acquiring Guidant Corp. for $27 billion in a bidding war with Johnson & Johnson.

On Monday, Boston Scientific said it was selling TriVascular as a "non-strategic asset."

The $65 million venture deal also includes investments from Delphi Ventures and Kearny Venture Partners, two firms that funded TriVascular before it was acquired by Boston Scientific.

You can reach Staff Writer Steve Hart at 521-5205 or steve.hart@pressdemocrat.com.