Dec. 20, 2007

State Announces 46 Percent Return on Investment from CardioSpectra

TETF Awardee Acquired for $25 Million

AUSTIN – Gov. Rick Perry today announced the State of Texas received a 46 percent return on its investment, with the potential to receive even more, when Texas Emerging Technology Fund (TETF) awardee CardioSpectra was acquired by Volcano Corporation. The acquisition was finalized December 18. CardioSpectra is the first TETF awardee to provide a cash return on investment.

"Investing in these ground-breaking technologies is higher risk, but it is also higher reward. Today we are seeing the rewards of our investment with CardioSpectra and I believe this is the first of many." said Gov. Perry. "CardioSpectra’s success is proof that the Emerging Technology Fund is ushering potentially life-changing ideas from the university classroom into the marketplace where they can make a difference."

CardioSpectra was awarded $1.35 million from the TETF in May 2006. As a result of the acquisition the TETF received $1.9 million, netting $633,929 for an immediate total realized return of 46 percent. The TETF stands to see an even greater return on investment if CardioSpectra meets a series of milestones set out in the acquisition agreement. "Combining the talent of Texas’ premier research institutions with the skilled and passionate entrepreneurial spirit of the CardioSpectra management team proved to be a winning combination for Texas," said Bill Morrow, TETF chairman. "The commercialization effort has yielded a nice monetary return with potential for more, jobs for Texas, and most importantly, a prime example of the TETF’s purpose, which will inspire other researchers and entrepreneurs to dream big dreams and repeat the cycle."

The TETF supports the need to link institutions of higher education to the emerging technology marketplace, increasing research collaboration between public and private sector entities.

"CardioSpectra’s success brings the best of all of us together demonstrating the effectiveness of the TETF to forge new companies in the global marketplace that commercialize revolutionary discoveries from world-class research on University of Texas System campuses," said Keith McDowell, Vice Chancellor for Research and Technology Transfer for the University of Texas System.

CardioSpectra resulted from collaboration between biomedical engineers at the University of Texas (UT) at Austin and cardiologists from the UT Health Science Center at San Antonio, together with Texas-based medical device industry entrepreneurs. The company developed an Optical Coherence Tomography (OCT) Diagnostic Catheter utilizing telecommunications technology. OCT is intended for vascular and ophthalmologic uses as well as for cancer detection and glucose monitoring for diabetes.

Volcano Corporation develops, manufactures and commercializes a broad array of intravascular ultrasound and functional measurement products designed to enhance the diagnosis and treatment of vascular and structural heart diseases.

In 2005, at the request of the governor, the legislature created the TETF, a $200 million initiative that provides funding for the development and commercialization of new university-tied technologies, and recruiting the best research talent in the world. Matching and commercialization funds coupled with additional federal and outside investments mean new technology is emerging in Texas.