Category Archives: LEDs

Nov. 22, 2002 — Dendritic Nanotechnologies Ltd. (DNT) has named Charles Burke founding chief executive officer.

Burke spent 15 years at Abbott Laboratories, where he created and led a group responsible for developing diagnostic products. He also was CEO of Research Biochemicals Inc., as well as founder and president of Monument Partners Inc.

He will be based in the Michigan laboratories of DNT, a U.S. subsidiary of Australian pharmaceutical nanotechnology firm Starpharma Pooled Development Ltd. The research facilities are located in the Center for Applied Research & Technology at Central Michigan University.

DNT is a leading patent holder in pharmaceutical products from dendrimers, synthetic polymers with branching parts designed as nanoscale vehicles for delivering drugs.

NOV. 21–CAMDEN, NJ–A New Jersey company already under investigation for a listeriosis outbreak is expanding a nationwide recall of chicken and turkey meat to 4.2 million pounds, the Department of Agriculture (USDA) announced today.

Jack Lambersky Poultry Company Inc., of Camden, N.J., is pulling the ready-to-eat meat packaged between May 29 and Nov. 2 because it may be contaminated with listeria, a harmful bacterium. The company, which does business as J.L. Foods, initially recalled 200,000 pounds of the meat on Nov. 2. The products were distributed to stores and institutions across the country.

Federal inspectors are uncertain if the bacterium found in the recalled meat matches the strain linked to the outbreak in the Northeast which sickened 52 people, killing seven and causing three miscarriages.

Investigators still are analyzing a sample taken Nov. 14 from meat sliced and sold at a business in Brooklyn, N.Y., according to the Agriculture Department.

In a statement, the company said that it is cooperating with inspectors to determine where the contamination occurred.

Listeria can cause flu-like symptoms, including fever, muscle aches and diarrhea. It can thrive in low temperatures, tainting refrigerated processed foods, such as sandwich meat and soft cheese. Pregnant women, the elderly, children, and people with weak immune systems are the most vulnerable to infection.

”Consumers should check their refrigerators and freezers for products involved in this recall and return them to the point of purchase,” says Garry L. McKee, administrator for the USDA’s Food Safety and Inspection Service (FSIS).

J.L. Foods is one of two companies so far that have issued recalls in connection with the listeria investigation. Wampler Foods, owned by Pilgrim’s Pride, is the other.

Last month, investigators found a strain of listeria that matched the one blamed for the outbreak in a floor drain at the Wampler Foods plant in Pennsylvania, prompting the company to recall 27 million pounds the largest recall.

Just three months earlier, a recall of 19 million pounds of ground beef from ConAgra Co. (Greeley, CO) due to E. coli contamination had been ranked as the second largest. Inmates at three Colorado prisons had been served the possibly tainted meat, while 28 people had fallen ill in California, Colorado, Michigan, South Dakota, Washington and Wyoming. While many were hospitalized, all were treated and released.

Before the Wampler recall, the largest recall in USDA history was 25 million pounds of ground beef produced by Hudson Foods in 1997. That recall sparked a Congressional effort to increase the number of inspections and tighten safety standards in meat packing plants.

That effort, however, has been successfully blocked by the meat industry, and consumer groups and congressional members often criticize federal agencies for being too soft on the industry.

The J.L. Foods investigation, led by the USDA and Centers for Disease Control and Prevention, is continuing.

McKee and other USDA officials have warned the meat and poultry industry in the past few months that the department will enforce food safety laws to protect public health. Consumers with questions about the recall can call Kenneth Martin, general manager for J.L. Foods Company, at: (800) 881-3250. A list of the pulled products is available on the USDA’s Food Safety and Inspection Service Web site.

Nov. 20, 2002 — Oxford Biosensors Ltd., a developer of medical diagnostic tools based in Kidlington, England, closed a second round of funding for approximately $6 million, according to a news release. The funds were provided by a consortium of international investors led by Mitsui & Co.

The funds will let the company move from product development into manufacturing and commercialization. Specifically, the funds will be used to purchase capital equipment and provide working capital for the company’s manufacturing facility. Oxford Biosensors was founded in 2000 and is a spinout of the University of Oxford.

Nov. 18, 2002 — Quantum Dot Corp. said it has launched its first product based on nanobiotechnology.

The Qdot 605 Streptavidin Conjugate, the first in a planned line of Qdot products, consists of a multilayered semiconductor nanocrystal attached to streptavidin, a specific biomolecule. Applications include cell and tissue analysis for drug discovery, according to a company news release.

Quantum dots brightly light up specific biological events. The nanoscale light-emitting diodes allow rapid, parallel and ultrasensitive detection of biomolecular interactions, and are thought to accelerate and reduce the costs of developing and evaluating drug candidates.

Click here to enlarge image

Nov. 18, 2002 — In general, the federal government has been good to Cepheid Inc. In 1996, the U.S. Department of Defense awarded Cepheid its first contract, a $1.8 million deal to develop DNA-based techniques for detecting biothreats. In 2002, the U.S. Postal Service (USPS) gave Cepheid and its partners $3.7 million to design a prototype anthrax monitoring system for its mail sorting facilities.

Click here to enlarge image

Now the team led by Northrop Grumman Corp. is poised to receive the multimillion-dollar contract to outfit postal sorting facilities with systems that include Cepheid’s automated GeneXpert DNA testing devices. In a conference call announcing the biotech company’s third quarter earnings, Cepheid Chief Executive Officer John Bishop declared it “the system under consideration.”

But Cepheid aspires to be more than a government contractor. It already made inroads in the life sciences market with its Smart Cycler, with nearly 1,000 systems sold since its launch in 2000. It joined Northrop’s partnership in part because the USPS project complements efforts to develop and validate the GeneXpert, said Bishop and Cepheid co-founder and President Kurt Petersen. The automated DNA system is scheduled to be marketed commercially to the diagnostics market in 2003.

Click here to enlarge image

“The company was very focused on government issues and bringing those programs forward,” Bishop said, talking about Cepheid’s early strategies and changes he helped implement since assuming his post in April. “We still have those programs. The difference is we’re going to leverage those programs. Those are not the long-term key strategic focus.”

In 1995, Petersen recognized he could design a fast, portable instrument for detecting traces of pathogens in blood, urine or air samples based on a miniaturized thermal cycler developed at Lawrence Livermore National Laboratory. Cepheid uses the cycler to perform a technique for replicating DNA called polymerase chain reaction (PCR).

PCR is accurate, but getting results can take a day or two because the process requires a skilled technician who must prepare and analyze the sample in a lab. The Smart Cycler cuts that time to 30 minutes, and the GeneXpert automates the process, removing the need for specialists and the possibility of human error.

Elemer Piros, senior biotechnology analyst with the investment and banking firm Rodman & Renshaw Inc., said automating the process should extend Cepheid’s market reach. “Without complete automation, you don’t get to the point of care,” Piros said.

Bishop wants to position the company as a leader in diagnostics and life sciences and look for strategic partnerships for applications where it lacks market expertise such as agriculture and food analysis. In that way, Cepheid should reap the most profits from its versatile technology.

“What we’ve done is move the company right up next to the market, so we will be directly involved with the market and we will realize the higher level of value from those markets,” he said. “That translates to a healthier bottom line and a more controllable bottom line.”

The postal contract, once awarded, will boost Cepheid’s already growing revenues and help reduce losses, Bishop said. Cepheid posted a 51 percent increase in product sales for the first nine months of 2002 compared to 2001 and an increase in revenues of 22 percent. Bishop credited a larger sales force for the gains.

But increased investment in research and development for the GeneXpert and restructuring costs widened the loss for the nine-month period. The company is also plagued with a sluggish stock price, which was around $4 in early November.

The postal contract will bring Cepheid recognition and an opportunity to prove the worth of its technologies, Piros said. “They will have a certificate of endorsement from the most respected bodies — the USPS and other government labs,” he said.

Cepheid’s Smart Cycler and GeneXpert systems use patented disposable cartridges that can be priced according to the application. The postal service, for example, will perform tests periodically in 292 facilities that may hold several of systems, providing a revenue stream beyond the initial sale of the equipment. Piros calculates Cepheid may realize a $7 return per cartridge. Bishop’s strategy is to apply the GeneXpert toward markets that will bear much higher costs.

The postal contract was scheduled to be awarded in September, but hit snarls over liability issues. The logjam will remain until the government approves indemnification of contractors, including Cepheid. The Northrop system is considered the USPS’s top choice. “It’s not an ‘if,’ but a ‘when,'” Piros said.

null

Company file: Cepheid Inc.
(last updated Nov. 18, 2002)

Company
Cepheid Inc.

Ticker symbol
Nasdaq: CPHD

Headquarters
904 Caribbean Drive
Sunnyvale, Calif., 94089

History
Co-founded in 1995 (incorporated March 1996) by Kurt Petersen, Thomas Gutshall, William McMillan.

Industry
Biotech research

Employees
143 (as of the end of 2001)

Revenues
$11.4 million for year ending December 2001

Small tech-related products and services
The company develops DNA-based detection and diagnostics devices used for agent detection and genetic profiling. Cepheid’s flagship product, the Smart Cycler, offers speedy and detailed DNA analysis. GeneXpert is an automated system that extracts and tests DNA taken from blood, spores and other substances. The heart of all the devices is the I-CORE, a module about the size of a deck of cards that quickly replicates DNA and optically measures the results. It uses microfluidic, optical and microelectronic components

Management

  • Thomas L. Gutshall: Co-founder, chairman of the board

  • John L. Bishop: chief executive officer and director

  • Kurt Petersen: president, chief operating officer and director

    • Selected strategic partners and customers

  • In October 2002, Cepheid announced a planned collaboration with Applied Biosystems to develop biodetection reagents.

  • Also in 2002, Cepheid worked with the U.S. Postal Service on a $3.7 million project to develop an anthrax monitoring system.

  • The firm is partnering with the Children’s Medical Center of Dallas and the University of Texas Southwestern Medical Center at Dallas to develop pediatric diagnostic systems, protocols and reagents.

  • In 2001, Cepheid and Environmental Technologies Group Inc. announced a collaboration on development of biological agent detection systems for use in military and security applications.

  • The company picked up a $1.8 million contract with the Department of Defense in 1996 to develop DNA-based biohazard detection systems.

    • Investment history
    Cepheid received approximately $2.5 million in first-round funding during 1997. During the following year, the company garnered a total of over $11 million in two tranches. Shortly after a $19 million third funding round in March 2000, Cepheid took a $30 million June IPO. Key Cepheid investors have included: Advanced Technology Ventures, Medtronic Inc. and Invemed Associates.

    Barriers to market
    Diagnostics equipment can face an extensive regulations and approval process. Additionally, Cepheid may need to license further technologies in order to develop other products.

    Competitors
    Biological agent detection and diagnostics is an increasingly cluttered niche. Key players include:

  • Aclara Biosciences Inc.

  • Affymetrix

  • Amersham Biosciences

  • Applied Biosystems

  • Caliper Technologies Corp.

  • Hoffman-LaRoche Ltd.

  • Nanogen Inc.

  • QIAGEN

    • Goals
    Short-term: Obtain the U.S. Postal Service program; use that to ramp up revenues, decrease losses and drive the company to profitability. On the products side, introduce the GeneXpert and reagents for life science market. Make inroads into the clinical diagnostics market and cancer detection markets. Long-term: Establish Cepheid in the genetic assessment market arena; get the company operating on a profit with a global presence and have some level of infrastructure in place in Europe.

    What keeps them up at night
    “The big issues are getting the product on the market, market adoption rates and driving the company to profitability,” says CEO John Bishop. “The markets are not accepting pie-in-the-sky promises. We’re back to basics. What are the markets, what are the products and what are the profits coming forward? So basically we’re looking at a business that is going to need to be profitable and generating solid profits on an ongoing basis.”

    Selected patents

  • Integrated fluid manipulation cartridge

  • Non-planar microstructures for manipulation of fluid samples

    • Recent news and publications
    Small Times magazine business leader of the year
    Cepheid reports sales, revenue increases

    Contact

  • URL: www.cepheid.com

  • Phone: 408-541-4191

  • Fax: 408-541-4192

    • — Research by Gretchen McNeely

    Click here to enlarge image

    Nov. 15, 2002 — How fully nanotechnology realizes its business potential will in large part hinge on the industry’s ability to accurately test and measure its products, experts say.

    Click here to enlarge image

    Investment won’t flow in and companies won’t trust their mission-critical procedures to nanotechnology unless the test and measure dragon is slain. Gauging dimensions, thermal properties, conductivity, strength and other elements is key in creating “manufacturability,” or the ability to create a duplicate object on an ongoing basis.

    Click here to enlarge image

    Progress appears mixed. In general, experts agree that testing of solids is far ahead of fluids. “If you are talking about hard materials, we’ve almost got the problem licked,” said Tom Wyrobek, president of Hysitron Inc., a Minneapolis-based manufacturer of hard surface testing equipment. “If you are talking about biological apps, soft materials, that’s just starting.”

    Click here to enlarge image

    Testing of solids is ahead because they tend to be less influenced by their environment and are therefore easier to isolate and measure. On the business side, the most successful nanolevel endeavor to date — semiconductors — is a solid. This means that an effective test and measurement industry regime has been developed for hard materials.

    “Semiconductors are definitely leading the parade right now,” said Doug Jamison, a vice president with Harris & Harris Group Inc., a New York-based venture capital company that invests in small tech. “They have been around longer, the technology is more mature.”

    But test and measurement researchers are beginning to face a major challenge: There’s a limit on the number of dimensions that can be measured repeatedly.

    Terry Michalske, director of the Center for Integrated Nanotechnologies (CINT), a joint project of Los Alamos and Sandia national laboratories, said that during the past five to seven years development of the scanning tunneling microscope has greatly enhanced the ability to measure width and height of nanostructures.

    The next step, he said, will be to test and measure in three dimensions. This will be difficult, but necessary to mass-produce potentially valuable things such as carbon nanotubes, he said. “It’s easy to scan a needle across a flat surface,” he said. “Think about scanning around the circumference of a carbon nanotube. I think it will require a new technology… I think it is a major challenge.” Wyrobek said that Hysitron offers three-dimensional testing techniques.

    An example of practical test applications, Wyrobek said, will occur when Armstrong World Industries Inc. places Hysitron’s nanoindentation tools in its floor tiles to test functionality and product life. Wyrobek, citing a nondisclosure agreement with Armstrong, would not say when the tests will take place. Currently, the company has a somewhat less sophisticated means of gauging these important qualities: It puts new floor tile in the company cafeteria and examines them after six months of scuffs and spilled soups.

    Hysitron offers the TriboIndenter, which measures mechanical properties such as the hardness and viscoelasticity of solids. It has sold TriboIndentors, which run about $250,000 each, to IBM Corp., Eastman Kodak Co., Dow Chemical Co., Xerox Corp., 3M, Intel Corp. and Gillette Co. Its gear is also at Sandia, Lawrence Livermore National Laboratory, NASA, Los Alamos National Laboratory, Argonne National Laboratory and elsewhere. A key player in the MEMS test and measurement arena is Etec Inc. The company, which specializes in testing how MEMS products perform, offers three main product families: The M/SteP-I series tests and calibrates inertial MEMS, the M/SteP-p series tests and calibrates pressure MEMS and the M/SteP-o series tests and calibrates optical MEMS, says Mark Ford, the company’s president. He would not say how much the products costs.

    A big question now is not only how long it will be before venture capitalists start seriously seeding nanotechnology companies, but also what role test and measurement will play in their decisions.

    Harris & Harris’s Jamison said that most VCs fund on the expectation of getting a payback within one to three years. A longer timeframe may just be too speculative. That’s why a predominant amount of money has flowed to revenue-producing semiconductor manufacturers. It is an established industry with a technological roadmap and established test and measurement procedures.

    Test and measurement of nanotechnology will become increasingly important during the next few years, experts indicate. “I think people realize that testing is critical,” Jamison said. “I think for an investment standpoint companies are realizing it on the hard side. On the soft side, I don’t think anyone has that answer yet.”

    BioTrove nets $5.25 million


    November 12, 2002

    Nov. 12, 2002 — BioTrove Inc., a Cambridge, Mass.-based developer of drug discovery tools, announced $5.25 million in second round financing. Catalyst Health and Technology Partners led the round. CB Health Ventures, Zero Stage Capital and BioFrontier Partners also participated. All are new investors in BioTrove.

    The 21-person company previously received funding from Pfizer Inc. in January, 2001, which BioTrove President and CEO Colin Brenan said constituted the company’s first round financing. The terms and amount of the Pfizer investment were not disclosed. In June, 2001, BioTrove received a NIST ATP grant for a little under $2 million over two years. BioTrove began operations in October 2000.

    Brenan said the company intends to hire “a few senior-level people” on both the technology and the business side and it will seek space outside of the area it is leasing from Pfizer. Goals also include increasing the customer base for the company’s two product platforms — Living Chip and Lab-on-a-Tape. Brenan said the funding would be sufficient for at least the next 18 months.

    Click here to enlarge image

    Nov. 11, 2002 — In 1994, Mike Jamiolkowski went to the first Commercialization of Micro Systems conference in Banff, Alberta. He had first heard the word MEMS only the year before.

    Fascinated by the technology, he came home and incorporated Microcosm Technologies Inc. to develop MEMS design software.

    Eight years later, the Cary, N.C.-based company now known as Coventor Inc. is getting ready for a December unveiling of its latest major software release, CoventorWare2003. Jamiolkowski is the company’s president and chief executive.

    Click here to enlarge image

    In the intervening years, Coventor has had its share of ups and downs. At first, it evolved into much more than a software company. Coventor’s business plan grew to include providing design consultation services and support. Sensing an opportunity to generate a set of building block designs, Coventor set up three business units specifically charged with generating IP when it collaborates on a design with customers: optical, biotechnology and RF (radio frequency) MEMS. Coventor began acting as an intermediary between product companies and various foundries.

    In January, 2001, the company changed its name from Microcosm to Coventor — short for co-inventor — to reflect the broadened business plan. Then the optical bubble popped.

    “We had a tremendous amount of business in optical,” Jamiolkowski said. “Unfortunately, some of those large companies have cut back and their expenditures have slowed down.” Smaller companies, he said, have likewise cut back or gone out of business altogether.

    “That led to a reassessment of where we should be investing our energy and capital,” said Prat Kumar, vice president of marketing. “We decided that we will not proactively invest in optical telecom and decided to freeze the investments for the time being in that area.”

    Today, Coventor has regrouped around its software and its RF MEMS unit. It has scaled back to about 50 employees from a one-time height of more than 100. The biotech unit has been spun off as Teragenics Inc., an eight-person company Coventor is currently incubating.

    Coventor is investing in RF MEMS — or wireless — development and is shipping platform design samples. “We feel RF MEMS is at a critical stage of customer interest,” Jamiolkowski said, adding that more than 25 companies have expressed interest in its RF work. He added Coventor is looking at options to make RF MEMS “successful on its own” and that such options “could be as significant as the Teragenics announcement.”

    Kumar was more explicit about RF MEMS. He said that Coventor would like to continue maturing the group’s intellectual property to the point where, if desired, the division could be spun off. RF MEMS have applications in mobile phones and other types of communications equipment.

    For now, however, the result of these efforts is to, “help us focus more on our core competency,” Jamiolkowski said. That is, software. Jamiolkowski said the software unit, if considered by itself, would be profitable.

    According to Kumar, the upcoming CoventorWare2003 will offer six to 10 times faster operation for some applications while using less memory. It will provide a more seamless flow between various tools, and will have a number of new tools and capabilities. The company uses an annual licensing model with licensing terms of 1-3 years, or even longer. Approximately 10 to 15 percent of customers still use a perpetual license.

    MEMS design consultant William Trimmer was a Coventor customer during a recent stint as chief technology officer for Standard MEMS Inc., which filed for bankruptcy protection recently. He said Coventor software’s strength is in the flexibility of approaches it makes available to designers.

    “MEMS involve the simultaneous design of mechanics and kinematics and electrostatics and fluidics,” he said. “Some problems are solved more easily with one approach and others with a different approach.” Trimmer started a micromechanics and MEMS research program at Bell Labs in the 1980s and has authored many papers in the field. In MEMS, Trimmer said, it’s important to do as much work in software as possible in order to predict — and avoid — problems during fabrication.

    Stephen Bart, an independent MEMS consultant and a former director of core technology development at Coventor, said the success of the software company is pegged to the overall success of MEMS. “When your product is software, you’re relying on, you’re betting on, the growth of the industry,” he said. “The whole thing about software is scaling. If you can’t get the number of seats up, you can’t make a viable business out of it. The only way to do that is to have a big enough market.”

    As for the size of future markets for MEMS, unfortunately no software can predict that.

    null

    Company file: Coventor Inc.
    (last updated Nov. 11, 2002)

    Company
    Coventor Inc.

    Headquarters
    4001 Weston Parkway
    Cary, N.C. 27513

    History
    Coventor was incorporated (as Microcosm Technologies) in January 1996. The name changed in January 2001 to reflect the company’s collaboration (“co-inventor”) with clients. Coventor later spun off Teragenics, an eight-person biotech and microfluidics unit. The company is now focusing on its software and RF MEMS divisions, with another potential spinoff in the works.

    Industry
    Technical design software and platform development

    Employees
    50

    Small tech-related products and services

  • MEMS/microfluidics design software suite, CoventorWare2003, which will be released in December.

  • MEMS development platforms, which act as “building blocks” for development of many MEMS-based devices, especially RF MEMS.

  • Coventor Catalyst, a toolkit used with clients’ existing MEMS manufacturing process.

    Management

  • Mike Jamiolkowski: president and chief executive officer

  • David H. Cook II: vice president, worldwide sales

  • Stephen R. Breit: vice president, product development

  • Prat Kumar: vice president, marketing

    • Investment history
    According to VentureSource, Coventor picked up $1.5 million in first round funding in fall 1996. It followed up with $4.75 million in fall 1998 and a corporate round for an undisclosed amount the next year. In spring 2000, Coventor garnered $20 million in a private placement, as well as an undisclosed amount in a later round during the spring of 2001. Besides individual investors and North Carolina Enterprise Fund (which led the initial round), key investors have included Intel Corp., J.&W. Seligman, Needham Capital Partners and Telos Venture Partners. In the early years, the Defense Advanced Research Projects Agency and the National Institute of Standards and Technology contributed about $5million.

    Barriers
    Growth of the MEMS design software industry naturally depends on the growth of the MEMS industry itself.

    Competitors

  • Corning Intellisense

  • MEMSCAP S.A.

  • Ansys Inc.

  • CFD Research Corp.

    • Why they’re in small tech
    “In the early 1990s, we recognized the potential of small tech to revolutionize and enable new technologies and believed our expertise could only lead to success in that marketplace,” said Gail Massari, senior manager, marketing communications.

    Goals
    “To be the premier provider of software for designing MEMS and integrating MEMS into systems to provide first-pass silicon success. We want the name Coventor to be synonymous with MEMS, for ‘Coventor Inside’ to be as powerful a message as ‘Intel Inside’.

    Contact

  • URL: www.coventor.com

  • Phone: 919-854-7500

    • Recent news
    Coventor spins off biotech unit
    Coventor introduces switch family for rapid MEMS integration

    — Research by Gretchen McNeely

    Nov. 7, 2002 — Dalsa Corp., a Waterloo, Ontario-based provider of semiconductor and electronic components in MEMS and other technology areas, announced a deal to raise (U.S.) $20.6 million (CDN $32 million) according to a news release. The proceeds are intended to reduce debt to enable the company to consider investments or acquisitions, the release said.

    Under the deal, a syndicate led by Yorkton Securities Inc. will purchase 2 million shares of common stock from the company, its chairman and chief executive Savvas Chamberlain and companies controlled by Chamberlain, at $10.3 (CDN $16) per share. Yorkton will also have the option to acquire up to 300,000 additional shares.

    Dalsa recently reported third quarter income of $2.4 million (CDN $3.7 million), versus about $700,000 (CDN $1.1 million) for the year-earlier period. Revenues were $20.4 million (CDN$31.7 million), versus $9.3 million (CDN $14.4 million) for the third quarter of 2001.

    Shares in Dalsa, which trade on the Toronto Stock Exchange and are not available to U.S. investors, closed up 5 percent at (CDN) $17.65 Wednesday.

    Click here to enlarge image

    BILLERICA, Mass., Nov. 4, 2002 — You can say that Continuum Photonics Inc. has bounced from one idea to another.

    The company was founded in 1998 as a product development shop, making vibration-dampening equipment for the aerospace and defense industries. Then came a foray into athletics: Continuum designed a chipset that went into tennis rackets, sold by Head NV, that helps absorb the shock of a ball.

    Up next: the risky business of telecommunications.

    Click here to enlarge image

    Continuum is using its experience in materials science to develop a “smart ceramic” switching component for optical networks. While executives are tight-lipped about the particulars, they say it will use MEMS to cut signal loss dramatically. They’re aiming for customers such as Lucent Technologies, Cisco Systems Inc. or Nortel Networks Corp., which would resell the gear to telecom carriers eager to cut their signal-regeneration costs.

    Despite skepticism from some corners of the telecom industry, the idea has gained attention. Continuum raised $14 million in venture capital in early July from Harris & Harris Group Inc., Flagship Ventures, Arcadian Venture Partners and others. It also pulls in revenues of several million dollars a year, thanks to licensing deals such as the Head project. The company has 42 employees.

    Continuum calls its technology DirectLight SmartSilicon. It uses lead zicronate titanate as the ceramic substrate, which can expand or shrink as electric charges are supplied. Embedded silicon MEMS devices do the grunt work of sending signals along the network, and the result is an optical component that allows far less signal loss than today’s networks, according to the company.

    Aaron Bent, the company’s executive vice president, said Continuum demonstrated the technology to potential customers at an industry tradeshow in March. He said the company has some demonstration units now, and hopes to be ready for manufacture by early 2003. Continuum already has an agreement with Applied MEMS Inc. of Stafford, Texas, to make its micromachined components.

    The idea of smart ceramics is not entirely new. Researchers first studied the concept in the 1990s, believing that piezoelectric ceramics could use changes in electrical fields to control the ceramic structure’s function. But early research found that most such ceramics were too brittle to be useful.

    Nesbitt Hagood, Continuum’s chief technology officer, said Continuum’s MEMS approach solves that problem and allows for a “stiff” signal actuator. Continuum says the resulting signal loss is only 1 decibel; other technologies can be in the range of 7 decibels.

    Harry Tuller, a professor at the Massachusetts Institute of Technology who studies piezoelectric ceramics, said the hurdle for a technology like Continuum’s is to ensure that the ceramic materials work on a silicon platform. Otherwise, physical forces acting on the structure can warp the parts.

    “Most of the challenge … is the integration of a ceramic technology onto a film technology,” he said.

    Continuum will also face the usual manufacturing worries about stiction, aging effects and inconsistencies among each batch of switches made, Tuller added. “Can you reproduce it in batch manufacturing? That’s the key.”

    Continuum’s investors believe the company can solve those problems and create a product useful in the telecom world even in today’s awful industry climate. Steve Ricci, an investor with OneLiberty Ventures who is on Continuum’s board of advisers, said enough demand exists even now to generate some revenue — not much, but sufficient for a small shop like Continuum.

    Ricci also said the management team’s record of creating real products eases an investor’s worried mind. “The creativity and tenacity of the people were encouraging,” he said. “They really demonstrate what it takes to make a product. That gave comfort.”

    null

    Company file: Continuum Photonics Inc.
    (last updated Nov. 4, 2002)

    Company
    Continuum Photonics Inc.

    Headquarters
    5 Fortune Drive
    Billerica, Mass., 01821

    History
    Several MIT engineers founded Continuum in the summer of 1998 to develop vibration-dampening applications for the aerospace and defense industries. The company later developed an energy-absorbing chipset for tennis rackets, and has now moved into the telecom sphere, building subsystems for optical networking original equipment manufacturers.

    Industry
    Fiber optics; photonics

    Employees
    42

    Small tech-related products and services
    Continuum is developing a MEMS-based ceramic optical switch designed to reduce signal loss. The switch would be marketed to telecom giants such as Cisco, Nortel and Lucent. To develop this switch, Continuum is using proprietary DirectLight SmartSilicon technology, bringing together “smart” materials, microfabrication techniques and low-loss, redundant electronics.

    Management

  • Jeffrey Farmer: chief executive officer

  • Aaron Bent: executive vice president of business development

  • Nesbitt Hagood: chief technology officer

    • Selected strategic partners and customers

  • Tennis racket maker Head NV (chipset customer)

  • Applied MEMS (fabrication partner)

    • Revenue
    Continuum says it brings in several million dollars a year due mainly to licensing arrangements such as the Head relationship. According to VentureSource (a VentureOne client publication), the company earned $2 million in revenues during 2000 and $6 million during 2001.

    Investment history
    Self-funded for over two years, Continuum closed a $1.7 million seed round in the fall of 2000. That round was led by the Massachusetts Technology Development Corp. and included private investors as well as Arcadian Capital Management and Gainesborough LLC. In May 2002, the company garnered $14.2 million in funding from its original investors and new participants Harris & Harris Group, Flagship Ventures and Prism Venture Partners (the latter two firms co-led the round).

    Barriers to market
    The telecom market remains in a major slump.

    Selected competitors

  • Agere Systems Inc.

  • Alcatel

  • Tellium Inc.

    • Goals
    Short-term: Develop a final model ready for mass-manufacture by 2003. Long-term: Sell the switch to vendors such as Lucent, Cisco Systems and Nortel.

    Why they’re in small tech
    “There’s a certain function we want to do, that you can’t do any other way,” said Nesbitt Hagood, chief technology officer. “We’d love to try other technology, but you need MEMS to do this.”

    What keeps them up at night
    “The market conditions,” said Aaron Bent, executive vice president. “How quickly will carriers start spending on next-generation technology?”

    Contact

  • URL: www.continuumphotonics.com

  • Phone: 978-670-4910

  • Fax: 978-670-4915

  • E-mail: [email protected]

    • Selected relevant patent
    Composites for structural control

    Recent news
    Continuum Photonics raises over $14 million in second round of financing
    Applied MEMS to develop Continuum’s switches

    — Research by Gretchen McNeely