Monday, December 12, 2005

Nanotechnology

No small feat: Bay State leads nation in nanotech

By Dyke Hendrickson

Officials of a startup nanotechnology firm have landed seed funding to develop a "nanoproduct" to replace hard chromium, a substance that soon could be legislated out of commercial use.

The Cambridge company, Xtalic Corp., reflects a new trend: Startups are taking nanotechnology out of the laboratory and into the commercial arena. Though nanotech has been hampered by the perception - and often the reality - that it is a broad science with few functioning companies, industry observers say 2006 will be the year when startup companies actually get out of the gate.

"Massachusetts is the No. 1 market in nanotechnology, and we are starting to see the new companies," said Jeffrey Crown, who heads the Massachusetts Nanotechnology Exchange, a nonprofit organization set up last year. "Many investors are seeing the future, and that means the small companies will develop."

An investor event designed to showcase new companies last week drew a capacity audience, many of them venture capitalists.

New York-based nanotechnology research firm Lux Research recently ranked Massachusetts No. 1 in the nation for economic development from nanotechnology. The Bay State is followed closely by California and Illinois, with Colorado and Connecticut rounding out the top five, according to Lux.

Michael Holman, a research analyst with Lux, said states were ranked on a variety of categories, including state funding, patents, papers, private companies and the capability to develop a startup to a prosperous corporation (See related chart with metrics showing how the top five states ranked in individual categories, below.).

Xtalic is one promising Hub firm, launched by two MIT researchers who licensed patents from that university, that is in a funding search mode. Xtalic last week closed on a seed round of $600,000, and is already seeking another round to continue its work.

"The hard chromium industry is facing environmental regulations that will alter the structure of the industry," said Christopher Schuh, Xtalic's co-founder and chief scientist. "Most of us know chromium from being a decorative element of cars, but it is much broader than that. Our goal is to commercialize a new metal-coating technology based on nanostructured alloys."

Several large corporations have expressed interest in becoming early adopters, Schuh said.

Schuh is an associate professor of metallurgy at MIT. Co-founder Alan Lund was a researcher at MIT before leaving to take the post of president at Xtalic.

The company, which employs three, is seeking a Series A round of $3 million to $5 million by June, said Schuh.

Coming of age Nanotechnology, of course, is a term that has been in the vernacular for several decades. Industry analysts define it as "the purposeful engineering of matter at scales of less than 100 nanometers to achieve size-dependent properties and functions."

Nanoparticles already exist in computer drives, catalytic converters, inks, and stain-free clothing, among other items. Examples of future use include medical diagnostic tools, advanced drug delivery systems, sensors for airborne toxins and highly efficient materials.

"This discipline is maturing as the technology is now at a point where people can see real products and real applications - not just interesting results at the lab bench," said Abigail Barrow, who heads the Massachusetts Technology Transfer Center in Boston.

Another reason for nanotechnology's coming of age is increased support from the federal government.

In recent months, Harvard, Northeastern, Boston universities, MIT and the University of Massachusetts have been among research universities that will share close to $50 million in grants to encourage nanotechnology over the next five years.

Nationwide, the federal R&D outlay will be $1 billion in 2005, according to Phillip Lippel, an assistant director at the National Nanotechnology Coordination Office. The National Science Foundation has projected that by 2015, the global impact of nanotechnology will top $1 trillion, according to Gradient Corp., a local risk science and application company.

Naming nanotechs There are a number of other new nanotech companies hitting the road to find funds so they can ramp up the research and get closer to commercialization. In Boylston, Active Surface Technologies Inc. plans to commercialize breakthroughs in the fabrication of thin films developed at Worcester Polytechnic Institute. Executives say that medical devices will be the company's primary initial focus. It is seeking up to $1 million for its seed round.

Advanced Conductors Inc. in Cambridge is developing bendable ceramic films that replace brittle glass layers in displays, solar cells and solid-state lighting. It will enable flexible flat-panel devices for conventional products, such as LCD screens.

The company, headed by MIT doctoral student John Lock, recently received an innovation grant from the Deshpande Institute in Cambridge. It is seeking $500,000 to develop the science.

Meanwhile, ExQor Technologies Inc., based in Boston, is an early-stage biotech startup developing drug-delivery systems for mental health. Its patent-pending nanotechnology employs proteins as the transport delivery system, officials said. The company, which is on the market seeking $12 million, has four patents pending.

On Cape Cod, MassCal Corp. has developed a device that measures chemical reactions in coatings. Officials say that MassCal's tools can solve problems during the development and manufacture of high-value chemical systems used as thin films or coatings. Founder Allan Smith said that companies have shown an interest, including DuPont Corp. He is seeking $1.3 million and a full-time chief executive. The Chatham-based company is affiliated with the University of Massachusetts at Dartmouth.

Evolved Nanomaterial Sciences Inc. in Cambridge is affiliated with Tufts University, and proposes to develop a 3-D filter that replaces engineered process steps in chiral separations technology.

The technology permits the creation of improved medications, company officials say.

And LumArray, an MIT-affiliated company, is a photolithography company that is looking to develop and sell "nanopatterning equipment" to handle new processes for the lithography industry. LumArray is based in Somerville.