2 Hawai'i biotech firms raise $5.6M

By Sean Hao
Advertiser Staff Writer

Two Hawai'i biotech companies attracted more than $5.6 million in investments last month, aided by the Act 221 technology tax credit program.

'Aiea research company Hawaii Biotech said yesterday it had raised $2.74 million, part of it from New Orleans, La.-based venture capital fund Advantage Capital Partners.

Honolulu-based Hoana Medical, which is developing biosensory monitoring pads for use on hospital beds, closed on $2.9 million in financing.

Both companies still need to raise more money to become profitable.

Act 221, which provides a 100 percent state income tax break for qualifying technology investments, was critical in acquiring the needed capital, said executives for Hawai Biotech and Hoana Medical.

The bulk of new investments came from Hawai'i-based individuals and institutions. Local investment interest can be key in attracting later-stage venture capital funding.

"If nobody loves you in your hometown, who's going to love you?" said Patrick Sullivan, chief executive of Hoana Medical. "It's a good thing — a real show of confidence to get local money into it."

Sullivan said the additional money would be plowed into research and development. Hoana Medical has raised about $8 million so far, he said.

The new investments attracted by Hawaii Biotech will go toward preclinical trial tests of several products, including a vaccine for the West Nile virus, said David Watumull, president and chief executive. Hawaii Biotech is researching a variety of antidotes and vaccines.

"It helps us move things along," he said. "We've had a lot of success with our projects, and hopefully that will continue."

Hawaii Biotech has raised about $8.5 million in the past two years, Watumull said.

Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.