VC-backed plastics company raises $7M more

The nice thing about plastics is that once you have a technological breakthrough, the opportunities for applications in a wide range of industries can be overwhelming.

That’s been the healthy problem experienced by Liquidia Technologies, which recently raised a $7 million Series C round of funding round led by Canaan Partners. The investment brings its total amount of funding raised to $40 million, according to regulatory documents. Other investors include Pappas Ventures, New Enterprise Associates, Wakefield Group and Firelake Capital.

Liquidia has developed a process for creating nano-scale patterns on polymer films. The company calls its innovation PRINT (which stands for Pattern Replication In Non-wetting Templates) and uses the technology to develop a type of plastic known as fluoropolymers.

“We believe that our liquid fluoropolymers provide an important solution to a whole host of problems,” says inventor and company founder Joseph DeSimone.

He’s not kidding. The company is providing printed polymers for everything from cleantech to biotech.

For example, DeSimone says that the company’s PRINT technology can help improve light management and efficiency on photovoltaic cells. It can also be used in the delivery mechanisms for drugs. It can enhance flat panel TV screens by creating anti-reflective screens and brightness enhancement filters that are lighter and thinner than those currently in use. And Liquidia is able to print plastic films with tiny indentations that can be used to mold particles.

“What we had here was a lot of great opportunities to sift through to determine where the sweet spots were,” says Neal Fowler, who was hired as CEO of the company in March 2008.

“We had a lot of academic experiments underway, but we had to have something commercial come out of it,” adds Fowler, who most recently ran Centocor, a subsidiary of Johnson & Johnson.

His hiring helped cement Liquidia’s evolving focus on life sciences. Focus was something that Liquidia had to have more of before it could raise its most recent round of financing. Canaan had been following founder DeSimone’s work for several years and wanted to work with Liquidia, if only it would get more excited about life sciences, where the firm felt its PRINT innovation could make a big difference.

“Once Neal came in, the company continued its shift in emphasis to life sciences,” says Canaan General Partner Stephen Bloch. “The technology is important for life sciences, particularly around those high-value areas where size and shape of molding particles makes a difference.”

Bloch says that Liquidia’s work is so groundbreaking, large companies are clamoring to collaborate. Early this year, Liquidia signed a deal with Abbott to license some of its PRINT technology for work in delivering specific drugs. “This company has more early corporate interest than anything we’re involved with,” says Bloch.

Meanwhile, as Liquidia focuses on pharmaceutical applications of its polymer technology, it is also weighing what to do with its materials science operations.

The company’s executives aren’t anxious to jettison the work the team has done on films to enhance solar panels or make LCD screens brighter. These are big markets, Fowler says.

“A lot of nano-companies are out there, but scale is a real big challenge,” he says. “We’ve de-risked that in a great way and spent a lot of effort on manufacturing.”

It takes a long time to work with big companies and hammer out original equipment manufacturing deals. It may take longer than Liquidia is willing to wait.

So Fowler and his board of directors are contemplating spinning off the materials side so that it can focus on these opportunities at its own pace. But nothing is certain.

“We’re evaluating everything from licensing to a complete spinout of the materials business,” Fowler says. “That business has a lot of viability, but we have to focus. We’re still growing up.” —Alexander Haislip