Arrowhead, Research Cuts, JCI, & More: This Week’s WI Watchlist
Catch up on news from Wisconsin’s innovation community with these recent headlines:
—Arrowhead Pharmaceuticals, which is based in Pasadena, CA, but houses its research and development operations in Madison, entered into a stockholder rights agreement. This type of agreement, known colloquially as a “poison pill,” is typically aimed at protecting a company’s shareholders in the event of a hostile takeover attempt.
Arrowhead (NASDAQ: ARWR) said in a press release that it would give stockholders a right to purchase one one-thousandth of a share of a new series of preferred stock at the price of $20 for each common share owned. This right would trigger only if an investor or investment group acquires a 15 percent or greater stake in Arrowhead. Under the terms of the agreement, shareholders who buy preferred stock would receive the same dividend, voting rights, and liquidation preferences as one share of common stock. That means purchasers of the new preferred stock would essentially have two votes per share owned. The idea is to make it easier for existing shareholders to buy more shares, and in the process dilute the shares held by the acquiring company. Arrowhead said that if it receives a takeover offer, owners of preferred stock would be able to buy $40 worth of common stock for $20.
—The budget proposal released by the White House earlier this month is estimated to cost Wisconsin nearly 2,000 jobs and slash about $240 million from the state’s economy annually, John Raymond wrote in an op-ed published by the Wisconsin State Journal. Raymond is president and CEO of the Medical College of Wisconsin, which is located in Milwaukee. Those projections are based on estimates that every $1 million in funding to the National Institutes of Health creates more than 17 jobs and about $2.4 million in economic impact. “These cuts would have catastrophic effects on people in Wisconsin and elsewhere waiting for new discoveries that lead to treatments and cures,” Raymond wrote.
—Milwaukee-based Johnson Controls (NYSE: JCI) sold one of its business divisions to Maplewood, MN-based 3M (NYSE: MMM) for $2 billion in cash. The business unit, Scott Safety, is based in Monroe, NC, and has about 1,500 employees, JCI said. It manufactures respiratory equipment, as well as gas- and flame-detecting systems for groups in industries such as law enforcement, fire and rescue, and the military.
—Investors in the Badger State rebooted the Wisconsin Venture Capital Association, a nonprofit trade group that was active from 2002 to 2008 but has been dormant for much of the past decade. The decision to revive the WVCA happened in part because Madison-based Venture Investors has a satellite office in Michigan, and one of the fund’s employees is on the board of a similar VC consortium in that state. The WVCA will hold its first meeting in years later this month in Madison.
Xconomy also dug into some numbers showing that early-stage companies headquartered in Michigan have raised more VC funding than Wisconsin-based startups each of the past four years. One program aimed at improving the climate for entrepreneurship and venture investing in Wisconsin is the Badger Fund of Funds, which is similar to a program launched in Michigan more than a decade ago that investors say has been a success.
—Bunker Labs, a national organization focused on helping U.S. military veterans form and grow companies, received a $238,000 entrepreneurship grant from the Wisconsin Department of Veterans Affairs, according to a BizTimes Media report. The grant funding will allow veterans considering starting their own companies to receive up to $500 worth of training from the Wisconsin Small Business Development Center, according to the report.
—More funding news: Milwaukee-based Scanalytics, which develops hardware and software to help customers track the movement of people in stores, at trade shows, and in other settings, recently raised $1 million from investors, co-founder and CEO Joe Scanlin said. Scanalytics, which currently has 15 employees, will use some of the new capital to add data scientists and engineers to its team, and recruit additional customers, Scanlin said.
—Becker’s Hospital Review profiled Redox, a Madison-based startup that develops digital tools enabling software developers to access data from electronic health records systems used at hospitals and clinics. Redox currently has 30 employees; about 20 of them reportedly used to work at Epic Systems, a health records giant based in Verona, a suburb of Madison. Redox has raised more than $12 million from investors since launching in 2014, including a $9 million Series B funding round that closed earlier this year, SEC filings show.
—Staying in health IT, the Centers for Medicare and Medicaid Services approved software developed by Madison-based Forward Health Group as a so-called “qualified registry” that healthcare providers can use to report data to the federal agency in 2017. The approval comes about two months after CMS kicked off a key component of a quality-based reimbursement program requiring clinicians and healthcare organizations to submit select patient data to the agency. The program is part of a broad shift in the healthcare industry from fee-for-service payment models to value-based care.
—Madison Magazine profiled Farhan Ahmad, who serves as chief technology officer at the Madison-based software company HealthDecision. The report, part of a package of stories called “Muslim in Madison,” explains that Ahmad and his family moved to the U.S. in 1998 from Pakistan, and he later found work at software and healthcare organizations in the area. It also examined his faith. “The reasoning and logic that’s provided by [Islamic] scholars here tends to be much more fact-based than you would get in Pakistan, where it’s just like you’re expected to believe one way and there’s no thought besides it,” Ahmad told the magazine.