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UT researchers team with XL Vision
May 05, 2000 02:12 PM ET

By Beth O'Connell, dbusiness.com

SEBASTIAN, Fla., and AUSTIN, Texas, May 5 (dbusiness.com) -- High-tech business innovators working on Florida's east coast are teaming up with researchers toiling in a Texas university lab.

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They are not strange bedfellows given the way emerging technology companies are created these days.

Business incubator XL Vision Inc. has announced a partnership with the University of Texas in Austin to launch a medical diagnostic company. The new venture will utilize technologies licensed from the university and target diagnostic testing for a variety of health conditions in humans and animals. The diagnostic test is designed to yield nearly instantaneous results.

For the university, the new, still-unnamed company marks a new approach to working with the business community.

"This is the first time we felt comfortable enough to sign a deal whose value rests principally upon the university taking an equity stake in the company," said Dr. Juan Sanchez, UT's VP for research.

The equity sharing terms of the licensing agreement were not disclosed. However, XL Vision says there is a commitment of an additional $1.3 million in a sponsored research agreement with UT. In addition, XL Vision has hired one of the physicians -- former UT student Damon Borich, who helped develop the technology -- to serve as chief medical officer for the newly formed company.

The Austin-based University is counting on the track record of the high-tech incubator located in Sebastian, on Florida's central east coast just south of Melbourne.

The privately held XL Vision is a partnership company of Internet-focused Safeguard Scientifics (NYSE: SFE) and incuVest of New York. Both invest in innovative technologies that can become market-leading public companies.

XL Vision's portfolio includes two companies it has taken through an initial public offering: eMerge Interactive (Nasdaq: EMRG), an e-commerce and online auction company for the cattle industry; and ChromaVision Medical Systems Inc. (Nasdaq: CVSN), a laboratory medicine diagnostics company that develops and manufactures an automated cellular imaging system used in clinical and research applications.

UT professor and researcher John T. McDevitt says the sensor technology at the core of the new medical diagnostic company can analyze a wide range of chemicals including toxins, drugs, bacteria and blood products. The technology uses a large number of miniaturized cavities that are created within a silicon wafer.

"These ultrasmall 'test-tube' like structures, prepared at UT Austin's microelectronics research clean room, serve as highly miniaturized measuring devices that can detect in detail the content of complex fluids," McDevitt said.

XL Vision will bring to the new company not only capital but also entrepreneurial expertise. XL Vision's Mike Otworth will serve as interim CEO, managing the company during the early growth stage.

The new company will have offices in Sebastian and open a new facility in Austin with an initial hiring of 25 to 40 employees. The company's expansion plans could include hiring up to 200 people over the next two years.

XL Vision also plans to use the Austin site as a base for other business ventures in the area.

Beth O'Connell is a correspondent for dbusiness.com covering Central Florida. E-mail her with story ideas and comments.


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