Mass High Tech

New CEO gives Boston base to virtual Cortria

by Mark Hollmer
September 5, 2008

Though the company has been around since 2005, biotechnology startup Cortria Corp. has existed only virtually with executives spread out among Washington, D.C., California, Florida and Canada.

The appointment of a Boston-based CEO is about to change all that.

Daniel Grau has brought the company out of stealth mode, with plans to grow Cortria’s headquarters here as it gears up to seek a second round of venture financing in 2009.

“Massachusetts is an outstanding place and the Boston area is an outstanding environment in which to build a biotechnology company,” said Grau, a former chief operating officer of Cambridge-based biotech CombinatoRx (Nasdaq: CRXX). “You have access to so much talent as you build a business ... and leading academic researchers and advisors who can shape the strategy of the company.”

Up until now, Cortria’s strategy has been to remain virtual and quiet, and some of that mind-set continues. Grau said he won’t discuss how much money the company raised in its first round or the amount of cash it will need for its second, out of deference to the wishes of investors Domain Associates and MVM Life Science Partners.

Grau said keeping Cortria virtual has helped it advance research and clinical trials to cheaply and effectively for its lead drug TRIA-662, which will treat dyslipidemia, which leads to abnormally high levels of fat in the bloodstream.

“There are probably some efficiencies about having virtual operations at the onset of a company ... where you are simply focused on the development of an asset to the point of increasing its value,” he said.

Grau, for now, is based in MVM’s offices at Old City Hall in Boston and said he will likely move the company to its own space in 2009. He also expects to hire locally over the next year, but “can’t forecast right now” how many people he will add to the 10 full- and part-timers currently on staff.

Outside observers may be intrigued at the notion of a company such as Cortria growing both quietly and virtually for so long.

But experts believe that increasing numbers of biotech startups are growing this way, and they see the path as lucrative.

“The strategy here is to take the company as far as you can on as little money as possible, to the point where you can then make the decision as to whether you want to build the company into a fully integrated biotech, sell the company or bring in a pharmaceutical partner,” said Steven Wilcox, an attorney and chairman of the life sciences practice group at the law firm Ropes & Gray LLP.

Wilcox offers one example of this strategy: San Diego-based Angiosyn was sold for more than $527 million to pharmaceutical giant Pfizer Inc. (NYSE: PFE) in 2005, after just three years of existence and only $5 million of venture investment.

Mark Hollmer can be reached at mhollmer@bizjournals.com.