Happy Holidays!

Happy Holidays and Happy New Year from EDG! We hope 2013 brings nothing but peace and joy to you and yours and we are looking forward to the exciting new happenings in the investment arena. Let’s bring these entrepreneurial ideas to life!

ENBD aims to double small business lending in 2013

By Mirna Sleiman

DUBAI | Tue Dec 11, 2012 7:34am EST

(Reuters) – Emirates NBD ENBD.DU expects lending to small businesses to double and top 1 billion dirhams ($272 million) next year as Dubai’s largest bank diversifies away from corporate and personal financing.

Suvo Sarkar, ENBD’s head retail banking, said on Tuesday the lender has a quarter of the market in lending to small and medium enterprises (SMEs) in the United Arab Emirates.

“This year the size of our lending to SMEs doubled from last year and we expect them to double in 2013 from 2012. I would say this will exceed 1 billion dirhams 2013,” he told Reuters.

Banks in the United Arab Emirates are increasingly focusing on small business lending following restrictions from the central bank on personal loans for individuals.

Corporate lending in the country has suffered during the past three years as companies grappled with debt.

“SMEs are expected to contribute more than 40 percent of the country’s GDP in 2013,” Sarkar said.

Emirates NBD, formed by the 2007 merger of Emirates Bank and National Bank of Dubai and which acquired Dubai Bank in 2010, will see revenue propped up by lending to SMEs, he said.

“We are seeing lot of action in food and beverage, travel and tourism, oil field services and construction.

(Reporting by Mirna Sleiman; Editing by Dan Lalor)

Taking a tip from tech, food incubators launch startups

By Neal Ungerleider

Thu Dec 13, 2012 3:12pm EST

A new group of food-based startups are applying tricks learned from the technology industry to grow a new wave of businesses to cash in on the growing “foodie” movement across the U.S.

Like tech entrepreneurs starting out in a Starbucks, foodies who find themselves needing space to prepare boutique treats are turning to shared programs called incubators and accelerators that help them launch by offering communal business spaces and logistical assistance.

Small food businesses—mom and pop operations selling goods at farmers markets, food trucks, or at boutique retail establishments—have proliferated in the last few years, according to data provided by the National Association for the Specialty Food Trade. In the New York City area alone, city politicians are rushing through 22,000 additional permits for mobile food vendors. Due to hygienic needs, raw material needs, and other factors, new small food businesses often need help getting started. In large urban markets such as New York and Los Angeles, startup costs frequently exceed $10,000, and that’s where the incubators and accelerators come in.

“A company can come in, rent space for the day, pack up their things and leave,” says Michael Schwartz at the Organic Food Incubator in New York. “The not so traditional part is that we have companies who stay here more permanently.” Tenants at the Organic Food Incubator work on everything from spicy Indian sandwiches to gluten-free breads to soft-serve “ice cream” made from crushed fruits.

Both incubators and accelerators offer small food businesses the opportunity to grow within a nurturing environment while defraying large startup capital costs.

The Organic Food Incubator hosts trade shows to introduce their members to prominent local grocery chains and distributors; members also have access to classes, networking event, and consulting assistance for recipes, social media, and distributors.

Ahkilah Johnson is the co-founder of Manhattan’s City Cookhouse, which offers commercial kitchen rentals along with community cooking classes and business development opportunities. Johnson says that “I used to do children’s cooking classes in the neighborhood, but could never find space for classes. We needed space in the community. My day job is in building schools so I thought we could build a space. We created a center for businesses and for healthy cooking classes.” Incubators such as the Organic Food Incubator and City Cookhouse offer micro-businesses access to high-end kitchen equipment, space to produce at scale, and support to grow their business. This can include anything from packaging assistance to networking sessions with large wholesalers and distributors.

While most of New York’s food incubators are medium-to-large sized commercial kitchens, several even larger facilities are coming to the city. 3rd Ward, a Brooklyn community arts and educational organization, is opening a large culinary incubator and educational center. Also in Brooklyn, a former pharmaceutical plant is being converted into a 660,000 square-foot culinary production facility whose rooms will be subdivided among a warren of small businesses.

While traditional accelerators have been aimed at internet-based startups and small technology firms, food accelerators are a much newer proposition. Food businesses traditionally require thousands of dollars in launch capital at the very least and are subject to much more intensive government regulation. The large sums that small food businesses need to expand have traditionally been found through more traditional fundraising methods in the past. One accelerator, 500 Startups, is nurturing mail-order food businesses among others. Culture Kitchen (which sells make-your-own ethnic cuisine kits) and Craft Coffee. In exchange for up to $250,000 in seed funding, participating businesses give up 5% equity.

One accelerator in Arkansas, The ARK, pays special attention to food. Due to Wal-Mart’s and Tyson Food’s headquarters being located inside the state, The ARK is specifically recruiting food start-ups who could benefit from close proximity to the agribusiness giants. Three of the groups funded by ARK’s 15 are food startups, including a social network for food trucks, a high-tech meat analytics firm, and an online marketplace for farmers. The ARK offers recipients approximately $18,000 in funding in exchange for 6% equity and a promise to relocate to northwestern Arkansas for the duration of the program.

“Not only do food-oriented startups get access to mentorship from top minds in the food industry, but founders also receive support and resources to accelerate their businesses during the three-month program, all in preparation to make investor pitches,” the ARK’s Jeannette Balleza told Reuters.

Another accelerator specializing entirely in food startups was recently launched in California as well. Palo Alto’s Local Food Lab is unlike traditional accelerators in that it doesn’t offer capital in exchange for equity, but rather an intensive six-week program for food startups to develop a business plan and cultivate industry contacts. Recipients include all-brunch food truck Brunched in the Face, South African-style snack maker LifeBites, and urban farming education effort Seeducate.

“Working through (ARK) benefited us by providing mentors and advice related to the industry we are entering,” said Derek Kean of Truckily, a logistics firm for food trucks funded through the ARK. “Being able to build upon experience and knowledge from former executives, entrepreneurs and current employees of companies that have had years of research and, more importantly, ‘mistakes made’ was invaluable.”

But despite the growing the popularity and apparent need food incubators and accelerators, they aren’t found everywhere: Apart from outliers such as ARK, most are situated in large cities or in dense suburbs. Only a few food incubators have sprouted up in smaller communities. Replicating the food incubator model in rural areas and college towns is the next great challenge for the growing field.

(The author is a Reuters contributor) (Editing by John Peabody and Brian Tracey)

Chicago picks Integrys to supply non-coal power through 2015

Mon Dec 17, 2012 9:09am EST

(Reuters) – Integrys Energy Services, a unit of Integrys Energy Group (TEG.N) of Chicago, won a municipal aggregation contract to supply Chicago with lower cost electricity from non-coal fuel sources through 2015.

The Chicago City Council last week picked Integrys because the company offered the lowest price margin in a two-stage competitive process that included eight companies.

“By buying electricity in bulk, we have secured an agreement that will put money back into the pockets of Chicago families and small businesses while ensuring that our electricity comes from cleaner sources,” Mayor Rahm Emanuel said in a statement.

The mayor said Chicagoans will save up to 25 percent a month on their first electricity bills from February to June 2013, representing about $25 in monthly savings for the average household.

Over the life of the agreement that ends in May 2015, Chicagoans will save up to 12 percent on their bills, resulting in a total savings of $130 to $150 for the average household for the entire agreement, the mayor said.

Chicago’s municipal aggregation supply agreement is the largest in the nation, the mayor said.

The city said it expects the transition to Integrys to be seamless. The city’s power company, Commonwealth Edison (ComEd), will still be responsible for delivering electricity, reading meters, and responding to outages.

ComEd is a unit of Chicago-based Exelon Corp (EXC.N).

ComEd will also continue sending monthly bills and receiving payments, and customers will be able to keep the same budget billing and automatic payment options they have now.

Integrys will be required to always beat or match the ComEd price.

Chicago residential and small commercial customers will be automatically transitioned into the program unless they opt out. They can opt out of the program at any time without charge, fee or penalty.

(Reporting By Scott DiSavino; Editing by Nick Zieminski)

Investors bet big on non-U.S. stock ETFs as year-end eyed: EPFR

By Sam Forgione

NEW YORK | Fri Dec 14, 2012 3:29pm EST

(Reuters) – Investors poured fresh money into stock funds worldwide with an emphasis on exchange-traded funds that hold foreign stocks as the end of the year approaches, data from EPFR Global showed on Friday.

Stock funds worldwide attracted $8.88 billion in new money in the week ended December 12, dwarfing the previous week’s inflows of $2.3 billion but falling short of the massive $14.86 billion the funds received in the last week of November, the fund-tracking firm said.

Bond funds worldwide still pulled in $5.24 billion in net new cash, the most since mid-November, with chunks of that total flowing into European, emerging market, and high-yield “junk” bond funds.

Stock ETFs attracted over $12 billion in new money, while actively managed stock funds suffered outflows of $3.23 billion, EPFR Global said. The inflows into ETFs show a high demand for passive stock funds, largely on the part of institutional investors, illustrating opportunistic buying.

As the end of the year approaches, investors are acknowledging strong stock market performance worldwide this year, said John Stoltzfus, chief market strategist at Oppenheimer and Co.

Investors showed renewed appetite for ETFs that hold foreign stocks and pumped $5.32 billion into emerging market stock funds, the most in nearly a year. European stock funds also attracted fresh demand with inflows of $1.6 billion, the most in roughly three months according to the fund-tracker.

“There are European stocks that U.S. investors are looking to own on expectations that those companies do a lot of business with Asia and the U.S.,” said Stoltzfus, and mentioned the healthcare, consumer discretionary, and materials sectors.

Funds that hold Chinese stocks stood out with huge inflows of $1.4 billion, the most in four years according to the fund-tracker, with $1.3 billion of that sum flowing into ETFs that hold Chinese stocks.

Upbeat data over the week showed that factory output in China, the world’s second-biggest economy, accelerated to its highest in eight months in November.

The benchmark S&P 500 stock index rose 1.36 percent over the reporting period, despite a lack of progress in negotiations between U.S. President Barack Obama and Congress over the looming “fiscal cliff” of tax increases and spending cuts.

On Wednesday, the final day of EPFR Global’s reporting period, the Federal Reserve ramped up its monetary stimulus program and committed to monthly purchases of $85 billion in Treasuries and mortgage-backed bonds in an effort to spur economic growth. The Fed also specified that interest rates would remain near zero until unemployment falls to at least 6.5 percent.

The yield on the benchmark 10-year Treasury fell to 1.59 percent on December 6 on expectations that the Fed’s policy-setting panel would announce its extended stimulus plan after a two-day meeting. The yield on the safe-haven bond has since risen to 1.71 percent in intraday trading Friday.

The inflows into emerging market stock funds over the week trounced a $1.66 billion inflow into U.S. stock funds, which still showed an improvement after the U.S. funds suffered outflows of $2.41 billion the previous week.

As with stock funds, investors favored bond funds that hold non-U.S. assets. Emerging market bond funds attracted $1.6 billion in new cash over the period, while European bond funds attracted $1.07 billion.

Inflows of $1.68 billion into high-yield “junk” bond funds also showed investors’ willingness to take risk over the week.

Investors tend to seek high-yield and stocks at the same time, said Wayne Kaufman, chief market analyst at John Thomas Financial, and could be adding to their bets on the risk assets.

“People have just been dramatically underinvested in equities, and if equities do have that strong correlation with junk bonds, then they’ve probably been relatively underinvested in junk bonds also,” Kaufman said.

(Reporting by Sam Forgione; Editing by Chizu Nomiyama)

Gene Therapy on the Mend as Treatment Gets Western Approval

Regulatory approval of a gene therapy treatment in Europe could spark broader patient access to the technology.

By Susan Young on December 7, 2012

Last month, Europe’s Committee for Medicinal Products for Human Use approved a gene therapy for a rare genetic disease, the first time a Western regulatory agency has okayed such a treatment, though gene therapies have been approved in China.

The virus-mediated treatment, called Glybera, which is being developed by Amsterdam-based UniQure, introduces a normal version of a gene needed to properly break down fats in the blood. Though the condition is rare, patients with dysfunctional copies of this gene have dramatically increased levels of fat in their blood, which can lead to fatal inflammation of the pancreas. The genetic repair lowers blood fat concentration and reduces the frequency of pancreatitis, according to clinical trial data.

 The approval is just another sign that the field of gene therapy is quietly enjoying a resurgence after disastrous results in the late 1990s derailed testing of the technology. A number of companies are now testing various gene therapy products. For example, in 2010, Cambridge, Massachusetts-based Bluebird Bio reported it had successfully treated an 18-year-old patient for a rare blood disease (see “Gene Therapy Combats Hereditary Blood Disease”). Hemophiliaimmune deficiencies, and blindness have all been treated with at least some benefit to the patients willing to try the experimental therapy. And large pharmaceutical companies such as Novartis,GlaxoSmithKline, and Baxter have taken on gene therapy projects in recent years.

“The fact that there were no approved gene therapy drugs up until recently probably made a subliminal impression on people that it wasn’t ready for prime time,” says Jean Bennett, a physician-scientist at the University and Pennsylvania and Perelman School of Medicine in Philadelphia. Bennett is involved in a clinical trial of gene therapy for an inherited form of blindness. “Now that there is one approved gene therapy product in the Western world, there is hope that there will be many others.”

Indeed, recent positive results have helped push the field beyond its early setbacks, perhaps the most public of which was the death of 18-year-old Jesse Gelsinger, who died in 1999 after receiving an experimental gene therapy for a genetic condition (see “A Death in Philadelphia”).  Other early gene therapy patients had severe or even deadly immune reactions.  Some patients who received gene therapy injections got cancer as a result of the treatment (see “The Glimmering Promise of Gene Therapy”). These setbacks raised the question of whether the treatment could be done safely.

The basic concept of gene therapy—replacing a defective gene or adding in a functional copy— is straightforward, but the trick is in the delivery. Gene therapies are often carried into a patient’s cells by viruses. Some of the early problems with the therapies were due to strong immune reaction to the transport viruses or cancer sparked by genomic changes induced by the viruses. But in recent years, researchers have found safer viruses and techniques for getting the replacement genes into a patient’s body.

 “The promise of gene therapy is phenomenal—a one-time treatment that will restore the natural function of the body,” says Jörn Aldag, CEO of UniQure. “Many people have pushed back and said it would never be approved, but now we are over the hump,” says Aldag.

UniQure has already built a manufacturing facility capable of commercial-scale production. Aldag expects Glybera to go on sale in the third quarter of 2013. In the meantime, the company must figure out what to charge for the treatment. The company is mulling the fact that treatments for other metabolic diseases can cost $200,000 per year or more, and that Glybera may be needed only once in a patient’s lifetime, says Aldag.  “How do you price a one-off treatment?”

Investor finds fertile territory in over-35 entrepreneurs

By Sarah McBride

SAN FRANCISCO | Fri Dec 7, 2012 1:36pm EST

(Reuters) – When he started looking around for start-ups in which to invest, Dan Scheinman noticed something: twenty-something entrepreneurs building Internet companies usually had a much easier time lining up early financing from venture capitalists compared to their forty- and fifty- something counterparts.

Age bias, increasingly acknowledged as a widespread phenomenon in Silicon Valley [nL1E8MFJM3], has created opportunity too.

“I was so excited you would not believe when I saw the pattern,” Scheinman, the former head of mergers and acquisitions at Cisco Systems (CSCO.O), recalls.

Many start-up investors claim they look for offbeat ideas put forth by gifted entrepreneurs, but in reality they often gravitate toward businesses that resemble past successes. In an era dominated by erstwhile start-ups — including Apple (AAPL.O), Microsoft (MSFT.O), Google (GOOG.O), and Facebook (FB.O) — that were founded by twenty-somethings and teenagers, a veritable cult of youth has many investors looking for the same.

But Scheinman, 49, claims good outcomes are possible — with less competition — by doing the opposite.

Scheinman has invested directly in eight companies since 2010, all with chief executive officers age 35 or older. On several occasions, he says he has heard the comment, “He doesn’t look like the traditional Internet CEO.”

The companies range from Think Big Analytics to free mobile video-calling service Tango to cloud-computing services company Arista Networks. Scheinman generally invests $50,000-$250,000 as part of a $1-$2 million funding round. He takes an active role, helping to line up other investors, generally taking a board seat, and providing strategy advice.

Of course, the true merits of Scheinman’s strategy will be clear only after a few years, when the companies in which he has invested have either failed, been acquired or gone through initial public offerings.

Little data exists on the average age of entrepreneurs that succeed in raising money.

But in a 2008 paper, “Education and Tech Entrepreneurship,” academics from Stanford, the National Bureau of Economic Research, and the Massachusetts Institute of Technology showed that the mean and median age of successful entrepreneurs was 39 at the time of company founding. The authors looked at companies with more than $1 million in sales and at least 20 employees.

Scheinman says he is pro-entrepreneur, no matter the age, but finds it easier to invest off the beaten track.

Another bonus: he manages to avoid the brazen ageism that he has often encountered among younger entrepreneurs. “I’d hear ‘Cisco is irrelevant, you’re old, you’re stupid,’” he says. “The level of hubris among the 25-year-olds, the ones who are getting funding, is very high.”

(Reporting By Sarah McBride; Editing by Jonathan Weber and Leslie Gevirtz)

Amgen buys Icelandic gene hunter Decode for $415 million

By Ben Hirschler

LONDON | Mon Dec 10, 2012 10:59am EST

(Reuters) – U.S. biotechnology group Amgen Inc has agreed to buy unlisted Decode Genetics, a pioneer in hunting down genes linked to disease, for $415 million in cash to boost its drive to develop better targeted drugs.

Founded in 1996, Decode blazed a trail in personal genomics by trawling Iceland’s unique genetic heritage, which has changed little since the Vikings arrived more than 1,000 years ago, to work out the links between gene variants and common diseases.

But it failed to live up to early expectations after going public in 2000 and filed for bankruptcy protection in 2009, weighed down by debts after 13 years of failing to make a profit, before re-emerging as a privately owned company.

Amgen and Decode said on Monday that the transaction did not require regulatory approval and was expected to close before the end of 2012.

As part of Amgen, Decode’s scientists will help in the task of ensuring that experimental medicines hit the right spot. Their know-how should allow Amgen to identify promising new avenues earlier and close down dead-ends more quickly.

“This fits perfectly with our objective to pursue rapid development of relevant molecules that reach the right disease targets, while avoiding investments in programs based on less well-validated targets,” Amgen Chief Executive Robert Bradway said.

PERSONALISED MEDICINE

UBS analysts said that the purchase, which will be funded by cash held offshore, was not surprising given that Amgen has key experimental drugs in its pipeline that were identified by human genetics work, including AMG 145 for heart disease and the bone drug romosozumab.

Understanding the genetic basis of disease has become increasingly important in drug discovery as the pharmaceutical industry shifts to developing personalized medicine that is suited for a patient’s particular genetic profile.

It is an area where Decode has extensive experience and its scientists have published prolifically on genetic mutations linked to a range of diseases including cancer, heart conditions and schizophrenia.

Commercially, however, the Reykjavik-based company has been far less successful. Its drug development programs stalled and its DNA tests for diseases have not brought in much cash.

The acquisition leaves Decode’s diagnostics business facing an uncertain future, with Amgen likely to evaluate this and other parts of the business after the deal closes.

Decode is currently owned by Saga Investments, a consortium including Polaris Venture Partners and ARCH Venture Partners, which bought it out of bankruptcy in 2010.

Polaris general partner Terry McGuire said his group had made a “substantial” return on its investment through the sale to Amgen, but he declined to give details or say if other large drug companies had been invited to bid for business.

CEO STAYS

Decode went public on a wave of euphoria about genetics after U.S. President Bill Clinton announced the completion of a working-draft DNA sequence of the human genome in 2000. Turning that gene promise into new drugs has proved harder and more time-consuming than initially hoped.

McGuire said that Decode’s founder and chief executive Kari Stefansson, a neurologist by training, would continue as president of the company after the Amgen takeover and would be a vice-president of research at the U.S. company.

Other genomics companies have fallen by the wayside over the years, though one Human Genome Sciences has managed to develop the first new drug for lupus in half a century with its partner GlaxoSmithKline (GSK).

GSK bought Human Genome Sciences for $3 billion this year, taking advantage of a dip in the U.S. biotech company’s shares. Two people familiar with the situation said in July that Amgen had also offered to buy the business for twice as much in 2010.

(Editing by David Goodman)

SpaceX lands first U.S. military launch contracts

By Irene Klotz

SAN FRANCISCO | Wed Dec 5, 2012 7:13pm EST

(Reuters) – Startup rocket company Space Exploration Technologies, which flies NASA cargo to the International Space Station, has landed its first launch contracts for the U.S. military, the company said on Wednesday.

The U.S. Air Force will pay $97 million for a Falcon 9 rocket to launch in 2014 the Deep Space Climate Observatory, a solar telescope that will be operated by NASA. It will also pay $165 million for a Falcon Heavy rocket for the military’s Space Test Program-2 satellite, which is expected to fly in 2015.

Both spacecraft will be launched from Space Exploration Technologies’ Cape Canaveral, Florida, site.

The company, also known as SpaceX, has been pursuing U.S. military launch business for years, hoping to break the monopoly held by United Launch Alliance, a partnership of Boeing and Lockheed Martin.

“SpaceX deeply appreciates and is honored by the vote of confidence shown by the Air Force in our Falcon launch vehicles,” SpaceX founder and chief executive Elon Musk said in a statement.

In addition to a 12-flight, $1.6 billion space station cargo delivery contract with NASA, SpaceX has a backlog of about 20 commercial and non-U.S. government satellites and payloads to fly on its Falcon family of rockets over the next five years.

The privately owned company plans to begin using a second launch site at Vandenberg Air Force Base in California in 2013.

SpaceX also is one of three companies hired by NASA to design a spaceship that can fly astronauts to the station, a $100 billion research laboratory that flies about 250 miles above Earth.

SpaceX’s Air Force contracts are part of a four-year, $900 million program that also includes Orbital Sciences Corp and Lockheed Martin, which is offering a new Athena rocket outside the United Launch Alliance partnership.

(Editing by Kevin Gray and Mohammad Zargham)

Ducted Wind Turbines: An Energy Game Changer?

Ducted turbine promises significant advances but delivery remains to be seen.

When it comes to wind power, unconventional schemes to boost power and cut costs have never been wanting. Quiet Revolution offers a vertical axis turbine that looks more like a blender than a power generation device. WhalePower proposes mimicking on turbine blades the tubercles found on whale fins to increase power production.  Meanwhile Altaeros Energies is developing a flying donut to harness increased wind speeds found at higher elevations.

Earlier this month SheerWind, a wind power startup based in Chaska, Minnesota, added a new design, INVELOX, to the list. INVELOX, short for “increasing the velocity of wind” is a ducted turbine that looks a bit like a giant funnel sitting on top of an equally large periscope. The ductwork is designed to capture wind from any direction, increase its speed and concentrate the moving airflow before passing it through a relatively small turbine at ground level.

It’s an interesting concept that attempts to address a number of challenges facing conventional wind turbines.  The power produced by a wind turbine increases with the cube of the wind speed so any increase in speed could offer a significant power boost. Increasing wind speed also reduces the cut in speed, or the minimum wind speed required to begin generating power.  SheerWind officials say that by speeding up the wind they can boost power output by 280 percent and reduce the cut in speed by 80 percent to a wind speed of 2 miles per hour.

Another key advantage touted by SheerWind is smaller, ground-based turbines. A growing challenge for conventional wind turbine developers is the ability to build, transport, and mount giant turbine blades. By funneling the wind down to a smaller diameter duct, SheerWind is able to use a turbine with blades that are 80 percent smaller than those used in conventional turbines with similar output. Keeping the turbine at ground level will also significantly reduce installation and maintenance costs. All told, INVELOX should generate power for roughly one third less cost than conventional wind turbines, company officials say.

All of this sounds great but can INVELOX deliver? Researchers at The City College of New York have done fluid dynamics modeling of INVELOX and say the company’s claims stand up. (The researchers, mechanical engineers Yiannis Andreopoulos and Ali Sadegh and are listed as “technical advisors” by SheerWind but say they have not received compensation from the company for their analyses)

Martin Hansen, a wind energy expert at the Technical University of Denmark, disagrees. He says INVELOX will draw in and speed up the wind as claimed, but when the turbine is placed inside the ductwork it will create such high pressure that little additional air will be drawn into the device, making it a poor alternative to conventional turbine designs.

SheerWind completed it’s first large scale prototype earlier this month. CEO Daryoush Allaei says initial testing without the turbine resulted in a near doubling of wind speed passing through the device as predicted in prior modeling.  Allaei says they will now install the turbine and begin monitoring power output.