Xencor Raises $12M in Second Round

Xencor Inc. operates more like an information technology company than a biotechnology company, and the company’s founders hope that the public markets will treat them as such when it goes public, most likely in 2001.

“After developing this technology at a laboratory in Cal Tech, its satisfying to see it being applied to commercial products,” said Chief Executive Bassil Dahiyat.

Xencor was founded in 1997 to create, develop and commercialize computationally designed proteins as research tools.

Stafford Investments LLC of Chicago led the company’s $12.3 million Series B round of financing, which closed last week. Dahiyat would not disclose the identity of individual investors who provided the balance of the round. Stafford had previously invested $3.6 million the company.

“The investment is an indication of the nature of our technology,” Dahiyat said. “And our ability through computers to improve biomedical products.”

The protein product is still in pre-clinical stages, with a target for commercial consumption within the next five years.

Proceeds from the investment will go to develop additional computer-based biomedical products and hire more researchers.

“This company offers so many different business models and revenue streams,” said John Stafford III of Stafford Investments. “It’s really like software, with a low overhead operating model geared toward platform technologies.”

Stafford Investments looks for early-stage investment opportunities in the biotech, software, Internet and communications industries. The securities company generally invests between $50,000 and $2.5 million of its own capital in each company it funds.

“Don’t call me a VC,” Stafford said. “We have no formal investment strategy, it just depends on the deal.”