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University of Michigan Students "Play VC" in a $25 Million Biotech Round



5/31/2012 8:13:50 AM

ANN ARBOR, Mich., May 31, 2012 /PRNewswire via COMTEX/ -- The Wolverine Venture Fund, managed by students at The Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies at the University of Michigan Ross School of Business, today announced it has invested in Sonitus Medical, a medical device company that manufactures the world's first non-surgical and removable hearing device to transmit sound via the teeth. The $25 million Series D round of venture capital financing was led by Abingworth and also included investments by Arboretum Ventures and Novartis BioVentures. The Wolverine Venture Fund first invested in Sonitus in March 2011.

Sonitus Medical is a leader in the bone conduction hearing device category, an emerging, distinct market that is differentiated from both the hearing aid and cochlear implant segments. The company's non-invasive SoundBite(TM) Hearing System is a prosthetic device that makes novel use of the established principle of bone conduction by transmitting sound via the teeth and thereby replacing the function of the impaired ear. It has already received FDA 510(k) clearance for two indications, single-sided deafness and conductive hearing loss.

"We are pleased to receive a large round with attractive terms to further validate our leadership position in the bone conduction hearing device category," said Amir Abolfathi, CEO of Sonitus Medical. "The Wolverine Venture Fund is part of a strong group of investors with an impressive track record. I was amazed with the trust the University places in the students to make these investments and consider it a model more business schools should embrace to foster entrepreneurship and smart investing."

The $5.5 million Wolverine Venture Fund was the country's first student-led venture fund and, together with the Frankel and Social Venture Funds, serves as a shining example of the Institute's action-based approach to entrepreneurial education. Since its inception, the Wolverine Venture Fund has invested in more than 20 companies in a wide range of innovative industries such as information technology, life sciences and alternative energy. A team of six students, representing both MBAs and Ph.D.s, spearheaded the investment in Sonitus Medical, including conducting all necessary due diligence, negotiation and collaboration with other investors.

"We are pleased to again invest in a company that is changing people's lives by giving them the joy of hearing," said Erik Gordon, associate director of the Zell Lurie Institute and managing director of the Wolverine Venture Fund. "This round has also been a tremendous experience for the students who oversaw the process. They were not only able to see the rapid progression of a portfolio company in the past year and participate in its latest financing, but they also got to collaborate on the deal with some very good, well-established venture capital firms from around the world."

Commenting on the experience Wolverine Venture Fund member and joint M.D./Ph.D. student Nicholas Douville said, "We were given a seat at the table with experienced investors representing firms here in Michigan, from the coasts and overseas, and invested real money that is going to make a meaningful difference for the company and those with hearing loss and single-sided deafness. Being a part of the Wolverine Venture Fund's second investment in Sonitus Medical was truly an invaluable experience and one that simply can't be matched in a classroom setting."

About the Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies The Institute and its Center for Venture Capital and Private Equity Finance bring together a potent mix of knowledge, experience and opportunities from the front lines of entrepreneurship and alternative investments. The student learning experience is further enhanced through internships, entrepreneurial clubs and events that serve to provide viable networks and engage the business community. The School's three student-led investment funds, with over $6.5M under management, immerse students in the business assessment and investment process. Founding Board Members include Samuel Zell, Chairman of Equity Group Investments and Eugene Applebaum, Founder of Arbor Drugs, Inc. For more information, visit the Institute at www.zli.bus.umich.edu .

SOURCE Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies


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