Divergence raises $1.4M

By Paul Riat, LocalBusiness.com
Apr 05, 2001 05:18 PM ET

EXCLUSIVE ST. LOUIS, April 5 (LocalBusiness.com) - Two-year-old genomics company Divergence Inc. just completed a $1.4 million round of financing, LocalBusiness.com has learned. The company has also appointed Derek Rapp as CEO and a member of the board.

Divergence is currently sequencing the genetic code of parasitic nematodes that attack crops like soybeans, cotton, strawberries, and bananas. The company is examining the genes of the pest so they can develop a non-toxic control method that doesn't harm the environment.

Nematodes are unsegmented worms, and are sometimes called roundworms. Many are parasitic to plants and animals, such as hookworms, pinworms, and heartworms. Nematode-induced human diseases include elephantiasis and African river blindness.

"We have identified several gene targets that we think are promising for nematode control and have filed patent applications," Rapp told LocalBusiness.com.

"We are still in the process of doing validation work to make sure that we are getting as robust a set of claims as we can on those gene targets, while identifying additional gene targets."

Rapp says the company believes it can easily market whatever applications it develops, as the predominant chemical now used to control nematodes will be banned by 2004.

Second VC round planned
Divergence currently has eight full-time employees, and several contract workers. Much of the venture capital will go toward hiring more scientists. After the company moves into a new lab in the next few weeks, Divergence says it will begin hiring to fill an undisclosed number of new positions in late spring or summer.

"There will be another round this fall, and I certainly expect it to be larger," he added. The company says the just-concluded VC round was oversubscribed.

Like father, like son
Rapp joins Divergence after 12 years at Monsanto in several positions, including director of mergers and acquisitions, director of commercial partnerships and alliances, and director of investor relations.

The company was founded by James McCarter, who serves as president and chief scientific officer, and his father John McCarter, Divergence's chairman.

James is also group leader for parasitic nematode genome projects at Washington University's Genome Sequencing Center.

The company was started with an undisclosed amount of money raised from the McCarter family. The $1.4 million round came from about 20 unidentified investors, Rapp said.

Paul Riat covers the St. Louis region for LocalBusiness.com. E-mail him with story ideas or comments.