For venture investors in the life-sciences industry, it can take many years to see a return on investment.

Every once in awhile, though, a Protez Pharmaceuticals comes along.

Founded in 2003, the Malvern developer of antibiotics raised a total of $23 million from venture capital firms and other investors. Of that, $21 million was raised in the last 2 1/2 years.

With Wednesday's purchase by Novartis AG, those investors will divvy up $100 million - a fourfold return. Plus, Novartis will pay up to $300 million more once Protez meets other development milestones.

How'd you like to risk a dollar and get $16 in return?

So who are some of those investors? One is the Ben Franklin Technology Center of Southeastern Pennsylvania, which invested $300,000 in 2004. Another is BioAdvance, the Philadelphia group funded in part by Pennsylvania's share of the nationwide tobacco company litigation settlement.

S.R. One Ltd., which is GlaxoSmithKline's corporate venture fund in Conshohocken, and Quaker BioVentures, of Philadelphia, are two local venture firms that also get to book a solid return.

In some deals, a Big Pharma company simply acquires a start-up for its promising therapies and jettisons the office and employees. Not this time. Novartis intends to keep Protez and its 25 employees in Malvern to work on the Phase II testing of its lead compound to treat skin infections.

This is about as close to a grand-slam as the Philadelphia-area sees: executives with a new idea start a company, local investors support it early on, company attracts buyer, new owner intends to keep operations locally.

Paying the Driver

When the boat is taking on water and the captain has disembarked (whether by the plank or faster boat), someone has to take the helm.

Sometimes that interim CEO is a board member. Directors are compensated quite handsomely for their part-time duties, but running the day-to-day operations of a company brings a whole bunch of headaches.

That's why companies often must make it worth a director's while to take on the aggravation of a turnaround.

Luminent Mortgage Capital Inc. named one of its directors as CEO in mid-May after chief executive S. Trezevant Moore Jr. resigned May 9. The credit crisis nearly claimed the Philadelphia company in 2007. Its business involves investing in residential mortgage securities.

To induce director Zachary H. Pashel to serve as president and CEO, Luminent granted him restricted stock award of 1.59 million shares. (He also will get an annual salary of $350,000 — half what his predecessor was to receive for 2008.)

That's a lot of shares, but at 30 cents a share, that value of that award on the May 15 grant date was only $477,000. Plus, this is restricted stock that vests over three years. That means he can't do anything with the first 530,000 shares until May 15, 2009.

Given that ex-CEO Moore forfeited his unvested restricted stock when he resigned, the deal with Pashel sounds like a good one for a company that's struggling contain the damage from rising mortgage impairments.

If Pashel can turn around Luminent, the restricted stock award will have been well worth it.

Quotable

We see little indication today of the beginnings of a 1970s-style wage-price spiral, in which wages and prices chased each other ever upward.

- Ben Bernanke, chairman of the Federal Reserve told Harvard students Wednesday.