VentureBeat

TODAY’S HEADLINES:

• PolyRemedy, developer of robotic wound care, takes in $25M (release)
• Bacchus Vascular gets $15M for clot-busting device (VentureWire)
• Protein-evolution company Modular Genetics gets $1.2M (VentureWire)
• PharmatrophiX gets $300K for Alzheimer’s disease prevention drugs (release)
• Light Sciences Oncology withdraws IPO (Edgar)
• Arizona’s Translational Accelerator launches $20M life-sciences fund (bizjournals.com)
• Cornea-reshaper Avedro gets $7M (VentureWire)
• Gastrotech Pharma gets $6M in wake of Lilly deal (VentureWire)
• Biomaterials maker MiMedx goes public via reverse merger (release)
• Acrongenomics to complete acquisition of Molecular Vision by the end of Q1 (release)

PolyRemedy, developer of robotic wound care, takes in $25M – Mountain View, Calif.-based PolyRemedy, a developer of systems that robotically manufacture wound dressings for patients, raised $25 million in a second funding round. Investors included Advanced Technology Ventures, IDG Ventures Boston, MedVenture Associates and Harris & Harris Group.

PolyRemedy has been keeping quiet about its work until now, but the company’s release lays out its strategy, which is to fabricate customized wound dressings at the “point of care” — here, apparently, doctors’ offices and home-care situations. The goal is to provide better treatment for chronic wounds such as diabetic ulcers, a common complication of diabetes that can manifest in the feet and other extremities as a result of nerve damage and poor blood circulation. The company claims its technology has been proven in clinical trials, but hasn’t provided any details.

Bacchus Vascular gets $15M for clot-busting device – Bacchus Vascular, a Santa Clara, Calif., developer of devices for local drug treatment of blood clots, raised $15 million in an extension of a recent recapitalization round, VentureWire reports. Investors included Vertical Group, Warburg Pincus, Kaiser Permanente Venture Development and Bacchus founder Thomas J. Fogarty.

Bacchus makes and markets a system it calls Trellis, which is a minimally invasive, catheter-based device consisting of two inflatable balloons and a “dispersion wire.” Physicians thread the catheter through the clot and inflate balloons at each end of it, then infuse a clot-busting drug directly into the clot. The dispersion wire then mechanically helps break up the clot, whose remains are then sucked out through the catheter. Bacchus is currently focused on deep-vein thrombosis, which are large clots usually located in the legs. Its device was approved in 2005, and the company intends to use the new funds to expand its marketing efforts.

Bacchus restarted with a $7.6 million recapitalization in June 2006 after apparently exhausting the patience of two initial investors, Three Arch Partners and De Novo Ventures, who haven’t participated in subsequent fundings. Prior to the recapitalization, Bacchus had raised $40 million, according to VentureWire.

Protein-evolution company Modular Genetics gets $1.2M – Modular Genetics, a Cambridge, Mass., biotech that engineers new proteins with enhanced function, raised $1.2 million toward an expected $5 million fourth funding round, VentureWire reports. Individual investors provided the funding.

Modular makes a gene-engineering system it calls the CombiGenex that can shuffle and recombine genes in order to make modified or novel proteins. By making thousands of slightly different molecules and then screening for the ones with improved functions, Modular aims to “evolve” new proteins for therapeutic uses.

PharmatrophiX gets $300K for Alzheimer’s disease prevention drugs – San Francisco’s PharmatrophiX (no Web site), a biotech working on drugs that prevent neurodegenerative disease, received a $300,000 grant from the Alzheimer’s Drug Discovery Foundation. Founded by Stanford researcher Frank Longo, PharmatrophiX is developing a class of drugs that mimic the activity of proteins called neurotrophins, which aid in the development, health and survival of neurons.

Light Sciences Oncology withdraws IPO – Bellevue, Wash.-based Light Sciences Oncology, a developer of light-activated chemotherapy, withdrew its $96.6 million IPO, citing “unfavorable market conditions.” Light Sciences becomes the seventh life-science startup to yank an IPO filing this year.

Light Sciences has kept hope alive for an awfully long time. The company originally filed its registration statement in April 2006, but hasn’t amended it since September of that year. Light Sciences raised $30 million in a second funding round last July, despite its still-active IPO registration.

CORRECTION: An earlier version of this item misstated PolyRemedy’s systems as “robotically apply[ing] wound dressings.” I’ve restated that to match the description in the second paragraph, which accurately describes the systems.

TODAY’S HEADLINES:

• 5AM Ventures puts $3.3M into stealthy ImmunoNewco (VBLS exclusive)
• NewLink Genetics raises $17M for cancer vaccine, immune drugs (VBLS exclusive)
• Biochip, stem-cell biotech Minerva Bio ousts CEO Jim Czirr and sues (release)
• Sonexa Therapeutics takes $30M for Alzheimer’s treatment (release)
• Tissue regenerator Healionics pulls in $1.7M (release)
• EGeen, clinical research organization, receives $245K (VentureWire)
• Barnvet Labs, HeMemics Bio get $75K apiece from Maryland gov’t (release)

5AM Ventures puts $3.3M into new immune-related startup – I’ve moved this item to a standalone post here.

NewLink Genetics raises $17M for cancer vaccine, immune drugs – I’ve moved the item to a standalone post here.

Biochip, stem-cell biotech Minerva Bio ousts CEO Jim Czirr and sues – This item is now a standalone post here.

Sonexa Therapeutics takes $30M for Alzheimer’s treatment – San Diego’s Sonexa Therapeutics (no Web site), a specialty pharma, raised $30 million in a first funding round. The proceeds will go toward licensing a so-far undisclosed compound from a Japanese pharmaceutical company that Solexa says is “being tested as a therapeutic to treat Alzheimer’s disease.”

Solexa will have worldwide rights to the experimental drug, excepting Japan and certain Asian countries. Investors in the round included Domain Associates, Scale Venture Partners, Alta Partners, AgeChem Venture Fund and MC Life Science Ventures.

Tissue regenerator Healionics pulls in $1.7M – Redmond, Wash.-based Healionics, a device company focused on tissue regeneration and biomaterials, raised $1.7 million in a first funding round. Individual investors, including Carl Lombardi, the former CEO of SpaceLabs Medical, and Sam Naficy, the medical director of the Naficy Plastic Surgery & Rejuvenation Center, provided the funding.

Healionics is focused on a new class of biomaterials it calls STAR, for sphere-templated angiogenic regeneration. These STAR materials are designed for insertable or implantable medical devices that need to integrate smoothly with and promote healing of the body’s tissues. In particular, Healionics claims that the materials are specifically engineered with “tightly controlled pore geometry” that maximizes the growth of blood vessels and tissue entry while minimizing the body’s tendency to “wall off” implants with scar tissue.

The company, founded last March, says it has established “multiple partnerships” for advancing the development of its materials. Possible applications include diabetes, wound care and infusion therapy.

EGeen, clinical research organization, receives $245K –EGeen, a contract research organization in Mountain View, Calif., raised $245,433 to expand its global operations, VentureWire reports. Ambient Sound Investments provided the funding.

EGeen conducts clinical trials for pharma and biotech companies in Estonia and other Eastern European nations. It has recently established a presence in the Ukraine and Romania. The company has previously raised $4.8 million in two funding rounds.

Redwood City, Calif.-based Satoris, a biotech developing a blood test for Alzheimer’s disease, raised $5 million in a second funding round, VentureWire reports. The deal values Satoris at $13.8 million after the financings. The company had previously raised $1 million from individuals, and said it will seek another $15 million this year.

Satoris plans to use the funding to begin commercialization of its protein-based blood test for Alzheimer’s disease, which the company expects to make available in the first half of this year. It looks like Satoris initially plans to market the test as a tool for clinical research, not as a general-purpose diagnostic, as the VentureWire story says the company plans to target pharma/biotech companies and Alzheimer’s research groups.

That’s definitely a good idea. The test itself certainly has the potential to break some important ground — Alzheimer’s can’t currently be diagnosed except by neurobehavioral testing of already-sick patients or via a post-mortem autopsy, whereas the Satoris test appears to detect the disease at a much earlier stage. But its error rates remain quite high, despite what the company touts as a 90 percent accuracy rate. I explained why in this post, which unpacked the numbers and showed why even that level of accuracy would produce a tremendous amount of life-altering misinformation if used to screen the general public.

The VentureWire story doesn’t say so, but to make the test commercially available that quickly almost certainly means Satoris will offer it as a “home brew” diagnostic, which allows it to sidestep the FDA approval process. Home-brew tests are performed by companies themselves in state-regulated laboratories — doctors or hospitals send patient samples into the lab, which then sends back the results. These sorts of diagnostics are permitted under a federal law known as the Clinical Laboatory Improvement Amendments, or CLIA. Traditional diagnostics, which usually involve the marketing of test kits and associated equipment to reference laboratories, hospitals or individual physicians, require explicit FDA approval.

Satoris says the funds will allow it to devote additional resources to further development of the test, and expects its cash cushion to last “well into next year.” CEO Cris McReynolds told VentureWire that he expects to begin fundraising again at the end of the year. VentureWire didn’t name investors in the current round, but previously reported that they would include Life Science Angels and Brain Trust Accelerator Fund.

TODAY’S HEADLINES:

• Ulthera receives $23M for cosmetic ultrasound devices (release)
• Senexis raises £2.9M for Alzheimer’s drugs (PDF release)
• Elixir Pharma postpones IPO (IPO Home)
• Cancer Therapeutics names Randall Riggs as CEO (release)

Ulthera receives $23M for cosmetic ultrasound devices — Ulthera, a Mesa, Ariz., startup developing ultrasound systems for cosmetic procedures, raised $22.5 million in a second funding round. Investors included New Enterprise Associates and 3i.

Ulthera, whose Web site is still a stub, aims to use its ultrasound devices for face lifts and “skin rejuvenation.” The company says the ultrasound can penetrate and remove — “microabrades,” in its terminology — skin tissue that is several layers deep without disturbing the surface, or epidemis. Deeper treatment supposedly triggers a “natural healing effect,” which Ulthera’s CEO claims will lead to a “gradual lifting and tightening of skin tissue in and around the face.”

The product can produce ultrasound images of the area to be treated as well. Ulthera has regulatory clearance to sell its device in Europe and expects FDA approval soon as well. The company will use the funds it raised for global commercialization, product development and to conduct additional trials to expand the use of its technology.

Senexis raises £2.9M for Alzheimer’s drugs — Senexis, a Cambridge, U.K., biotech working on drugs for Alzheimer’s disease and other conditions related to aging, received £2.9 million ($5.7 million) from the Wellcome Trust. The funding came from the Wellcome’s “Seeding Drug Discovery” program, and and augments £700,000 Senexis raised last year from BTG, a London specialty pharma. BTG and the Wellcome had previously invested £2.4 million in Senexis.

The company is developing small-molecule drugs intended to prevent the misfolding of amyloid proteins, which clump together in plaques around nerve fibers. Many scientists believe that these amyloid plaques cause inflammation that ultimately kills nerve and brain cells in Alzheimer’s patients, although dissenters still argue that plaques may be a distraction or even a defensive reaction to the disease. At this point, no one can say for certain exactly what causes the disease.

Still, most Alzheimer’s drugs now under development target the clumping amyloid proteins, and Senexis is no exception. One of its two lead candidates is a small molecule designed to inhibit the misfolding and aggregation of amyloid proteins in Alzheimer’s patients. The other is intended to tamp down brain inflammation. Both are still in animal testing. Senexis also hopes to treat diabetes by inhibiting aggregation of an amyloid protein that the company appears not to have identified.

Elixir Pharma postpones IPO — Elixir Pharmaceuticals, a Cambridge, Mass., biotech focused on anti-aging and obesity drugs, postponed its IPO. The company had most recently planned to raise as much as $92 million in its offering.

It’s not entirely clear why Elixir, which I figured would follow in the footsteps of Sirtris Pharmaceuticals‘ successful IPO (our coverage here), chose to delay the offering — which is almost always code for pulling it entirely. One possible reason might be that Elixir co-founder Leonard Guarente, a MIT professor sometimes tipped as a future Nobel laureate, decamped from Elixir for Sirtris in November.

You can see our previous coverage of Elixir here and here.

Featured companies: AxoGen, Cognition Therapeutics, Ester Neurosciences, Gene Security Network, HealthTalk, MPM Capital, Revolution Health, SparkPeople

UPDATING: Expanded items on AxoGen, Ester and Cognition. Posted full items on MPM (link) and Gene Security Network (link).

AxoGen raises $12M for nerve regeneration — AxoGen, an Alachua, Fla., biotech focused on developing grafts for damaged “peripheral” nerves, raised $12.1 million in a third funding round. Investors included Accuitive Medical Ventures, Cardinal Partners, De Novo Ventures and Springboard Capital II.

AxoGen develops tissue grafts designed to preserve or restore the function of damaged nerves in the body’s periphery — areas such as the limbs, face or genitals. The company’s technology aims to “cleanse” nerve-graft tissue of substances that might inhibit nerve growth and regeneration — particularly one known as chondroitin sulfate proteoglycan — while preserving other factors that promote regrowth and integration of the grafted nerve.

The company launched its first peripheral-nerve graft product in July. AxoGen says the new funding will allow it to promote the product more vigorously.

Ester Neurosciences acquired by Amarin for $15M — Israel’s Ester Neurosciences, a biotech developing treatments for neurological conditions such as Alzheimer’s disease and multiple sclerosis, sold itself to Amarin of the U.K. for an upfront payment of $15 million plus up to $17 million in contingency payments. The release is here.

Ester’s lead program consists of a gene-silencing “antisense” drug for the neurodegenerative condition myasthenia gravis, which is now in a mid-stage test involving 18 patients. The company is also working with Pharmacopeia of the U.S. to develop small-molecule drugs that target variants of the AChE neurotransmitter that appear to be related to behavioral abnormalities or cognitive and motor degeneration.

HEADLINES OF NOTE:

• AxoGen raises $12M for nerve regeneration (release)
• Ester Neurosciences acquired by Amarin for $15M (release)
• Alzheimer’s drug developer Cognition Therapeutics raises $200K (release)
• RevolutionHealth acquires HealthTalk, invests in SparkPeople (release)
• MPM Capital looks for Indian life-science investments (VentureWire, sub req’d)
• Gene Security Network gets $4M for molecular diagnostics (release)

Featured companies: CoMentis, ForHealth Technologies, Merrimack Pharmaceuticals, QuantomiX, Progenitor Cell Therapy, River Diagnostics, Topaz Pharmaceuticals

UPDATED: Expanded items on CoMentis, Topaz and ForHealth.

CoMentis gets $12M for eye, Alzheimer’s treatments — South San Francisco’s CoMentis, a biotech pursuing treatments for Alzheimer’s disease and macular degeneration, raised $12 million in a third funding round, VentureWire reports (subscription required). Wellington Management provided the funding.

The company’s lead drug candidate, ATG003, is an eye drop designed to treat age-related macular degeneration (AMD), a leading cause of blindness in the elderly. The drug inhibits a particular cell-surface “receptor” protein called nAChR that helps promote the growth of blood vessels. In AMD, abnormal vessels obscure vision by leading blood and fluid into the retina. Existing treatments for AMD — principally Genentech’s Lucentis and Avastin — also inhibit vessel growth, but must both be delivered by injection into the eye. ATG003 is in mid-stage human tests.

CoMentis is also developing an Alzheimer’s drug, CTS-21166, which inhibits beta secretase, a protein thought — but not proven — to play a key role in the development of the cognitive disorder. Beta secretase cuts another protein called amyloid precursor protein into pieces, one of which is commonly known as beta amyloid, a neurotoxic protein that clumps together in “plaques” around neurons in the brains of many Alzheimer’s patients.

Inhibit beta secretase, the theory goes, and you’ll cut off the production of beta amyloid and maybe alter the course of the disease. That drug is still in early-stage human testing.

Topaz Pharma takes in $20M for head-lice treatment — Philadelphia’s Topaz Pharmaceuticals, a company developing a new, naturally derived treatment for head lice in children, raised $20 million in a first funding round. Aisling Capital and Fidelity Biosciences provided the funding.

The head-lice treatment, which Topaz doesn’t seem to have named yet, employs an active ingredient derived from a naturally occurring soil organism that is toxic to head and body lice. The company also says it is working on treatments for acne and infection as well as childhood-disease vaccines.

ForHealth Tech gets $9M for automated pharmacy systems — Daytona Beach, Fla.-based ForHealth Technologies, a developer of automated systems for hospital pharmacies, raised $4 million in equity and an additional $5 million in debt. Equity investors included New Enterprise Associates, National Healthcare Services, Red River Ventures, and Chisholm Private Capital. Square 1 Bank provided the debt.

OTHER HEADLINES OF NOTE:

• Progenitor Cell Therapy faces possible acquisition by StemCells (release)
• River Diagnostics raises €1.5M for microorganism tests (release)
• Microscope maker QuantomiX acquired by El-Mul(release)
• Merrimack Pharma pulls in $35M for cancer, autoimmune therapies (VW)
• Frontier Scientific acquires Echelon Bioscences (release)

Satoris, a Redwood City, Calif., biotech developing a diagnostic test for Alzheimer’s disease, is close to raising $5 million in a second funding round, VentureWire reports (subscription required). The funds will allow the company to make its test available to outside researchers.

Satoris made a big splash in mid-October, when researchers identified 18 proteins they said could be used to identify people with Alzheimer’s disease via a simple blood test. What’s more, the test also appeared to detect incipient Alzheimer’s in people with mild cognitive impairment, meaning that it could theoretically be used to predict who is most likely to eventually develop the often devastating disease.

An Alzheimer’s blood test would be a major development, since there’s currently no good physical way of diagnosing, much less predicting, the condition. The disease is typically identified — often imprecisely — via cognitive testing. In fact, the only certain way to diagnose Alzheimer’s is via brain autopsy, which isn’t a particularly attractive option to most people.

Satoris says successful development of its test should help accelerate the development of new Alzheimer’s treatments. Which would be great, because at the moment, early diagnosis of the degenerative condition wouldn’t actually do anyone much good, even though the disease can cause brain damage well in advance of actual symptoms. Current treatments for the disease do little more than delay the onset of memory loss and other cognitive symptoms.

What’s more, the Satoris test may still be of limited usefulness simply because it is likely to produce huge numbers of mistaken diagnoses, at least in its current form. In the Nature Medicine paper that heralded the test’s discovery, the research team found that the 18 proteins correctly identified 90 percent of the blood samples from Alzheimer’s patients and 88 percent of the non-Alzheimer’s samples.

That sounds pretty good until you imagine trying to use that test as a widespread screening tool. An estimated five percent of Americans aged 65 to 74 have Alzheimer’s, according to this NIH fact sheet. Now imagine testing all of the roughly 20 million people in that age group with the Satoris test. It will correctly detect Alzheimer’s in 900,000 of the one million people that actually have it, which is great. At the same time, though, it will incorrectly diagnose more than twice as many people — 2.3 million — who don’t actually have the disease. That doesn’t even get into its possible predictive uses, where the potential errors — and their consequences — are even worse. (Hat tip to Derek Lowe, who recently crunched similar numbers over at In the Pipeline.)

All of which goes to underscore why diagnostic tests are actually a lot trickier than people frequently realize. While many of us would be more than willing to undergo surgery or take a drug that had a 90 percent chance of curing us, that sort of success rate is pathetically low in the diagnostic area, since false-positive and false-negative results can have such outsized consequences. No doubt insurers will be asking some hard questions if Satoris tries to bring the test to market without refining it a great deal further.

Which it looks like it intends to do. Satoris previously raised $1 million from individuals in 2004, and will be looking for another $15 million next year to launch a “home brew” version of the test — a tactic in which Satoris would test blood samples mailed to it by doctors, potentially allowing it to sidestep FDA regulation. The company’s current investors, however, appear unconcerned; Life Science Angels and Brain Trust Accelerator Fund are expected to participate in the current round, according to VentureWire.

Featured companies: CeraPedics, Lab21, Incisive Surgical, Orasi Medical, Transoma Medcal, ZyGem

(UPDATED: Expanded items on Transoma, Lab21 and Orasi.)

Medical-device maker Transoma files for $75M IPO — St. Paul, Minn.-based Transoma Medical, a developer of implantable wireless diagnostic sensors, filed to raise $75 million in an initial offering. The company is currently focused on the markets for heart patients and general biomedical research.

Transoma received FDA “clearance” for its first product on Oct. 1. That device, called the Sleuth ECG system, records, analyzes and transmits electrocardiogram data for patients at risk of irregular heartbeats. The company anticipates expanding its use to a broad range of cardiovascular conditions, and also sells the technology for data collection in test animals during preclinical drug and device trials. (If the technology eventually makes its way to human tests, it will certainly be interesting to see how trial participants react to the notion of being “wired for sound” this way.)

Diagnostics firm Lab21 raises £2M in debt — Lab21, a U.K. biotech that makes a variety of genomic and other diagnostic tests, raised £2 million ($4.1 million) in venture debt, VentureWire reports (subscription required). The company declined to say who provided the funding. Lab21 had previously raised £10 million in equity from Merlin Biosciences.

The company also recently licensed a coronary heart-disease test from Ark Therapeutics Group. Terms of that agreement weren’t disclosed.

Lab21 was considering a £2.5 million third funding round in April, and told VentureWire it is still looking into that and the possibility of an IPO, although the company would like to boost its valuation first. It has previously raised £10 million in equity from Merlin Biosciences. “We’re still considering the IPO route, even though everyone knows the IPO market isn’t the greatest right now,” CEO Jerry Walker told VentureWire. “The next step is to get revenue from the coronary [diagnostic] product, which will come to market early in the new year.”

Orasi Medical raises $2.4M for Alzheimer’s diagnostic — It’s a big day for companies based in St. Paul, Minn. (Incisive Surgical, headlined below, makes the third such in today’s news). Orasi Medical, a University of Minnesota spinout that’s developing a diagnostic test for Alzheimer’s disease, raised $2.4 million, according to the Minneapolis-St. Paul Business Journal. (There’s no release that I can find.) Investors included PrairieGold Venture Partners, CentreStone Ventures and individuals.

Orasi is apparently still pretty quiet about its strategic direction — its Web site is barely a stub. It does, however, point the curious to mainstream-press articles such as this one (PDF) in the Economist, which describes University of Minnesota neuroscientist Apostolos Georgopoulos and his work studying the magnetic fluctuations of the human brain for possible clues to the onset of neurological diseases such as Alzheimer’s and schizophrenia. It’s not too hard to connect the dots from there.

OTHER HEADLINES OF NOTE:

• Skin stapler Incisive Surgical raises $6M (PE Hub)
• CeraPedics raises $14.5M for regenerative bone implants (release)
• New Zealand’s ZyGem, an enzyme maker, hires new CEO in the U.S. (release)

The thirteenth edition of Gene Genie, a biweekly collection of the blogosphere’s best posts on disease genetics, is up at the Genetic Geneologist, courtesy of proprietor Blaine Bettinger.

The roundup includes posts on:

• the Personal Genome Project, George Church’s effort to sequence the genomes of ten volunteers;
• the neurophysiological importance of ApoE4, a protein related to Alzheimer’s disease;
• the potential involvement of viral infection in the development of multiple sclerosis;
• a list of seven ways to stay up-to-date on developments in genetics;
• and the genetics of left-handedness.

As an added bonus, it also features two HIV-related posts by yours truly. Check it out.

(CORRECTED: See below.)

Featured companies: VistaGen Therapeutics, MindWeavers, Cutanea Life Sciences, Heptares Therapeutics

VistaGen raises $3.75M for stem-cell based drug discovery — South San Francisco, Calif.-based VistaGen Therapeutics, a biotech that uses human embryonic stem cells to discover new drugs, raised $3.75 million in a bridge financing as it prepares to raise up to $20 million in a fourth round, VentureWire reports (subscription required). Montaur Capital Partners provided the funding.

VistaGen, founded in 1998, isn’t your typical stem-cell company. Where companies ranging from Geron and Advanced Cell Technology to Novocell aim to use the controversial cells — which must be derived from five-day-old embryos in a destructive process — directly as therapies to help regenerate damaged organs, VistaGen merely grows stem-cell cultures in its labs and uses those cultures to discover and run preliminary safety tests on drug candidates.

The embryonic cells are capable of “differentiating” into any type of cell in the body, which VistaGen says makes them valuable for determining how an experimental drug molecule will interact with living human tissue. The company uses its stem-cell “screens” to identify promising small-molecule drugs (that is, compounds that can be swallowed rather than injected) and to determine what side effects they might cause once ingested. Over time, VistaGen suggests, it might develop screens for drugs that trigger stem cells’ regenerative powers, potentially inducing cellular repair in conditions such as heart disease or diabetes.

For now, however, VistaGen’s lead drug candidate is a relatively prosaic compound called AV-101 that the company plans to begin testing against epilepsy later this year. AV-101 is a “prodrug” — a molecule that’s converted into an active form by the body’s natural metabolism — that turns into a neuroinhibitor once it reaches the brain. In addition to epilepsy, VistaGen suggests that the drug may also have uses in stroke, neuropathic pain and neurodegenerative diseases such as Alzheimer’s disease. For more detailed info, see the company’s Web site here and here.

Oxford’s MindWeavers raises $1.1M for mind-altering software — MindWeavers, an Oxford, England-based software company that develops software designed to improve mental function, raised $1.1 million (£558,000) through City and Merchant Group. Next year, the company hopes to raise up to £1 million with a listing on London’s Plus Markets electronic exchange.

MindWeavers develops its programs based on neuroscience research from Oxford University, which spun out the company in 2000. Its first product was Phonomena, a interactive game for children that the company says builds auditory discrimination and language skills. Several other programs are designed to improve “neuroplasticity” and to stimulate brain activity in middle-aged and elderly people in order to ward off age-related cognitive decline. VentureWire has more.

Skin-care firm Cutanea raises “millions” in convertible debt — Cutanea Life Sciences, a Cambridge, Mass., specialty pharmaceutical company focused on dermatology, raised a “multi-million” dollar round of convertible debt, VentureWire reports. Institutional investors such as Nexus Medical Partners provided the funding. Cutanea licenses neglected or cast-off experimental drugs from universities or other companies and runs them through human tests.

Heptares Therapeutics spins out of Britain’s MRC — The MRC Laboratory of Molecular Biology has spun out a new company, Heptares Therapeutics, with undisclosed seed funding from MVM Life Sciences Partners. The company will focus on drugs for diseases of the nervous system and metabolism. (Hat tip: PE Hub.)

CORRECTION: Due to incorrect information supplied by VentureWire, the VistaGen Therapeutics item originally stated that Montreux Equity Partners provided funding. In fact, Montaur Capital Partners led the funding. The VentureWire correction is here.

Is the bell tolling for EPO? – The news keeps going from bad to worse for the wonder drugs of biotech — the anemia treatments known as ESAs or EPO, shorthand for “erythropoiesis stimulating agents” and “erythropoietin,” respectively. Earlier today, an FDA advisory panel recommended new warnings for the drugs, which stimulate the production of oxygen-carrying red blood cells, as well as fresh clinical studies on their safety. Recent studies in kidney-dialysis patients linked higher doses of ESAs to heart problems and strokes, while studies in cancer patients treated for chemotherapy-related anemia have suggested that the treatments don’t improve patient survival, and may even cut lives short — possibly by encouraging tumor growth.

New restrictions, which the panel didn’t spell out, could put a serious crimp in ESA sales, which currently amount to billions of dollars for Amgen and Johnson & Johnson. The two companies have also been taking a public-relations battering in terms of how they promote the drugs. Yesterday, the NYT ran a front-page piece that detailed how rebates offered by Amgen and J&J encourage doctors to overuse the drugs, and today the WSJ followed with a look at whistleblower allegations that J&J boosted EPO sales by pushing higher-than-approved doses.

It’s worth remembering that while the storm is currently walloping industry giants like Amgen and J&J, plenty of smaller biotechs that have staked their hopes on getting into the anemia-treatment game could eventually be affected as well. These companies include Affymax, FibroGen and Neose. Only Affymax is public; another potential ESA competitor, GlycoFi, was acquired by Merck last year.

First embryonic stem-cell trial edges forward – By early next year, Geron plans to be injecting recent spinal-injury patients with nerve cells grown from embryonic stem cells, in hopes of regenerating damaged nerve pathways. This trial was supposed to be underway already, but last year the FDA requested more animal data for safety purposes. Geron CEO Thomas Okarma says the treatment will have been tested in 2,000 animals before it ever reaches humans. The FT’s Clive Cookson has the story.

Aggressive treatment leads to worse “quality of death” in cancer patients – File this one under things you already knew but didn’t want to think about. A study of 243 advanced cancer patients revealed that a greater number of aggressive treatments — including the use of ventilators and non-palliative chemotherapy — in the last week of life was associated with greater physical and psychological distress and a lower chance of dying in a preferred location (often home). Money quotes:

[Said study lead author Gabriel Silverman:] “These results suggest that when patients are actively dying, the use of aggressive treatments should be considered with caution and only pursued with the full understanding of patients or their surrogate decision makers.

[...]

“As a doctor, if I had a patient or family who wanted aggressive, life-sustaining care toward the end of their life, I would view it as a red flag warning of patient or caregiver distress,” Dr. [Robert] Arnold [of the University of Pittsburgh] concluded. “Often patients and their families are suffering, sad, or distressed at the end of life, and when dying occurs in medical settings they may hope that aggressive treatment will help the suffering, but often it doesn’t.”

Tau gets a little respect – For the past decade or so, Alzheimer’s researchers have concentrated their attention on beta amyloid, the protein that clumps around neurons in “tangles” visible in the autopsied brains of many — though not all — Alzheimer’s patients. Now comes evidence that a dark-horse protein called tau may also bear some responsibility for the disease. Researchers reported last week in Science that they reversed memory loss in mice by tinkering with their genes to produce lower levels of the tau protein. It’s heartening to see competing theories getting some attention in the Alzheimer’s community, which has had an unfortunate tendency to shun researchers who strayed from the majority opinion, but don’t expect beta-amyloid supporters to give much ground until they have to. That might be soon, as a new batch of drugs designed to block formation of beta-amyloid tangles should begin reporting data from human trials later this year.

New genetic heart-disease link – Another whole-genome association study has identified a new genetic variation that appears to increase heart-attack risk by 60 percent in European populations. The catch is that the variation doesn’t appear to be associated with any known gene, and instead exists in the long stretches of non-coding, or “junk,” DNA, meaning that no one has any idea why it should have any effect on heart-attack rates. The NYT has more.

Stem-cell researchers make like Willie Sutton – Near the end of this otherwise unremarkable account of a talk by James Thomson, the Wisconsin researcher who first isolated and grew human embryonic stem cells, comes this interesting nugget: Thomson will open a “satellite laboratory” on the UC Santa Barbara campus for stem-cell collaborations with UCSB researchers. Coincidentally enough, having a presence in the state might also qualify Thomson for funding by California’s $3 billion stem-cell program. Willie Sutton, you’ll recall, is the outlaw who once proclaimed that he robbed banks “because that’s where the money is.” Some sentiments, it seems, are universal.

Hypocrisy in the generic-biologics fight? – The prospect of legislation that clears a path for “generic” versions of expensive biotech drugs appears to have dimmed significantly. But biotech consultant and blogger David Williams — no fan himself of the push for “biogenerics” — notes that biotech companies and their lobbyists may be shooting themselves in the foot when they argue that biogenerics could never be “identical” to branded products now on the market. It’s worth reading his entire post — it’s not long — but the gist is that changing the manufacturing process for name-brand biotech drugs, which happens all the time, opens up the same “equivalence” issues that BIO and its allies find insurmountable where biogenerics are concerned. The main difference is that name-brand manufacturers can handle the issue with short, inexpensive “bioequivalence” trials — but they insist that biogenerics must undergo expensive, full-blown clinical testing to assure their efficacy and safety. If the biogenerics issue heats up again, don’t be surprised to see this argument make a comeback.

Surgical robots in space, stem cells in rodent eyes – These are just two interesting stories from the San Jose Mercury News I haven’t yet had a chance to mention. Last Sunday, the Merc ran this piece on efforts to automate surgery, with the ultimate goal of building robots that could operate on astronauts in space or soldiers on the battlefield. Far off and far out stuff. Similarly, this piece outlined the possibility of growing new blood vessels using an early and highly regenerative stem cell called a hemangioblast. Ultimately, these fast-growing cells could one day regrow blood vessels in the heart, eyes or limbs that were damaged by injury or disease.

Avid Radiopharmaceuticals, a Philadelphia-based maker of “molecular imaging agents” that help highlight diseased tissue in various medical scans, raised $26 million in a third round to develop early-detection products for Alzheimer’s and Parkinson’s disease.

AllianceBernstein and Safeguard Scientifics led the round. Previous investors including Pfizer Strategic Investments Group, the venture arm of Pfizer; Lilly Ventures, the venture arm of Eli Lilly; RK Venture Group; and BioAdvance also joined the round.

Avid’s development efforts are focused on new imaging agents for neurological problems. It recently announced initial positive results for AV-1, its lead compound for imaging the clumps of beta-amyloid protein that are often characteristic of Alzheimer’s disease.

The company’s release on the funding is here.