VentureBeat

TODAY’S HEADLINES:

• PEAK Surgical takes in $21M for electrosurgical tools (release)
• CellGate acquired by Australian cancer biotech ProGen for $2.5M (release)
• Traversa raises $2M for RNAi-delivery technologies (release)
• RemitDATA, Web-based healthcare-service co., takes in $5.5M (bizjournals.com)
• Spinal-implant maker Archus Orthopedics gets $10M venture loan (release)
• Promedior pulls down another $5.5M for fibrotic disease (release)
• Acrongenomics takes 11 percent stake in Molecular Vision (release)
• Hepatitis drug-developer Biolex withdraws IPO (IPO Home)
• Employee drug screener eScreen gets Carlyle investment (release)
• NovaMin raises $2.5M for dental-care products (VentureWire)
• Cardious receives $1.5M for heart-valve repair (VW)
• PE-backed Spire Healthcare buys PE-backed Classic Hospitals for £145M (FT)
• Aberdare Ventures promotes two principals to partner (release)

CellGate acquired by Australian cancer biotech ProGen for $2.5M –CellGate, a Redwood City, Calif., biotech working on new cancer drugs, sold itself to ProGen, an Australian biotech also focused on cancer, for the equivalent of about $2.5 million. The release is here. Needless to say, this represents a fire sale for a biotech that seems to have run out of time.

CellGate was pursuing drugs that aimed to shut down the growth of cancer cells either by inhibiting polyamine or by “turning down” the activity of cancer-related genes. ProGen will conduct an 18-month assessment of CellGate’s first drug candidate, a polyamine inhibitor that had already completed an early stage, phase I clinical trial, before deciding upon a mid-stage, phase II program. ProGen will also evaluate a stable of CellGate’s preclinical drug candidates.

ProGen will issue shares worth $1.5 million for CellGate’s assets, and will assume net liabilities of roughly another $1 million. The sale represents a significant loss for CellGate’s investors, including Healthcare ventures and New Enterprise Associates, who as recently as 2002 put $10 million into the company in a fourth funding round. I haven’t been able to piece together how much CellGate raised over its lifetime, although it’s certainly considerably more than that $10 million.

Traversa raises $2M for RNAi-delivery technologies – Traversa Therapeutics, a La Jolla, Calif., biotech working on ways to deliver RNA-based drugs to their cellular targets, raised $2 million in a first financing round. Investors included San Diego Tech Coast Angels, Mesa Verde Venture Partners and Morningside Group.

Traversa’s work is intimately involved with RNA interference, a newly discovered technique for “silencing” disease-related genes using short strands of RNA that trigger a natural cellular mechanism for shutting down genes. Getting those short RNA molecules into cells in the first place, however, isn’t particularly easy.

Traversa claims to have solved that problem, although it doesn’t appear to be saying how. The company will license its RNA-delivery approach to drug companies, and also offers it for use as a drug-screening technology.

RemitDATA, Web-based healthcare-service co., takes in $5M – Memphis, Tenn.-based RemitDATA, a provider of Web-based healthcare-data services, raised $5 million in a new funding round.Noro-Moseley Partners and SSM Partners provided the funding.

RemitDATA offers Web-based tools for individual physician practices designed to help them track insurance and Medicare reimbursements and scan paper records into digital form. The company also makes a sales-management tool for the homecare industry.

Promedior pulls down another $5.5M for fibrotic disease – Promedior, a Malvern, Pa., biotech focused on fibrotic disease, raised an additional $5.5 million as an extension to its first funding round. Polaris Venture Partners, Morgenthaler Ventures, HealthCare Ventures and Easton Capital participated in the financing.

Fibrotic disease is a general name for conditions that entail repeated bouts of inflammation followed by scarring that, over time, can lead to organ failure. Examples include heart failure, cirrhosis and kidney failure. Promedior aims to develop drugs that can slow or reverse the scarring process, and intends to begin clinical trials of its first drug candidate this year. The company previously raised $7 million in its first funding round.

Acrongenomics takes 11 percent stake in Molecular Vision – Acrongenomics, a Swiss company that acquires and develops life-sciences technology, took a 10.5 percent stake in Molecular Vision, a developer of credit-card sized diagnostic devices. Acrongenomics had previously announced its intent to acquire Molecular Vision, so presumably this is the first step in that plan. The release is here.

Hepatitis drug-developer Biolex withdraws IPO – Biolex Therapeutics, a Pittsboro, N.C., biotech developing ways to manufacture protein drugs in an aquatic-plant system, withdrew its planned $70 million IPO. We previously covered Biolex and its IPO dreams here.

NovaMin raises $2.5M for dental-care products – NovaMin, an Alachua, Fla., company working on tooth-remineralization products, raised $2.5 million in a third round of funding and expects another $2.5 million, VentureWire reports. Intersouth Partners provided the financing.

Cardious aims at $1.5M for heart-valve repair – Cardious, a Northfield, Minn., medical-device company working on a heart-valve bypass device, is raising $1.5 million in a first funding round, VentureWire reports. The company aims to raise the funds from angel investors. Cardious is developing an aortic-valve replacement that can be put in place on a beating heart, rerouting blood flow around the damaged valve.

Featured companies: Alere Medical, AorTx, BioMedical Innovations, Cavidi, Centice, Integrated BioPharma, Oxitech, Nastech

UPDATED: Expanded items on Centice, AorTx and Alere Medical.

Centice raises $11M for drug-safety technology — Centice, a Morrisville, N.C., developer of computer-sensor systems, raised $11 million in a second funding round. Investors included S-Group Direct Investments, the Aurora Funds, Novak Biddle Venture Partners, Innovation Ventures and several individuals.

The funding will further Centice’s work on the Pass Rx system, a sensor designed to ensure the authenticity of prescription drugs. The company doesn’t appear to say much about how it’s supposed to work, beyond noting that the system can “verify dispensed medications against a customer’s prescription at the point of sale in real-time.” The company previously raised $3 million in 2004, according to VentureWire (subscription required).

Heart-valve replacer AorTx acquired by Hansen Medical for $9.3M — AorTx (no Web site), a Mountain View, Calif., medical-device startup focused on heart-valve replacements, sold itself to Hansen Medical for $9.3 million in cash, stock and assumption of debt. AorTx shareholders stand to earn as much as another $30 million in milestone payments should AorTx products clear various development and regulatory hurdles.

Our previous coverage of the company is here. AorTx had previously raised $5.8 million in two funding rounds, so the deal represents a decent return to shareholders, who include Bio-Star Private Equity Fund, Saratoga Ventures, MedFocus, Wilson Sonsini Goodrich & Rosati and St. Jude Medical.

Chronic-illness care manager Alere Medical acquired by Inverness for $302M — Alere Medical, a Reno, Nev., disease-management firm, sold itself to Inverness Medical Innovations for $302 million in cash and stock. Alere had previously raised about $45 million in equity investment. The company develops programs that help patients with chronic illnesses such as diabetes or heart problems manage their conditions via at-home monitoring, education and nurse-patient relationships.

OTHER HEADLINES OF NOTE:

• Oxitech pulls in £1.5M for sterilizing pest control (VW)
• Medical diagnostics maker Cavidi draws $1M (VentureWire, sub req’d)
• BioMedical Innovations names Rafael Andújar as general managing partner (VW)
• Integrated Biopharma names Robert Erwin president of plant-biotech subsidiary (release)
• Nastech to spin off RNAi work into independent startup MDRNA (release)

Featured companies: DirectFlow, Direvo, Indigo Biosystems, MacroGenics

Direct Flow raises $27M for heart-valve implants — Santa Rosa, Calif.-based Direct Flow Medical, a startup developing heart implants, raised $27 million in a second funding round. Investors included Johnson & Johnson Development, Foundation Medical Partners, VantagePoint Venture Partners, ePlanet, EDF Ventures, New Leaf Venture Partners and Spray Venture Partners.

Direct Flow makes minimally invasive aortic-valve replacements for the heart. This particular field happens to be booming — we’ve previously covered competitors JenaValve, AorTx and Sadra.

MacroGenics signs Eli Lilly pact worth initial $43M for autoimmune disease — MacroGenics, a Rockville, Md., biotech developing antibody-based therapies for autoimmune disease, signed a partnership with Eli Lilly that could be worth more than $600 million. MacroGenics is working on antibodies designed to tamp down autoimmune responses by inducing tolerance to antigens that might otherwise promote strong immune reactions to the body’s own cells. The company’s first drug candidate targets diabetes — specifically “type one” diabetes that results when the immune system targets insulin-producing cells in the pancreas.

OTHER HEADLINES OF NOTE:

• Indigo Biosystems gets funding for lab-data software (VentureWire, sub req’d)
• Germany’s Direvo pulls in €12M for biomanufacturing (release)

Featured companies: Adnexus Therapeutics, Bristol-Myers Squibb, Cellerix, Elixir Therapeutics, GenomeQuest, Intronn, JapanBridge, JenaValve, VirXsys, Ysios Capital

[NOTE: This item is a catchup daily briefing originally posted on 9/27/07. I've edited the item's timestamp to preserve the chronological order of the briefings. --D.P.H.]

Adnexus Thera cancels IPO, sells itself to Bristol-Myers for $430M — Waltham, Mass.-based Adnexus Therapeutics, a biotech pursuing drugs against cancer and other diseases, said it would cancel plans for its IPO and instead sell itself to Bristol-Myers Squibb for $430 million in cash, or a net purchase price of $415 million once adjusted for the biotech’s cash balance. Adnexus shareholders may also receive another $75 million assuming particular developmental milestones are met.

You can find our earlier coverage of Adnexus, which filed for its IPO just last month, here and here. Adnexus is the second biotech I’m aware of that’s recent chosen an acquisition offer over facing vicissitudes of the biotech IPO market. (The other was NovaCardia; you can find our coverage here.)

Elixir Pharmaceuticals seeks $86.3M IPO — Elixir Pharmaceuticals, a Cambridge, Mass., biotech focused on anti-aging, obesity and metabolic diseases, filed to raise as much as $86.3 million in an IPO. Elixir is best-known for its work with sirtuins, a class of chemicals that appear to mimic the anti-aging effects of calorie-restricted diets. A similar company founded by a competing set of researchers, Sirtris Pharmaceuticals, raised $60 million in an IPO last May. (See our coverage here.)

Neither company, however, emphasizes its work with the potentially anti-aging molecules, and instead play up their interest in treating a cluster of diseases such as diabetes, obesity and other metabolic disorders. Elixir’s two leading candidates on that front treat diabetes, and were licensed from Japan’s Kissei Pharmaceutical.

Interestingly enough, Elixir’s SEC filing also lists “healthcare reform measures” as a risk that could “hinder or prevent” the company’s success. For what it’s worth, Elixir also thinks patent reform poses a threat.

“Adult” stem-cell company Cellerix raises €27.2M — Spain’s Cellerix, a company aiming to use so-called adult stem cells as a treatment for skin regeneration and autoimmune-related defects known as fistulas, raised €27.2 million ($32 million). Investors included Life Sciences Partners, Ventech, Ysios Capital Partners, Roche Venture Fund, Novartis Venture Fund, Genetrix, Grupo A&G, Spanish investor Jose Antonio Matji and Cellerix management.

Celletrix was spun out of the Spanish biotech company Genetrix, which remains its majority shareholder. Celletrix has two products in clinical tests. One uses stem cells derived from the patient’s own fatty tissue to treat fistulas, which are abnormal connections between organs and skin or between different organs. The other treats a blistering skin condition known as epidermolysis bullosa using a combination of cells — although apparently not stem cells — from the patient and a universal donor.

Ysios Capital seeks €65M for life-science fund — Spanish venture-capital firm Ysios Capital Partners is looking to raise €65 million ($91 million) for its first life-sciences fund. (Their PDF release is here.)

The firm envisions making investments of between €500,000 and €4 million in early-to-late-stage companies in biotech, pharmaceuticals, healthcare and medical technology. Ysios plans to make the majority of its investments in Spanish companies, but expects it may devote up to 30 percent of the fund outside of Spain.

Heart-device maker JenaValve pulls in an extra €10M — Munich-based JenaValve, makers of a minimally invasive replacement for aortic heart valves, raised an additional €10 million ($14 million) in order to win European approval of the device, VentureWire reports. Investors included Edmond de Rothschild Investment Partners, NewMed Management and Atlas Venture.

The company said it hopes to begin marketing the device by mid-2009, after which it may seek U.S. approval as well. Prior to that, however, JenaValve is likely to seek potential acquirers, the company’s chief financial officer told VentureWire.

JapanBridge raises $6.5M for in-licensed cancer drugs — Tokyo’s JapanBridge, a specialty pharmaceutical company founded last year by Itochu and MPM Capital, raised $6.5 million in an additional first funding round. Investors included MPM Capital, Itochu and Kyowa Hakko.

The funding is intended for building its infrastructure and identifying two to four cancer drugs for in-licensing to Japan. Separately, JapanBridge said it struck a partnership with Kyowa Hakko to collaborate on cancer-drug development.

Genetic-search company GenomeQuest raises $4M — GenomeQuest, a Westborough, Mass., developer of a Web-based genetic search engine, raised $4 million in a second funding round. Investors included Mosaix Ventures, Cross Atlantic Partners, Milestone Venture Partners, and Société Générale Asset Management Alternative Investments.

GenomeQuest describes its service as a Web-based system that makes it possible for corporate researchers to search for genetic and biological information across a variety of public and private databases. In that sense, it sounds generally similar to the service offering by NextBio, which raised $7 million in June. See our previous coverage of that company here.

Gene-therapy company VirXsys acquires Intronn’s assets — Gaithersburg, Md.-based VirXsys, a gene-therapy company hoping to treat AIDS and genetic disease, acquired the core assets and preclinical programs of fellow Gaithersburg biotech Intronn. Terms of the all-stock deal weren’t disclosed. Intronn’s technology aims to reprogram gene expression by inserting genetic code at the RNA level to repair mutations or repair other damage.