VentureBeat

(UPDATED: See below.)

Featured companies: FoldRx Pharmaceuticals, Ophthotech, Pevion Biotech, Restoration Robotics, Glide Pharma, Reliant Pharmaceuticals, Nanosphere, SurModics, BioFX Laboratories

FoldRx Pharma to receive $22M against cystic fibrosis — Cambridge, Mass.-based FoldRx Pharmaceuticals, a biotech focused on diseases that result from misfolded proteins, will get $22 million over the next five years from an affiliate of the Cystic Fibrosis Foundation to further its work against the genetic lung disease. The money will be paid as FoldRx meets various developmental milestones, including pushing two experimental drugs into early-stage human trials. The company’s current drug candidates, however, don’t target cystic fibrosis, and instead aim to take on a particular class of diseases known as amyloidosis and Parkinson’s disease.

The Boston Globe and the WSJ Health Blog have more.

Newly formed Ophthotech raises $36M against eye disease — Ophthotech, a newly formed Princeton, N.J., biotech with a focus on eye disease, raised a whopping $36 million in a first funding round. The company, founded by a bevy of former Eyetech Pharmaceuticals officials, is going to follow directly in the former company’s footsteps by taking aim at age-related macular degeneration with aptamers licensed from Archemix (which we wrote about here).

Investors in the round included SV Life Sciences, HBM BioVentures and Novo A/S. (See update below.)

Pevion Biotech gets $29M for vaccines — Pevion Biotech, a Bern, Switzerland-based vaccine developer, raised $29 million (CHF35 million) in a first funding round. Investors included BZ Bank Aktiengesellschaft, BB Biotech Ventures II, CC Private Equity Partners and Bachem Holding. The company is conducting clinical trials of vaccines against malaria, breast cancer and hepatitis C.

Hair-transplant automator Restoration Robotics raises $25M — Restoration Robotics, a Mountain View, Calif., developer of robotic surgery systems for hair transplants, raised $25 million in a second round of funding, PE Hub reports. The company’s Web site is a stub and the linked article doesn’t contain much information, but an April VentureWire store republished at Alta Partners’ site gets to the root of the matter:

Sutter Hill Ventures and Alloy Ventures, for example, have invested in the first and second rounds raised in 2005 and 2006, respectively, by Restoration Robotics Inc., which is testing a robotic device that performs hair transplants. Transplant-surgery outcomes vary according to the surgeon’s skill. Restoration’s robot — which is surgeon-controlled — produces uniform results in half the time, says CEO Jim McCollum. Investors hope this pushes hair transplants into the mainstream. Today, “people think of late-night commercials when they think of hair restoration,” says Sutter Hill Managing Director Jeffrey W. Bird.

Investors in the round include InterWest Partners, Alloy Ventures and Sutter Hill Ventures.

Glide Pharma raises $4.6M for needle-free drugs — U.K. specialty pharma Glide Pharma raised $4.6 million (£2.3 million). Investors included Oxford Technology 4 VCT and Oxford Capital Partners. The company is developing drugs that can be delivered via its own needle-free injection system. We’ve written about other startups pursuing similar technology, including StrataGent Life Sciences and Macroflux.

Reliant Pharma refiles for a $400M IPO — Reliant Pharmaceuticals, a Liberty Corner, N.J., specialty pharma that withdrew a planned $300 million IPO in 2005, is going to try again, only with more at stake. The company filed to raise as much as $400 million in an offering, despite the fact that it is on track to lose more than $100 million this year, which would be the third time in four years it has done so.

In the first six months of this year, Reliant reported a net loss to common shareholders of $56.4 million on revenue of $230 million. That net loss would have been only $21.8 million but for preferred-share dividends of $34.6 million in the half. Reliant sells a variety of unrelated second-hand drugs for cardiovascular problems.

Interestingly enough, Reliant made its last charge at the public markets with the famed Ernest Mario at the helm. Mario jumped from Reliant just last week, and is now CEO of the little-known Capnia (see our coverage here).

Nanosphere aims for outsized $100M IPO — Nanosphere, a Northbrook, Ill., developer of nucleic-acid and protein detection and diagnostic systems, filed to raise as much as $100 million in an IPO. As of March 31, the company had an accumulated deficit of $112.6 million. Earlier this year, it submitted its Verigene molecular-diagnostic system to the FDA for approval; Nanosphere intends to market the device to hospital laboratories that currently aren’t equipped to perform such tests in-house.

SurModics snaps up diagnostic-supply company BioFX for up to $22.7M — SurModics, an Eden Prairie, Minn., developer of drug formulations and other biological supplies, agreed to acquire BioFX Laboratories of Owings Mills, Md., for $11.3 million in cash and milestone payments worth up to $11.4 million. The release is here. The acquisition is the second for SurModics this month; it bought out Brookwood Laboraties on Aug. 2 (our coverage is here).

UPDATE (2:37pm PT): Added items on Glide Pharma, Reliant Pharmaceuticals, Nanosphere, and SurModics/BioFX Laboratories.

UPDATE REDUX: Over at Pharma’s Cutting Edge, Fred Cohen notes what I didn’t have time to, which is that Ophthotech essentially amounts to a do-over for the architects of Eyetech’s failure. Check it out.

San Diego’s NovaCardia, a developer of drugs for cardiovascular disease, agreed to sell itself to Merck for $350 million.

The specialty pharmaceutical company has in-licensed two drugs from other drug makers, one to treat kidney problems in heart failure patients and another for atrial fibrillation. The heart-failure drug, KW-3902, should enter a late-stage trial this year; the atrial-fibrillation drug, meanwhile, is slated to enter mid-stage trials this year.

Actually, I take that back — KW-3902 has already completed one “pilot” late-stage trial, which is intended to establish the dose for three later trials that the company apparently hopes to present together in order to win FDA approval. It’s kind of unusual to still be establishing the proper dose this late in the process, and the FDA often looks askance at multiple trials if the company intends to try to make some sort of combined analysis. But I guess Merck is satisfied if they’re willing to pay top dollar for the company.

NovaCardia had filed for an $86.3 million IPO in March, after rejecting acquisition offers the previous year.

(UPDATED: See below.)

Sunrise, Fla.-based Bioheart thinks enough of its stem-cell treatment for heart disease that it has just boosted its expected IPO take by $10 million, to $45 million. A close reading of its latest SEC filing, however, raises a fair number of questions for would-be investors.

Bioheart’s leading therapy candidate is MyoCell, a treatment designed to reverse heart-attack damage. MyoCell consists of myoblasts — a kind of muscle stem cell — that are removed from a patient’s own thigh muscles, cultured for roughly 21 days, and then injected into the scar tissue surrounding the individual’s heart in a minimally invasive procedure. If all goes well, these myoblasts then engraft into the scar tissue, transform into normal skeletal-muscle cells and then, in some still-mysterious fashion, restore some muscular activity to damaged portions of the heart.

So far, so good, even if Bioheart can’t explain why the transformed cells might bolster the heart, since they don’t appear to “link up” with chemical signals that direct the heart’s cells to beat in unison. The company does offer several theories, including the possibility that the injected cells somehow “stretch,” channel electrical currents, fuse with or otherwise “acquire” properties of existing heart-muscle cells, or release proteins that inhibit scar formation.

Unfortunately, two early clinical trials so far haven’t demonstrated that MyoCell significantly improves heart function, and some data suggest the therapy might even be dangerous. The first test, a 20-patient safety trial called Myoheart, provided no statistically significant evidence that the treatment helped patients walk farther, improved their quality of life or bolstered their hearts’ efficiency (as measured by a parameter called left ventricular ejection fraction). To be fair, Myoheart wasn’t designed to provide proof of efficacy. Still, two of the 20 patients died, possibly because of MyoCell, and four experienced irregular heartbeats thought to be related to the cell therapy.

A larger 40-patient trial in Europe called Seismic also turned up cause for concern. Although this trial compared heart patients who received MyoCell with others who didn’t, it still hasn’t generated any statistically significant data suggesting the stem-cell treatment helps patients. (Only interim data is available, although the company says it doesn’t expect to see significant data for several months.) More disturbing, however, is the fact that the MyoCell patients actually saw their heart efficiency decline, on average, almost four times faster than the untreated group in the six months following the procedure. One patient died from multiple organ failure, possibly attributable to MyoCell, and eight others had irregular heartbeats possibly linked to the therapy.

The Seismic data also aren’t statistically significant and may well be skewed if, by chance, the MyoCell group included especially sick patients or if healthier people dominated the control group. Still, it’s not exactly an encouraging sign, so it beats me why the company thinks its IPO chances have greatly improved all of a sudden, particularly in a market environment that has recently been fairly dismissive of biotech offerings.

One other interesting fact that would-be investors might want to consider: Bioheart’s primary patent on MyoCell expires in 2009, which is when the company is expecting to see final data from a pivotal U.S. trial. That could crimp commercialization of the treatment even if it is approved, to say the very least. (The company does say it thinks it can win a five-year extension of the patent, but even that isn’t very much.)

Bioheart’s original SEC filing, in case you’re curious, is here. (Hat tip: VentureWire, subscription required)

UPDATE (10/12/07): Bioheart slashes its offering price, effectively halving the company’s value. I gloat about it here.

Portola Pharmaceuticals, a South San Francisco, Calif., biotech aiming to develop treatments for blood clots and other heart-related problems, raised $70 million in a third round of financing dominated by late-stage and public-market investors.

Among new investors in the round were Brookside Capital; AllianceBernstein; Teachers’ Private Capital, the private investment arm of Ontario Teachers’ Pension Plan; Goldman Sachs, T. Rowe Price, IBTM and CIDC. They were joined by existing investors Abingworth, Alta Partners, Advanced Technology Ventures, Frazier
Healthcare Ventures, MPM Capital, Prospect Ventures and Sutter Hill Ventures.

Portola plans to use the funding for additional clinical trials of its two leading drug candidates, both experimental blood thinners targeting different blood proteins that promote coagulation. PRT054021, an oral molecule that inhibits Factor Xa, showed promising signs in a recent mid-stage human test, and will advance into further clinical trials. Meanwhile, PRT060128, which prevents blood platelets from aggregating, has completed early trials and should move into mid-stage testing by the second half of 2007. Should they receive regulatory approval, both compounds would compete with blood thinners already on the market.

Portola aims to go public and may do so as early as next year, the company’s chief financial officer, Mardi Dier, told VentureWire (subscription required).