VentureBeat

TODAY’S HEADLINES:

• Stent maker IDev Tech raises $25M (VentureWire)
• Xytis gets $15M for brain-injury drugs (VentureWire)
• Diagnostic maker Iris Biotech plans to go public, launch breast-cancer test (Edgar)
• RiverVest Venture Partners raises $75M life-science fund (release)
• Concentric Medical names Maria Sainz CEO (release)

[Note: I'm a little sad to announce that this will be my last life-science briefing at VentureBeat, although with luck, it won't be the end of my time here. Starting Monday, I'll be blogging regularly on the drug industry and healthcare over at BNET Industries, a new CNET venture, so drop by if you can. (Preparing for that move is the main reason non-briefing posts have been scarce recently.) I still hope to post here occasionally as well, since covering below-the-radar startups has been a blast, and I'm not ready to give it up quite yet.

It's been a great year -- my first VentureBeat post was on April 3, 2007 -- and I want to thank Matt for the opportunity to join you here, and all our regular readers and commenters for your time and your insights. As journalists, we're only as good as our sources and readers, and you guys have helped in countless ways to make me look much smarter than I really am. --D.P.H.]

Stent maker IDev Tech raises $25M – IDev Technologies, a Houston medical-device startup, raised $25 million in a third funding round, VentureWire reports. The company is developing a new type of stent for use in propping open the liver’s bile ducts .

The company’s existing investors, a group that includes Bay City Capital, Heron Capital, PTB Sciences and RiverVest Venture Partners, provided the funding. IDev had previously raised $24 million, according to VW.

Xytis gets $15M for brain-injury drugs – Irvine, Calif.-based Xytis, a biotech focused on disorders of the central nervous system, raised $15 million in an extension of its second funding round, VentureWire reports. Its backers included Atlas Venture, CDC Innovation, Sanderling Ventures and Ventech.

The company says it was founded in 2005 from the merger of Xytis Pharmaceuticals and Remergent. (Sounds more to me like Xytis swallowed Remergent, but they’re free to describe it however they’d like.) Its lead drug candidate, XY2405, blocks a cellular protein called the Bradykinin B2 receptor, a signaling molecule thought to promote inflammation.

Xytis is testing the drug as a potential treatment for traumatic brain injury; the molecule is currently in mid-stage, phase II trials. The company is also testing an antidepressant in early-stage trials.

Xytis raised half the money last August, then received the second $7.5 million in April, the company told VentureWire. It has previously raised $24.5 million in its current incarnation, and its “predecessor companies” pulled in $6.5 million.

Diagnostic maker Iris Biotech plans to go public, launch breast-cancer test – Santa Clara, Calif.-based Iris Biotechnologies, a developer of molecular diagnostic tests, is preparing to go public, VentureWire reports. The company plans a small offering on the OTC Bulletin Board — if I’m reading its latest SEC filing correctly, its existing shareholders will raise about $1.1 million, with no proceeds headed to the company  — and hopes to launch a breast-cancer test later this year.

Iris plans to use chips to measure gene activity in breast cancer, with the hope of predicting the odds that a surgically removed tumor will recur and, eventually, helping patients and doctors customize cancer treatment from an early stage. The company claims that it will be competitive with Genomic Health and Agendia, two companies with similar tests for predicting breast-cancer recurrence.

There’s something a little odd about Iris’ disclosures in the SEC forms, though. Iris doesn’t describe its technology, the genes it will test or how it settled on them in any detail, and spends almost as much time talking about its database of patient information and related computer technology as it does about its tests. While it may consider some or all of that information a trade secret — and disclosure requirements may well be looser for such a small offering — it’s still kind of unusual for a startup to ask outside investors to put up their money essentially on faith.

TODAY’S HEADLINES:

• Q Thera takes in $15M for neural stem-cell treatments (release)
• Stroke clotbuster Concentric Medical withdraws IPO (IPOhome)
• Avera recaps with $9M to relaunch human tests of GI drug (VentureWire)
• Tissue repairer Nerites raises $5.7M (release)
• Semafore Pharma aims for $7.5M to launch new cancer-drug trials (VentureWire)
• Triage Wireless gets $6.7M for “cuffless” blood-pressure monitors (peHUB)
• MAKO Surgicals prices IPO, falls in first day of trading (WSJ)
• ImmunoCellular acquires assets of Molecular Antibody Technology (release)

Q Thera takes in $15M for neural stem-cell treatments – Q Therapeutics, a Salt Lake City biotech working on neural stem-cell treatments for neurological conditions, has received the first portion of a $15 million second funding round. Investors in the round included vSpring Capital, Invitrogen, Epic Ventures, Toucan Capital, University of Utah Research Foundation, Salt Lake Life Science Angels and Q management.

Q is taking aim at diseases such as multiple sclerosis and cerebral palsy that result when the protective myelin sheath that protects nerve fibers and the spinal cord deteriorates, often for little-understood reasons. The company is developing neural stem cells that can produce new glial cells, which in theory should be able to regenerate the damaged myelin. (Irritatingly enough, the company insists on calling its product “Q cells.”) The company aims to begin clinical trials in transeverse myelitis, a paralyzing form of MS, next year.

Stroke clotbuster Concentric Medical withdraws IPO – Concentric Medical, a Mountain View, Calif., developer of medical devices for removing stroke-causing blood clots, withdrew its proposed IPO. The company becomes the eighth life-science startup to abandon an IPO this year.

Concentric, of course, cited “unfavorable market conditions” as the reason for its withdrawal. The device maker, which is still unprofitable, reported working capital and cash and short-term investments of $20.3 million at the end of June and has been burning cash at a rate of about $7 million a year, so it’s not necessarily in dire straits. Concentric, in fact, today announced it had arranged a $15 million line of credit with Horizon Technology Finance, giving it an additional cushion.

The company makes and sells a catheter-based device that can be snaked through a patient’s blood vessels to the brain in order to physically “grab” and remove stroke-causing blood clots. Although Concentric won approval for the device in 2004, sales have grown more modestly — in part, perhaps, because Concentric hasn’t undertaken the clinical studies necessary to demonstrate the usefulness of its technique compared to other treatments, and has no plans to do so. (The company listed this point as a risk factor in its SEC filings.) What’s more, the Concentric device can sometimes damage blood vessels in the brain; in one of two studies, almost ten percent of patients suffered a cranial hemorrhage.

Our previous coverage of the company is here.

Avera recaps with $9M to relaunch human tests of GI drug – Avera Pharmaceuticals, a San Diego specialty pharma developing drugs against a variety of conditions, recapitalized with a $9 million “first” funding round, VentureWire reports. Such a recap usually amounts to a restart for a company, which in this case was prompted by a halted clinical trial of a drug for irritable bowel syndrome and overactive bladder.

Investors in the recap included all participants in the company’s previous funding round: Aisling Capital, SV Life Sciences, Aberdare Ventures, BioAsia Investments, H.I.G. Ventures, Montreux Equity Partners, Bay City Capital, BTG PLC, Frazier Healthcare Ventures, InterWest Partners, St. Paul Venture Capital and Windamere Venture Partners. The company declined to provide a valuation to VentureWire, but it’s almost certainly suffered a “down round,” or it wouldn’t be recapitalizing.

Avera shut down mid-stage trials of its drug, known as AV608, last year after animal testing turned up potential toxicity issues. The company has since redesigned the drug to eliminate a compound it called a “non-active metabolite,” and hopes to resume studies later this year. Avera had raised more than $72 million prior to the recap.

Featured companies: Concentric Medical, Vertebration, Vision RT, Kemeta

Clotbuster Concentric Medical files for $69M IPO — Mountain View, Calif.-based Concentric Medical, which makes and markets devices for removing dangerous blood clots from the brains of stroke patients, filed to raise up to $69 million in an initial offering. The company’s devices consist of catheters that are threaded into the body’s circulatory system via the femoral artery in the groin and passed into the brain to the site of the clot. There, a wire at the end of the catheter coils around the clot, permitting its removal.

Although Concentric’s device has been approved since 2004, the company is still losing money despite briskly expanding sales. The company posted a $6.9 million net loss in 2006, down from $9.7 million in 2004. Sales rose to $11.3 million from $2.3 million over the same period.

Concentric’s clot-removal device is based on technology licensed from the University of California. Among the risk factors noted by the company is the fact that the device can malfunction and sometimes causes additional injury to the delicate blood vessels of the brain. Concentric said it has submitted 82 medical-device reports to the FDA as of June 30; in 56 of those events, the device’s tip fractured, and in 22 instances a blood vessel was damaged.

Spinal implant maker Vertebration raises $750K — Vertebration, a Columbus, Ohio, developer of spinal implants, raised a $750,000 seed round, VentureWire reports (subscription required). The funding consisted of $500,000 in venture debt arranged by NCT Ventures and a $250,000 private placement to angel investors.

The company may seek a first funding round of $3.5 million to $10 million later this year, according to VentureWire. Its Web site should be active next week.

From the VentureWire piece:

Columbus, Ohio-based Vertebration plans to take its first product, a spinal implant called Xycor, to market in late October. The implant works to restore the height and space between two vertebrae or a partial vertebra through a minimally invasive procedure. Xycor received 510(k) clearance from the Food and Drug Administration earlier this year. Vertebration is developing instruments to accompany its lead product, as well as other products for the spine market.

Vision RT gets $500K for radiation imaging — Vision RT, a London-based developer of three-dimensional imaging tools for guiding radiation therapy, raised $495,725 (£250,000) from the Capital Fund, VentureWire reports. The company’s tools provide a three-dimensional model of a patient in order to properly direct radiation-beam treatment for cancer and other diseases.

Kemeta takes equity investment from Dow Chemical for breath analysis — Kemeta, a Phoenix developer of breath-analysis systems, said Dow Chemical took a minority equity stake in the company. Details of the transaction weren’t disclosed.

Kemeta aims to produce a palm-sized analyzer that can measure breath acetone, a by-product of burning fat, for use in obesity. The sensor technology was originally developed by Dow.