VentureBeat

TODAY’S HEADLINES:

• HemCon Medical acquires Alltracel Pharma (release)
• Transoma Medical, implantable wireless device maker, withdraws its IPO (Edgar)
• Oracle Healthcare cuts Precision Thera acquisition price by roughly 15 percent (release)
• MedBillManager adopts change:healthcare name, aims for March 3 relaunch release

Another slow news day, as yesterday we covered most of the fundings other sites are writing about today. I’ll update if anything else crops up. In the meantime, feel free to check out yesterday’s briefing or any other items here.

HemCon Medical acquires Alltracel Pharma – This item is now a standalone post here.

Transoma Medical, implantable wireless device maker, withdraws its IPO – Transoma Medical, a St. Paul, Minn., maker of implantable wireless diagnostic sensors, formally withdrew its $77.6 million IPO. Transoma postponed its IPO earlier this month; unsurprisingly, the company cited “unfavorable market conditions” as the reason for its withdrawal.

Transoma is one of several startups working on ways to monitor the vital signs of sick or at-risk patients in ways that don’t require invasive procedures or constant visits to the doctor’s office. The company’s devices, which received FDA approval last October, involve an implantable recorder that monitors a patient’s heartbeat and a handheld wireless device that records the data and regularly transmits it to a physician’s office via a home-installed base station.

The company has raised just over $25 million in three funding rounds since its founding in 1984, when it was known as Data Sciences International. Although Transoma generates close to $40 million a year from sales of its older diagnostic products, it is still burning cash at a rate of roughly $4.3 million every quarter. As of Sept. 30, 2007, Transoma held $26.1 million in cash, equivalents, and working capital, so its cash situation isn’t yet dire; if those trends hold, it will be down to about $17 million by the end of March. Don’t be surprised if Transoma hits the fundraising hustings again before long.

MedBillManager adopts new name as parent company change:healthcare aims for March 3 relaunch – MedBillManager, a site that helps people sort through complex medical expenses, will adopt a new name and Web site as it relaunches on March 3. Its parent company, Nashville, Tenn.-based change:healthcare, is consolidating its various Health 2.0 properties under its own name; these will now be available at www.changehealthcare.com.

The company announced the changes in an email; for a Web version, see here. A screenshot of the new site suggests that change:healthcare will now be emphasizing social networking as part of services for medical-bill management, finding and rating doctors, and comparing prices across various healthcare providers.

Oracle Healthcare cuts Precision Thera acquisition price by roughly 15 percent – Back in December, the “blank check” acquisition company Oracle Healthcare Acquisition agreed to buy the Pittsburgh diagnostic biotech Precision Therapeutics in a transaction that was virtually impossible to value at the time. Only later did the companies indicate that the acquisition would cost Oracle around $150 million (based on the issuance of 19 million Oracle shares at a price of $7.90 apiece detailed in this prospectus).

Not any more, apparently. The two companies just agreed to reduce a key variable in the calculation that establishes how many shares Oracle will issue to Precision’s owners, cutting the deal’s value by approximately 15 percent to roughly $127.5 million. The details, however, remain a bit murky: The deal’s participants haven’t done anyone a favor by describing the ratio at which Precision shares will convert to Oracle shares in a dense, wordy paragraph. Complex calculations like this should be set out in an equation with clearly defined variables, dammit.

In addition, the proposed amendment to the merger deal will cause founders of Oracle to forfeit shares of the special-purpose acquisition company, or SPAC, currently worth $14.8 million. It will also eliminate a “top-up” provision that would have handed Precision shareholders extra Oracle stock if the SPAC’s share price declined.

What does all this add up to? It sure looks like everyone involved in the deal is getting a haircut of some kind, although why this is happening now isn’t remotely clear. I’m certainly tempted to think that Precision is turning out less of a bargain Oracle thought, but at this point, it’s impossible to know for sure.

For more about SPACs, see our coverage here.

UPDATE: The merger is dead.

TODAY’S HEADLINES:

• H-P “great-grandchild” Alverix raises $7.7M for portable diagnostic devices (release)
• Moksha8 takes in $39M to commercialize drugs for Asia (peHUB)
• Dynogen Pharma goes public, gets $98M in reverse merger (release)
• EKR Thera raises funds, pays up to $170M to “reacquire” PDL BioPharma drug (release))
• R4 Vascular receives $4.4M for vascular-access devices (VentureWire)
• Medical tube and syringe maker Amsino Medical sells stake to Baring PE Asia (release)
• Implantable-diagnostic maker Transoma Medical postpones IPO (IPOhome)

H-P “great-grandchild” Alverix raises $7.7M for portable diagnostic devices – I’ve moved this item to a standalone post here.

EKR Thera raises funds, pays up to $170M to “reacquire” PDL BioPharma drug – This item is now a standalone post here.

Moksha8 takes in $39M to commercialize drugs for Asia – Moksha8, a stealthy San Francisco drug developer that commercializes “high-value” therapies for Asia and other markets, raised a combined $39 million in first and second funding rounds, peHUB reports, citing regulatory filings. TPG Biotech provided the $24 million first round, and was joined by Lit Tele of Brazil in a $15 million second round.

Actually, I call Moksha8 a San Francisco company because peHUB does, but I have my doubts. The company’s stub of a Web site lists offices in Hong Kong, SF, Philadelphia and London, and provides Hong Kong and Philadelphia-area phone numbers as its main points of contact. The company’s name, by the way, appears to be a reference to the Hindu term for liberation from the cycle of reincarnation. One more observation from the Web site: Moksha8’s “other markets” are likely in Central and South America, which is the only region besides Asia highlighted on a global-map background image there.

Dynogen Pharma goes public, gets $98M in reverse merger – Dynogen Pharmaceuticals, a Waltham, Mass., specialty pharma focused on gastrointestinal disease, went public in a reverse merger with Apex Bioventures Acquisition, a “specialty acquisition” corporation. Such entities are formed by investors specifically to acquire private companies, and frequently — as in this case — raise funds for later acquisitions via an IPO.

Dynogen shareholders will receive $98 million in Apex stock, and are eligible for two additional milestone-related payments of $23 million apiece. The combined company, which will be run by Dynogen’s CEO and operate out of Dynogen’s current offices, is expected to have up to $65 million in cash by the time the deal closes.

Implantable-diagnostic maker Transoma Medical postpones IPO – Transoma Medical, a St. Paul, Minn., maker of implantable medical-diagnostic devices, postponed its planned $77.6 million IPO, IPOhome reports. The company hasn’t yet formally withdrawn the offering, although that seems a foregone conclusion at this point.

Transoma makes implantable monitoring devices, such as a wireless gadget that monitors an individual’s heartbeat and transmits the information to a data center and then to a doctor’s office. Our previous coverage of Transoma is here and here; we’ve also written about startups working on similar devices, such as CardioMEMS and its implantable wireless sensors for measuring blood pressure, heart function and heart rate, here.

TODAY’S HEADLINES:

• Drug-screening tool maker IonGate Bio raises €4.6M (release)
• Protein-drug maker Molecular Partners gets $5M up front in Centocor deal (PDF release)
• ProtaGen takes in €1M for protein biochips (PDF release)
• China’s Sundia MediTech, a contract research organization raises second round (release)
• Vital-signs implant maker Transoma Medical sets IPO terms, aims for $78M (Edgar)
• UMD receives $1M grant for Baltimore biotech incubator (TechJournal South)

Drug-screening tool maker IonGate Bio raises €4.6M — IonGate Biosciences, a Frankfurt, Germany, developer of tools for drug screening, raised €4.6 million ($6.7 million) in a third funding round. Investors included Heidelberg Innovation and KfW (Kreditanstalt für Wiederaufbau).

IonGate, whose slogan appears to be “Measure More Membrane,” focuses on the study of proteins embedded in cell membranes, particularly “transport” proteins that move molecules of various sorts in and out of cells. The company’s tools allow drug companies to observe the activity of these proteins, apparently in order to determine whether particular drug candidates activate them in order to make their way into the cell interior.

The company plans to use the funding to expand its international operations, especially in the U.S. The company formed a U.S. subsidiary in December, and plans to build out distribution channels here in order to market its surface-protein analysis technology.

Protein-drug maker Molecular Partners gets $5M up front in Centocor deal — Zurich’s Molecular Partners, a biotech developing drugs based on a new class of binding proteins, struck a partnership with J&J’s Centocor unit (PDF link) that yielded the startup a $5 million upfront payment. The collaboration will focus on Molecular’s work with DARPins — the acronym stands for designed ankyrin repeat proteins, in case you were curious — that the company is currently developing as potential anti-inflammatory drugs.

Molecular will receive additional undisclosed cash for research and licensing fees, as well as royalty payments for any drugs that result from the collaboration. We covered their technology — which is interesting, but may also have serious drawbacks relative to monoclonal antibodies, which is Centocor’s specialty — in more detail here (fifth item).

ProtaGen takes in €1M for protein biochips — ProtaGen, a Dortmund, Germany, provider of protein-analysis tools, raised €1 million ($1.5 million — PDF link) in an interim financing. Investors included MIG, Co KG Beteiligungsfonds 3, S-Venture
Capital Dortmund and Kreditanstalt für Wiederaufbau (KfW).

The funding will allow the company to expand its development and sales of protein biochips, which enable relatively quick identification and analysis of proteins from biological samples. Such chips might one day be useful as diagnostic tools, although for now they are mostly used to find and “validate” proteins that might serve as “biomarkers” for the presence or progress of disease. ProtaGen is also working on its own diagnostics for Alzheimer’s disease and various inflammatory conditions.

China’s Sundia MediTech, a contract research organization raises second round — Sundia MediTech, a Shanghai contract-research startup founded by U.S. biopharmaceutical veterans, raised an undisclosed second funding round. Sundia didn’t disclose the identities of its investors beyond noting that first-round participant IDG Ventures was also involved in this funding.

Sundia’s press release makes for some amusing reading, and not just because it seems to have been written by someone with a relatively poor grasp of English. The statement is mostly devoted to extolling Sundia’s “excellent reputation” and “phenomenal growth,” not to mention the difficulty it has had beating investors off with a stick. For instance, there’s this:

One month later, Wuxi Pharmatech from the same city had a very successful IPO at New York Stock Exchange as the first Chinese CRO company to go public. Suddenly, CRO became a hot area for all investors to look for opportunities. ”Wuxi’s IPO definitely brought more investors to us”, the company’s CFO Dr. Beijia Yu recalled, ”We did have a difficult time to handle all requests from VCs, PEs and investment bankers for meetings to discuss investment possibility. The response to our fund raise from the investors was overwhelming.”

Maybe they deserve it — it’s difficult to say from here, and of course, it’s not as if U.S. startups don’t sometimes toot their own horn a bit loudly. Still, it’s an interesting example of the different cultural norms at play in a Chinese company.

Vital-signs implant maker Transoma Medical sets IPO terms, aims for $78M — Transoma Medical, a St. Paul, Minn., medical-device maker, set its IPO terms and now hopes to raise as much as $77.6 million. The company intends to price its shares between $14 and $16.

Transoma makes implantable devices that monitor patient vital signs. We previously covered them here.

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)