VentureBeat

TODAY’S HEADLINES:

• OptiMedica takes in $16M for eye-treatment lasers (release)
• Genome analyzer BioNanomatrix raises $5M (release)
• Heart diagnostic startup Aviir gets another $1.5M (VBLS exclusive)
• Pharmaca, integrative-pharmacy chain, draws $20M (release)
• LifeWatch, cardiac-monitoring device maker, withdraws IPO (IPOhome)
• Jerry DeVries, Steven Whitlock join PTV Sciences as venture partners (VentureWire)

OptiMedica takes in $16M for eye-treatment lasers – OptiMedica, a Santa Clara, Calif., medical-device maker, raised $16 million in a third funding round. Investors included Kleiner Perkins Caufield & Byers, Alloy Ventures and DAG Ventures.

The startup makes and sells an eye-treatment laser system called Pascal — the acronym stands for “pattern scan laser” — which is approved for treating of retinal diseases such as diabetic retinopathy and other conditions involving the abnormal growth of blood vessels that can leak and obscure vision. The laser works by “photocoagulation,” which simply means it burns and fuses tissue at the point of focus — sealing off blood vessels, for instance, healing tears in the retina or even reattaching a retina that’s come loose.

Genome analyzer BioNanomatrix raises $5M – This item is now a standalone post here.

Heart diagnostic startup Aviir gets another $1.5M – Palo Alto, Calif.-based Aviir, a biotech focused on heart diagnostics, raised an additional $1.5 million as a follow-on to its second funding round, the company’s chief operating officer, Avi Kulkarni, said. The money is an equity investment related to a still-undisclosed partnership with a large pharmaceutical company, he told me.

Aviir is still in stealth mode, as we noted last year when we first wrote about its use of Stanford technology for detection and monitoring of cardiovascular disease. Kulkarni did offer a few additional details, telling me, for instance, that the company’s name is actually an acronym that stands for “atherosclerotic venous inflammation and insulin resistance.”

That, plus the fact that Aviir is working on what Kulkarni said is a “multiple biomarker panel assay” for heart disease, suggests to me that the company plans on measuring the levels of various proteins, probably from blood, in order to get a more precise picture of stressors such as inflammation and insulin resistance that might lead to heart problems. (”Insulin resistance” is an interesting choice, since that’s the cause — or the effect, perhaps — of type 2 diabetes, which is also linked to heart trouble.)

Aviir raised $11.5 million of a planned $25 million round last September, it disclosed in an SEC form now available online (PDF link) via the California Department of Corporations. The remainder of that round will become available when the company hits unspecified milestones.

For a look at the sort of thing Aviir is probably working on, check out this 2007 paper from Physiological Genomics, in which a research team from Stanford and Aviir detail the use of inflammatory proteins known as chemokines to identify patients with atherosclerosis. On the more whimsical side, a self-described friend of the company’s founders describes what he knows about Aviir on his blog, and also posts a odd homemade video “commercial” that suggests the company will be predicting lifetime disease risks for infants.

TODAY’S HEADLINES:

• Luminous Medical raises $24M for automated glucose monitoring (release)
• Alimera Sciences gets $30M for eye-disease drug (release)
• Vaccine maker LigoCyte draws $28M (release)
• Heartbeat tracker CardioNet trims IPO, aims for listing today (IPOhome)
• Axial Biotech takes in $6M for spinal diagnostics (release)
• Insulin bioengineer enGene receives $6.4M (release)
• GlucoLight raises funding for, well, glucose monitoring (release)
• Germany’s InflaRx gets seed funding for sepsis work (release)
• Cell imager Amnis pulls in $3.5M (VentureWire)
• Korea Bone Bank gets funding for bone transplants (release)

Luminous Medical raises $24M for automated glucose monitoring – Carlsbad, Calif.-based Luminous Medical, a medical-device maker, raised $23.5 million in a second funding round. Investors included Adams Street Partners, RiverVest Venture Partners, Finistere Ventures, De Novo Ventures and Latterell Venture Partners.

Luminous is developing an automated blood-sugar sensor for diabetic patients being treated in hospital intensive-care units and operating rooms. According to the company, keeping a tight rein on blood-glucose levels, which can soar or crash unexpectedly in diabetics, helps prevent complications while shortening hospital stays and reducing the risk of death.

Measuring such tight control, however, typically requires manually checking blood-glucose levels every 30 to 60 minutes, the company says. The Luminous device, by contrast, uses infrared spectroscopy — a technique that identifies particular molecules by measuring which wavelengths of light they absorb — to measure glucose and other blood chemicals non-invasively.

The company licensed its technology from InLight Solutions of Albuquerque, N.M., which previously invested $60 million in the technology. The device has not been approved by the FDA.

Axial Biotech takes in $6M for spinal diagnostics – Axial Biotech, a Salt Lake City diagnostic-test maker, raised $6 million as part of its second funding round. Investors included Johnson & Johnson Development, vSpring Capital and Ohio Biotech Group.

Axial, founded in 2002 by a group of spinal surgeons and geneticists, is an odd hybrid of biotech and devices. The company aims to produce tests that will predict and measure the severity of spinal problems such as scoliosis, as well as unspecified “motion-preserving technologies” — presumably an alternative to the stigmatizing back braces that orthopedists have long inflicted on children with the condition.

Insulin bioengineer enGene receives $6.4M – Canada’s enGene, a Vancouver biotech looking for ways to jump-start natural insulin production in diabetics, raised $6.4 million in a first round of funding. Investors included Saad Investments, Masa Life Science Ventures and private investors.

EnGene has an audacious — which is to say, of course, also quite chancy — approach to diabetes, in which the immune system attacks and kills insulin-producing “beta cells” in the pancreas (type 1 diabetes) or the body grows desensitized to insulin and requires higher levels (type 2 diabetes). In either case, patients often require insulin shots to maintain blood-sugar levels necessary or proper metabolism.

EnGene proposes to engineer cells in the small intestine — known as “K cells” — to produce insulin themselves. The advantage of this technique lies in the fact that K cells, like beta cells, respond to sugar levels in the gut, although they normally secrete a separate molecule. Once bioengineered to produce insulin as well, these cells could help regulate blood sugar automatically much the way beta cells normally do.

Of course, gene therapy has, in general, been a great disappointment so far, so there’s no shortage of uncertainty associated with this sort of technique. EnGene has tested its technique in mice, but not yet in humans. The startup plans to seek a second round of funding in the second half.

Alimera Sciences gets $30M for eye-disease drug – Alimera Sciences, an Alpharetta, Ga., drug developer with a focus on eye disease, raised $30 million in a third funding round. The company will now take a majority stake in its drug for diabetic macular edema, a vision-degrading complication of diabetes, which Alimera is developing with its partner pSividia.

We’ve written before about Alimera, which is presumably still contemplating an IPO this fall. All five of the company’s existing VC backers participated in the round: BA Venture Partners, Domain Associates, Intersouth Partners, Polaris Venture Partners and Venrock Associates.

Vaccine maker LigoCyte draws $28M – LigoCyte Pharmaceuticals, a Bozeman, Mont., biotech focused on new vaccines against infectious disease, raised $28 million in a third funding round. Investors included Forward Ventures, JAFCO, Novartis Venture Fund, Fidelity Biosciences, MedImmune Ventures, Athenian Venture Partners and MC Life Sciences Ventures.

The company is developing new vaccines using “virus-like particles” — usually structural viral proteins, minus the replication machinery packed in DNA or RNA — against gastroenteritis, anthrax and flu. It is also working on antibody drugs against inflammatory disease.

Oraya, a secretive Menlo Park, Calif., medical-device startup, has struck again. The company raised $18 million in what is presumably a second funding round, VentureWire reports (subscription required). Investors included Synergy Life Science Partners (see yesterday’s coverage of this newish VC firm here) and Essex Woodlands Health Ventures. We covered Oraya’s first round of funding last June.

VentureWire says the company is working on some sort of unspecified ophthalmology device, which is certainly more than we knew last year. Oraya’s founder and CEO is Michael Gertner, a surgeon and serial medical-device entrepreneur who is also a consultant to the Biodesign Program and Department of Surgery at Stanford. (He’s also an adjunct partner at Essex Woodlands, which has a somewhat more detailed — and possibly out-of-date — bio for him here.)

Eye disease would be something of a departure for Gertner, who has previously founded five other device startups, all of which still appear to be keeping themselves largely under wraps (for instance, any Web sites tend to be uninformative stubs):

• Medlogics Device Corporation — Develops non-polymer drug-coated stents for treating arterial blockages. Founded in 2003.
• Allux Medical — Develops electro-optical devices for allergic rhinitis (hay fever). Founded in 2004.
• Minimus Surgical Systems — Develops unspecified electromedical equipment, although these patent applications suggest the company is working on implantable, remote-controlled balloon devices that reduce stomach volume for the treatment of obesity.
• Hydrocardia — Apparently named after an obscure medical term for excess fluid in the pericardial sac that surrounds the heart. No Web site.
• Gem Biosystems — No further information beyond the fact that it raised $1 million from Essex Woodland in 2006

A quick look through Gertner’s patent applications and issued patents doesn’t turn up too many additional clues as to what Oraya might be doing. He does have one issued patent and at least two applications dealing with what appears to be a valved “fistula,” a blood-vessel graft used to ease the trauma of routine needle insertions in kidney dialysis — but of course that has nothing to do with ophthalmology. (In fact, this technology could easily be related to Gem’s business.)

In any event, it’s intriguing to note that even the oldest of Gertner’s companies appears to have no marketed products and continues to fly mostly under the radar. Which suggests to me either that Gertner or his investors simply have a real passion for secrecy — which is entirely understandable — or that perhaps things haven’t gone quite as well as planned. In any event, Gertner looks like someone worth keeping an eye on. (Hat tip to Mark Wendman, who first pointed out Gertner’s work to me.)

According to VentureWire, the new funding will carry Oraya into clinical trials. Gertner told the newswire only that the company expects to begin human tests of its devices “shortly,” so who knows what that means.

TODAY’S HEADLINES:

• Fovea Pharma sees €30M for eye drugs (release)
• Ascendis Pharma raises €18M for time-release drugs (PDF release)
• Arcion draws $9M for topical pain drugs (VentureWire, sub req’d)
• Saladax Biomedical raises $8M for chemotherapy diagnostics (VW)
• MedAssets prices IPO at top of range, raises up to $221M (IPO Home)
• Pequot spin-off Longitude seeks $250M for life-science investments (VW)
• Third Rock Ventures adds three new partners (release)
• Ultrasound surgical co. ProRhythm files for bankruptcy protection (release)
• The Hartford Financial Services Group acquires healthcare-benefit administrator TopNoggin (release)
• Healthcare IT provider MedAptus names Doug Percy as new CEO (release)
• VivoMetrics appoints Howard Baker as new CEO (release)

Fovea Pharma sees €30M for eye drugs — Paris-based Fovea Pharmaceuticals, a biotech focused on eye disease, raised €30 million ($44 million) in a second funding round. Investors included Forbion Capital Partners, Sofinnova Partners, Abingworth, GIMV, the Wellcome Trust and CAPE.

Fovea’s lead drug candidates address a variety of ophthalmic conditions, including chronic allergic conjunctivitis and two types of macular edema. The company said the proceeds will allow it to begin mid-stage, phase II human tests of three drugs for these conditions.

Ascendis Pharma raises €18M for time-release drugs — Ascendis Pharma, a Danish specialty pharma with a new trick for making time-release versions of existing drugs, raised €17.6 million ($25.8 million) (PDF) in a first funding round. Investors included Sofinnova Partners, Gilde Healthcare Partners and Zweite TechnoStart Ventures Fonds.

Ascendis also announced the acquisition of Complex Biosystems, a German biotech with technology for enhancing the effectiveness of protein-based drugs. Complex Biosystems will apparently become the research arm of Ascendis, which sort of raises the question of what sort of research the company was conducting prior to the acquisition.

The startup has developed what it calls a novel chemical “linkage” technology that reversibly binds and disables a “carrier” molecule. Apparently that linkage degrades in a predictable fashion, effectively releasing active drug in a time-controlled fashion. Ascendis hasn’t said much about its drug candidates except to note that they address a wide range of disease, including diabetes, neurological disorders and heart disease.

(UPDATED: See below.)

Almost two weeks ago, Genentech angered doctors and elderly patients when it announced plans to restrict access to Avastin, a cancer drug that doubles as an unapproved, but quite inexpensive, treatment for eye disease. In those conditions, which can lead to encroaching blindness when left untreated, Avastin competes with a much more costly Genentech drug called Lucentis. (For background and our take on the situation, click here.)

Now the giant biotech appears to be taking a few steps back from the precipice. In an open letter posted on its site yesterday, Genentech said it will postpone plans to bar Avastin sales by “compounding pharmacies” — which can safely divide up a large vial of the drug into the tiny doses needed for intraocular injection (see photo at left) — by a month, giving retinal specialists and patients until Jan. 1 to find other suppliers. Perhaps more important, Genentech said it would continue to make Avastin available to compounding pharmacies should the FDA grant it “legal and regulatory authority to do so.”

Genentech also offered a more detailed explanation for its original decision to limit Avastin distribution, noting that the FDA had warned a compounding pharmacy about the sterility and repackaging of the drug. Worse, at least from the big biotech’s perspective, an FDA inspection of a Genentech manufacturing facility raised questions about the suitability of some Avastin production lots for use in the eye due to a “higher visual inspection standard.” (More on that when I know more.) Genentech says that to “resolve” the FDA’s concerns, it destroyed four batches of Avastin, amounting to 350,000 vials with a market value of more than $200 million — a vastly inflated estimate of the company’s actual loss, given that the marginal production cost to Genentech is almost certainly far lower than that.

To be fair, the issues here are complex, although it’s also important to bear in mind that we’re only hearing one side of the story — the FDA doesn’t comment on regulatory matters. If we take Genentech’s version of events at face value, then the company does appear to face additional regulatory scrutiny related to the ocular use of Avastin, with the potential for further unexpected losses if inspectors require the destruction of additional production lots. It’s hard not to sympathize with management under such conditions.

But there’s still something missing in this explanation. Even with the compounding pharmacies out of the picture, no one expects Avastin use in eye disease to go away, since ophthalmologists will still be able to get it from hospitals or other doctors. As a result, Genentech’s regulatory risk doesn’t really go away, either — if the FDA is concerned about Avastin’s suitability for ocular use when, say, half of elderly patients with wet age-related macular degeneration are using the drug, is the agency really going to be that much less concerned if only one-quarter of these patients are using Avastin? That’s still a lot of people.

So while Genentech’s concern about potential problems with the FDA certainly can’t be dismissed, it’s still not really sufficient to explain their actions. The only way for the company to really placate a safety-obsessed FDA — Genentech’s implicit characterization, not mine — would be either to declare total war on ocular Avastin use or to improve Avastin manufacturing so that the product would satisfy the FDA’s alleged concerns. So far, of course, Genentech hasn’t done either, although its allusion to getting FDA permission to supply compounding pharmacies suggests that it may be weighing the latter. If so, that’s all to the good.

Still, the company’s first instinct was clearly to inconvenience patients, many of them desperate, with a move that might also improve its bottom line, instead of taking steps that would clear up the problem for good, albeit at some expense and potential harm to future Lucentis sales. That still says a great deal about the company’s claimed commitment to “the best interests of patients.”

Hat tip to the WSJ health blog

UPDATE: David Williams raises some similar questions at the Health Business Blog, and apparently manages to dig up the FDA warning letter to the compounding pharmacy as well.

Alacrity Biosciences, a Laguna Hills, Calif., biotech developing eye treatments, raised $4.9 million in bridge financing while it gathers clinical data in support of a larger first round later this year, VentureWire reports (subscription required). The funding was provided by unidentified hedge funds and private individuals; the same group invested $8.5 million as a bridge financing in January.

Alacrity focuses on eye conditions such as dry-eye disease, glaucoma and retinal disease. The company’s lead compound, ALTY-501, has just completed a mid-stage human trial that should produce data by the end of August. At that point, the company hopes to raise a $25 million first round.