VentureBeat

TODAY’S HEADLINES:

• InSound Medical raises $11M for “invisible” hearing aids (VBLS exclusive)
• Corventis takes in $20M for heart-failure therapy (VBLS exclusive)
• Molecular diagnostics user AssureRx raises $1M (Cincinnati Enquirer)
• Arresto Biosciences, cancer-drug developer, raises funds (VentureWire)
• San Diego’s Obalon raises $4.7M for drug discovery (peHUB)

InSound Medical raises $11M for “invisible” hearing aids – This item is a standalone post here.

Corventis takes in $20M for heart-failure therapy – San Jose, Calif.-based Corventis, a startup working on ways to monitor the vital signs of heart-failure patients, raised $19.9 million in a second funding round, according to Dana Mead, a Corventis board member and VC at Kleiner Perkins Caufield & Byers. Investors in the round included Kleiner Perkins, Mohr Davidow Ventures and DAG Ventures, Mead said.

Mead declined to further describe Corventis, which remains in stealth mode. The startup, however, is sponsoring a clinical trial (see its registration in the federal clinical-trials database) in which it intends to monitor heart-failure patients with some kind of “multi-sensor” device it calls the MUSE Clinical System.

While MUSE isn’t described in detail, it appears to be a non-invasive monitor of some kind designed to measure various aspects of the heart’s function, presumably including ejection fraction (a measure of how well the heart is pumping blood) and blood pressure within the heart, two measures that generally require doctors to thread sensors through a patient’s veins into the heart itself. The Corventis trial isn’t yet enrolling patients. (UPDATE: In a subsequent email, Mead said the trial has begun enrolling patients.)

Molecular diagnostics user AssureRx raises $1M – AssureRx, a Mason, Ohio, startup working on new molecular diagnostics for personalized medicine, raised more than $1 million in new funding, the Cincinnati Enquirer reports. The Health Foundation of Greater Cincinnati, the Cincinnati Children’s Hospital Medical Center, Blue Chip Venture Co., CincyTech USA and several individual investors provided the funding.

AssureRx is developing a new test licensed from Children’s Hospital and the Mayo Clinic intended to help doctors determine the best doses of antidepressants and other drugs for individual patients. The Enquirer story didn’t go into much detail, but it sounds as though the company may be measuring variation in genes that influence how quickly the body breaks down, or metabolizes, drugs, such as cytochrome P450.

UPDATE: Belatedly — as in a full week later — AssureRx put out this release on the funding. The only additional news seems to be that the startup’s tests look at several genes, not just one.

Arresto Biosciences, cancer-drug developer, raises funds – Arresto BioSciences, a Palo Alto, Calif., biotech developing a new class of cancer drugs, has raised an undisclosed sum in two funding rounds since last May, VentureWire reports. Investors included Kleiner Perkins Caufield & Byers and HealthCare Ventures.

Arresto is developing drugs that attack the “extracellular matrix,” a tissue layer that provides structural support to cells. Under certain conditions, changes in the extracellular matrix appear to play a role in the development of cancer, as well as “fibrotic” disease such as cirrhosis and pulmonary fibrosis.

San Diego’s Obalon raises $4.7M for drug discovery – Obalon, a stealthy San Diego drug developer, raised $4.7 million of an anticipated $7.7 million first funding round, peHUB reports. Investors included Domain Associates, Okapi Ventures and Phagia Technology.

TODAY’S HEADLINES:

• Cogentus Pharma raises $63M for blood thinners (release)
• Corthera draws $23M for heart-failure drug (release)
• Nanolymf seeks $2M for drug-delivery tech (release)
• LineaGen pulls in $5.6M for molecular diagnostics (release)

Cogentus Pharma raises $63M for blood thinners — Menlo Park, Calif.-based Cogentus Pharmaceuticals, a specialty pharma developing combined formulations of existing drugs, raised $62.5 million in a third funding round. Investors included Keffi Group, Prospect Venture Partners, Ridgeback Capital, Apothecary Capital and Pinnacle Ventures.

Cogentus aims to combine existing drugs in fixed doses in order to reduce side effects. The company’s lead candidate, CGT-2168, combines the blood thinner clopidogrel with omeprazol, a treatment that reduces gastrointestinal side effects. Cogentus is one of several specialty pharmaceutical companies pursuing this strategy, which does have the potential drawback that doctors may simply prescribe the drugs separately instead of paying extra for the combined formulation. We covered Horizon Therapeutics, which is doing the same thing with pain drugs, here.

Corthera draws $23M for heart-failure drug — San Mateo-based Corthera, a biotech developing a heart drug based on the hormone relaxin, raised $23 million in a third funding round. Investors included Caxton Advantage Life Sciences Fund, Domain Associates and Kleiner, Perkins, Caufield & Byers.

Corthera, formerly known as BAS Medical, hopes to use synthetic relaxin to treat acute heart failure and preeclampsia, a complication of pregnancy. We previously covered the company here.

TODAY’S HEADLINES:

• Acorn Cardio raises $22M for heart-failure device (bizjournals.com)
• Agile Therapeutics raises $5.6M for women’s health (release)
• Polyheal draws $1M for wound healing (Globes)
• MatrixBio receives seed funding for cancer diagnostics (release)
• Pacira Pharma names David Stack as CEO (release)
• VivoMetrics appoints Howard Baker as CEO (release)

Acorn Cardio raises $22M for heart-failure device – St. Paul, Minn.-based Acorn Cardiovascular, a device maker investigating a device that would restrain the expansion of failing hearts, raised $22 million in a new funding round. Investors included Cardinal Partners, Thoratec, SightLine Partners, Credit Suisse and New Enterprise Associates.

Acorn’s device, which it calls the CorCap, is a polyethylene mesh wrap that wraps around the heart, theoretically slowing or stopping the expansion that often occurs as hearts weaken and tire. The company sells the CorCap in Europe, but last year an FDA advisory panel recommended against approval of the device, throwing Acorn’s future into doubt until it reached an agreement with the FDA to conduct a new 50-patient trial. We previously covered Acorn’s travails and its primary venture competitor, the Sunnyvale, Calif., startup Paracor Medical, in this post.

Agile Therapeutics raises $5.6M for women’s health – Agile Therapeutics, a Princeton, N.J., specialty pharma focused on new contraceptives for women, raised $5.6 million in an extension of its fifth funding round, bringing the total for that round to $17.6 million. Investors in the round include the Hillman Company, ProQuest Investments, TL Ventures and Novitas Capital.

Agile’s lead product candidate is a low-dose estrogen patch for contraception, which is currently in mid-stage human trials. Agile suggests that the seven-day patch, which delivers steady doses of levonorgestrel and ethinyl estradiol, may help alleviate some side effects associated with high hormone exposure, such as breast tenderness, bloating or weight gain, and nausea.

TODAY’S HEADLINES:

• Gene-silencing developer Santaris raises €20M (PDF release)
• Consumer-driven healthcare manager RedBrick Health prescribed $15M (release)
• Cardiac Dimensions takes in $36M for heart-valve device (release)
• TcLand Expressions gets €8.2M for biomarkers (PDF release)
• TheraQuest Bio gets $3M for pain drugs (release)
• Brain-software maker NeuroTrax visualizes $1.5M (VentureWire)
• ActivBiotics selling off assets after clot-busting drug failure (release)
• Nanostart buys stake in Singapore’s Curiox, a drug-discovery tech firm (release)
• Respiratory biotech Altair Thera gets additional funding (VentureWire)
• Specialty pharma Prometheus Labs files for $100M IPO (Edgar)
• Sirtris co-founder David Sinclair joins Lux Capital as venture partner (PDF release)

Gene-silencing developer Santaris raises €20M — Denmark’s Santaris Pharma, a developer of gene-silencing drugs, raised €20 million ($30 million) (PDF) in a third financing round. Investors included Gilde Healthcare Partners, BankInvest, Novo, LD, Forbion Capital Partners, Global Life Science Venture, Sunstone Capital, Seventure, Omega, Innovation Capital and members of the Company’s board and management. Gilde contributed €7.5 million to the round.

Santaris is pursuing an “antisense” strategy for turning off particular disease-related genes using synthetic strands of nucleic acid, which bind to and deactivate the messenger RNA molecules that are crucial to gene activity. (Technically, the mRNA plays a key role in the manufacture of a gene’s protein or proteins, which in disease states are often either malformed or overproduced. The drug molecule is a complement to the mRNA’s nucleic-acid sequence, which in DNA chemistry makes it an “antisense” molecule.)

Whereas biotechs working on antisense drugs have traditionally used strands of DNA — often chemically modified to improve their durability and cell-penetrating abilities — to block gene activity, Santaris has produced what it claims is a unique RNA analogue that it calls a “locked nucleic acid.” (The company goes into detail here.) The Santaris molecule, which combines LNA and DNA, is supposed to bind RNA in three dimensions, presumably boosting its binding ability and therefore potency.

Santaris is first targeting chronic lymphocytic leukemia, and says its drug candidate has already demonstrated initial safety and efficacy in an early-stage human test. The company has several other candidates in preclinical development, as well as two other molecules it licensed to Enzon Pharmaceuticals, one of which has also begun human testing against cancer.

For a more detailed look at antisense, see our coverage of Excaliard Pharmaceuticals, a biotech that licensed a slew of technology from antisense pioneer Isis Pharmaceuticals, here.

Consumer-driven healthcare manager RedBrick Health prescribed $15M — RedBrick Health, a Minneapolis healthcare company promoting “consumer-oriented” plans that shift much of the financial responsibility for medical care to individuals, raised $15 million in a second funding round. Investors included Fidelity Ventures, Highland Capital Partners and Versant Ventures.

RedBrick aims to help companies set up consumer-directed healthcare plans, which are also known as “defined contribution” schemes in that they limit the financial exposure of employers, who simply make regular contributions to employee “health savings accounts.” These plans, obviously, put the financial onus on individuals, who pay for their own medical care out of these accounts, in contrast to traditional “defined benefit” plans in which individuals pay premiums for comprehensive health coverage. In theory, these consumer-oriented plans should hold down healthcare costs by making individuals more “responsible” users of medical care; in practice, sick patients are often in a terrible position to be good medical “consumers,” and the plans have have proven generally unpopular to boot.

That hasn’t slowed RedBrick or its backers. The company will use the funding to continue expanding its efforts to sell and manage consumer-directed healthcare plans, which RedBrick somewhat misleadingly insists on calling “consumer-owned” healthcare. (Such plans usually couple health-savings accounts with a high-deductible insurance plan.) The company recently announced deals with several new client companies, although none are exactly what you’d call high profile firms — their ranks include the Ridgeview Medical Center in the Minneapolis-St. Paul area, which is switching its employees to a RedBrick-supported plan, and Welch Allyn, a medical-device manufacturer in Skaneateles Falls, N.Y., which is doing likewise.

Cardiac Dimensions takes in $36M for heart-valve device – Cardiac Dimensions, a Kirkland, Wash., developer of heart-valve devices, raised $35.5 million in a fourth financing round. Investors included Johnson & Johnson Development, Lumira Capital, Mitsubishi UFJ Capital, West River Capital, Montgomery & Co., Frazier Healthcare Ventures, Interwest Partners, MPM Capital, and Polaris Venture Partners.

Cardiac Dimensions is working on an implantable device designed to reshape the heart’s mitral valve, which in heart-failure patients sometimes weakens and allows blood to swish backward through the heart’s chambers. We’ve covered several other startups working on mitral-valve devices, including Evalve and Cardiosolutions.

Featured companies: Aldagen, LDR, Lyten Endoscopy, MachLabs, Permatox, TeleMedicine Clinic, ThromboVision

Spinal-implant maker LDR raises $25M — Austin, Texas-based LDR, a maker of spinal implants, raised $25 million in a third funding round. Investors included Telegraph Hill Partners, Austin Ventures, Rothschild Private Equity and PTV Sciences.

LDR sells spinal-fusion devices, artificial disks and other spine-related devices in more than 30 countries, and plans to use the funds for further expansion.

Aldagen adds $9M for adult stem-cell work — Aldagen, a Durham, N.C., biotech developing regenerative therapies with “adult” stem cells, raised an additional $9 million (PDF link), bringing its third funding round to a total of $23 million. Investors in the additional financing include Tullis-Dickerson, CNF Investments, Harbert Venture Partners and Intersouth Partners.

The company’s most advanced experimental treatment uses stem cells derived from umbilical-cord blood to somehow improve the speed and effectiveness of cord-blood transplants in children, although the company doesn’t explain how. Nor has it revealed the results of an early-stage human test. Other treatments now entering clinical trials use stem or related progenitor cells isolated from a patient’s own bone marrow to treat heart failure or clot-related oxygen deprivation in the limbs.

The Triangle Business Journal has more.

ThromboVision raises $4M for personalized-medicine diagnostics — The Houston, Texas, biotech ThromboVision said it raised $4 million in a first funding round. Investors included the private-equity firm National Healthcare Services and private investors.

ThromboVision is developing new tests of platelet activity that may help doctors determine which patients are most likely to respond to low doses of blood thinners such as aspirin or Plavix, which are used to prevent clots that can cause heart attacks or strokes. This is similar — in concept, at least — to the FDA’s recent push to require the use of genomic tests to determine the proper dosing of warfarin, another blood thinner. (See our coverage here.)

MachLabs launches two device companies — MachLabs, a Redwood City, Calif., investor partnership founded by entrepreneurs Michael Laufer and John Lonergan, recently launched two medical-device startups, VentureWire reports (subscription required). Lyten is developing a minimally invasive treatment for obesity, while Permatox hopes to introduce a non-invasive alternative to Botox.

TeleMedicine Clinic receives €7M for radiology services — Barcelona-based TeleMedicine Clinic, a center for the outsourced analysis of medical images such as X-rays and MRIs, raised €7 million ($9.7 million), VentureWire reports. Investors included Kennet Partners, Active Capital Partners and an undisclosed European seed investor.

Featured companies: BioVascular, Carefx, ClinResearch, Healthcare Management Directions, NanoCor, OxyPlus, Revitus, Spotlight Surgical, United BioSource

UPDATED: See below.

Healthcare IT provider Carefx pulls in $17.9M — Carefx, a Scottsdale, Ariz., provider of hardware and software that “aggregates” patient records, has raised $17.85 million in a third funding round, Private Equity Hub reports, citing a regulatory filing. Investors included Carlyle Venture Partners and UV Partners.

Carefx’s pitch is basically the same as that from any system integrator — a term guaranteed to glaze eyes in most circumstances — in that they offer to tie together hospital-patient information that’s currently scattered across disparate computer systems. As with all system-integration pitches, it sounds like a terrific idea, if it works. Of course, many systems-integration efforts often only work after creating a significant amount of chaos and disarray within their respective organizations, which would certainly be interesting in critical-care areas such as the emergency room or intensive care. None of which to say that efforts to make electronic medical records more comprehensive and easier to use aren’t worthy, of course.

Medical imager Spotlight Surgical pulls in $7.4M — San Francisco’s Spotlight Surgical, a maker of medical-visualization software, raised about $7.42 million in a second funding round, Private Equity Hub reports, citing a regulatory filing. Attractor Ventures led the round.

Secretive drug developer OxyPlus gets $8M — OxyPlus, a Boston biotech working on drugs for cancer and heart disease, raised $8 million in a first funding round, VentureWire reports (subscription required). Index Ventures provided the funding, which follows an undisclosed amount of angel seed investment.

From the VentureWire story:

Based in Boston, OxyPlus is developing compounds discovered by Claude Nicolau, a professor at the Universite Louis Pasteur in Strasbourg, France, and Jean-Marie Lehn, a professor at the College de France. [President Conrad] Bletzer said the company is keeping the scientific details under wraps, but the company’s drugs are being targeted for several high-profile indications. “They’re small molecules for the treatment of cardiovascular issues and cancer,” he said.

Medtronic pumps up to $7.5M into heart treater NanoCor — Chapel Hill, N.C.-based NanoCor Therapeutics, a biotech working on gene therapy for heart failure, raised $3.75 million from Medtronic, with another $3.75 million dependent upon certain performance milestones.

For some reason, NanoCor doesn’t want to come right out and say it’s a gene therapy company — instead, it wants to create the first “intracellular genetic protein therapy” for heart failure. That amounts to the same thing, since the company plans to use some sort of nanoparticle to shuttle a “proprietary” and so-far unnamed gene to the heart, where it will be taken up by heart cells in order to begin producing some form of useful protein.

NanoCor plans to use nanoparticle technology from Asklepios BioPharmaceutical, or AskBio, from which NanoCor was spun out in 2005. Medtronic will have certain rights to license any resulting treatment.

Healthcare Management Directions gets almost $1.5M for “smart hospitals” — Brentwood, Tenn.-based Healthcare Management Directions, developer and would-be operator of “smart hospitals” with a heavy emphasis on IT systems and electronic records, raised just under $1.5 million in a first funding round following its 2004 recapitalization, VentureWire reports. Investors included Evergreen Investments and new and undisclosed individual and institutional investors. The funding will cover the firm’s investment in an Oklahoma facility it plans to manage.

Heart-drug developer BioVascular acquires Revitus for platelet drug — BioVascular, a San Diego biotech at work on anti-clotting drugs, acquired Revitus, another biotech working on similar drugs. Terms of the deal weren’t announced. Revitus was founded out of the Oregon Health & Science University in 2004.

United BioSource acquires controlling stake in ClinResearch — United BioSource, a Bethesda, Md., a provider of various services to the life-sciences industry, acquired a controlling stake in ClinResearch, a German firm with expertise in designing and conducting flexible, or “adaptive,” clinical trials. The companies didn’t announce financial terms.

UPDATE (1:00pm PT): Added items on NanoCor, Healthcare Management Directions, BioVascular/Revitus, and United BioSource/ClinResearch.

(UPDATED: See below.) Paracor Medical, a Sunnyvale, Calif., startup developing a mesh restraint designed to support failing hearts, raised $44.35 million in a fourth round of funding. The company is vying with another device startup, Acorn Cardiovascular, to prove that this sort of device works and to bring it to market.

The idea behind Paracor’s device, which it calls HeartNet, is simple. In heart failure, a general term for a variety of similar conditions with different causes, the heart muscle grows progressively weaker and loses the ability to pump enough blood through the body. In many cases, the heart reacts to its reduced pumping strength by enlarging, which temporarily makes it possible to contract more strongly. Over time, however, the enlarged heart tires again, triggering a new cycle of enlargement and weakness.

Paracor’s HeartNet is an elastic metal-alloy mesh designed to wrap around the heart and support it, theoretically improving its efficiency and slowing or stopping failure-related expansion of the muscle. (See the photo above.) Doctors stretch this mesh over a still-beating heart via a less-invasive form of the surgery known as a thoracotomy, which Paracor calls a “mini-thoracotomy.” (For some mildly gory photos, see this research abstract, which is a PDF file.)

In early clinical trials, heart-failure patients who received the mesh were able to walk farther, reported fewer symptoms and witnessed improvement in a variety of heart-related measurements such as oxygen transport and utilization. Paracor is currently enrolling volunteers in a large, randomized study of the device in 272 patients, which company officials hope will allow them to apply for FDA approval by 2010, according to VentureWire (subscription required).

Acorn’s experience, however, provides a cautionary tale. The St. Paul, Minn., company is developing a similar polyethylene mesh wrap called CorCap, which it already markets in Europe (see its PDF brochure here). CorCap requires a full open-chest surgery (see slide #8 in this PowerPoint deck) and can complicate subsequent heart surgeries.

In a 300 patient trial, CorCap appeared to improve a variety of outcomes for patients who received it. Last December, however, an FDA dispute-resolution panel said the company would need to conduct an additional clinical trial before the agency would consider U.S. approval, after an FDA advisory panel recommended against approval in 2005. Some panel members called the study a “quagmire” because of its poor design and statistical anomalies. Acorn hovered on the brink of dissolution until this May, when it reached an agreement with the FDA to conduct a 50 patient confirmatory trial for which it is currently raising $15 million, the company told VentureWire.

Paracor’s funding round was led by Aberdare Partners, joined by Montagu Newhall Associates and existing investors Delphi Ventures, Pequot Ventures, InterWest Partners, Alta Partners, De Novo Ventures, Saratoga Ventures, and Palo Alto Investors. The company said the new funds will support its pivotal trial of HeartNet.

UPDATED: Expanded and rewritten throughout.