VentureBeat

TODAY’S HEADLINES:

• Molecular-diagnostics maker Atlas Genetics gets £2.1M (MS Word release)
• One-man shop Paloma Pharma takes in $5M for eye, cancer drugs (VentureWire)
• Israel’s Optimata receives $1.5M for simulations to rescue failed drugs (release)
• Centrose raises $1.3M for sugar-modified drugs (Milwaukee Journal-Sentinel)
• Halyard buys healthcare-compliance adviser HCPro from Riverside (release)
• RiverRock Holdings acquires medical-billing software maker Dynamic Energy (release)
• Maryland’s Sirnaomics gets $50K for RNAi (TechJournal South)

Molecular-diagnostics maker Atlas Genetics gets £2.1M – Atlas Genetics, a Bath, U.K., developer of molecular diagnostics, raised £2.1 million ($4.1 million) in a funding round. The release is here (MS Word file). Investors included South West Ventures Fund, Finance South West Growth Fund, Braveheart Ventures, GEIF and private investors through the SWAIN business angel network.

Atlas is working on portable, rapid diagnostic systems that detect specific molecules of DNA and RNA from blood or urine in order to identify a variety of infectious pathogens. The company is currently exploring tests for chlamydia and gonorrhea, drug-resistant staphylococcus, group B streptococcus, meningitis and Norwalk virus, as well as an equine test for respiratory infections.

One-man shop Paloma Pharma takes in $5M for eye, cancer drugs – Paloma Pharmaceuticals, a Jamaica Plain, Mass., biotech focused on treating vascular disease, raised $5 million in a second funding round, VentureWire reports. Angel investors provided the funding.

Paloma is developing a class of “improved” anti-angiogenic drugs that interfere with blood-vessel growth. Such drugs could potentially treat a range of diseases, including cancer, ocular disease such as macular degeneration, arthritis, fibrotic disease and others. The company expects to begin clinical trials in cancer and eye disease later this year.

The startup has never taken venture capital and has only one employee, CEO David Sherris. Paloma contracts out almost all of its functions, and Sherris retains a majority stake in his company, which he hopes to sell or take public by the end of this year.

Israel’s Optimata receives $1.5M for simulations to rescue failed drugs – Optimata, an Israeli biotech that hopes to use computer simulations to “rescue” failed experimental drugs, raised $1.5 million in a funding round. Private investors from Europe provided the funding.

Optimata has developed a simulator it calls a “virtual patient” that can theoretically be used to model the way the human body responds to disease and drug treatments. The company’s intention is to use its model to revive drugs that failed in clinical trials by determining why things went wrong and ways to avoid prior pitfalls. Optimata says it is in the final stages of identifying discontinued cancer treatments that it wants to license and “repurpose.”

Featured companies: Antisense Pharma, Arteriocyte, Excelimmune, Fluxion Biosciences

UPDATED: Expanded items on Antisense Pharma, Arteriocyte, and Excelimmune.

Antisense Pharma raises €27M for cancer drugs — Munich’s Antisense Pharma, a biotech developing gene-silencing drugs against cancer, raised €27 million ($38 million) in a fourth funding round. The company’s PDF release is here.

MIG provided the funding, which the company said will support late-stage trials of its lead drug candidate, AP 12009, in brain cancer. AP 12009 is an “antisense” drug, one that blocks the activity of malfunctioning genes. Although long a promising way of attacking a variety of diseases, only one antisense drug has ever been approved, and most scientists believe that it doesn’t actually work via gene silencing. Antisense Pharma, however, says that AP 12009 showed positive results in a mid-stage trial.

Excelimmune raises $2M for cancer, infection antibodies — Cambridge, Mass.-based ExcelImmune, a biotech developing “polyclonal” antibodies for fighting cancer and infection, raised $2 million in a first funding round, VentureWire reports (subscription required). Greenheart provided the funding.

Many top-selling biotech drugs these days are monoclonal antibodies, which are genetically engineered to bind to a single target, such as a surface protein on cancer cells. Excelimmune, by contrast, focuses on polyclonal antibodies — essentially a mix of different antibodies that bind to different targets. Polyclonal antibodies are a major part of the body’s immune system, but no one has ever successfully developed polyclonal-antibody drugs. The company said the new funding will allow it to develop new polyclonal antibodies against an unspecified target, and that it will raise a second round next year to forward a candidate into animal tests.

Arteriocyte acquires product, forms partnership with Medtronic — Arteriocyte, a Cleveland medical-device maker, struck a partnership with Medtronic that includes the acquisition of Medtronics’ Magellan platelet business. The release is here.

OTHER HEADLINES OF NOTE:

• Tool developer Fluxion Biosciences raises $6.9M (PE Hub)

Featured companies: Ablynx, Avant Immunotherapeutics, BioForm Medical, Celldex Therapeutics, Genomas, High-Throughput Genomics, Orchid Cellmark, ReliaGene Technologies, SarCode, TransMolecular, VisEn Medical

UPDATED: Expanded items on SarCode, Celldex/Avant and Ablynx.
UPDATE REDUX: Added items on BioForm Medical, High-Throughput Genomics and Orchid Cellmark/ReliaGene.

San Francisco’s SarCode draws down $7M for inflammation drugs — The two-year-old startup drew down $7 million as part of a $25 million first funding round the company arranged last December, VentureWire reports (subscription required). Investors in that round included Alta Partners and Clarus Ventures. The company’s post-investment valuation was $30 million in December.

SarCode is focused on developing new treatments for inflammation using technology it licensed from Sunesis Pharmaceuticals in January. The company can still draw another $13 million from its first round, and anticipates that existing funding will carry it through the end of 2009.

Cosmetic-surgery product maker BioForm sets IPO range, aims for $127M — San Mateo, Calif.-based BioForm Medical, a developer of skin fillers and other cosmetic-procedure products, set its sights on an IPO that could raise up to $126.5 million. BioForm now aims to sell as many as 11.5 million shares at a price of $9 to $11 apiece. Should it come in at the high end of that range, the offering would value the company at almost $500 million.

See our previous coverage of BioForm, which sometimes touts itself as more of a medical-device company than one focused on “medical aesthetics,” in the first item here. The company’s main customers are plastic surgeons and dermatologists.

Celldex goes public with $67M Avant acquisition — Privately held Celldex Therapeutics acquired a majority stake in publicly traded Avant Immunotherapeutics for $66.7 million in stock. The release is here.

The deal effectively takes Celldex public via a form of reverse merger. Although the combined company will be known as Avant, Celldex shareholders will own 58 percent of it. Avant’s current CEO, Una Ryan, will remain in that position in the combined company, which will be worth an estimated $115 million following the merger. The new Avant will pursue a number of immune-related treatments for cancer, infectious disease and autoimmune disease.

High-Throughput Genomics raises $10M for gene-expression tools — Tuscon’s High-Throughput Genomics, a biotech focused on tools that measure gene activity, raised $10 million in a third funding round. Investors included Merck Capital Ventures, Solstice Capital, Valley Ventures and Arcturus Capital.

HTS, founded a decade ago as a subsidiary of a combinatorial-chemistry company called Systems Integration Drug Discovery Company, spun out as an independent company in 2001. The company provides tools that let researchers study the activity of genes and proteins in laboratory samples.

Ablynx aims at €99.2 million IPO for “mini-antibodies” from llama DNA — Belgium’s Ablynx, a biotech focused on developing new therapies using miniature antibody molecules derived from llama DNA, said it hopes to raise as much as €99.2 million ($141.5 million) in an IPO. (Its release is here.)

The offering will be launched on Eurolist by Euronext Brussels. You can find our previous coverage of the company here and here.

OTHER HEADLINES OF NOTE:

• DNA-testing co. Orchid Cellmark acquires ReliaGene Technologies for $8.6M (release)
• VisEn Medical raises $7.5M for imaging (PE Hub)
• Genomas pulls in $2.5M for “DNA-guided medicine” (PE Hub)
• TransMolecular names Nicholas Nicolaides chairman (release)

Every trend has its counterexamples, and the rush of venture funding into biotechnology is no exception.

VentureWire reports today (subscription required) on the case of Sequella, a small Rockville, Md., biotech working on new therapies for drug-resistant tuberculosis (whose bacterium is pictured at left). The company is seeking $20 million to put SQ109 (link to PDF), its leading TB-drug candidate, through mid-stage human testing. So far, however, the company isn’t finding many takers:

“There are 30 venture capital firms that are Sequella watchers,” said Sequella Chief Executive Carol A. Nacy. “But the venture financiers are very risk averse.”

As a result, Sequella, based in Rockville, Md., has had to raise much of the $26 million it has raised to date from angel investors and through grants from National Institutes of Health. Founded in 1997 and leveraging a drug library developed in conjunction with the NIH, Sequella now has a diagnostic patch in Phase III trials and a lead compound, SQ109, which just completed Phase I.

Nacy said that the tuberculosis market has been like a roller-coaster in the past 50 years. “In the late 1950s, TB was the number one killer of people in the U.S.,” she said. That spurred a bevy of antibiotics to combat the disease, and the development of a combination treatment in the 1970s effectively ended innovation in the field. “So the medical community said, no more unmet need,” she said.

But the bacteria continued to mutate, eventually developing into drug-resistant strains that became a crisis by the 1990s. Big pharma and investors alike have slowly realized the need to invest more in infectious diseases, but Nacy said that TB in particular has been neglected. Still, some industry giants like Pfizer Inc., Johnson & Johnson Inc. and Sanofi-Aventis SA have dipped their feet in, and Daiichi Sankyo Inc. sold the TB portion of its infectious disease platform to Sequella in 2004.

Medical authorities have been warning about the dangers of drug-resistant TB for nearly a decade, but apparently the message is still a tough sell where some venture capitalists are concerned.