VentureBeat

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: Aveo Pharmaceuticals, Aviir, deltaDot, Origen Therapeutics

Heart-diagnostic maker Aviir raises $11.3M — Palo Alto, Calif.-based Aviir, a biotech developing cardiovascular diagnostics based on Stanford research, raised $11.3 million of an expected $25 million second funding round, PE Hub reports. The news is presumably from one of those paper-based SEC filings that are supposed to be digitized before long.

Investors include Bay City Capital, Aberdare Ventures and New Leaf Ventures. Aviir hasn’t said much about its technology beyond the fact that its tests are designed to provide “accurate diagnosis and prognosis” of heart disease and that it expects to reach the market next year. That’s ridiculously fast for anything that needs to move through clinical trials, so chances are good that Aviir is aiming for some sort of “home-brew” strategy in which it will conduct the tests itself instead of selling kits and reagents to clinical laboratories around the country. Home-brew tests are regulated less strictly by the FDA.

DeltaDot, biological tool maker, raises £3M — The London maker of tools for identifying and separating biomolecules drew in £3 million ($6.1 million) (PDF link) from investors in a fourth funding round, bringing the total raised in that round to £6 million. Investors included FF&P Private Equity, Imperial Innovations, NPI Ventures, Sitka Health Fund VCT and London Technology Fund.

DeltaDot, which spun out of the Imperial College of Science, Medicine and Technology, uses technologies from high-energy physics to measure the ultraviolet-light absorption of molecules and then applies signal-processing algorithms to identify them.

Aveo Pharma raises $5M in broader deal with OSI Pharma — Cambridge, Mass.-based Aveo Pharmaceuticals, a biotech developing targeted cancer drugs, raised $5 million in equity and received another $10 million in cash as part of a broader development partnership with publicly traded OSI Pharmaceuticals. The deal will also include payments for future milestones and royalties, if any, although the companies didn’t estimate their potential value.

The alliance is aimed at developing drugs that target a cellular process known as “epithelial-mesenchymal transition,” a natural stage of cellular development mimicked by tumor cells as they spread, or metastasize, throughout the body. See our previous coverage of Aveo here.

Origen receives $2M grant for chicken-based antibodies — Burlingame, Calif.-based Origen Therapeutics, a company focused on developing biotech products from genetically engineered chickens, received a $2 million grant from the National Institute of Standards and Technology. The funding is intended to spur development of human polyclonal antibodies — which attack a variety of different protein targets instead of a single one, the way monoclonal antibodies do — that can be produced by chickens and deposited in eggs for harvesting. The first goal of the program will be to develop therapies for antibiotic-resistant hospital infections, which represent a growing threat to patients.

From the Origen press release:

Most antibody therapeutics today, such as the cancer treatments Avastin® and Herceptin® and the anti-infective Synagis®, are monoclonal antibodies that attack a single antigen target on a cell or viral surface. In contrast, when the human immune system produces antibodies against disease, it makes polyclonal antibodies capable of recognizing and attacking different antigens on the same cell, enabling that disease target to be simultaneously attacked at many different points. Thus the ability to produce fully human polyclonal antibodies on a commercial scale for use as therapeutics could take antibody-based therapies to a new level of efficacy by more closely mimicking the full potential of the natural human immune response. Until now, the production of safe and effective polyclonal antibody treatments has been hampered by the lack of an appropriate system for the development and production of such antibodies.

Ablation Frontiers, a Carlsbad, Calif., developer of devices for treating irregular heartbeats known as cardiac arrythmias, raised $21.8 million in a third funding round. The Novartis Venture Fund led the round, joined by Affinity Ventures, Hexagon Investments, Trellis Health Ventures, Versant Ventures, Aberdare Ventures, and Pequot Ventures.

Ablation Frontiers apparently aims to use radio energy, directed by a catheter, to burn away malfunctioning heart tissue that contributes to arrythmia. The company’s Catheter Ablation System has been approved in Europe, but is still undergoing trials in the U.S.

Conatus Pharmaceuticals, a San Diego developer of drugs for inflammation and liver disease, closed a $22 million private placement that brings its first round of funding to $27.5 million. Investors included Aberdare Ventures, Advent Venture Partners, Bay City Capital, and Gilde Healthcare Partners.

Conatus was founded by former executives of Idun Pharmaceuticals in mid-2005 after Pfizer acquired their company. The funding will support mid-stage clinical trials of its lead compound, CTS-1027, for liver disease. The first trial, in hepatitis C patients, is expected to begin by the end of this year. Conatus licensed CTS-1027 from Roche last November.