VentureBeat

Featured companies: Adenosine Therapeutics, Allylix, Caprotec BioAnalytics, Equipois, F-Star, Insightec, MedNets.com, Renal Solutions, Transport Pharmaceuticals, VeriCare Management

UPDATED: Expanded items on Transport Pharmaceuticals, InSightec and VeriCare Management.

Transport Pharma aims for $35M for cold-sore treatment — Framingham, Mass.-based Transport Pharmaceuticals, a dermatology-focused biotech developing a new treatment for cold sores, is looking to raise $35 million in a fifth funding round, VentureWire reports (subscription required). Hillman Co., Quaker BioVentures, Carlyle Group and EGS Healthcare Capital Partners have pledged $15 million in the round, which the company expects to close in February.

Transport’s leading product candidate is device that uses a low-voltage electrical current to improve the absorption of drugs through the skin. The handheld device, which the company calls the Solovir electrokinetic transdermal system, delivers a reformulated version of the antiviral drug acyclovir directly to cold sores in a ten-minute treatment. The company has so far raised roughly $36 million in venture funding.

InSightec takes in $30M for ultrasound surgery — Israel’s InSightec, a developer of ultrasound-based surgical systems, raised $30 million in a new funding round. Investors included Elbit Imaging, GE Capital Equity Holdings, MediTech Advisors and directors and managers of the company.

InSightec’s system combines MRI scanning and focused ultrasound in order to attack tumors in a non-invasive fashion. The device has been approved in the U.S. for treatment of uterine fibroids, which are non-cancerous tumors of the female reproductive system. InSightec is currently studying ways to apply the system to brain, liver and bone tumors as well.

VeriCare Management gets $9.5M for mental healthcare services — San Diego’s VeriCare Management, a provider of mental-health care to the elderly, raised $9.5 million (MS Word document) in a second funding round. Investors included HLM Venture Partners, Salix Ventures, Acacia Venture Partners and Aetna Ventures.

This is sort of an interesting investment, as VCs haven’t traditionally been all that interested in healthcare providers. In the release, Aetna managing director Adam Grossman notes that the investment is aimed specifically at improving the quality of healthcare, which suggests that some VCs, at least, are starting to view quality improvements as financially rewarding. The logic isn’t entirely clear to me, but it seems to parallel the effort that David Brailer’s new outfit, Health Evolution Partners, is just getting off the ground. (See our coverage of Health Evolution here.)

HEADLINES OF NOTE:

• Adenosine Thera gets $4.5M for a grab-bag of drugs (release)
• Caprotec BioAnalytics raises $6.6M for protein-analysis tools (GenomeWeb News)
• Ergonomic-arm maker Equipois raises $1.5M (VW)
• F-Star adds $4.5M for engineered antibodies (release)
• Healthnostics acquires med-info portal MedNets.com (release)
• Flavor and fragrance producer Allylix raises $3.4M (release)
• Renal Solutions acquired by Fresenius Medical for $190M (release)

Giant players such as Google and Microsoft already provide health care-focused search sites, but they aren’t that impressive.

San Francisco’s Healthline, however, is focusing solely on health search, and is making surprising headway. It has six million monthly unique users, and is the only search engine among the top-twenty U.S. health-related sites — with the exception of Yahoo Health (see list below). And with healthcare a very important part of the economy, there’s a land-grab going on, and investors want a part of it. Healthline today announced it has raised $21 million more in financing, led by GE/NBC Universal’s Peacock Equity Fund.

Its success apparently derives from giving users more options, such as links to trusted article sources related to the symptoms they experience, along with lists of possible causes, tips and advice.

West Shell, chief executive, told us that’s why sites such as AOL and others are booting Google’s health related search, which provides a simple list of results but no other context, in favor of Healthline. Over the past two months, it has signed numerous other syndication deals, and now powers search at sites like NBC Universal’s iVillage Total Health, Eons and Health Central Network.

There several players in this area, most notably Kosmix, Microsoft’s Medstory (see our coverage), and Google’s health-only search site. A host of others are trying to build communities around health issues, but don’t focus purely on search per se. Healthcare.com, with $6 million in fresh cash, recently joined the crowd.

Healthline’s financing comes from GE/NBC Universal’s Peacock Equity Fund, a joint venture between GE Commercial Finance’s Media, Communications & Entertainment business and NBC Universal, and includes strategic financing from Aetna Ventures, LLC, Kaiser Permanente Ventures, U.S. News and World Report, and previous investors VantagePoint Venture Partners and Reed Elsevier Ventures.

The company has now raised a total of $59 million. The site launched in 1999, but then went through a major reorganization to focus on search in 2005.