VentureBeat

TODAY’S HEADLINES:

• Quark Pharma gets $27M for RNAi drugs (release)
• TargetRx takes in $9.6M for physician-prescribing data (release)
• D-Pharm raises more than $3M for fat-like drugs (release)
  
• Vortex Medical raises $2.3M for medical devices (VentureWire)
• Specialty pharma Ascio takes in $3M (VentureWire)
• Keraderm gets $1.7M for antifungal drugs (VentureWire)
• Contract researcher CTMG raises $500K toward $1M round (VentureWire)
• Singapore’s Progeniq raises seed funding for life-science computing (release)
• Acrongenomics scuttles Molecular Vision acquisition (peHUB)
• Michael Gutch joins H.I.G. Ventures (release)

Quark Pharma gets $27M for RNAi drugs – Fremont, Calif.-based Quark Pharmaceuticals, a biotech startup working on “RNA interference” drugs, raised $27 million in an eighth funding round. The company’s fundraising follows a failed attempt to go public last year, and reflects a somewhat smaller haul than the $30 million it had hoped to raise.

The company’s backers include investment vehicles of SBI Asset Management and SBI Investment, both subsidiaries of Tokyo-based SBI Holding. The investment cements Quark’s deep relationship with Japan; its previous investors include two other Tokyo-based investment partnerships, the Trans-Science Global Bio-Technology Fund and Asuka DBJ Investment LPS, and the company has long worked with several Japanese pharmaceutical companies as well.

Quark’s work in RNAi — the use of short RNA molecules to “silence” disease-related genes — has already produced two drug candidates that are in clinical trials. One is being tested in the eye condition known as age-related macular degeneration by Pfizer; Quark is testing the other as a way to prevent acute kidney industry.

Danny Zurr, Quark’s CEO, said the startup will use the funding to greatly expand  its clinical-trial program. By the second half of this year, the company plans to have its drug candidates in five different tests at Quark and Pfizer. We’ve written a fair bit about Quark and its colorful history over the past year or so.

TargetRx takes in $9.6M for physician-prescribing data – TargetRx, a Horsham, Pa., startup that analyzes physician-prescribing behavior for drug companies, raised $9.6 million in a new funding round. Its backers include Quaker BioVentures, New Enterprise Associates and Domain Associates.

Target bills itself as a company capable of providing “unparalled insights” into the way doctors prescribe drugs — always a subject of great interest to pharmas of all stripes. In practice, Target appears to get its information by paying doctors to participate in online marketing programs held in a closed forum on its Web site.

The company claims that its methods provide useful predictive information about physician behavior. In certain respects, its approach isn’t all that different from Sermo, which has begun selling access to its online doctor forum to investors and pharmaceutical companies like Pfizer.

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.

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:

• Aptamer-drug maker Archemix withdraws its $72.5 million IPO (Edgar)
• OraMetrix raises $20M for robotic orthodontic systems (peHUB)
• Microarray maker TeleChem goes public via reverse merger (release)
• BioVascular pulls in $11M for platelet-disease treatments (release)
• Cequent Pharma adds $4.5M for for RNAi drugs (VentureWire)
• CareSeek, online medical-rating service, gets $575K, looks for $5M (VentureWire)
• Satiogen takes in $700K for obesity treatment (VentureWire)
• Dilon Tech appoints Robert Moussa as CEO (release)

Aptamer-drug maker Archemix withdraws its $72.5 million IPO – I’ve expanded this news into a standalone item on the state of the life-science IPO market here.

OraMetrix raises $20M for robotic orthodontic systems – Richardson, Tex.-based OraMetrix, a maker of 3-D robotic systems for orthodontic use, raised $20 million in a new funding round, peHUB reports. The financing is either a third round (as peHUB puts it) or a sixth (as VentureWire reports based on an interview with the company’s CFO). Existing investors, including Rho Capital Partners, Versant Ventures, Brentwood Venture Capital and Star Ventures, provided the cash.

Founded in 1998, OraMetrix makes and sells what it calls the SureSmile system for orthodontic braces. After taking a 3-D scan of a patient’s mouth, an orthodontist can then use the system’s computer modeling to develop a treatment plan. A robotic system then precisely bends the “archwires” that push teeth around.

OraMetrix claims the system shortens the duration of treatment and reduces office visits. The company has sold the system since 2004 and told VentureWire that it has installed SureSmile for more than 200 doctors, but says it needs to roughly double that figure to reach profitability.

Microarray maker TeleChem goes public via reverse merger – TeleChem International, a Sunnyvale, Calif., maker of gene-chip microarrays that is also known as ArrayIt, went public via a reverse merger with Integrated Media Holdings. The companies don’t quite call it a reverse merger, but given that IMH shares have traded at around two cents since September, the company has a shareholder’s deficit of $1.5 million and noted in its latest quarterly filing that there is “substantial doubt” about its ability to remain a going concern, the dots aren’t all that hard to connect.

Technically, IMH acquired TeleChem’s existing shares in exchange for 35 million shares of the merged company, which will undergo a one for 30 reverse split. At yesterday’s IMH close of, yes, two cents, that values the deal at about $21 million.

BioVascular pulls in $11M for platelet-disease treatments – San Diego’s BioVascular, a specialty pharma focused on drugs for fighting blood clots related to heart surgery, raised $10.9 million in a third funding round. Investors included BB Biotech Ventures, Merck KGaA and Domain Associates.

The funds will allow BioVascular to complete early-stage trials of two drugs, saratin for the prevention of clotting in grafted vessels following heart-bypass operations, and BVI-007, a platelet-production inhibitor it acquired last year when it bought out the biotech Revitus.

Cequent Pharma adds $4.5M for for RNAi drugs – Cequent Pharmaceuticals, a Cambridge, Mass., developer of drugs based on the gene-silencing technique called RNA interference, added $4.5 million to its first funding round, VentureWire reports. The new cash, provided by existing investors Novartis Option Fund, Ampersand Ventures, Nexus Medical Partners and Pappas Ventures, brings Cequent’s total funding in the round to $13.5 million.

RNAi involves the use of short stretches of RNA that engage ancient cellular mechanisms for silencing the output of particular disease-related genes. RNA, however, doesn’t enter cells easily, so Cequent is working on a way to use genetically engineered, non-disease-causing bacteria that will enter human cells and produce the desired RNA molecules locally. We covered Cequent’s previous funding here.

TODAY’S HEADLINES:

• 5AM Ventures puts $3.3M into stealthy ImmunoNewco (VBLS exclusive)
• NewLink Genetics raises $17M for cancer vaccine, immune drugs (VBLS exclusive)
• Biochip, stem-cell biotech Minerva Bio ousts CEO Jim Czirr and sues (release)
• Sonexa Therapeutics takes $30M for Alzheimer’s treatment (release)
• Tissue regenerator Healionics pulls in $1.7M (release)
• EGeen, clinical research organization, receives $245K (VentureWire)
• Barnvet Labs, HeMemics Bio get $75K apiece from Maryland gov’t (release)

5AM Ventures puts $3.3M into new immune-related startup – I’ve moved this item to a standalone post here.

NewLink Genetics raises $17M for cancer vaccine, immune drugs – I’ve moved the item to a standalone post here.

Biochip, stem-cell biotech Minerva Bio ousts CEO Jim Czirr and sues – This item is now a standalone post here.

Sonexa Therapeutics takes $30M for Alzheimer’s treatment – San Diego’s Sonexa Therapeutics (no Web site), a specialty pharma, raised $30 million in a first funding round. The proceeds will go toward licensing a so-far undisclosed compound from a Japanese pharmaceutical company that Solexa says is “being tested as a therapeutic to treat Alzheimer’s disease.”

Solexa will have worldwide rights to the experimental drug, excepting Japan and certain Asian countries. Investors in the round included Domain Associates, Scale Venture Partners, Alta Partners, AgeChem Venture Fund and MC Life Science Ventures.

Tissue regenerator Healionics pulls in $1.7M – Redmond, Wash.-based Healionics, a device company focused on tissue regeneration and biomaterials, raised $1.7 million in a first funding round. Individual investors, including Carl Lombardi, the former CEO of SpaceLabs Medical, and Sam Naficy, the medical director of the Naficy Plastic Surgery & Rejuvenation Center, provided the funding.

Healionics is focused on a new class of biomaterials it calls STAR, for sphere-templated angiogenic regeneration. These STAR materials are designed for insertable or implantable medical devices that need to integrate smoothly with and promote healing of the body’s tissues. In particular, Healionics claims that the materials are specifically engineered with “tightly controlled pore geometry” that maximizes the growth of blood vessels and tissue entry while minimizing the body’s tendency to “wall off” implants with scar tissue.

The company, founded last March, says it has established “multiple partnerships” for advancing the development of its materials. Possible applications include diabetes, wound care and infusion therapy.

EGeen, clinical research organization, receives $245K –EGeen, a contract research organization in Mountain View, Calif., raised $245,433 to expand its global operations, VentureWire reports. Ambient Sound Investments provided the funding.

EGeen conducts clinical trials for pharma and biotech companies in Estonia and other Eastern European nations. It has recently established a presence in the Ukraine and Romania. The company has previously raised $4.8 million in two funding rounds.

TODAY’S HEADLINES:

• MRI image-analysis firm Confirma receives $18M (release)
• Specialty pharma Zogenix raises $18M (release)
• Arcion pulls in $8.8M for topical pain gel (release)
• Bayhill Therapeutics files for $87M IPO (Edgar)
• Peakdale Molecular, chemistry-services provider, raises £1M (release)
• Radiopharmaceutical maker Cellectar draws in $13M (release)
• Critical-care drug maker Ikaria names Daniel Tasse as CEO (release)
• Noxxon Pharma appoints Frank Morich as CEO (release)

MRI image-analysis firm Confirma receives $18M –Confirma, a Bellevue, Wash., developer of automated systems for medical-image analysis, received $17.5 million in a third funding round. Investors included Telegraph Hill Partners, Fluke Venture Partners, Northwest Venture Associates, Prism Ventureworks and Versant Ventures.

The company already sells image-analysis software and associated equipment for breast-cancer detection, and is developing a similar system for prostate cancer. We previously covered the company here.

Specialty pharma Zogenix raises $18M – Zogenix, a San Diego specialty pharma, raised $18 million in a new financing round. Investors included Abingworth Management, Clarus Ventures, Domain Associates and Scale Venture Partners.

Zogenix previously raised $60 million in a first funding round back in Aug. 2006, and apparently has been quiet since then. Our coverage of them is here. Zogenix is developing a needle-free injection system for pain and CNS drugs, which it licensed from Aradigm in 2006.

Bayhill Therapeutics files for $87M IPO – Bayhill Therapeutics, a Palo Alto, Calif., biotech focused on autoimmune disease, filed to raise $86.3 million in an IPO. The company aims to restore the immune system to a state of “tolerance,” theoretically defusing particular autoimmune diseases while leaving the body’s defenses intact.

Bayhill’s approach to inducing tolerance is by using small loops of DNA, known as plasmids, that code for a specific protein antigen that appears to set off the body’s attack against itself. By introducing those plasmids in such a way that they’ll be taken up and “turned on” by the immune-system’s antigen presenting cells, the company hopes to re-educate the immune system to ignore those particular proteins.

Like most novel biotechs at this stage, Bayhill’s technology is intriguing but unproven. Its lead candidate, a drug for multiple sclerosis, has completed a mid-stage, phase II trial, but the result are complex to interpret. The company’s drug is a plasmid that codes for “myelin basic protein,” or MBP, one of the immune-system’s targets in MS. In that phase II trial, however, Bayhill only tested some patients to see if they had high levels of antibody to MBP — and the company only saw a significant reduction in MS-related brain lesions among those few patients with high MBP-antibody levels.

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.

Featured companies: Ascent Therapeutics, Bas Medical, Bikam Pharmaceuticals, Fundamental Applied Biology, Juvaris BioTherapeutics, Medavante, Trivitron, Vapotherm

UPDATED: Expanded items on Bas Medical and Juvaris.

Bas Medical raises $20M for heart-failure drug — San Mateo, Calif.-based Bas Medical, a biotech developing drugs based on a hormone called relaxin, raised $20 million in a third funding round, VentureWire reports (subscription required). Investors included Domain Associates, Kleiner Perkins Caufield & Byers and Sears Capital Management.

Relaxin is a natural peptide hormone whose levels typically rise during pregnancy, boosting heart and kidney function. Bas Medical figures that the hormone may be useful in treating disorders such as acute heart failure and preeclampsia, a dangerous pregnancy complication involving high blood pressure and kidney failure. The company is currently carrying out mid-stage human tests of the peptide in both conditions.

Bas Medical also announced that it hired Stan Abel as its new CEO. Abel previously served as CFO for both Peninsula Pharmaceuticals and its spinout, Cerexa.

Juvaris BioTherapeutics takes in $16M for immunotherapy — Juvaris BioTherapeutics, a Pleasanton, Calif., biotech developing new vaccines and immunity boosters, raised $15.9 million in a first funding round, PE Hub reports. Kleiner Perkins Caufield & Byers led the round, which involved $13.8 million in equity and the remainder in debt and convertible notes.

Juvaris is developing vaccines against infectious disease and cancer using adjuvants — substances that enhance immune response, and thus the activity of vaccines — made from complexes formed by out of complexes of DNA and fatty molecules called lipids. We previously covered the company here.

HEADLINES OF NOTE:

• Phama-services co. Medavante draws $7M (VentureWire)
• India’s Trivitron draws $11M for medical devices (release)
• Respiratory-care device developer Vapotherm gets $11.25M (PE Hub)
• Ascent Thera receives $8M for cancer, inflammation drugs (PE Hub)
• Fundamental Applied Biology raises $4.8M for protein drugs (PE Hub)
• Bikam Pharma pulls in $3.6M (PE Hub)

No one likes going to the dentist, and that lingering novocaine numbness usually just makes matters worse. But would you be willing to pay more — possibly a lot more — out-of-pocket for a shot that restores feeling to your face more quickly?

San Diego’s Novalar Pharmaceuticals is betting that you will. The specialty-pharmaceutical firm has been testing a drug it calls NV-101, which it says can cut in half the time it takes people to recover from local anesthetic. NV-101 has been through two late-stage clinical trials, and could be approved for use following non-surgical dental procedures such as cavity fillings as early as April.

Novalar’s approach is something of a departure for the field of specialty pharmaceuticals, which is crowded with deadly boring companies earnestly looking to tweak old or cast-off drugs just enough to justify charging high prices for them. NV-101 is still an old drug — in fact, it’s a reformulated version of phentolamine, an old generic drug previously used to treat hypertension. Phentolamine causes blood vessels to expand, increasing blood flow and lowering blood pressure.

In this case, however, the drug is definitely being put to a novel use, if not exactly a life-threatening one. The theory is that NV-101, administered locally following a dental procedure, essentially helps the body “wash away” remaining traces of the local anesthetic. Novalar CEO Donna Janson envisions dentists offering NV-101 as an option to patients who fear that hours of numbness will impact their ability to smile, drink, or even hold in their drool. (No lie — the company tested exactly these sorts of “functional impairments” in one of its clinical trials.)

Of course, dental insurance is unlikely to cover the drug, at least at first, so NV-101 will probably undoubtedly emerge as a new “convenience” option for patients willing and able to pay for it. Janson, in fact, cheerfully acknowledges that many dentists will have a profit incentive to use the drug.

“Patient satisfaction is number one” for many dentists, she says, noting the proliferation of spa-like dental clinics and the popularity of cosmetic dentistry (which also happens to be quite lucrative for its practitioners). Although the company hasn’t yet set a price for NV-101, Janson says it will be “modest” in comparison to the cost of many procedures, giving dentists the opportunity to “upsell” the drug. “There will be a financial hook,” Janson says. According to the company’s market research, dentists will typically charge patients twice what the drug costs them.

One risk of this strategy, of course, is the possibility that some enterprising dentists might find a way to use generic phentolamine instead of NV-101, potentially boosting their profit even further. Janson says that’s unlikely, mostly because Novalar will sell NV-101 in the same cartridges used to deliver lidocaine or other local anesthetics, making it particularly convenient to use. Dentists wanting to use the generic drug would have to calculate the right dose and use a standard syringe, which might alarm patients and could lead to complications.

Novalar’s backers are certainly fans of its strategy. Earlier today, the company announced that it had raised $30 million in a fourth funding round. Investors included New Enterprise Associates, Domain Associates, SR One and Montreux Equity Partners.

(And just in case anyone didn’t get the reference, that top-left photo features the seemingly murderous dentist played by Steve Martin in the film Novocaine.)

Featured companies: Imalux, Sagent Pharmaceuticals, Sequel Pharmaceuticals, Sinexus, TranS1, U.S. Spinal Technologies

Sagent Pharmaceuticals draws in $53M for injectable generics — Sagent Pharmaceuticals, proving that there’s still life in the apparently lucrative but boring specialty-pharmaceuticals business, raised $53 million in a first funding round. Vivo Ventures led the round for the Schaumburg, Ill., company.

Like other specialty pharmas, Sagent essentially picks up abandoned or cast-off drugs from other companies and tries to make them work in new ways. The company plans to take its first product to market in the fourth quarter, VentureWire reports (subscription required).

From VentureWire:

Schaumburg, Ill.-based Sagent focuses on the development of injectable treatments. The company’s core strength is generic pharmaceuticals, Yu said, and it has a broad-based focus on injectable treatments for a variety of indications. Sagent currently has more than 200 products in development, and plans to launch its first injectable treatment, which has already been approved by the Food and Drug Administration, in the fourth quarter. For the commercialization, Sagent plans to draw on the 20 business partnerships the company has worked to establish, Pauli said.

NovaCardia spinoff Sequel Pharma draws on $20M for heart drug — Fresh from the sale of NovaCardia to Merck (see our coverage here), officials of that heart-drug company founded a second startup, San Diego’s aptly named Sequel Pharmaceuticals, and raised $20 million in a first funding round. Investors included Domain Associates, Forward Ventures, InterWest Partners, Montreux Equity Partners, and Skyline Ventures.

Sequel owns the rights to one of NovaCardia’s former drugs, which it intends to develop as a treatment for atrial fibrillation, a problem characterized by uncoordinated pumping and electrical activity in the heart’s upper chambers that can put people at risk of blood clots and strokes. The company also plans to develop novel drugs for its pipeline.

U.S. Spinal Tech to seek $20 million — Boca Raton, Fla.-based U.S. Spinal Technologies said it plans to solicit $20 million in third-round funding, VentureWire reports. The company has begun speaking to investors but hasn’t yet received any money.

So far, the company has raised $9 million, 40 percent of that from angels and the remainder from other individuals. U.S. Spine makes several spinal implants that are already on the market, but a flagship device designed to replace the “pedicle screws” that serve as anchor points for rods in spinal fusion is stilll under development.

Sinexus raises $3.5M for sinusitis devices — Palo Alto, Calif.-based Sinexus raised $3.5 million in a first funding round, PE Hub reports, citing a regulatory filing. Investors included Kleiner Perkins Caufield & Buyers and U.S. Venture Partners. The medical-device company is focused on treating chronic inflammation of the nasal passages.

As it turns out, Sinexus also received seed funding in 2003 from Durect, a company that makes drug-delivery technologies. According to this 10-K filed with the SEC, Durect and an unnamed venture-capital firm each loaned Sinexus $150,000; Durect repurchased the obligation from Sinexus in February 2006.

Medical imager Imalux pulls in $5.1M — Cleveland’s Imalux, a developer of optical-tomography imaging systems, raised $5.1 million in a third funding round. The proceeds include the conversion of $2.5 million in bridge financing. Early Stage Partners, ElectroSonics Medical, Reservoir Venture Partners, Symark, and more than twenty other prior and new investors participated in the round.

Spinal-device maker TranS1 sets IPO range, aims to raise up to $88.6M — Wilmington, N.C.-based TranS1, a developer of minimally invasive spinal-fusion devices, said it plans to price its IPO shares between $12 and $14 apiece, yielding a maximum possible take of $88.6 million. See our earlier coverage of TranS1’s IPO here.

Featured companies: Entelos, Firstsource Solutions, Helixis, Iconix Biosciences, MedAssist Holding, Songbird Hearing

Entelos pays up to $39M for Iconix Biosciences — In a rare all-Bay Area biotech transaction, Foster City, Calif.’s Entelos agreed to acquire Iconix Biosciences for up to $39.1 million in stock. The deal consists of an up-front payment of $14.1 million in Entelos shares and a potential “earn out payment” of $25 million if certain financial milestones are met. The acquisition is scheduled to close tomorrow.

Entelos develops computer models of disease intended to assist in the identification of drug candidates and early analysis of their effectiveness. Iconix, meanwhile, has focused on building “toxicogenomic” reference information, which details the genetic profiles that are most likely to lead to toxic side effects when a particular drug is used. Entelos president James Karis said in a statement that the combination will create “a new paradigm for discovering and developing drugs” by making it possible to also predict whether certain drug candidates may cause toxic side effects.

Iconix had raised a total of more than $50 million prior to the acquisition, according to VentureWire (subscription required). Its investors included Abingworth Management, Institutional Venture Partners, Kleiner Perkins Caufield and Byers, and MDS Pharma Services.

Newly formed Helixis raises $10M for diagnostics — Helixis, a Carlsbad, Calif., developer of “low cost, fast and accurate” molecular diagnostics, raised $10 million in a first funding round. The funding was provided by Domain Associates and Okapi Venture Capital.

Helixis makes some grand but fairly vague claims in its announcement. The company has licensed technology from Caltech, but doesn’t say what it is, and claims that it will “radically reduce” the cost, size and power requirements of existing diagnostic technology. This appears to be a reference to existing diagnostics that require large and expensive equipment such as PCR machines for analysis. All in all, this sounds like a worthy effort — if diagnostic tests remain expensive, that will greatly limit their usefulness in pharmacogenomics and personalized medicine — but the company will need to be clearer about what it’s actually up to before I can get too excited about it.

Montreux Equity Partners raises fourth fund — Montreux Equity Partners, a life-sciences focused VC firm in Menlo Park, Calif., is raising a fourth fund, VentureWire reports. The news service cited the Santa Barbara County Employees’ Retirement System, which has approved a $5 million investment in the new fund. Montreux reportedly declined to comment on the new fund’s expected size, although two preceding funds raised a total of $170 million. Montreux invests primarily in biotech and medical-device companies.

Shaky Songbird Hearing reportedly raises $4M in recapitalization — VentureWire reports that Songbird Hearing, a New Brunswick, N.J., maker of disposable hearing devices, has raised $4 million in a recapitalization funding. The news service names NewSpring Capital and the Provco Group as investors in the round.

The company apparently has a long and somewhat shaky history. VentureWire says this is Songbird’s second recapitalization — essentially a restructuring of a company’s debt and equity relationships — and that it had previously raised $120 million since its founding in 1997. There’s also the fact that Songbird’s supposed Web site currently features a “coming soon” page for the “Planet Sun Tanning Salon” in Manahawkin, N.J. (You can see Songbird’s cached page here.)

In any case, the VentureWire story says the fresh capital will pay for a redesign of the companies products and for day-to-day operations.

MedAssist Holding, a hospital-finance consultant, sold to Indian outsourcing firm for $330M — The private-equity firm RoundTable Healthcare Partners agreed to sell MedAssist Holding to an affiliate of Mumbai-based Firstsource Solutions for $330 million in cash. MedAssist helps hospitals clean up their financial operations, a task the company calls “outsourced revenue-cycle management services.” Firstsource is a major Indian outsourcing firm that handles a variety of “back-end” business operations for its customers.

(UPDATED: See below.)
Is there a better way to combine drugs in cancer chemotherapy? Celator Pharmaceuticals, a Princeton, N.J., venture drug maker that just raised $10 million, aims to find out.

Like Horizon Therapeutics, which we wrote about here, Celator is convinced that combining two existing drugs in a single formulation at the right proportions can yield better results than current treatments. Although many chemo drugs are already used in combination, the drugs that can be used this way are limited by their side effects. For instance, two chemo drugs that cause severe nausea can’t be used together, because each would have to be given at a less-than-optimal dose in order not to completely debilitate the patient.

In addition, Celator is convinced that various chemo drugs — and here we’re talking about traditional “cytotoxic” chemotherapy that typically kills off all cells that divide quickly, including those that line hair follicles or the digestive tract — tend to work either in concert or at odds depending on the balance in which they’re delivered. So by identifying the drugs that work best together when mixed at an optimum ratio, the company hopes to enhance chemo’s tumor-killing power while minimizing side effects.

Sounds great. Does it work? So far, it’s hard to say. Celator’s lead candidate, CPX-1, is a combination of irinotecan and floxuridine at the cleverly derived molar ratio of, um, one to one. That drug is now in mid-stage human trials. The company’s second candidate, a combination of cytarabine and daunorubicin known as CPX-351, is entering a phase I trial against acute myeloid leukemia.

There are a few cautionary notes. In an earlier “phase I” test of CPX-1 in 26 patients, 15 saw their tumors stabilize for at least two months and two experienced tumor shrinkage (see the PDF “poster” on the study here). Of course, like most early-stage trials, that test wasn’t randomized, controlled or blinded — every patient got the drug — which pretty strongly limits the conclusions you can reasonably draw from it. It certainly doesn’t support the company’s claim in its press release that “over 70 percent of cancer patients in the trial showed a clinical benefit.” For the record, 17/26 is 65 percent, not 70 percent; you can only get to the 70 percent figure by ignoring the data for three patients whose cancer wasn’t “evaluated,” including one who lived less than two weeks after getting the drug. It’s also kind of dicey to claim “clinical benefit” for a drug when you can’t answer the question, “Compared to what?” — which this trial most certainly wasn’t designed to address.

Still, it’s early days for this sort of combination-drug work, and Celator’s investors certainly seem game to tag along. Investors in this follow-on to the company’s $40 million second funding in 2005 included Domain Associates, Quaker BioVentures, TL Ventures, Ventures West Management, GrowthWorks Capital, the Business Development Bank of Canada, and Hearthstone Investment.

The New Jersey Star-Ledger has more here.

UPDATED: Added some additional thoughts on Celator’s claim of “clinical benefit” in its phase I trial.

UPDATE REDUX: Celator’s PR rep lodged a factual objection to the original lead sentence, so I’ve tweaked it.

Read the rest of this entry »

Apnex Medical, a Minneapolis maker of implants for the treatment of obstructive sleep apnea, raised $16.1 million in a first round of funding. Participants included Domain Associates, New Enterprise Associates, Polaris Ventures Partners and Apnex Chairman Michael Berman.

VentureWire reports that Apnex is using “neurostimulation” technology, presumably involving timed electrical pulses to open upper-throat muscles that can close during sleep and choke off the airway, interrupting breathing for a period of up to 10 seconds — an episode known as an apnea. A number of neuromodulation companies have recently received funding, including NeuroVista, a Seattle epilepsy-treatment company, and CVRx, another Minneapolis firm with a hypertension-regulation device.

The company’s announcement is here.