VentureBeat

TODAY’S HEADLINES:

• PEAK Surgical takes in $21M for electrosurgical tools (release)
• CellGate acquired by Australian cancer biotech ProGen for $2.5M (release)
• Traversa raises $2M for RNAi-delivery technologies (release)
• RemitDATA, Web-based healthcare-service co., takes in $5.5M (bizjournals.com)
• Spinal-implant maker Archus Orthopedics gets $10M venture loan (release)
• Promedior pulls down another $5.5M for fibrotic disease (release)
• Acrongenomics takes 11 percent stake in Molecular Vision (release)
• Hepatitis drug-developer Biolex withdraws IPO (IPO Home)
• Employee drug screener eScreen gets Carlyle investment (release)
• NovaMin raises $2.5M for dental-care products (VentureWire)
• Cardious receives $1.5M for heart-valve repair (VW)
• PE-backed Spire Healthcare buys PE-backed Classic Hospitals for £145M (FT)
• Aberdare Ventures promotes two principals to partner (release)

CellGate acquired by Australian cancer biotech ProGen for $2.5M –CellGate, a Redwood City, Calif., biotech working on new cancer drugs, sold itself to ProGen, an Australian biotech also focused on cancer, for the equivalent of about $2.5 million. The release is here. Needless to say, this represents a fire sale for a biotech that seems to have run out of time.

CellGate was pursuing drugs that aimed to shut down the growth of cancer cells either by inhibiting polyamine or by “turning down” the activity of cancer-related genes. ProGen will conduct an 18-month assessment of CellGate’s first drug candidate, a polyamine inhibitor that had already completed an early stage, phase I clinical trial, before deciding upon a mid-stage, phase II program. ProGen will also evaluate a stable of CellGate’s preclinical drug candidates.

ProGen will issue shares worth $1.5 million for CellGate’s assets, and will assume net liabilities of roughly another $1 million. The sale represents a significant loss for CellGate’s investors, including Healthcare ventures and New Enterprise Associates, who as recently as 2002 put $10 million into the company in a fourth funding round. I haven’t been able to piece together how much CellGate raised over its lifetime, although it’s certainly considerably more than that $10 million.

Traversa raises $2M for RNAi-delivery technologies – Traversa Therapeutics, a La Jolla, Calif., biotech working on ways to deliver RNA-based drugs to their cellular targets, raised $2 million in a first financing round. Investors included San Diego Tech Coast Angels, Mesa Verde Venture Partners and Morningside Group.

Traversa’s work is intimately involved with RNA interference, a newly discovered technique for “silencing” disease-related genes using short strands of RNA that trigger a natural cellular mechanism for shutting down genes. Getting those short RNA molecules into cells in the first place, however, isn’t particularly easy.

Traversa claims to have solved that problem, although it doesn’t appear to be saying how. The company will license its RNA-delivery approach to drug companies, and also offers it for use as a drug-screening technology.

RemitDATA, Web-based healthcare-service co., takes in $5M – Memphis, Tenn.-based RemitDATA, a provider of Web-based healthcare-data services, raised $5 million in a new funding round.Noro-Moseley Partners and SSM Partners provided the funding.

RemitDATA offers Web-based tools for individual physician practices designed to help them track insurance and Medicare reimbursements and scan paper records into digital form. The company also makes a sales-management tool for the homecare industry.

Promedior pulls down another $5.5M for fibrotic disease – Promedior, a Malvern, Pa., biotech focused on fibrotic disease, raised an additional $5.5 million as an extension to its first funding round. Polaris Venture Partners, Morgenthaler Ventures, HealthCare Ventures and Easton Capital participated in the financing.

Fibrotic disease is a general name for conditions that entail repeated bouts of inflammation followed by scarring that, over time, can lead to organ failure. Examples include heart failure, cirrhosis and kidney failure. Promedior aims to develop drugs that can slow or reverse the scarring process, and intends to begin clinical trials of its first drug candidate this year. The company previously raised $7 million in its first funding round.

Acrongenomics takes 11 percent stake in Molecular Vision – Acrongenomics, a Swiss company that acquires and develops life-sciences technology, took a 10.5 percent stake in Molecular Vision, a developer of credit-card sized diagnostic devices. Acrongenomics had previously announced its intent to acquire Molecular Vision, so presumably this is the first step in that plan. The release is here.

Hepatitis drug-developer Biolex withdraws IPO – Biolex Therapeutics, a Pittsboro, N.C., biotech developing ways to manufacture protein drugs in an aquatic-plant system, withdrew its planned $70 million IPO. We previously covered Biolex and its IPO dreams here.

NovaMin raises $2.5M for dental-care products – NovaMin, an Alachua, Fla., company working on tooth-remineralization products, raised $2.5 million in a third round of funding and expects another $2.5 million, VentureWire reports. Intersouth Partners provided the financing.

Cardious aims at $1.5M for heart-valve repair – Cardious, a Northfield, Minn., medical-device company working on a heart-valve bypass device, is raising $1.5 million in a first funding round, VentureWire reports. The company aims to raise the funds from angel investors. Cardious is developing an aortic-valve replacement that can be put in place on a beating heart, rerouting blood flow around the damaged valve.

IGA Worldwide, a New York-based provider of advertising that appears within video games, has raised $25 million from a collection of venture capital, private equity and large media firms.

The potential market for in-game advertising is big, even as some analysts trying to measure it are prone to hype. It made only $55 million last year, but is expected to pass $800 million in 2012 with total video game ad spending reaching $2 billion that year, according to Park Associates.

IGA claims to be the largest independent in-game advertising company using an ad-serving network. It helps advertisers target video-game players across gaming platforms and genres, and works with game developers to try to make the advertising relevant.

Greg Blonder, a partner at Morgenthaler Ventures who was an early investor in IGA, says that in-game advertising is starting to become acceptable to game players and publishers — even though both groups were nervous at first.

Competitors include Microsoft, which purchased rival Massive last year, allowing it to include in-game advertising as another option for its advertising network. According to Blonder, Microsoft doesn’t have the cultural DNA to put ads into games in a way that users are comfortable with, something he thinks IGA’s executive team understands better because of their backgrounds in game publishing and advertising.

An interesting startup working on a similar idea is Mochi Media’s MochiAds. It lets game developers build games in Flash and include advertising, then splits the revenue with them.

IGA says the market potential is what created interest among strategic investors. The company has run ads for Discovery, FHM, Intel, MTV, T-Mobile and others. It also provides a communications consultancy, called Hive.

A lead investors in this round, GE/NBC Universal’s Peacock Equity, said that the gaming industry has growth potential “that can shape the future of the new media advertising industry.”

It will probably be another generation of video games — one to three years from now — that build advertising in as part of the game, Blonder said.

Other investors in this round include KTB Ventures as well as other existing investors Easton Capital, Intel Capital and DN Capital.

Gentis, a Philadelphia developer of an injectable spinal implant, raised $10 million in a first round of funding. Pappas Ventures and Easton Capital led the round, joined by Ivy Capital Partners and Matignon Technologies.

The company is at work on an implant designed to restore function to a degenerated spinal disk by bolstering or replacing the gel-like tissue at its center. The implant, called DiscCell, can be injected into the disk, where it hardens in place. The implant hasn’t yet been tested in humans; Gentis said the funding will allow it to complete animal testing and a pilot clinical trial prior to filing with the FDA for a “pivotal” clinical study.

Biolex Therapeutics, a Pittsboro, N.C., developer of technology for improving the properties of monoclonal antibodies, raised $30 million in a third funding round.

Biolex specializes in producing proteins that are difficult to make with existing bioengineering processes and in optimizing the biological properties of monoclonal antibodies. It is also pursuing its own experimental drug candidates, and said the proceeds of this round will serve primarily to advance Locteron, an experimental time-release form of interferon alfa, into late-stage human tests against hepatitis C.

Investor Growth Capital led the round, joined by two other new investors, JP Morgan Securities and Easton Capital. Existing shareholders including Quaker BioVentures, Polaris Venture Partners, Intersouth Partners, Mitsui & Co. Venture Partners, Johnson & Johnson Development Corporation and Dow Venture Capital also participated. The company’s release is here (PDF).