VentureBeat

TODAY’S HEADLINES:

• IlluminOss Medical gets $11M for bone-fracture devices (peHUB)
• Contract researcher Crown Bioscience takes in funding (release)

IlluminOss Medical gets $11M for bone-fracture devices — East Providence, R.I.-based IlluminOss Medical, a medical-device startup, raised $11 million in a second funding round, peHUB reports. Backers included New Leaf Ventures and Foundation Medical Partners.

The company’s Web site is barely more than a stub that describes IlluminOss as a device company “pioneering new frontiers in orthopedic surgery.” peHUB offers the further tidbit that the company is developing a minimally invasive system for treating bone fractures.

We’ve previously covered Sonoma Orthopedics Products, a California firm with what may be a similar technology for treating fractures with an implant that supposedly speeds healing from inside the bone.

Contract researcher Crown Bioscience takes in funding – Crown Bioscience, a biology-services startup in Santa Clara, Calif., raised an undisclosed sum in a second funding round. Chemizon, a division of Optomagic, provided the cash.

Crown offers a variety of biology-based services, including protein characterization, drug-candidate discovery and assessment of anticancer drugs. In other words, it’s a contract-research organization, although it seems to have a wider range of offerings that many CROs do.

Featured companies: AgraQuest, BridgeHealth, CardioMems, Collegium Pharmaceutical, Emergin, Entegrion, gDiapers, Precision Therapeutics, PregLem

UPDATED: Expanded items on Entegrion, Collegium, and gDiapers. Added CardioMems item. New items posted on AgraQuest (link), BridgeHealth (link) and Precision Therapeutics (link).

Entegrion draws $4.7M for bleeding control — Entegrion, a Research Triangle Park, N.C., biotech focused on products that stop bleeding, raised $4.7 million in a second funding round, VentureWire reports (subscription req’d). Investors included BD Ventures, Catalysta Partners and unnamed individuals.

Entegrion’s main product is Stasix, a formulation derived from human platelet cells that promote blood clotting. Those cells are processed and freeze-dried into a powder, which can be applied directly to wounds or reconstituted and infused throughout the body. The U.S. military has picked up the tab for much of the product’s development, courtesy of congressional earmarks arranged by the North Carolina delegation.

Specialty drug maker Collegium Pharma nets $2.5M — Collegium Pharmaceutical, a Cumberland, R.I., specialty pharma developing drugs for neurological, respiratory and skin disorders, raised $2.5 million from insiders, VentureWire reports. Westfield Life Sciences Fund and Boston Millennia Partners provided the funding.

Like most specialty pharmas, Collegium licenses cast-off or failed drugs from other companies and pushes them through clinical testing. The company, which already markets drugs for acne and wound healing, said it may seek a fourth funding round depending on its 2008 sales. Collegium hopes to request marketing approval for a new allergy early next year.

CardioMems closes $33M funding for wireless heart sensors — Atlanta’s CardioMems, a device maker focused on wireless heart sensors, raised $33 million in a fifth funding round. Investors included Arcapita Ventures, Boston Millennia Partners, Medtronic, Easton Capital Partners, Foundation Medical Partners, Arboretum Ventures, Deerfield Capital Management, Vision Capital Advisors, Aperture Venture Partners and Rockport Venture Securities.

CardioMems’ first product is a sensor that can detects the pressure within an aneurysm, a weakened section of an arterial wall that is susceptible to rupture. We previously covered the company here.

Eco-friendly gDiapers pulls in new funding — Portland, Ore.-based gDiapers, a maker of biodegradable, flushable baby diapers, raised a second funding round. The company didn’t disclose how much it raised. 2x Consumer Products Growth Partners provided the funding. (For the amusing tale of a columnist who tried these diapers — complete with a mildly panicked online comment apparently from the gDiapers CEO — see this NJ Star-Ledger piece.)

HEADLINES OF NOTE:

• AgraQuest raises $20M for biotech pesticides (release)
• Precision Thera drops IPO, goes public via reverse merger (release)
• Women’s health co. PreLem raises CHF 36M (release)
• Entegrion draws $4.7M for bleeding control (VentureWire, sub req’d)
• Specialty drug maker Collegium Pharma nets $2.5M (VW)
• Medical tourism firm BridgeHealth raises $1M+ (release)
• Eco-friendly diaper co. gDiapers raises funding (VW)
• Wireless hospital-alarm co. Emergin acquired by Philips Electronics (release)

Featured companies: DirectFlow, Direvo, Indigo Biosystems, MacroGenics

Direct Flow raises $27M for heart-valve implants — Santa Rosa, Calif.-based Direct Flow Medical, a startup developing heart implants, raised $27 million in a second funding round. Investors included Johnson & Johnson Development, Foundation Medical Partners, VantagePoint Venture Partners, ePlanet, EDF Ventures, New Leaf Venture Partners and Spray Venture Partners.

Direct Flow makes minimally invasive aortic-valve replacements for the heart. This particular field happens to be booming — we’ve previously covered competitors JenaValve, AorTx and Sadra.

MacroGenics signs Eli Lilly pact worth initial $43M for autoimmune disease — MacroGenics, a Rockville, Md., biotech developing antibody-based therapies for autoimmune disease, signed a partnership with Eli Lilly that could be worth more than $600 million. MacroGenics is working on antibodies designed to tamp down autoimmune responses by inducing tolerance to antigens that might otherwise promote strong immune reactions to the body’s own cells. The company’s first drug candidate targets diabetes — specifically “type one” diabetes that results when the immune system targets insulin-producing cells in the pancreas.

OTHER HEADLINES OF NOTE:

• Indigo Biosystems gets funding for lab-data software (VentureWire, sub req’d)
• Germany’s Direvo pulls in €12M for biomanufacturing (release)

(UPDATED at 3:10pm PT: See below.)

Featured companies: Agendia, EndoGastric Solutions, FlowCo, Gentris, MedManage Systems, ParagonDx, Presidio Pharmaceuticals, Xoova

Presidio Pharma raises $26M for viral treatments — San Francisco’s Presidio Pharmaceuticals, a biotech developing new antiviral drugs, raised $26 million in a second funding round. Investors included Panorama Capital, Baker Brothers Investments, Bay City Capital, Ventures West Capital, Nexus Medical Partners, Sagamore Bioventures, George Rathmann Fund and Peninsula Overview Partners.

Presidio’s lead drug candidates take aim at HIV, hepatitis C and other viral infections. None of its drugs have entered human tests yet.

EndoGastric Solutions pulls in $30M for “transoral” surgeries — Redmond, Wash.-based EndoGastric Solutions, a medical-device maker developing products for incision-free gastrointestinal surgery, raised $30 million in a fourth funding round. Investors included DeNovo Ventures, Chicago Growth Partners, MPM Capital, Advanced Technology Ventures, Foundation Medical Partners, and Oakwood Medical Investors.

In March, EndoGastric received FDA clearance for a device it calls the StomaphyX, a disposable surgical instrument that can be passed into the stomach or the intestines via a patient’s mouth. Although EndoGastric isn’t too clear on exactly what the StomaphyX is for — the company says it’s for use in “endoluminal transoral tissue approximation and ligation” — the device appears to be a sort of staple gun that can fasten together parts of the stomach or intestines. EndoGastric says the device can be used to treat gastroesophageal reflux disease, and its Web site appears to suggest that it can also perform bariatric surgery from inside the stomach as a treatment for obesity.

Agendia gets $34M for gene-based diagnostics — Amsterdam-based Agendia, a developer of gene-based diagnostic tests for cancer, raised $34 million (€25 million) in a fourth funding round. Investors included ING, Van Herk Biotech, Gilde Healthcare Partners and Global Life Science Ventures.

Agendia, founded in 2003, sells diagnostic tests that assess the “activity level” of various genes in tumor tissue, a technique that allows it to predict whether, for instance, a woman has a high or a low risk of seeing her breast cancer return. That test, sold under the brand name MammaPrint, was approved in the U.S. in February. Agendia has developed similar tests for identifying unknown cancers and for assessing the prognosis of colon cancer.

MedManage Systems, a drug-sampling service provider, receives $5M — MedManage Systems, a Bothell, Wash., company that helps drug manufacturers push free samples into the hands of doctors in order to “build brands,” raised $5 million of a planned $10 million financing, PE Hub reports, citing a regulatory filing. Investors include Lilly Ventures, Prism VentureWorks, QuestMark Partners and Versant Ventures.

At heart, MedManage’s business seems to be a consulting service that uses a mix of technology, data analysis and old-fashioned legwork make it easy for physicians to hand out free drug samples, which the MedManage site calls “a proven marketing strategy” for “influenc[ing] physician prescribing behavior.”

The company’s Web site is larded up with all manner of marketing buzzwords, but it’s actually fascinating to read through. That’s because most folks in the pharmaceutical industry would never admit that drug samples are part of a sophisticated marketing program aimed at getting doctors used to particular brands and patients to request them by name. (Large drug companies would prefer you to believe that they give away free drugs out of the kindness of their heart and sympathy for the people who can’t afford their products.) MedManage, however, makes no bones about using samples to push particular drugs. So for a peek behind the curtain, check out MedManage’s description of what it calls its “OmniSample Solution” — it’s very illuminating.

Xoova raises $2.5M for medical social-networking — Santa Monica, Calif.-based Xoova, a social network for doctors and patients, has raised $2.5 million in a first funding round last year, VentureWire reports (subscription required). Spark Capital Partners provided the funding.

Xoova allows physicians to post profiles of themselves online, much the way Facebook and similar services do for the general population. Xoova CEO Tommy McGloin estimates that 20,000 doctors have already done so, a number he hopes will grow to 100,000 by the time he begins raising an expected $5 million round next year.

Consumers can search the doctor profiles and, in some cases, can make appointments online if the doctor has signed up for a free Xoova service. McGloin said the company intends to roll out new features in coming months, although the one cited by VentureWire — allowing patients to both book and cancel appointments online — sounds awfully mundane.

Cardiac-device maker FlowCo raises $250K — FlowCo, an Indianapolis medical-device developer, raised $250,000 in a seed financing. BioCrossroads provided the funding. FlowCo, which doesn’t have a Web site, is working on a new catheter for deploying arterial stents, the wire-mesh devices that prop open clogged arteries, more accurately.

ParagonDx acquires Gentris unit for early diagnostics — ParagonDx, apparently a newly formed Morrisville, N.C., biotech firm focused on molecular diagnostics, said it acquired the Gentris Diagnostics unit of Gentris, a pharmacogenomics firm also based in Morrisville. Financial terms of the deal weren’t disclosed.

It’s not immediately clear exactly what this transaction means — I’m assuming ParagonDx was essentially spun out of Gentris, but the release isn’t terribly clear on that point. There are also some other oddities, such as the fact that as of this moment, the ParagonDx URL redirects to the Gentris site. It’s entirely possible that they’re just working out merger-day glitches, but it’s also possible something else weird is going on.

UPDATE (3:10pm PT): Added items on MedManage Systems, Xoova, FlowCo and ParagonDx/Gentris.

Innovative Metabolics, a Boston developer of neuromodulation systems for “chronic disease,” raised $5.5 million in a first funding round, VentureWire reports (subscription required). The round was led by Morgenthaler Ventures, which was joined by Foundation Medical Partners.

Although the company apparently still wants to keep a low profile, it’s not too hard to make an educated guess at what it might be up to. In January, Innovative Metabolics paid $500,000 and an unspecified number of preferred shares to Critical Therapeutics to license technology for stimulating the vagus nerve.

From the Critical Therapeutics press release:

Innovative Metabolics is a privately held company founded by two of Critical Therapeutics’ co-founders, Kevin J. Tracey, M.D. and H. Shaw Warren, M.D. In 2002, Dr. Tracey and a team of researchers at The Feinstein Institute for Medical Research (formerly the North Shore-Long Island Jewish Research Institute) discovered a pathway for the anti-inflammatory signal between the brain and major organs such as the heart, stomach, liver and small intestine. As part of this discovery, the Feinstein Institute secured intellectual property directed to both therapeutic and device approaches of stimulating this anti-inflammatory pathway. The discovery of this pathway was published in the December 2002 issue of Nature. Critical Therapeutics licensed patent rights related to the modulation of this pathway by pharmacologic agents and vagal nerve stimulation from the Feinstein Institute in 2003.

In addition, there’s this recent abstract from a paper Kevin Tracey published earlier this year in the Journal of Clinical Investigation:

Cytokine production by the immune system contributes importantly to both health and disease. The nervous system, via an inflammatory reflex of the vagus nerve, can inhibit cytokine release and thereby prevent tissue injury and death. The efferent neural signaling pathway is termed the cholinergic antiinflammatory pathway. Cholinergic agonists inhibit cytokine synthesis and protect against cytokine-mediated diseases. Stimulation of the vagus nerve prevents the damaging effects of cytokine release in experimental sepsis, endotoxemia, ischemia/reperfusion injury, hemorrhagic shock, arthritis, and other inflammatory syndromes. Herein is a review of this physiological, functional anatomical mechanism for neurological regulation of cytokine-dependent disease that begins to define an immunological homunculus.

Translated, this excerpt suggests that Tracey — presumably, along with the company he co-founded — believes he’s discovered a way to tamp down inflammatory disease of the organs by stimulating the vagus nerve in a particular way. Of course, it’s not at all clear which conditions Innovative Metabolics is hoping to treat — if I had to guess at this point, I’d probably pick something that’s not even among the conditions listed in that abstract, such as inflammatory bowel disease.

In any case, all this is further proof that neuromodulation is a pretty hot area. For instance, I wrote about another company planning to use vagus-nerve interference to curb obesity here. Others are at work on related devices that could treat epilepsy, sleep apnea or hypertension.

(CORRECTED: See below.)

Seattle-based NeuroVista, a developer of devices for the treatment of epilepsy, raised $33.8 million in a second-round funding and left behind its former name, BioNeuronics.

The company, founded in 2002 by whiz kid Daniel DiLorenzo, has been quiet about its technology and commercial direction. In April, however, DiLorenzo received a patent for a “neurological control system” using “closed-loop intracranial stimulation” for the “optimal control of neurological disease.” In other words, given NeuroVista’s public interest in epilepsy, it sounds very much like it’s working on implantable neuromodulation devices that could monitor and perhaps counteract the early signs of an oncoming seizure. (Hat tips: VentureWire and Neurotech Business Report).

VentureWire also reports that one other venture-backed company, NeuroPace, and two established device makers, Medtronic and Houston-based Cyberonics, may also be researching epilepsy devices.

Here’s NeuroVista’s vaguely worded announcement. The round was led by Advanced Technology Partners and Delphi Ventures, who were joined by Three Arch Partners, Sprout Group and Foundation Medical Partners.

CORRECTION: An earlier version of this item stated that Dan DiLorenzo “co-founded” NeuroVista. He’s informed us that he was the sole founder, and I’ve corrected the item to reflect that.