VentureBeat

Featured companies: Angstrom Medica, Asuragen, Aryx Therapeutics, HistoRx, MiMedx, Pioneer Surgical, Transfusion & Transplantation Technologies, Tolerx, Vivo Ventures

UPDATED: Expanded Aryx and XDx items.
UPDATE REDUX: Expanded Tolerx item, moved XDx to a separate post.

Aryx sets IPO range, seeks $92M for redesigned drugs — Fremont, Calif.-based Aryx Pharmaceuticals, a specialty pharma focused on producing safer versions of existing drugs, set its IPO range and now seeks to raise as much as $92 million. That’s a bit more than the $85.3 million the company originally estimated when it first filed.

Aryx reengineers existing drugs, many with safety problems, in order to revive them or to sidestep complications. It now plans to offer up to 5.75 million shares at a price of $14 to $16 per share. Our previous coverage of the company and its strategy is here.

Map Pharmaceuticals, another specialty pharma that went public earlier this month, has seen its shares rise 22 percent since its offering, so the prospects may be good for Aryx as well. The seemingly bottomless investor appetite for specialty pharma — mostly companies that buy or re-engineer existing drugs instead of discovering new ones — stands in sharp contrast to the experience over in biotech.

The most recent biotech IPO, that of Targanta Therapeutics, fared badly, with shares now down 16 percent. Next up is Bioheart, which we’ve covered here and here, and whose star-crossed IPO is still scheduled for this week.

Tolerx gets $70M, plus a possible $680M, from GSK for diabetes drug — Cambridge, Mass.-based Tolerx, a venture-backed biotech focused on diseases of the immune system, struck a major alliance with GlaxoSmithKline to develop and commercialize an antibody drug that might be effective against diabetes. The companies’ joint release is here.

Tolerx will receive an upfront payment of $70 million, which will be a mix of equity and advance R&D funding. The company may also get an additional $155 million in future development costs, up to $350 million in milestone payments and up to $175 million in sales milestones. Tolerx will also be able to co-market the drug, called otelixizumab, for treating type 1 diabetes in the U.S., and will earn double-digit royalties on worldwide sales of the drug.

Those are some mighty impressive numbers for a drug that hasn’t yet begun late-stage trials more than two years after Tolerx first reported positive mid-stage data. Otelixizumab is an antibody that sticks to a surface protein on immune cells called T cells, presumably in a way that then tamps down misfiring immune responses. In that earlier test, 80 patients newly diagnosed with type 1 diabetes — in which T cells attack insulin-producing beta cells in the pancreas — received two to four-hour infusions of either otelixizumab or placebo for six days. Those who received the drug required less insulin and appeared to retain more of their beta cells over the next 18 months.

If those results hold up, otelixizumab would be one of the first treatments to slow the course of type 1 diabetes. That study, however, was relatively small, and some critics have warned that anomalies in the data might have skewed the results.

OTHER HEADLINES OF NOTE:

• HistoRx raises $6M to for new diagnostics (release)
• MiMedx, orthopedic implant maker, draws in $3.8M (VentureWire, sub req’d)
• Transfusion & Transplantation Technologies raising $5M for blood analysis (VW)
• Spinal-device maker Pioneer Surgical acquires Angstrom Medica (release)
• Biology services provider Asuragen inks cancer pact with Merck (release)
• Vivo Ventures adds James Huang as executive in residence (release)

Featured companies: AirInSpace, Anacor Pharmaceuticals, Apollo Endosurgery, Ascension Health Partners, BG Medicine, CeraPedics, GlaxoSmithKline, Simplex Diabetic Supply, Zars Pharma

UPDATED: Last entry added at 2am PT on 10/8/07.

Anacor Pharma pulls in $22M from Glaxo, with hundreds of millions more on the line –Palo Alto, Calif.-based Anacor Pharmaceuticals, a biotech developing new anti-infective and anti-inflammatory drugs using boron chemistry, struck a wide-ranging partnership with GlaxoSmithKline worth up to $605 million. Anacor will receive a $12 million cash payment and a $10 million equity investment in exchange for Glaxo options to as many as eight drug candidates.

Anacor is also eligible for milestone payments on each product candidate, although the release is so badly worded it’s difficult to know exactly how much is really on the line. What the release says is that “Anacor is eligible to receive discovery, development, regulatory and commercial milestones ranging up to $252 million and $331 million for each product candidate.” Does that mean a total of $583 million for each candidate, somewhere between $252 million and $331 million, or something else altogether? You’ve got me. I’ve put in calls to both companies, and will update if someone clarifies this.

(UPDATE: A GSK representative finally called back, admitted that the original wording was unclear, and said that any given product candidate could yield maximum potential milestones of between $252 million and $331 million. Whew.)

Anacor is developing a new class of antibiotics, antifungal drugs and anti-inflammatories based on the novel properties of boron, an element that doesn’t feature largely in traditional pharmaceuticals. Its leading candidates target a fungal infection called onychomycosis and the autoimmune skin condition psoriasis. The company filed for a $58 million IPO in August; see our coverage here.

Simplex Diabetic Supply draws $50M for acquisitions — Brentwood, Tenn.-based Simplex Diabetic Supply (no Web site), a provider of diabetic testing supplies, raised $50 million for expansion. New Enterprise Associates provided the funding. Simplex Chairman Richard Pinson said the funding will allow the company to “accelerate and execute” its acquisition strategy. (UPDATE: See a longer take on this deal and what it says about the business strategies of nervous VCs here.)

Ascension Health Ventures launches $200M healthcare fund — Ascension Health Ventures, a St. Louis-based venture firm owned by the Catholic non-profit healthcare provider Ascension Health, launched a new $200 million fund. Ascension Health and two other Catholic health systems — Catholic Health Initiatives and Catholic Health East — provided the funding. The fund will target later-stage medical device, healthcare technology and healthcare service companies. The release is here.

Bone-graft substitutor CeraPedics pulls in $14M — The Lakewood, Colo., maker of a drug-infused putty that stimulates bone regrowth, raised $14.5 million of a $16.5 million first funding round, PE Hub reports, citing a regulatory filing. Orbimed Advisors led the round. CeraPedics makes a bone-graft substitute that relies on a peptide called P-15 that plays an important role initiating the formation of bone.

Apollo Endosurgery raises $11.5M for minimally invasive surgical devices — The Austin, Tex., developer of surgical devices designed for operations that utilize the body’s “natural orifices” raised $11.5 million in a first funding round. Among those providing the funding were PTV Sciences, H.I.G. Ventures, and individual investors. Apollo’s devices are specifically designed for surgeries that utilize the digestive tract in order to access the peritoneal cavity — a technique now being applied to obesity and early-stage cancers.

AirInSpace draws €6M for biodecontamination devices — Paris-based AirInSpace, a developer of devices that identify and neutralize airborne biological hazards, raised €6 million ($8.5 million) in a second funding round. Investors included Matignon Technologies and Oddo AM. AirInSpace makes devices that reduce airborne microbial pathogens, although I’ve read their release and Web site through a few times and I still don’t have a clue exactly how they’re supposed to do that.

AssayDepot gets $1.8M for drug-research service marketplace — San Diego’s AssayDepot, an Internet marketplace for the drug-research services industry, raised $1.8 million in a first funding round. Private investors provided the funding. The company is developing a marketplace intended to allow industry and academic researchers to contract for research services offered around the world.

Zars Pharma abandons IPO — Salt Lake City’s Zars Pharma, which reformulates pain drugs for delivery via skin patches, formally withdrew its proposed IPO, citing “market conditions.” Its SEC filing is here. The last we heard from the company was in late September, when Zars reportedly postponed an IPO that had been scheduled for that week. (See our previous coverage here, here and here.)

The Zars withdrawal doesn’t seem to herald any particular trend in the IPO market, which is still blowing hot and cold on biotech and pharma companies. For instance, MAP Pharmaceuticals, another specialty pharma that went public last Friday, has seen a nice share-price rise of more than 30% since its offering. Two more tests of the biotech IPO market are expected this week: BioHeart (which I covered here) and Targanta Therapeutics (our coverage here and here).

Diagnostics maker BG Medicine sets IPO range, aims for €50M — BG Medicine, a Waltham, Mass., maker of molecular diagnostics for heart disease and measuring drug response, now hopes to raise as much as €50 million ($70.8 million) in an IPO. BG Medicine plans to sell as many as 6.9 million shares at a price of €5.75 to €7.25 apiece. We last wrote about the company here.