VentureBeat

TODAY’S HEADLINES:

• Precision Thera merger with “blank check” Oracle Healthcare collapses (release)
• Sleep Solutions takes in $21M for sleep-apnea diagnostics (release)
• Trevena takes in $24M for drugs targeting G-proteins (release)
• “Specialty biotech” PanGenetics gets €23M for antibody drugs (release)
• Cancer-drug maker Unibioscreen pulls in €5M (release)
• Danish contract manufacturer CMC Biologics raises new funding (PDF release)
• Healthcare investor EDF Ventures postpones fourth fund (VentureWire)
• Global TB-drug alliance names former Sanofi-Aventis exec Jerome Premmeurer as CEO (release)
• Liquidia Tech names Neal Fowler as CEO (release)

(NOTE: Sorry for the minimal posting yesterday — I was at the Health 2.0 conference with extremely limited Internet connectivity. Normal posting resumes today.)

Precision Thera merger with “blank check” Oracle Healthcare collapses – This item is now a standalone post here.

Sleep Solutions takes in $21M for sleep-apnea diagnostics – Sleep Solutions, a Pasadena, Md., developer of diagnostic devices for sleep apnea, raised $20.5 million in a new funding round. Investors included TPG Biotechnology, MedVenture Associates, Emergent Ventures and Lava Ventures.

Sleep Solutions has developed a home-use diagnostic device for identifying sleep apnea, which are breathing difficulties during sleep. Diagnosing apnea has traditionally required patients to spend the night in a sleep laboratory. Left untreated, apnea can increase the risk of more serious problems, including stroke and heart attack.

Trevena takes in $24M for drugs targeting G-proteins – Trevena (no Web site), a Berwyn, Penn., biotech focused on a new area of drug discovery, raised $24 million in a first funding round. Investors included Alta Partners, Healthcare Ventures, New Enterprise Associates and Polaris Venture Partners.

Like many biotechs, Trevena plans to develop drugs that attack a particular biological mechanism rather than any particular disease. In this case, the company is targeting a class of proteins known as G-protein coupled receptors, or GPCR, which according to the company are affected by close to 40 percent of all drugs on the market today. The company didn’t describe its plans in any detail.

Healthcare investor EDF Ventures postpones fourth fund – EDF Ventures, an Ann Arbor, Mich., VC firm specializing in early-stage healthcare, has delayed a planned fourth fund, VentureWire reports. The postponement is related to the departure last year of managing director Beau Lasky, who left for Steamboat Ventures.

The firm intends to begin talking to potential investors again in several months. EDF didn’t say how much it hopes to raise in the new fund; its third fund closed in 2005 with $55 million in commitments.

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:

• 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.

Featured companies: BioVex, Cavadis, Innovention, Paratek Pharmaceuticals, Phase Bioscience, Reliant Pharmaceuticals, Xencor

UPDATED: Expanded Paratek and Xencor items.

Paratek Pharma raises $40M for new antibiotics — Boston’s Paratek Pharmaceuticals, a biotech working on new antibiotics to treat drug-resistant bacterial infections, raised a first tranche of a $40 million eighth round of funding. The company’s release is here, VentureWire (subscription required) has more details here.

Investors in this funding included Aisling Capital, D.E. Shaw, Boston Life Science Venture Corporation, Nomura Phase4 Ventures, Novartis BioVentures, BioFund Ventures, HBM BioVentures, Lombard Odier Darier Hentsch, BioVeda Fund and Hercules Technology Growth Capital. Paratek’s lead drug candidate, PTK 0796, is being studied against skin-structure infections and community-acquired pneumonia.

Xencor raises additional $15M for cancer, immune-disease drugs — Xencor, a Monrovia, Calif., biotech developing “engineered” protein- and antibody-based drugs, raised an additional $15 million in its fifth funding round, bringing the total to $60 million. Investors included Oxford Bioscience Partners, Merlin Nexus, Novo Nordisk, MedImmune Ventures, HealthCare Ventures and Zen Investments.

Xenocor’s lead candidate is an antibody that could target Hodgkin’s disease and T-cell lymphoma. The company expects to begin early-stage human trials later this year.

HEADLINES OF NOTE:

• Protein purifier Phase Bioscience pulls in an additional $5.4 million (American Venture Magazine)
• Reliant Pharma trims IPO plans, aims for $364M offering (Edgar)
• Cavadis, developer of diagnostics for “vulnerable” coronary plaques, raises seed funding (PDF release)
• Innovention Tech pulls in $115,000 for new surgical probe (release)
• BioVex names Jan van Heek chairman (release)

Featured companies: Ablynx, Cardiosolutions, Carigent Thereapeutics, Elusys, Genome Corp., GlobeImmune, Novazone, Targanta Therapeutics, Waterfront Media

UPDATED at 5:45am on 9/27/07

GlobeImmune raises $41M for immune-system therapies — GlobeImmune, a Louisville, Colo., biotech focused on new forms of immunotherapy to treat viral infections and cancer, raised $41.2 million in a third funding round. Investors included Wexford Capital, Celgene, the Mellon Family Investment Company, the Richard King Mellon Foundation, Eminent Venture Capital, Boston Life Science Venture, WRF Capital, HealthCare Ventures, Morgenthaler Ventures, Sequel Venture Partners, Lilly Ventures, Medica Venture Partners, Adams Street Partners, Biogen Idec, Pac-Link Bioventures, China Investment and Development, Yasuda Enterprise Development, Partners Healthcare, and GC&H Investments.

GlobeImmune’s experimental drugs are based on genetically engineered yeast cells, which have been altered to produce proteins that stimulate the immune system to attack diseased cells. The company’s lead product targets hepatitis C, and has completed early-stage human trials. Another drug is intended for use in pancreatic cancer.

Waterfront Media pulls in $25M for online health info — New York’s Waterfront Media, which bills itself as the largest privately held provider of online health information, raised $25 million in a fourth round of funding. Investors included Scale Venture Partners, Foundation Capital, Rho Ventures, Time Warner Ventures, BEV Capital, and Neocarta Ventures.

Waterfront said it will use the funds to expand its Everyday Health Network, a health-information portal, and to make acquisitions in the goal of becoming the “number one health destination” on the Web.

Novazone seeks $20M for food-safety tech — Novazone, a Livermore, Calif., developer of food-safety technology, is looking to raise $20 million in a third funding round, VentureWire reports (subscription required). Novazone is developing an ozone-based disinfectant for food and water purification. The company previously raised $7 million in 2006 from Chrysalix Energy, Foundation Capital and Grauer Capital.

Cardiosolutions raises $7M for heart device — Stoughton, Mass.-based Cardiosolutions, a medical-device maker focused on minimally invasive repairs to the heart’s mitral valve, raised $7 million in a first funding round. BioVentures Investors led the round.

The company’s device is intended to restore function to the valve that separates the two left chambers of the heart without open-heart surgery. Cardiosolutions was founded in 2006 by STD Med, a Stoughton-based medical-technology firm.

Elusys wins $12M contract for anthrax treatment — Pine Brook, N.J.-based Elusys, a biotech focused on antibody-based treatments for infectious disease, won a $12 million federal contract that will support development of its anthrax treatment Anthim. That treatment targets the so-called “protective antigen” component of anthrax, theoretically blocking the bacteria’s ability to produce fatal levels of toxin.

Ablynx wins €1.9M grant for miniature antibodies — Belgium’s Ablynx, a biotech working to devise new therapies using miniature antibody molecules, received a €1.9 million ($2.6 million) grant from the Institute for the Promotion of Innovation by Science and Technology in Flanders. The company said the funding would allow it to pursue new uses for its “nanobodies” and to expand its intellectual-property portfolio.

Genome Corp. raises $250K for new sequencing technology — Providence, R.I.-based Genome Corp. raised $250,000 in seed financing to extend development of a new high-speed DNA sequencing technology. The Slater Technology Fund provided the financing.

Nanotech-drug developer Carigent Therapeutics raises seed funding — Yale spinout Carigent Therapeutics, a New Haven, Conn., biotech working on a nanoparticle-based drug technology, raised an undisclosed amount of seed funding, VentureWire reports. Saint Simeon Marketing e Investimentos provided the funding in May.

The idea is that engineered nanoparticles can specifically target particular proteins, theoretically making them ideal “carriers” for other drug molecules that attack cancer, infectious pathogens or other other disease-related substances. The company has also secured $250,000 in grants from the National Cancer Institute and the National Science Foundation, and plans to target cancer with its first product, it told VentureWire.

Antibiotic maker Targanta sets IPO price range — Cambridge, Mass.-based antibiotic developer Targanta Therapeutics said it now hopes to raise up to $92.6 million in an IPO by selling shares at a price of $12 to $14 apiece. Targanta has previously expected to pull in $86.3 million; I wrote about some of the risks inherent in the company’s plans to win FDA approval for an in-licenced antibiotic called oritavancin that it hasn’t even tested itself here.

So far, Targanta seems to have managed to assure investors that it can overcome those challenges, which include some potentially strong competition from a variety of sources. Its offering will still serve as a good test of the strength of the biotech IPO market, which has been iffy for well over a year.

(UPDATED at 5:05 p.m. PDT; see below.)
(As part of my ongoing effort to strike the right balance between keeping up with venture-business news and writing more analysis, I’m inaugurating a daily briefing that will collect deal-related news items from the life sciences in one place. I’ll continue updating this post throughout the day as the news dictates. Comments on this or any other feature of this blog are always welcome; sound off below. For more on recent and possible future changes to the Life Sciences site, see earlier posts here and here.)

Featured companies: CoolSystems, BioProcessors, ConforMIS, Semafore Pharmaceuticals, Vatera Capital, Danish Diagnostic Development, BG Medicine

CoolSystems raises $3M for sports medicine — CoolSystems, a Berkeley, Calif., medical-device maker focused on sports medicine and post-surgical treatments for orthopedic injuries, raised $3 million in an expected $6 million seventh funding round, VentureWire reports (subscription required). The inside round includes MedVenture Associates, Maxwell Trust, Roda Group and angel and individual investors. Completing the $6 million round will bring the company’s total fundraising to $28.9 million.

Founded in 1998, CoolSystems makes and sells compression and cooling wraps under the GameReady brand. From the VentureWire story:

The company’s device treatments include a technology that provides a simultaneous compression and cold therapy, as well as wraps, for the treatment of post-orthopedic surgery and sports medicine. The technology works when a cloth is wrapped around the treatment area and is squeezed on the outside like a blood pressure cuff with a cyclical compression to reduce swelling, while high speed cooling is applied on the inside. The company also worked on the wraps with doctors and dress designers to get the best fit. CoolSystem’s equine division sells products for competitive and post-operative horses.

Implant maker ConforMIS secures $10M debt facility – Lexington, Mass.-based ConforMIS, a maker of knee implants for arthritis patients, secured a $10 million “debt facility” with Merrill Lynch Capital. The funding will help accelerate commercialization of the company’s patient-specific knee implants while serving as a bridge to a mezzanine round.

Microbioreactor maker BioProcessors raises $10M — BioProcessors, a Woburn, Mass., developer of drug-development laboratory equipment, raised an additional $10 million in a third funding round, bringing its total for the round to $28 million, VentureWire reports.

Investors included LSP Ventures, HLM Venture Partners, New Science Ventures, Oxford Bioscience Partners and Healthcare Ventures. According to PE Hub, the company has a post-money valuation of approximately $68 million. BioProcessors, founded in 2000, makes miniature “bioreactors” for culturing cells or conducting automated cell-based experiments.

Semafore Pharma names new CEO – Semafore Pharmaceuticals, an Indianapolis biotech focused on cancer drugs, named Edward Jacobs as its new CEO. Jacobs was previously the chief operating officer at SuperGen.

Kos Pharma founder starts new VC fund — Michael Jaharis, a co-founder of Kos Pharmaceuticals, which Abbott Labs snapped up for $4.2 billion last December, has launched his own VC fund, Vatera Capital, VentureWire reports. The fund has already participated in one funding, a $53 million round for Aveo Pharmaceuticals (see our coverage here). Given Jaharis’ background running drug-reformulation companies — that is, ones focused on figuring out how to package old drugs in new ways — it seems likely that his investments will follow suit. (Aveo, which licensed its cancer drugs from Mitsubishi Pharma, is a pretty good example, in fact.) This strategy can certainly make money — Kos itself is a prime example of that — but it probably isn’t going to knock anyone’s socks off.

Israel’s manufacturing-quality inspector Orbotech pays $39M to acquire Danish Diagnostic Development — Orbotech, an Israel-based maker of electronic-component inspection systems, agreed to buy Danish Diagnostic Development for $39 million in cash, plus up to another $6.5 million in milestone payments. (See the release here.)

DDD is a leading maker of “gamma cameras” used in CT and MRI scans as well as in “nuclear medicine,” which involves injecting a radioactive solution into a patient, then observing their movements with the gamma camera. Orbotech said the acquisition heralds its diversification into medical imaging.

BG Medicine files for European IPO — Waltham, Mass.-based BG Medicine notified the SEC that it intends to go public on the Euronext Amsterdam market. BG Medicine is focused on developing new “molecular diagnostics” that aimed at detecting disease or other bodily harm at the earliest possible moment. The company’s lead candidates include tests for early signs of heart failure or clogged arteries and another test to determine if patients are likely to respond to new cancer drugs such as Herceptin and Avastin.

UPDATE (5:05pm PT): Added items on Semafore Pharmaceuticals, Vatera Capital, Danish Diagnostic Development and BG Medicine.

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