VentureBeat

TODAY’S HEADLINES:

• Allegro pulls in $4M for lung-cancer molecular diagnostics (release)
• Ocular bandage developer I-Therapeutix raises $6M (Mass High Tech)
• NanoBio gets last of $30M for skin-infection drugs (release)
• Cayenne Medical raises $15M for sports medicine (release)
• Aridis Pharma seeks $10M for oral-form drugs and vaccines (VentureWire)
• Neurosurgical device maker Nfocus Neuro acquires StarFire Medical (release)

Allegro pulls in $4M for lung-cancer molecular diagnostics – Boston’s Allegro Diagnostics, a biotech developing molecular diagnostics for lung cancer, raised $4 million in a first funding round. Investors included Kodiak Venture Partners, Catalyst Health Ventures and Boston University.

Allegro is commercializing gene-expression tests based on technology developed by two BU researchers, Jerome Brody and Avrum Spira. The company’s Web site and release don’t describe its technology in further detail. Allegro says the funding will allow it to begin human testing of its diagnostic.

Ocular bandage developer I-Therapeutix raises $6M – I-Therapeutix, a Waltham, Mass., device maker focused on using hydrogels as “liquid bandages” for ocular surgeries, expects to close a $6 million second funding round this month, Mass High Tech reports. Investors included Versant Ventures, SV Life Sciences, Pinnacle Ventures and angel investors.

Founded in 2006, I-Therapeutix plans to begin clinical trials of its hydrogel sealant in cataract surgery in the second quarer of this year. The product, called I-Zip, will be compared to ordinary corneal bandages. Ultimately, the startup plans to develop the hydrogel as a mechanism for delivering drugs directly to the eye.

Aridis Pharma seeks $10M for oral-form drugs and vaccines – Aridis Pharmaceuticals, a San Jose, Calif., drug and vaccine developer, aims to raise up to $10 million in a first funding round, VentureWire reports. The company was founded in 2003 by former executives of Aviron, which was acquired by MedImmune in 2002.

Aridis is working to stabilize drugs and vaccines that would otherwise require injections so that they can be delivered via inhalation or swallowing. Its lead candidates include a rotavirus vaccine, an antibody for cystic fibrosis and a new type of antibiotic.

Neurosurgical device maker Nfocus Neuro acquires StarFire Medical – Nfocus Neuromedical, a Palo Alto, Calif., device maker focused on treating hemorrhagic stroke, acquired StarFire Medical, a developer of minimally invasive devices for treating problems in the blood vessels serving the brain. The companies didn’t divulge financial details.

StarFire makes and sells balloon catheters for treating brain-vessel fistulas and aneurysms, both blood-vessel defects that can lead to uncontrolled bleeding. Nfocus makes a different type of device for treating these defects, although it doesn’t appear to have disclosed much about its particular approach.

NanoBio gets last of $30M for skin-infection drugs – NanoBio, an Ann Arbor, Mich., biotech developing new anti-infective drugs, raised the final $10 million of a $30 million equity funding that appears to be the company’s first. Perseus provided the funding. NanoBio’s lead compounds address herpes cold sores and nail fungus.

A new portal for trading virtual goods called Live Gamer announced its first funding today, promising to add some structure and protections to online transactions.

As massively multi-player online games (MMORPGS) like World of Warcraft have gained popularity, real-world markets have sprung up for everything from online currency and items, to favors, to entire player accounts. For the most part, players buy and sell with no oversight or regulation, a situation Live Gamer promises to change.

Live Gamer will stay on the good side of game publishers by only allowing trades according to the rules of the game, and spending time preventing strategies like “gold farming,” in which some players use the game only to accumulate gold or items in the virtual world then sell them for real-world currency.

Several entrenched competitors to the company already exist, part of the unapproved “gray zone” of trading that publishers find undesirable. Two of the largest are GamePal and IGE, which appear to make much of their income from gold farmers based in the developing world.

If gamers decide to follow the rules and trade through Live Gamer, they’ll receive the bulk of the sales price. Some 10 percent of each sale will be split between Live Gamer and the publisher, with the remainder going to the seller — making it roughly as profitable as using Amazon or eBay to sell goods.

The company already has some clients on board, including Funcom and Sony. However, Vivendi, the publisher of the current most-popular online game World of Warcraft, has said it will not work with Live Gamer.

Charles River Ventures, Kodiak Venture Partners, and Pequot Ventures provided the $24 million funding, the company’s first.

Featured companies: Akermin, Fluxion Biosciences, iCardiacTechnologies, Wellocities

UPDATED: Expanded items on Fluxion, Akermin, and Wellocities.

Fluxion Bio draws in $6.9M for cell-analysis tools — Fluxion Biosciences, a San Francisco developer of cellular-analysis tools, raised $6.9 million in a second funding round, VentureWire reports (subscription required). Investors included Kodiak Venture Partners, Claremont Creek Ventures and Life Science Angels.

Fluxion takes the idea of running chemical reactions against living cells — a key step in screening and analyzing the activity of drug candidates — to its logical conclusion with a system designed to measure biochemical changes involving, and sometimes within, a single cell. The company’s first microfluidic system is intended to allow researchers to study cells that adhere to surfaces, such as platelets that stick to arterial walls in the formation of plaque, and biofilms, which are drug-resistant sheets excreted by bacteria for protection.

Fluxion is also working on tools for studying electrochemical signaling within cells, which the company hopes to launch next year. The current financing may also make it possible for Fluxion to launch a third instrument that will image individual cells while they float in solution. Existing cell-imaging systems only work when cells are anchored in place.

The company could be profitable as early as 2010, Fluxion executives told VentureWire. It has raised a total of $7.4 million since its founding in 2005.

Bioenzyme-catalyst co. Akermin raises $5M — Akermin, a St. Louis developer of new biocatalytic enzymes, raised $5 million in a second tranche of its first funding round. Investors included Prolog Ventures, OnPoint Technologies, Chrysalix Energy and the St. Louis Arch Angels.

Akermin works with catalytic enzymes — molecules that speed particular chemical reactions — made via biotechnology that could replace precious-metal catalysts now used in fuel cells. The company is developing prototype “biofuel cells” and thin-fuel cells the company refers to as “bio-batteries.” Enzymes should theoretically be cheaper and more environmentally friendly than metal catalysts.

Fuel cells, which could theoretically replace conventional batteries and engines in some applications, are one of those clean technologies that have been on the table for decades in one form or another. However, existing technologies generally aren’t considered cost- or energy-effective when compared to burning fossil fuels or using traditional batteries.

Akermin is part of a wave of startups working on overcoming the difficulties in making fuel cells. Another is Bloom Energy, a secretive Silicon Valley startup that has nevertheless received plenty of press.

Akermin’s technology is a polymer “stabilizer” for these enzymes that’s designed to immobilize them, stabilize them and enhance their operating lifetime. The company has raised a total of just under $8.5 million since its founding.

Online health service Wellocities draws $1M — Toronto’s Wellocities, a diabetes-focused health-information site, raised $1 million in seed funding to create a more general online health service for Canadians. XDL Capital Group provided the funding.

The company didn’t say much more about its online strategy or how it would differ from a host of new, mostly U.S.-based sites that offer everything from detailed health information to physician directories to patient communities. In diabetes, Wellocities provides an online community and ways for diabetics to track their progress in maintaining control of their weight and blood-sugar levels.

OTHER HEADLINES OF NOTE:

• iCardiac raises undisclosed round for electrocardiogram cardiac-risk systems (release)

Music services have been slow to let mobile users pay to download music from the Internet, but that just changed, with Apple announcing that iPhone users can now do so.

They’ll be able to buy music from iTunes directly, no longer having to download to their home computers and then sync to the device.

At 99 cents, that’s attractive. Especially with Apple’s accompanying announcement that it has slashed the price of its popular 8 gigabye iPhone to $399, down from $599.

Meanwhile, Groove Networks, a company that has already been offering music downloads to mobile users, announced that it would fight on against Apple’s initiative by taking $6 million more in funding from venture capitalists.

Groove says its users have downloaded 35 million songs since 2004, striking distribution deals with Vodafone, MTS Allstream and Sony BMG to allow their subscribers to access Groove.

But its mission may be uphill going forward. It cost $2.50 to download a song on Groove, way more than iTunes’ 99-cent price. Groove does let you play your song on your cell phone and save a version to your PC for playing as well, however. The company sells songs from EMI, Warner Music International and some smaller labels.

Groove took the funding from ORIX Venture Finance. It has now raised a total of $32 million.

Former backers in include Egan Capital, Charles River Ventures, Kodiak Venture Partners, and Star Ventures.