VentureBeat

(UPDATED: See below.)

Featured companies: Anaptys Biosciences, Arterial Remodeling Technologies, Cambria Biosciences, CaseNet, ChemoCentryx, Ensemble Discovery, MediQuest, Piedmont Pharmaceuticals, Raven Biotechnologies, Sensys Medical, Verus Pharmaceuticals, Xanodyne Pharmaceuticals

UPDATED: Expanded items on Anaptys, Arterial Remodeling, Raven Biotech, Sensys and MediQuest. Moved ChemoCentryx and Xanodyne to a separate item.

Antibody-drug maker Raven Biotech merges with VaxGen — Raven Biotechnologies, a South San Francisco biotech developing antibody drugs, is merging with the troubled, publicly held vaccine maker VaxGen. The confusingly worded release is here.

Although the deal isn’t technically a reverse merger, Raven is effectively taking over the shell that VaxGen has become. VaxGen, once best known for its pioneering, but ultimately failed, attempt to produce an AIDS vaccine, next set its hopes on producing anthrax vaccine for the U.S. government. But the company lost that contract in 2006. VaxGen had been delisted from the Nasdaq two years earlier. Since then, VaxGen has been looking to sell itself or to find some other combination with which it could make use of its cash ($56.5 million as of Sept. 30) and existing investment in biotech production facilities. [UPDATE: VaxGen's CFO wrote in to point out that the company also holds $20.7 million in "investment securities."]

Although Vaxgen will be the surviving company, Raven CEO George Schreiner will run the combined entity, most of whose business will consist of Raven’s antibody-drug development programs. The company’s lead candidate, RAV12, is currently in early-to-mid stage tests against a type of cander called adenocarcinoma. According to VentureWire, Raven has raised $115 million in venture funding.

All of which makes the deal’s valuation a bit puzzling. As of Sept. 30, VaxGen had 33.1 million shares outstanding, giving the company a market capitalization of $36.7 million at its closing price of $1.11 on the Pink Sheets. VaxGen will issue another 32 million shares and will end up with 51 percent of the combined company. Near as I can tell, that seems to value Raven at somewhere around $33 million, although I wouldn’t take that figure to the bank.

Before the deal can close, VaxGen needs to relist its stock on a national exchange. The two companies will undergo restructuring to save cash, and once combined will use Raven’s headquarters in South San Francisco.

Antibody-drug maker Anaptys raises $34M — Anaptys Biosciences, a San Diego biotech developing new antibody-based drugs, raised $33.9 million in a second funding round. Investors included Novo A/S, Frazier Healthcare Ventures, Alloy Ventures, Avalon Ventures, Numenor Ventures, WS Investment and Anaptys board member Nick Lydon.

Anaptys relies on a technique for producing large quantities of varied antibodies in order to find ones with the best “drug-like” properties. We’ve written about other companies working on similar “diversity generation” techniques, most recently AvidBiotics, which we described here.

Arterial Remodeling Tech gets €5.5M for absorbable stents — Paris-based Arterial Remodeling Technologies (no Web site), a device maker developing “bioresorbable” artery-opening stents, raised €5.5 million ($7.8 million). Investors included Matignon Technologies and SGAM Alternative Investments.

Stents are the meshlike tubes used to prop open blocked arteries following a heart attack. Existing stents can lead to side effects such as scarring and potentially dangerous blood clots, so companies such as ART are developing stents that slowly dissolve into harmless components such as carbon dioxide and water. Although ART doesn’t describe its technology in detail, see this 2004 press release about Guidant’s acquisition of a bioresorbable-stent startup and this article for a look at how these absorbable stents might work.

Glucose-meter maker Sensys Medical pulls in $3.8M — Chandler, Ariz.-based Sensys Medical, a device maker developing a non-invasive glucose meter for diabetics, raised $3.8 million of $4.5 million in bridge funding, VentureWire reports (subscription required). Investors included Adams Street Partners, Alliance Technology Ventures and Pappas Ventures.

MediQuest seeks $20M to $40M against Raynaud’s disease — Bothell, Wash.-based MediQuest, a biotech developing new treatments against Raynaud’s disease, aims to raise up to $40 million in a second funding round, VentureWire reports. The company recently reported positive late-stage data of its drug for Raynaud’s disease, a condition involving reduced blood flow to the extremities.

OTHER HEADLINES OF NOTE:

• Ensemble Discovery gathers $15M for DNA-based drugs (PE Hub)
• Piedmont Pharma draws $8.5M for parasitology drugs (release)
• CaseNet raises $7.5M for healthcare-management software (release)
• Cambria Biosciences pulls in $5M to fight neurodegenerative disease (release)
• Verus Pharma names Robert Keith as CEO (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.

Featured companies: Change:healthcare, Gemin X Biotechnologies, Ipsogen, the Practice

Change:healthcare raises $1M for health 2.0 sites — Nashville, Tenn.-based change:healthcare, a provider of Web-based health information, raised $1 million in a first funding round. The investment firm Solidus, also based in Nashville, provided the cash. There’s no release, but the Nashville Business Journal did run this story.

Change:healthcare operates two “health 2.0″ Web sites designed to empower individuals by helping them better navigate the healthcare system. FindYourDoc.com offers a searchable database of doctors and hospitals, while MedBillManager is a fee-based service for helping individuals and families manage a confusing welter of medical bills and insurance statements.

Cancer-drug developer Gemin X garners $72.6M — Montreal’s Gemin X Biotechnologies, a biotech developing a variety of cancer drugs, has raised $72.6 million of a planned $114.7 million third funding round, VentureWire reports (subscription required).

The wire service cited a regulatory filing for its report. No investors were reported on that filing, although the company did just appoint Eric Roberts, a managing director of Caxton Advantage, to its board. Understandably enough, such appointments usually reflect the desire of a VC or, in this case, a hedge-fund affiliate, to keep a close eye on a significant investment.

Gemin X develops cancer drugs that, for the most part, interfere or promote the process of programmed cell death, or apoptosis.

Physician-office manager The Practice raises £1.4M — The Practice, a U.K. firm that manages doctors’ offices, raised £1.4 million ($2.9 million). MMC Ventures provided the funding. The proceeds will allow the company to expand its operations.

Ipsogen draws in $3.4M for diagnostic tests — Ipsogen, a Marseille, France, biotech focused on cancer diagnostics, raised $3.4 million, VentureWire reports. Investors included Matignon Technologies, Societe Generale Asset Management, Sofipaca and Connecticut Innovations, which provided $680,000 to help the company’s U.S. subsidiary expand its headquarters in New Haven, Conn. Connecticut Innovations is a quasi-public economic-development agency. The company’s lead product is a diagnostic for leukemia.

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.