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:

• PolyRemedy, developer of robotic wound care, takes in $25M (release)
• Bacchus Vascular gets $15M for clot-busting device (VentureWire)
• Protein-evolution company Modular Genetics gets $1.2M (VentureWire)
• PharmatrophiX gets $300K for Alzheimer’s disease prevention drugs (release)
• Light Sciences Oncology withdraws IPO (Edgar)
• Arizona’s Translational Accelerator launches $20M life-sciences fund (bizjournals.com)
• Cornea-reshaper Avedro gets $7M (VentureWire)
• Gastrotech Pharma gets $6M in wake of Lilly deal (VentureWire)
• Biomaterials maker MiMedx goes public via reverse merger (release)
• Acrongenomics to complete acquisition of Molecular Vision by the end of Q1 (release)

PolyRemedy, developer of robotic wound care, takes in $25M – Mountain View, Calif.-based PolyRemedy, a developer of systems that robotically manufacture wound dressings for patients, raised $25 million in a second funding round. Investors included Advanced Technology Ventures, IDG Ventures Boston, MedVenture Associates and Harris & Harris Group.

PolyRemedy has been keeping quiet about its work until now, but the company’s release lays out its strategy, which is to fabricate customized wound dressings at the “point of care” — here, apparently, doctors’ offices and home-care situations. The goal is to provide better treatment for chronic wounds such as diabetic ulcers, a common complication of diabetes that can manifest in the feet and other extremities as a result of nerve damage and poor blood circulation. The company claims its technology has been proven in clinical trials, but hasn’t provided any details.

Bacchus Vascular gets $15M for clot-busting device – Bacchus Vascular, a Santa Clara, Calif., developer of devices for local drug treatment of blood clots, raised $15 million in an extension of a recent recapitalization round, VentureWire reports. Investors included Vertical Group, Warburg Pincus, Kaiser Permanente Venture Development and Bacchus founder Thomas J. Fogarty.

Bacchus makes and markets a system it calls Trellis, which is a minimally invasive, catheter-based device consisting of two inflatable balloons and a “dispersion wire.” Physicians thread the catheter through the clot and inflate balloons at each end of it, then infuse a clot-busting drug directly into the clot. The dispersion wire then mechanically helps break up the clot, whose remains are then sucked out through the catheter. Bacchus is currently focused on deep-vein thrombosis, which are large clots usually located in the legs. Its device was approved in 2005, and the company intends to use the new funds to expand its marketing efforts.

Bacchus restarted with a $7.6 million recapitalization in June 2006 after apparently exhausting the patience of two initial investors, Three Arch Partners and De Novo Ventures, who haven’t participated in subsequent fundings. Prior to the recapitalization, Bacchus had raised $40 million, according to VentureWire.

Protein-evolution company Modular Genetics gets $1.2M – Modular Genetics, a Cambridge, Mass., biotech that engineers new proteins with enhanced function, raised $1.2 million toward an expected $5 million fourth funding round, VentureWire reports. Individual investors provided the funding.

Modular makes a gene-engineering system it calls the CombiGenex that can shuffle and recombine genes in order to make modified or novel proteins. By making thousands of slightly different molecules and then screening for the ones with improved functions, Modular aims to “evolve” new proteins for therapeutic uses.

PharmatrophiX gets $300K for Alzheimer’s disease prevention drugs – San Francisco’s PharmatrophiX (no Web site), a biotech working on drugs that prevent neurodegenerative disease, received a $300,000 grant from the Alzheimer’s Drug Discovery Foundation. Founded by Stanford researcher Frank Longo, PharmatrophiX is developing a class of drugs that mimic the activity of proteins called neurotrophins, which aid in the development, health and survival of neurons.

Light Sciences Oncology withdraws IPO – Bellevue, Wash.-based Light Sciences Oncology, a developer of light-activated chemotherapy, withdrew its $96.6 million IPO, citing “unfavorable market conditions.” Light Sciences becomes the seventh life-science startup to yank an IPO filing this year.

Light Sciences has kept hope alive for an awfully long time. The company originally filed its registration statement in April 2006, but hasn’t amended it since September of that year. Light Sciences raised $30 million in a second funding round last July, despite its still-active IPO registration.

CORRECTION: An earlier version of this item misstated PolyRemedy’s systems as “robotically apply[ing] wound dressings.” I’ve restated that to match the description in the second paragraph, which accurately describes the systems.

Featured companies: Mawell, OpGen, Vital Therapeutics

Optical genome-mapper OpGen raises $23.6M in a restart — OpGen, a Madison, Wisc., biotech developing a genomic test for identifying disease-causing microbes, raised $23.6 million in what the company is billing as a first funding round. In fact, however, the funding is more of a restart for the company, which was founded in 2001 and previously provided genomic services to researchers.

OpGen is now focused on developing speedy genome-based tests that can help identify and track infectious disease microbes. The company has set its sights on clinical microbiology laboratories as potential customers; such laboratories now try to identify the source of a patient’s infection by growing up the responsible bacterial in culture, a process that can take days. OpGen’s technology, which identifies patterns in single molecules of DNA to identify particular microbial strains, can deliver answers within two to three hours, the company says.

Investors included CHL Medical Partners, Highland Capital Partners, Versant Ventures and Mason Wells.

Vital Therapies gets $28.1M for artificial liver — San Diego’s Vital Therapies, a device maker developing an “artificial liver,” raised $28.1 million in a third funding round. Investors included Versant Ventures, Delphi Ventures, HBM BioMed China, DFJ DragonFund China, MedVenture Associates, Valley Ventures, Toucan Capital and Heights Capital.

Vital’s main focus is on a cartridge-style device that mimics the toxin-breakdown and waste-filtering function of the liver. The device, which contains artificially grown human liver cells, is intended for use while patients await a liver transplant. The device has completed four early-to-mid-stage trials, two of them in China, where prevalent hepatitis frequently contributed to liver failure.

Finland’s Mawell draws €8M for healthcare IT — Helsinki’s Mawell, a bioinformatics company providing software and services to drug companies and hospitals, raised €8 million ($11.1 million) from the private-equity firm CapMan, VentureWire reports (subscription required). CapMan will become Mawell’s largest owner.

(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.

Sonoma Orthopedics, a stealthy spinal-device maker in Santa Rosa, Calif., raised at least $10 million in a second funding round, VentureWire reports. The company raised $3 million in a first round last April.

Sonoma Orthopedics is at work on devices that repair or reinforce bones from the inside. MedVenture Associates led the round, and was joined by existing investors EDF Ventures, Asset Management, Halo Fund and Angel’s Forum.

Asthmatx, a Mountain View, Calif., developer of a bronchial device for asthma treatment, raised $50 million by selling a 15% stake to Olympus Medical Systems, a unit of Japan’s camera and precision-device maker Olympus.

Last October, Asthmatx withdrew an IPO at the last minute, citing a desire to pursue “alternative strategic options” — that is, better offers. And it seems to have found one; Dan Primack at PE Wire figures that Asthmatx’s current $280 million pre-money valuation is close to twice what it would have been in the planned IPO.

Asthmatx makes an experimental device that uses heat to thin smooth-muscle tissue in the airways of asthmatic patients, with the aim of inhibiting the muscular contractions typical of an asthma attack. (The company gently refers to this process as “delivering controlled thermal energy” to the airway’s smooth muscle.) Known formally as bronchial thermoplasty, the technique involves a catheter and a small heatable wire “basket” that a physician can extend into the airways of the lungs. Patients are sedated during the procedure, but don’t have to be hospitalized.

In March, a team of doctors funded by Asthmatx reported in the New England Journal of Medicine that bronchial thermoplasty with the company’s Alair device appeared to reduce the frequency of asthmatic attacks compared to a control group. That study, however, is difficult to interpret, as a significant number of patients dropped out during a “washout” period in which they had to give up their asthma medications for two weeks prior to the onset of treatment. The researchers also cautioned that thermoplasty “may increase the potential for a strong placebo effect,” which of course would make it difficult to know how much the treatment actually helped patients.

Asthmatx had previously raised $42.5 million in venture funding from a number of backers, including Polaris Venture Partners, Menlo Ventures, Vanguard Ventures, HBM BioCapital, MedVenture Associates, Boston Scientific and Montreux Equity Partners. A release of sorts on the funding is here; VentureWire has more here (subscription required).

Palo Alto, Calif.-based Pulmonx raised $20 million in a second-round funding, VentureWire reports (subscription required).

The startup is one of several device makers hoping to pioneer new medical techniques in the field of “interventional pulmonology.” Much like interventional cardiology, in which non-surgeons perform procedures such as angioplasty and stenting to open blocked arteries, interventional pulmonology aims to give lung specialists new tools to treat lung problems such as emphysema in their offices. Patients, of course, could benefit from quicker recovery times and avoiding hospitals as well, at least if the procedures are proven to be equal or superior to existing techniques.

According to VentureWire:

Richard M. Ferrari, managing director of De Novo, said that these companies, like Pulmonx, are looking to replace the current mode of treatment: lung volume reduction surgery. “It’s an incredibly invasive procedure,” he said. “So the concept of having an office-based procedure is irresistible.”

Pulmonx’s technology involves the insertion of a one-way valve, shutting off diseased portions of the lung. Ferrari said that the technique is part of a growing field of interventional pulmonology, which, like the more established field of interventional cardiology, uses catheter-based treatments for diseases.

Pulmonx has been in trials outside of the U.S., Ferrari said, and plans to begin human implantations in the U.S. later this year or early next year. “The $20 million will take them well into their clinical trials,” he said.

The round was led by De Novo Ventures. Others involved in the round include new investor Latterell Venture Partners and existing investors Montreux Equity Partners and MedVenture Associates.