VentureBeat

TODAY’S HEADLINES:

• Compact ultrasound maker Zonare Medical raises $30M (VentureWire)
• TherOx raises $30M for hypersaturated-oxygen devices (peHUB)
• Accumetrics, antiplatelet-drug diagnostic maker, raises $29M (release)
• Population Genetics takes in £3.8M for massively parallel genome studies (GenomeWeb)
• “Brain fitness” trainer Dakim raises $11M (release)
• BioIQ, home-diagnostics maker, takes in $2.5M (release)
• Hospital med-tracker Sabal Medical raises funds (release)
• Seattle’s PharmaIN gets $400K NIH grant for nanoparticle staph drug (PDF release)
• SensiGen, molecular-diagnostics developer, receives Michigan state loan (release)
• Arcus Ventures aims for $50M fund, targets cancer (VentureWire)

Compact ultrasound maker Zonare Medical raises $30M – Zonare Medical Systems, a Mountain View, Calif., maker of ultrasound-imaging systems, raised $30 million in a recent seventh funding round, VentureWire reports. Existing investors provided the funding, a group that includes Frazier Healthcare Ventures, 3i Group, Mosaix Ventures, CB Health Ventures, Draper Fisher Jurvestson, Ascension Health Ventures, Kaiser Permanente Ventures, Earlybird, Saints Capital, Merrill Lynch Venture Capital and Texas Instruments.

The company said the funding should set it on the road to profitability and eventually to a hope-for IPO. Zonare makes compact ultrasound systems that can be used in sonography and for a variety of other medical diagnostic purposes.

TherOx raises $30M for hypersaturated-oxygen devices – TherOx, an Irvine, Calif., maker of oxygenation devices for treating heart attacks, raised $30 million in a tenth funding round, peHUB reports. Investors included Kleiner Perkins, Integral Capital Partners and New Science Ventures.

The startup makes devices that supersaturate blood with oxygen, then infuse that blood into areas of the heart at risk of damage from oxygen starvation due to a heart attack. TherOx has now raised over $120 million in venture funding.

Accumetrics, antiplatelet-drug diagnostic maker, raises $29M – San Diego’s Accumetrics, a maker of diagnostics that measure patient response to anti-platelet drugs, raised $28.8 million in a fourth round of funding. Investors included Arnerich Massena & Associates, BBT Fund, Essex Woodland Health Ventures, RiverVest, PTV Sciences, KB Partners and Kaiser Permanente Ventures.

The startup makes a system that measures how well individuals are reacting to treatment with anti-platelet drugs, which are used to prevent or help dislodge major blood clots. Since patient response can vary widely, often as a result of genetic factors (see our coverage of this sort of “personalized medicine” here), such monitoring can help doctors avoid dangerous overdoses or to switch unresponsive patients to higher doses or different drugs as necessary.

Population Genetics Technologies takes in £3.8M for massively parallel genome studies – Population Genetics Technologies, a U.K. startup devoted to technologies for studying thousands of genomes at once, raised £3.8 million ($5.9 million) in a first funding round, GenomeWeb reported. Investors included Auriga Partners, Noble Fund Managers, and Compass Genetics Investors.

The company raised £1.1 million in seed funding from the Wellcome Trust back in 2005 to aid in the development of the technology. PGT is working on a technique devised by Nobel laureate Sydney Brenner that purports to analyze genetic variation in DNA samples from thousands of individuals at once.

In this 2005 release, PGT co-founder Sam Eletr described the method as “will allow the mixing of thousands of samples in one test tube and the simultaneous interrogation [analysis] of all of them in one experiment, instead of in as many experiments as there are genomes in a population…. We expect our technology to allow handling much larger numbers of genomes than pooling does and to have the further advantage of protecting the identities of individuals involved in any population study by allocating them a code that may be kept confidential. We expect it also be applicable to any collection of DNA molecules and genomes, whether from plants, animals, micro-organisms or humans.”

PGT also named Mel Kronick, a former R&D manager at both Agilent Technologies and Applied Biosystems, as CEO.

Featured companies: Algorithme Pharma, Bacchus Vascular, Botaneco, Cubist Pharmaceuticals, Ikonisys, Healthcare Management Systems, Illumigen Biosciences, Kilmer Capital Partners, Medical Specialties Distributors, Metastatix, Microphage, Orthosoft, Thomas McNerney & Partners, TranS1, TriReme Medical, Wren Medical, Zimmer

UPDATE: Expanded TriReme Medical, Ikonisys and TranS1 items.

UPDATE REDUX: Added MicroPhage item.

Stent-maker TriReme Medical sails off with $15.6M — Pleasanton, Calif.-based TriReme Medical, a device maker developing a new type of artery-opening stent for blood-vessel junctions, raised $15.6 million in a third funding round. (The company doesn’t appear to have a Web site.) Investors included Three Arch Partners and Adams Street Partners.

TriReme claims that its new stent is easier to use and can be placed more accurately than similar stents now on the market. The product is still undergoing clinical studies.

Ikonisys draws $30M for cancer and prenatal diagnostics — New Haven, Conn.-based Ikonisys, which now makes and sells a cell-based diagnostic for cancer and prenatal testing, raised $30 million in a fifth funding round. Investors included Goldman, Sachs, Trevi Health Ventures, Palisade Capital, Everfin, Lakeview Capital Management, New Science Ventures, Promark Holdings, Saint Simeon - e Investimentos, and WHI Group.

Ikonisys makes an automated microscope-based test that analyzes cells from blood and other bodily fluids. The system can chunk through up to 175 microscope slides in one go, providing an initial diagnosis for each one based on a computer analysis of stained cell samples. The company has received FDA approval to market the test for detection of bladder cancer and to scan for prenatal chromosomal defects.

TranS1 IPO exceeds estimated range, raises $95M for spinal-fusion devices — The Wilmington, N.C., maker of minimally invasive devices for spinal fusion priced its IPO shares at $15 apiece, above its expected range of $12 to $14, raising as much as $95 million on the sale of up to 6.3 million shares. The offering values the company at $281.6 million. Our previous coverage of the firm is here and here.

In early trading Wednesday, TranS1 shares were up 60 percent to $24. That’s more confirmation — as if we needed it — that life-science investors seem excited about everything except biotech.

Infection-diagnostic co. MicroPhage raises $1.6M — Antibiotic-resistant staphylococcus infections are on the rise, boosting the need for ways to detect the bugs at an early stage so as to prevent their spread and treat patients most effectively. MicroPhage, a Longmont, Colo., biotech at work on a diagnostic test of this sort, raised $1.6 million in a second tranch of its first funding round. Private investors provided the funding.

MicroPhage isn’t alone in this market, of course. We wrote earlier about OpGen and AdvanDX — see our coverage here and here — which hope to speed detection of these “superbugs” (technically known as MRSA, for methicillin-resistant staphylococcus aureus) using new genome-based tests. MicroPhage, however, takes an ingenious and decidedly low-tech approach: Its tests are designed to detect MRSA by infecting the staph germs with bacteria-specific viruses called bacteriophage. These viruses multiply so rapidly that they should be detectable by simple antibody tests within one to four hours, a solution the company bills as simple and inexpensive compared to its high-tech counterparts.

OTHER HEADLINES OF NOTE:

• Botaneco takes in $2.4M for dermatology emulsions, split from SemBioSys Genetics (release)
• Marval Bio raises $1M for less toxic contrast dye for CT scans (VentureWire, sub req’d)
• 7 Health Ventures raises $70M for Israeli medical-device startups (VentureWire)
• Zimmer completes acquisition of OrthoSoft for $51.4M (Fort Wayne Journal-Gazette)
• Cubist buys “exclusive option” to acquire anti-infective developer Illumigen (release)
• Medical Specialties Distributors acquires infusion-product distributor Wren Medical (PE Hub)
• Kilmer takes majority stake in contract researcher Algorithme Pharma (PE Hub)
• Healthcare IT firm Healthcare Management raises funds, recapitalizes (release)
• Clotbuster-device co. Bacchus Vascular names Scott Cramer CEO (release)
• Chemokine specialist Metastatix names Carol Gallagher as CEO (release)
• Thomas, McNerney & Partners names Eric Aguiar partner, Jason Brown as associate (release)

Featured companies: Aryx Therapeutics, FlowCardia, Graftcath

FlowCardia raises $30M for artery roto-rooters — Sunnyvale, Calif.-based FlowCardia, a medical-device maker building catheter systems that bore holes in blood clots, raised $30 million in a third funding round. Investors included Gilde Healthcare Partners, Life Sciences Partners, Hambrecht & Quist Capital Management, New Science Ventures, Frazier Healthcare Ventures, JP Morgan Partners, Pappas Ventures, Rockport Venture Partners and Gold Hill Capital. The funding is intended to speed commercialization of the company’s “recanalization” device, which essentially busts through clots that totally block arteries.

Aryx aims to raise $86M in IPO for rejiggered drugs — Aryx Therapeutics, a Fremont, Calif., biotech company that derives ostensibly safer versions of existing drugs, filed to raise up to $85.3 million in an initial offering. The company uses a technology that reengineers these current drugs so they aren’t broken down by the same metabolic pathway in the liver, which is subject to “traffic jams” that can boost drug levels in the blood and lead to side effects.

Aryx’s first candidate is a reengineered form of cisapride, an acid-reflux (read: heartburn) drug better known by the brand name Propulsid, which was withdrawn from the U.S. market after it was linked to heartbeat irregularities. Aryx is also at work on a redone version of warfarin, a blood thinner usually administered to people at risk of blood clots. (See our recent coverage of FDA’s decision to include pharmacogenomic information on the warfarin label that might alleviate side effects here.)

GraftCath aims for $10M to develop better dialysis catheter — Eden Prairie, Minn.-based GraftCath, a medical-device company working on alternative to central venous catheters for kidney-dialysis patients, aims to raise $10 million in a fourth financing round by October, VentureWire reports (subscription required). The news service didn’t name any investors in the round.

From VentureWire:

To initiate dialysis, doctors must create an entranceway into the bloodstream. This can be done by joining an artery to a vein to create a fistula, or by using a graft to connect the artery and vein. Both methods provide adequate blood flow for dialysis, but fistulas are preferred because they use a patient’s own vessels and are less susceptible to infection and to becoming narrowed or occluded.

[When] patients aren’t eligible for fistulas or grafts… [they typically receive a] central venous catheter over the long term for their access point. These catheters put patients at a higher risk for blood-borne infection than either fistulas or grafts. These blood-borne infections, or bacteremias, are dangerous to patients and costly to hospitals. According to a study published in May in the journal Infection Control and Hospital Epidemiology, the mean cost of catheter-related bacteremia is estimated to be $23,451 per hospitalization.

GraftCath claims its device reduces the risk of bacteremia, although VentureWire’s explanation isn’t terribly clear. Supposedly the device is safer because it’s implanted under the skin, although it clearly has to exit somewhere, since otherwise there’s no way to hook up the patient to a dialysis machine, which clears the blood of toxins in people whose kidneys are failing. The company doesn’t have a Web site that might explicate things, either.

(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.

Woburn, Mass.-based BioVex, a biotech working on new ways to attack cancer and infections, raised $22 million in a fifth funding round. Triathlon Medical Ventures led the round, joined by New Science Ventures, Forbion Capital Ventures, Avalon Ventures, Credit Agricole Private Equity, GeneChem Management, Innoven Partners and Scottish Equity Partners.

BioVex is developing so-called oncolytic viruses, which are designed to infect and destroy tumor cells — long a promising but never-proven anti-cancer technique. The company put an unusual twist on the concept by adding a gene to a herpes simplex virus that expresses GM-CSF (granulocyte macrophage-colony stimulating factor), a molecule that stimulates a strong immune response. Ideally, this virus should infect tumor cells while leaving healthy cells alone, then hijack the tumor cells’ own internal machinery to manufacture GM-CSF, stimulating an immune response that should also be directed at the tumor cells.

That experimental drug, OncoVex GM-CSF, is currently in mid-stage human tests against skin cancer and early tests against head and neck cancer. BioVex is also developing a vaccine against genital herpes. The company had filed to go public last year, but withdrew its proposed offering last October.