VentureBeat

TODAY’S HEADLINES:

• Antibody-discovery startup Adimab raises new funding (release)
• Lung-device maker Spiration gets $19M (release)
• Sample-prep startup Protein Discovery pulls in $10M (release)
• Inogen takes in $13M for portable oxygen device (VentureWire)
• Healthcare IT concern Medaptus raises $11M for expansion (VentureWire)
• Contract lab Synexis raises $14M (peHUB)
• Medical-device VC firm BioStar Ventures takes in $24M of $80M fund (peHUB)
• Halsa Pharma gets $250K for “natural” obesity-control treatment (release)
• Diagnostics provider Lab21 acquires NPTech (peHUB)
• Galil Medical names Martin Emerson CEO (release)

Antibody-discovery startup Adimab raises new funding – Lebanon, N.H.-based Adimab, a biotech working on new ways to discover antibody drugs, has raised a second round of funding. The company didn’t disclose the size of the round.

Adimab, which raised $6 million last July, is one of several startups looking to design new antibody drugs in bioengineered yeast cells, as we wrote at the time. (Alder Biopharmaceuticals, which raised $40 million in January, is another.) The technique promises to be much faster — and freer of patent restrictions — than current methods. When Adimab completes its current manufacturing facility in the second quarter, it claims it will be able to produce a panel of human antibodies against a particular target in just 90 days, instead of the year or more traditional methods can require.

Investors included Polaris Venture Partners and SV Life Sciences, who also invested in the company’s first round.

Lung-device maker Spiration gets $19M – Spiration, a Redmond, Wash., medical-device startup, raised $18.5 million in a seventh funding round. Investors included Versant Ventures, Olympus Medical Systems, New Enterprise Associates, New Leaf Venture Partners, InterWest Partners, Investor Growth Capital and Three Arch Partners.

Spiration has now raised a total of $97 million. It is developing a set of one-way valves for emphysema that can be implanted in the lung’s airways via a minimally invasive procedure. These valves are designed to shunt air away from diseased portions of the lung and redirect it to healthier areas. The company said the funding would support commercialization of its device in Europe and to complete studies for regulatory approval in the U.S.

Other startups working on similar technology include Emphasys Medical, Pulmonx and Broncus Technologies.

Sample-prep startup Protein Discovery pulls in $10M – Knoxville, Tenn.-based Protein Discovery, a biotech with new laboratory technology for protein identification, raised $10 million in a third funding round. Investors included Santé Ventures, Memphis Biomed Ventures, the Southern Appalachian Fund, and the Nashville Capital Network.

The startup is developing technology that aims to “simplify” the process of preparing biological samples for protein analysis. The details are probably too much for anyone who’s not a lab technician themselves, but feel free to check out the company’s explanation if you dare.)

Inogen takes in $13M for portable oxygen device – Inogen, a Goleta, Calif., medical-device maker, raised $12.6 million in its fifth funding round, VentureWire reports. Investors included Accuitive Medical Ventures, Arboretum Ventures, Avalon Ventures, Novo A/S, Numenor Ventures and Versant Ventures.

The company makes and sells portable oxygen-delivery systems for patients suffering from a lung problem called chronic obstructive pulmonary disease. The product has been on the market for several years, and Inogen says it believes it might take several more before it’s in a position to be acquired or to go public.

TODAY’S HEADLINES:

• Vantia Thera spins out of Ferring, raises £19M (PDF release)
• Third Eye gets $150K for intracranial-pressure monitor (release)
• Diabetes tester Oculir closes doors, returns capital (VentureWire)
• Catalyst Health Ventures raising $60M fund (VentureWire)

Vantia Thera spins out of Ferring, raises £19M – Vantia Therapeutics, a U.K. spinout of Ferring Pharmaceuticals, has launched and raised £19 million ($37.7 million) in a first funding round (PDF link). Investors included MVM Life Science Partners, SV Life Sciences and Novo A/S.

Vantia inherits a collection of traditional “small molecule” drugs from its parent, including two that are already in clinical trials. Both drug candidate target the hormone vasopressin, which among other things regulates the body’s retention of water. One candidate is being tested as a possible treatment for enlarged prostate, the other for painful menstruation.

Diabetes tester Oculir closes doors, returns capital – Oculir Inc., a San Diego startup that aimed to develop a non-invasive glucose-testing device for diabetics, has instead shut down, VentureWire reports. The startup, founded in 2003, was working on technology designed to measure blood-sugar levels using infrared light bounced off the white of the eye. Such testing currently requires diabetics to prick their fingers for a tiny blood sample, often several times a day.

Unfortunately, the technology proved too challenging for the company and its backers. “It turned into a research project, and our venture investors wanted to invest in development, not research,” CEO John Burd told the news service.

Oculir raised $7.3 million back in December 2005 from Onset Ventures, CHL Medical Partners, Canaan Partners, Three Arch Partners, Shepherd Ventures and Windamere Venture Partners. It now plans to return an undisclosed sum to its investors — a fairly clear sign that Oculir’s VCs demanded that the company wind down its operations.

Catalyst Health Ventures raising $60M fund – Catalyst Health Ventures, a Newton, Mass., VC firm, hopes to raise a $60 million second fund, VentureWire reported. The fund will invest in medical-device, diagnostics, instrument and drug-screening startups.

Catalyst had pulled in $3.5 million of a planned $25 million as of Feb. 14. The firm intends to focus on early-stage companies and is looking to invest in six or more startups, often with initial investments of $2 million to $3 million.

(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)

When news that the brand-new startup Ophthotech had raised a $36 million first round broke on Monday, it was clear that the venture amounted to a kind of do-over for officials of the late, unlamented Eyetech Pharmaceuticals. Eyetech, you might recall, burst onto the scene with a rocket-science aptamer-based blindness drug called Macugen and a flashy $157 million IPO, then proceeded to get its head handed to it by even better rocket science from Genentech, and eventually sold itself ignominiously to OSI Pharmaceuticals for a lower share price than its IPO (a deal that apparently worked out even less well for OSI).

I didn’t write any of this at the time, however, and in the meantime several others have made a number of interesting observations about Ophthotech’s emergence, not to mention noting some eerie historical parallels. Fred Cohen at Pharma’s Cutting Edge offered this acerbic interpretation:

OSI is now divesting its eye business. As part of the divestiture, OSI has licensed its apatemer targeting PDGF (a related angiogenic peptide) to newly formed Ophthotech. Ophthotech has also licensed development and marketing rights to Archemix’s aptamer targeting the C5 component of complement (an inflammation factor). As you’ll read, Ophthotech is staffed largely by former Eyetech execs. It’s a chance for them to do it all over again. Perhaps this time around they will not sell out the early public-market investors by dumping the firm below its IPO price, while reserving a tidy sum for themselves.

But to really head through the looking glass, you have to turn to the In Vivo blog, where Chris Morrison writes:

SV Life Sciences, HBM BioVentures, and Novo AS have just funded an ophthlamology start-up with a $36 million Series A that will pay for the acquisition of two interesting drug candidates. Didn’t that happen last year? It sure did, in May 2006. The company was Lux BioSciences.

OK, how about this: David Guyer, MD, and Samir Patel, MD, have teamed up as founders of an ophthalmology specialist based on in-licensed aptamer drugs and hope to make headway in the tricky macular degeneration space. SV (then Schroder Ventures Life Sciences) was an early investor. No, no, no, that was way back in 2000. Eyetech, right? Absolutely.

Guyer is now chairman of Ophthotech and Patel is CEO. Morrison goes on to note that Ophthotech has licensed an aptamer against platelet-derived growth factor from none other than OSI, which, of course, originally acquired it from… Eyetech. A second deal brought in more aptamers from Archemix (see our coverage), which bought Gilead Sciences’ aptamer technology in 2001, gaining control of everything but… the aptamer that Gilead licensed to Eyetech, which became Macugen.

Morrison rightly wonders why all the technology and money now flowing into Ophthotech didn’t go to Lux BioSciences instead. The answer, he suggests, may simply be that Big Pharma’s hunger for biotech — and its tendency to pay top dollar — has convinced VCs that they’re better off spreading their eggs among as many baskets as possible.

Or, as Morrison puts it:

Oddly enough, only a few years ago, it would have been a sure thing to keep all these assets under one corporate roof, because the VCs would have been hoping for an IPO exit, and investors like to see multiple clinical projects at IPO hopefuls. Now that M&A is the preferred exit, the assets are siloed. For now.

(UPDATED: See below.)

Featured companies: FoldRx Pharmaceuticals, Ophthotech, Pevion Biotech, Restoration Robotics, Glide Pharma, Reliant Pharmaceuticals, Nanosphere, SurModics, BioFX Laboratories

FoldRx Pharma to receive $22M against cystic fibrosis — Cambridge, Mass.-based FoldRx Pharmaceuticals, a biotech focused on diseases that result from misfolded proteins, will get $22 million over the next five years from an affiliate of the Cystic Fibrosis Foundation to further its work against the genetic lung disease. The money will be paid as FoldRx meets various developmental milestones, including pushing two experimental drugs into early-stage human trials. The company’s current drug candidates, however, don’t target cystic fibrosis, and instead aim to take on a particular class of diseases known as amyloidosis and Parkinson’s disease.

The Boston Globe and the WSJ Health Blog have more.

Newly formed Ophthotech raises $36M against eye disease — Ophthotech, a newly formed Princeton, N.J., biotech with a focus on eye disease, raised a whopping $36 million in a first funding round. The company, founded by a bevy of former Eyetech Pharmaceuticals officials, is going to follow directly in the former company’s footsteps by taking aim at age-related macular degeneration with aptamers licensed from Archemix (which we wrote about here).

Investors in the round included SV Life Sciences, HBM BioVentures and Novo A/S. (See update below.)

Pevion Biotech gets $29M for vaccines — Pevion Biotech, a Bern, Switzerland-based vaccine developer, raised $29 million (CHF35 million) in a first funding round. Investors included BZ Bank Aktiengesellschaft, BB Biotech Ventures II, CC Private Equity Partners and Bachem Holding. The company is conducting clinical trials of vaccines against malaria, breast cancer and hepatitis C.

Hair-transplant automator Restoration Robotics raises $25M — Restoration Robotics, a Mountain View, Calif., developer of robotic surgery systems for hair transplants, raised $25 million in a second round of funding, PE Hub reports. The company’s Web site is a stub and the linked article doesn’t contain much information, but an April VentureWire store republished at Alta Partners’ site gets to the root of the matter:

Sutter Hill Ventures and Alloy Ventures, for example, have invested in the first and second rounds raised in 2005 and 2006, respectively, by Restoration Robotics Inc., which is testing a robotic device that performs hair transplants. Transplant-surgery outcomes vary according to the surgeon’s skill. Restoration’s robot — which is surgeon-controlled — produces uniform results in half the time, says CEO Jim McCollum. Investors hope this pushes hair transplants into the mainstream. Today, “people think of late-night commercials when they think of hair restoration,” says Sutter Hill Managing Director Jeffrey W. Bird.

Investors in the round include InterWest Partners, Alloy Ventures and Sutter Hill Ventures.

Glide Pharma raises $4.6M for needle-free drugs — U.K. specialty pharma Glide Pharma raised $4.6 million (£2.3 million). Investors included Oxford Technology 4 VCT and Oxford Capital Partners. The company is developing drugs that can be delivered via its own needle-free injection system. We’ve written about other startups pursuing similar technology, including StrataGent Life Sciences and Macroflux.

Reliant Pharma refiles for a $400M IPO — Reliant Pharmaceuticals, a Liberty Corner, N.J., specialty pharma that withdrew a planned $300 million IPO in 2005, is going to try again, only with more at stake. The company filed to raise as much as $400 million in an offering, despite the fact that it is on track to lose more than $100 million this year, which would be the third time in four years it has done so.

In the first six months of this year, Reliant reported a net loss to common shareholders of $56.4 million on revenue of $230 million. That net loss would have been only $21.8 million but for preferred-share dividends of $34.6 million in the half. Reliant sells a variety of unrelated second-hand drugs for cardiovascular problems.

Interestingly enough, Reliant made its last charge at the public markets with the famed Ernest Mario at the helm. Mario jumped from Reliant just last week, and is now CEO of the little-known Capnia (see our coverage here).

Nanosphere aims for outsized $100M IPO — Nanosphere, a Northbrook, Ill., developer of nucleic-acid and protein detection and diagnostic systems, filed to raise as much as $100 million in an IPO. As of March 31, the company had an accumulated deficit of $112.6 million. Earlier this year, it submitted its Verigene molecular-diagnostic system to the FDA for approval; Nanosphere intends to market the device to hospital laboratories that currently aren’t equipped to perform such tests in-house.

SurModics snaps up diagnostic-supply company BioFX for up to $22.7M — SurModics, an Eden Prairie, Minn., developer of drug formulations and other biological supplies, agreed to acquire BioFX Laboratories of Owings Mills, Md., for $11.3 million in cash and milestone payments worth up to $11.4 million. The release is here. The acquisition is the second for SurModics this month; it bought out Brookwood Laboraties on Aug. 2 (our coverage is here).

UPDATE (2:37pm PT): Added items on Glide Pharma, Reliant Pharmaceuticals, Nanosphere, and SurModics/BioFX Laboratories.

UPDATE REDUX: Over at Pharma’s Cutting Edge, Fred Cohen notes what I didn’t have time to, which is that Ophthotech essentially amounts to a do-over for the architects of Eyetech’s failure. Check it out.

Irving, Texas-based Reata Pharmaceuticals, a biotech working on new drugs to treat cancer and inflammation, raised $25 million in a fifth funding round. The round was led by existing investors, including CPMG and Novo A/S.

Pittsburgh-based Logical Therapeutics, a developer of drugs for inflammation and metabolic disease, raised $30 million in a second funding round and announced it is moving its headquarters to a location “near Boston.” (What are the odds that the new location might be Cambridge, the hub of biotech and pharma activity in the region?)

Logical has acquired all of its drug candidates from other companies or institutions, including the University of Pittsburgh, which isn’t particularly surprising given that it only has two employees. (It plans to expand to ten by early next year, according to VentureWire.) Its lead compound, LT-NS001, is a “prodrug” of the anti-inflammatory naproxen, better known as Aleve, meaning that the body’s enzymes will convert the drug into naproxen once ingested. Such prodrug forms are often designed to make drugs more effective by improving their ability to pass through the gastrointestinal tract. Other candidates include an oligopeptide for obesity and diabetes and another peptide that blocks tumor necrosis factor, or TNF, a protein that plays a key role in rheumatoid arthritis and other inflammatory conditions.

SV Life Sciences led the round, joined by Burrill & Co., Novo A/S, Sigvion Capital and Pennsylvania Early Stage Partners. Logical said the funding will allow the company to take LT-NS001 into mid-stage clinical trials.