VentureBeat

Featured companies: DirectFlow, Direvo, Indigo Biosystems, MacroGenics

Direct Flow raises $27M for heart-valve implants — Santa Rosa, Calif.-based Direct Flow Medical, a startup developing heart implants, raised $27 million in a second funding round. Investors included Johnson & Johnson Development, Foundation Medical Partners, VantagePoint Venture Partners, ePlanet, EDF Ventures, New Leaf Venture Partners and Spray Venture Partners.

Direct Flow makes minimally invasive aortic-valve replacements for the heart. This particular field happens to be booming — we’ve previously covered competitors JenaValve, AorTx and Sadra.

MacroGenics signs Eli Lilly pact worth initial $43M for autoimmune disease — MacroGenics, a Rockville, Md., biotech developing antibody-based therapies for autoimmune disease, signed a partnership with Eli Lilly that could be worth more than $600 million. MacroGenics is working on antibodies designed to tamp down autoimmune responses by inducing tolerance to antigens that might otherwise promote strong immune reactions to the body’s own cells. The company’s first drug candidate targets diabetes — specifically “type one” diabetes that results when the immune system targets insulin-producing cells in the pancreas.

OTHER HEADLINES OF NOTE:

• Indigo Biosystems gets funding for lab-data software (VentureWire, sub req’d)
• Germany’s Direvo pulls in €12M for biomanufacturing (release)

Featured companies: Bioptigen, Echo Therapeutics, Forest Laboratories, Intrinsic Therapeutics, Microbia, Phreesia, Sontra Medical, TransMedics, Xanthus Pharmaceuticals

[NOTE: This is a catchup briefing, posted on 9/28/07. I've adjusted the item's timestamp to keep the briefings in chronological order. --D.P.H.]

Patient-info digitizer Phreesia takes in $10.3M — Phreesia, a New York company that claims to offer a “100% free” — but ad-sponsored — digital patient check-in application to doctors, raised $10.3 million in a second funding round. Investors included Polaris Ventures Partners, HLM Venture Partners, Long River Ventures and Village Ventures.

Phreesia offers doctors wireless touch-screen pads and related software designed to replace the traditional check-in clipboard in doctors’ offices. Among other claimed benefits, the technology is designed to provide legible patient information and to conduct patient interviews — along the lines of those endless rows of checkboxes that ask you to recall your own medical history and sometimes that of your immediate family as well. The catch is that the devices will then beam sponsored “educational” content at patients, although Phreesia claims doctors can first review it and that patients can skip it if they want. (Any guesses on how easy people will find to do that?)

I hope to return to Phreesia before much longer — among other things, they plan to present at Demo this year. (UPDATE: They’ve done so, and apparently were named one of the best presentations at the conference.) And there are certainly plenty of cool things about this idea, not least the fact that returning patients can merely confirm their information instead of filling it all out again. Still, the service raises lots of questions, not least among them the consequences of letting “sponsors” — read: “drug companies” — have direct access to patients in waiting rooms. Anyway, this looks interesting enough that I’ll definitely take a closer look.

Xanthus aims for $30M to support leukemia treatment — Cambridge, Mass.-based Xanthus Pharmaceuticals, a biotech with a small-molecule drug against acute myeloid leukemia, intends to raise $30 million in a third funding round, VentureWire reports (subscription required). The company would aim to complete the funding by late this year or early next.

The leukemia drug, which the company calls Xanafide, has completed mid-stage human tests (PDF) that Xanthus claimed “associated” the drug with complete remissions. The trial wasn’t blinded or randomized, which in short means it’s almost impossible to draw such sweeping conclusions from it. Xanafide isn’t a particularly exotic drug, either; as a topoisomerase II inhibitor, it shares the same basic mechanism of action as many traditional chemotherapy drugs. Still, this is why companies carry out blinded, randomized late-stage trials, which Xanthus says it intends to begin with Xanafide before long.

Spinal-device maker Intrinsic raises $21M — Intrinsic Therapeutics, a Woburn, Mass., device maker focused on minimally invasive spinal-disc repair, raised $21 million in a fourth funding round, VentureWire reports. Investors included New Enterprise Associates, Spray Venture Partners, Sprout Group and an unidentified institution.

The company’s been close-mouthed about its progress, although VentureWire reports that it recently began selling its disc devices in Europe. The financing is intended to fund future clinical trials and the costs of applying for FDA approval.

Live liver transplanter TransMedics files for $86.3M IPO — In case you’re not a Monty Python, that headline is a joke — although not by much. TransMedics, an Andover, Mass., medical-device company, aims to develop a box that can keep living, transplanted organs alive. They’ve filed to raise $86.3 million in an IPO. This is another fascinating-sounding company I’ll have to come back to once I’ve caught up on these briefings, but in the meantime feel free to check out their S-1 and their Web site. Also, I should note that TransMedics is actually focused on heart transplants, not liver.

Eye imager Bioptigen gets $500K infusion — Durham, N.C.-based Bioptigen received a $500,000 convertible financing as it prepares for a second funding round. Investors included the Piedmont Angel Network Two and other existing investors. Bioptigen is developing a real-time imaging system for ophthalmic indications.

Microbia strikes deal worth up to $330M for GI disorders — Microbia, a Cambridge, Mass., biotech with a focus on gastrointestinal and heart disease, struck a partnership with New York’s Forest Laboratories worth up to $330 million to develop its first GI drug. Microbia gets a $70 million upfront payment and milestone and licensing payments worth much more if the development is successful. Microbia has already raised $231 million in venture equity. See the company’s release here (PDF).

Featured companies: Reliant Technologies, Leptos Biomedical, Calidora Skin Clinic

Reliant Tech seeks $95M IPO for dermatology lasers — Mountain View, Calif.-based Reliant Technologies, a developer of medical lasers for “skin rejuvenation” treatment, filed to raise as much as $95 million in an initial offering. The company currently markets two laser systems for skin treatment under the Fraxel brand name, and intends to launch a third one next year.

Oddly enough, Reliant Tech’s IPO filing comes just days after Reliant Pharmaceuticals filed for a $400 million initial offering (see our coverage in this daily briefing). That should certainly keep investors on their toes. Journalists, too — I almost didn’t cover this IPO because I thought I’d already written about it.

Although it has products on the market, Reliant Tech is not only still losing money, its losses are apparently continuing to mount. Total revenues have grown substantially, to $57.4 million in 2006 from $4.5 million in 2004, but its net losses have also kept pace, largely as a result of mounting sales and marketing expenses. Net losses in 2006 were $20.9 million, up from $13.3 million in 2004; for the first half of 2007, the company posted a loss of $10.9 million on $35.3 million in revenue.

Reliant Tech raised $37 million in its two most recent fundings, most recently drawing in $15 million in a fifth round, according to VentureWire (subscription required).

Neuromodulator Leptos raises $20M for obesity implant — Leptos Biomedical, a Brooklyn Center, Minn., developer of obesity-control implants, raised $20 million in a third funding round, VentureWire reports. Investors included Latterell Venture Partners, Spray Venture Partners, Thomas McNerney & Partners and Technology Partners.

Leptos is developing what it calls an “implantable pulse generator” designed to send electric signals into the sympathetic nervous system in order to suppress appetite and induce the burning of fat. The company has apparently already conducted a pilot trial of the device, which it says the new funding will allow it to extend. Leptos hasn’t disclosed additional details about its technology; on its Web site, the page devoted to approach is a two-paragraph stub filled with boilerplate.

I’ve written earlier about EnteroMedics, another company hoping to treat obesity using an implant that interferes with signals transmitted along the vagus nerve — you can read our previous coverage here. In general, the whole field of “neuromodulation” is heating up quite a bit these days, with companies hoping to use timed electrical pulses to the nervous system for treating everything from epilepsy to sleep apnea to hypertension — although it’s worth bearing in mind that almost all of these approaches are so far unproven. See our previous coverage of other companies in this space here, here, here, here, and here.

Founded in 2003, Leptos is the brainchild of serial physician-entrepreneur John Dobak, who previously founded hypothermia-inducer InnerCool Therapies and CryoGen, which developed a cryothermic technique for stanching uterine bleeding. Both companies have since been acquired — InnerCool for $6 million (after raising $49 million) and CryoGen for something between $40 million and $150 million (after raising roughly $60 million).

Skin-clinic chain Calidora raises $4M for SoCal expansion — Calidora Skin Clinic, a chain of four “medical-aesthetic” skin-care clinics in the Seattle area, raised $4 million in a first funding round to expand its operations into southern California. Roughly half the funding was provided by the company’s existing angel investors and insiders, with Fluke Venture Partners providing the rest.

From the release:

Courtion said the funding enables the completion of expansion plans underway in Manhattan Beach, Marina Del Ray, and Glendale, Calif., and other real estate and partnership opportunities on the near horizon. The company is working with Southern California based Caruso Affiliated, a leading retail developer, on two of the three properties, including the Americana at Brand, which is slated to open in downtown Glendale in Spring of 2008.