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updated after reaching CEO Russ Fradin and Cox Chief Financial Officer John Dyer

Adify, whose software helps companies build their own advertising networks, has been acquired by media company Cox Enterprises for $300 million, according to various sources.

We’ve since confirmed the acquisition with CEO Russ Fradin (see his own blog post here).

The San Bruno, Calif. startup had raised around $27 million in total funding, with backers including U.S. Venture Partners, Venrock Associates, GE Commercial Finance, NBC Universal, and Time Warner Investments.

Adify has built many vertical ad networks and its client list that includes the Guardian, Forbes.com and NBC WeatherPlus. Some speculate that Adify was a strategic acquisition target for Cox, which is a private but giant media company that owns Cox Newspapers (with related websites) and Cox Networks, the third-largest cable company in the United States.

However, Fradin downplayed the strategic nature of the deal, instead saying it was just the latest move by Cox to enter a high-growth media business, something it has done consistently over the years. Cox started as a newspaper company, but then diversified with each new innovation, moving to radio, TV and eventually online, building Autotrader, for example, cannibalizing its own existing classifieds business. Cox Chief FInancial Officer John Dyer also told us Cox’s media properties could use some help to build their own ad networks, but he said the main reason for the deal was Cox executives’ belief that Adify’s business will continue to grow.

The price tag must have made Adify executives and investors pretty happy. PaidContent reports (and we’ve since confirmed) that the company brought in $7 million in revenue in 2007 and was set to bring in around $35 million this year. Adify launched in 2006 and was founded by Larry Braitman and Richard Thompson, the team that also created Flycast Communications a decade earlier.

The company has built 108 ad networks, Fradin said.

TODAY’S HEADLINES:

luminous-medical-logo-150px.gifLuminous Medical raises $24M for automated glucose monitoring – Carlsbad, Calif.-based Luminous Medical, a medical-device maker, raised $23.5 million in a second funding round. Investors included Adams Street Partners, RiverVest Venture Partners, Finistere Ventures, De Novo Ventures and Latterell Venture Partners.

Luminous is developing an automated blood-sugar sensor for diabetic patients being treated in hospital intensive-care units and operating rooms. According to the company, keeping a tight rein on blood-glucose levels, which can soar or crash unexpectedly in diabetics, helps prevent complications while shortening hospital stays and reducing the risk of death.

Measuring such tight control, however, typically requires manually checking blood-glucose levels every 30 to 60 minutes, the company says. The Luminous device, by contrast, uses infrared spectroscopy — a technique that identifies particular molecules by measuring which wavelengths of light they absorb — to measure glucose and other blood chemicals non-invasively.

The company licensed its technology from InLight Solutions of Albuquerque, N.M., which previously invested $60 million in the technology. The device has not been approved by the FDA.

axial-biotech-logo-150px.gifAxial Biotech takes in $6M for spinal diagnostics – Axial Biotech, a Salt Lake City diagnostic-test maker, raised $6 million as part of its second funding round. Investors included Johnson & Johnson Development, vSpring Capital and Ohio Biotech Group.

Axial, founded in 2002 by a group of spinal surgeons and geneticists, is an odd hybrid of biotech and devices. The company aims to produce tests that will predict and measure the severity of spinal problems such as scoliosis, as well as unspecified “motion-preserving technologies” — presumably an alternative to the stigmatizing back braces that orthopedists have long inflicted on children with the condition.

engene-logo-150px.gifInsulin bioengineer enGene receives $6.4M – Canada’s enGene, a Vancouver biotech looking for ways to jump-start natural insulin production in diabetics, raised $6.4 million in a first round of funding. Investors included Saad Investments, Masa Life Science Ventures and private investors.

EnGene has an audacious — which is to say, of course, also quite chancy — approach to diabetes, in which the immune system attacks and kills insulin-producing “beta cells” in the pancreas (type 1 diabetes) or the body grows desensitized to insulin and requires higher levels (type 2 diabetes). In either case, patients often require insulin shots to maintain blood-sugar levels necessary or proper metabolism.

EnGene proposes to engineer cells in the small intestine — known as “K cells” — to produce insulin themselves. The advantage of this technique lies in the fact that K cells, like beta cells, respond to sugar levels in the gut, although they normally secrete a separate molecule. Once bioengineered to produce insulin as well, these cells could help regulate blood sugar automatically much the way beta cells normally do.

Of course, gene therapy has, in general, been a great disappointment so far, so there’s no shortage of uncertainty associated with this sort of technique. EnGene has tested its technique in mice, but not yet in humans. The startup plans to seek a second round of funding in the second half.

Alimera Sciences gets $30M for eye-disease drug – Alimera Sciences, an Alpharetta, Ga., drug developer with a focus on eye disease, raised $30 million in a third funding round. The company will now take a majority stake in its drug for diabetic macular edema, a vision-degrading complication of diabetes, which Alimera is developing with its partner pSividia.

We’ve written before about Alimera, which is presumably still contemplating an IPO this fall. All five of the company’s existing VC backers participated in the round: BA Venture Partners, Domain Associates, Intersouth Partners, Polaris Venture Partners and Venrock Associates.

ligocyte-logo-150px.gifVaccine maker LigoCyte draws $28M – LigoCyte Pharmaceuticals, a Bozeman, Mont., biotech focused on new vaccines against infectious disease, raised $28 million in a third funding round. Investors included Forward Ventures, JAFCO, Novartis Venture Fund, Fidelity Biosciences, MedImmune Ventures, Athenian Venture Partners and MC Life Sciences Ventures.

The company is developing new vaccines using “virus-like particles” — usually structural viral proteins, minus the replication machinery packed in DNA or RNA — against gastroenteritis, anthrax and flu. It is also working on antibody drugs against inflammatory disease.

peak-surgical-logo-200px.gifPalo Alto, Calif.-based PEAK Surgical, a device company developing new surgical tools that aim to control bleeding via electric energy, raised $21 million in a third funding round. Investors included Signet Healthcare Partners, Lehman Brothers and Venrock Associates.

The company is working on new electrosurgical tools that it says should offer significant improvements over the existing technology for using electric pulses to heat surgical instruments for cutting or coagulation of tissue. PEAK doesn’t go into great detail about its technique on its Web site or in its release, except to cite a number of scientific references and to say that it relies on short-pulsed, “plasma-mediated” electrical discharges.

The technology, however, originated at Stanford, where PEAK, it turns out, stands for “pulsed electron-avalanche knife.” The technique, developed by a team led by Daniel Palanker, involves using a high voltage electric field to create a plasma, a kind of electrically charged gas, which can be shaped and controlled to make clean cuts in tissue.

PEAK — the company, that is — claims the technology can limit the heat damage that normal electrosurgical tools can cause to surrounding tissue. Although the technique seems to have originated for use in retinal surgery, PEAK says that it is exploring its use in almost every surgical field but ophthalmic, including general, heart, gynecologic, plastic and neurological surgery.

bostonpower.JPGMoney has been pouring into battery and fuel cell startups of late, with companies like A123 Systems, Lilliputian Systems, and M2E Power (coverage here, here and here) raising funding ranging from single- to triple-digit millions.

Now another company has taken on a heavy round of funding: Boston Power, a firm that plans to concentrate its efforts on the laptop market with a battery that ages better than competing products.

One of the most annoying things about laptop batteries (besides when they catch on fire) is their short lifespan. Standard lithium-ions lose their ability to recharge over time, and typically have to be replaced every year or so by mobile workers.

sonata.JPGThe battery that Boston Power just began producing, the Sonata, will continue to charge just as well as they did when brand new for up to several years, depending on the usage habits of owners.

The Sonata averages a four to five time longer lifespan than current battery technology, according to the company. That, in turn, will lead to fewer discarded batteries from the millions of laptop users around the world.

“I have a system that’s a few years old, but I still get 4 hours battery life. I’m often the only person in the room that’s not plugged in,” founder and CEO Chrstine Lampe-Onnerund told us in an interview.

Unlike companies like A123, which has a proprietary doping technology, Onnerund tells us that Boston Power’s secret is just in overall good engineering, and solving production problems ranging from battery chemistry to the manufacturing process.

The Sonata will, at least initially, be sold through laptop manufacturers who will choose what to charge for it. The company plans on scaling its production, which is handled by outside firms, to one million batteries per month by the end of 2008.

The $45 million investment is the company’s third. Oak Investment Partners led the round, while Venrock Associates, Granite Global Ventures and Gabriel Venture Partners also participated. The Boston-area company has raised over $68 million total to date.

(UPDATED with minor editing changes.)

Venrock Associates, the venerable Rockefeller-founded VC firm in Menlo Park, Calif., plans to expand its investments in publicly traded biotechs, VentureWire reports (subscription required).

The venture firm, which allocates roughly one-third of its funds to healthcare-related investing, said it will set aside about 10 percent of its latest $600 million fund for public-company investments in biotech. Venrock backed four public biotechs in its last fund, and now plans to invest in as many as three public biotechs every year over the next three years.

From VentureWire:

[General partner Anders] Hove, who is leading the effort, said there are many public biotech companies with promising products but relatively little cash….

The firm typically looks to fund clinical-stage companies with market capitalizations in the $300 million- to $350 million-range. The partners generally don’t want to take board seats on public companies, he said. Since the company’s fortunes – and the firm’s investment – are tied to the success of clinical trials, there’s not much a board member can do to help the company, he said.

Venrock has been bringing in new blood to work on public deals, and also plans to have William Rastetter, the former executive chairman of Biogen Idec who joined the VC firm last year, evaluate such investments.

Aveo Pharmaceuticals, a Cambridge, Mass. cancer-drug company, raised $53 million in a fourth round of funding from a coalition of mostly blue-chip life-science investors.

New investors included Biogen Idec, Bessemer Venture Partners, Merlin BioMed Group, Mitsubishi UFJ Financial Group and Vatera Holdings, an investment vehicle owned by Kos Pharmaceuticals founder Michael Jaharis. Schering-Plough also provided a $10 million equity investment as part of a collaboration agreement.

The round also included new funding from existing investors Highland Capital Partners, Venrock Associates, MPM Capital, Prospect Ventures, Flagship Ventures, Oxford Bioscience Partners, Greylock Partners, Lotus Biosciences and GE Capital.

Founded in 2002 by a pair of Harvard cancer researchers, Aveo claims to model tumor biology in sophisticated ways that allow it to identify more effective cancer drugs. Its lead candidate, AV-412, takes aim at epidermal growth-factor receptor, or EGFR, the same cancer-growth protein targeted by current drugs such as Erbitux, Tarceva and Iressa. Aveo says its models show that AV-412 is more potent than other EGFR drugs and appears to be active against tumors that are resistant to Tarceva or Iressa. AV-412 was in-licensed from Mitsubishi Pharma, and is currently in early-stage human testing.

Aveo, formerly known as GenPath Pharmaceuticals, has previously raised roughly $65 million. See the company’s release here.

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