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Social network hi5 has bought a social network application developer company called PixVerse for an undisclosed amount. While PixVerse’s applications, like Pix Chat and Pix Wall, run on multiple platforms on rival social networks, the reason for the purchase is that hi5 wants its technology.

PixVerse applications are based on what it considers a “breakthrough” implementation of Adobe’s Flash technology that it has built its various applications on. It also uses Google App Engine, which lets third parties use Google’s infrastructure for their own sites.

Hi5 will use PixVerse to build out its own chat features for its users, although details are still vague. From the company:

To answer your question, the PixVerse team and technology give us some great resources for enhancing real-time communication (IM, chat, etc.) between users of hi5. We won’t be announcing specific product plans till later this year, but we see this as a great add-on to our core service.

PixVerse raised previously unannounced funding from venture firm Venrock.

San Francisco-based hi5 is one of the larger social networks in the world, with more than 50 million unique visitors per month. It claims to be the number one social network in various Spanish-speaking Latin American countries, parts of Eastern Europe, Africa and Asia.

Another algal biofuel company has emerged from stealth mode, and this one has the biggest story yet, at least according to the estimation of its investors.

Only a year old, Sapphire Energy is a San Diego startup that has lab-developed an algae that it says can create a substance akin to crude oil that can be processed by existing refineries, transported through existing infrastructure and burned without difficulty by today’s vehicles.

Sapphire has raised over $50 million from three investors, including Arch Venture Partners, whose Kristina Burow helped co-found the company. Burow told me in an interview yesterday that Arch, along with Venrock and UK-based medical research charity The Wellcome Trust, has given Sapphire an “open checkbook” not based on the usual venture model of set rounds and valuations, from which the company can draw as much capital as necessary to commercialize the technology as rapidly as possible.

The excitement of Sapphire’s investors and founders over its technology stems in part from the size of its plans. CEO Jason Pyle says that where other biofuels can only promise to replace a small fraction of the oil use in the United States, the algae that Sapphire is working on could replace all of it.

How is that possible? Well, where fuels like ethanol and biodiesel rely on grown feedstocks — corn, sugar, switchgrass, trees — Sapphire’s algae requires no feedstock at all, just water and sunlight. Pyle claims that the requirement to grow without relying on a food crop was one of the company’s founding principles.

The two other requirements, that the algae cultivation not take useful land or use fresh, potable water, should quell many environmental concerns. Instead, Sapphire plans to use non-potable water like agricultural runoff and salt water.

One of the distinguishing factors of algae startups is that they tend to dream, and talk, rather large, and Sapphire is no exception. Like other companies, its algae has yet to be proven at commercial scales — a step that has foiled initial attempts by other companies, most famously Greenfuel Technologies, whose first large algae project grew so rapidly it choked itself out. But when I pointed that out to Pyle, both he and the two VCs I spoke to on a conference call (the other being Arch co-founder Robert Nelson) shrugged off the objection.

“The ability to produce this organism and use it is well understood at scale … the attempts of biofuel companies do not represent the best attempts at scaling these systems,” Pyle said. And although Sapphire won’t reveal where or how it intends to initially cultivate its algae, Pyle says it is specially developed to fit a particular niche in the ecosystem, which will both keep it from escaping into the wild, and keep wild algae from invading and damaging production, a significant problem for many algae startups.

However, despite the implicit criticism Sapphire has for its competitors, Pyle believes that there will be many winners in the algal biofuel space. “In a trillion dollar market, it’s hard to believe in a winner take all strategy,” he said.

While algae currently accounts for an almost negligible amount of the fuel market, in any country, it may take less time to commercialize than other technologies. Sapphire plans to move forward next with pilot testing, going from production of 100 barrels of “green crude” per day, to 1,000, all the way up to 10,000 per day.

If that model turns out to be the right one, the future of the biofuel industry looks fairly straightforward. Cultivation ponds drawing water from farms, waste-streams, tainted reservoirs, the ocean and other sources would be dotted thickly throughout the southern half of the United States, each producing three to four million gallons per year. To replace the entire crude oil usage of the country, it would take between two and three thousand of these ponds, according to my back-of-the-envelope calculations.

That scenario is a long way off, though: Sapphire plans to have its first commercial production plant in about three years, after which it would require billions of dollars in project financing to build up production. And how quickly that project financing comes through will depend almost entirely on the price of the finished product versus the crude oil prices at the time.

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SlideShare, a company that lets you upload Powerpoint presentations to the web then share them with others, has raised $3 million from Venrock. Its site has been growing increasingly fast since it launched in 2006, chief executive Rashmi Sinhahmi tells me. It now gets 4.5 million unique visitors per month, with more than 400,000 registered users that have uploaded around 300,000 presentations to date.

The site lets you do things that you’d expect from this type of social software, like vote on your favorite presentations, see lists of the most highly-voted presentations, as well as embed presentations as widgets on other web sites. It is notably now large enough that its own user base is sending back substantial online traffic to people who post presentations, according to one of its angel investors, Dave McClure.

The company competes somewhere between document-sharing sites like Scribd and Docstoc and general online presentation services like Google Presentations.

The funding will be used to build out its team, its technology, and to launch more ways of accessing content topics on the site.

For more on the company, see the embedded SlideShare presentation starring McClure, above.

Besides Venrock, investors include Mavericks owner Mark Cuban, Friendster founder Jonathan Abrams, Google employee Hal Varian, Index Partners partner Saul Klein, and entrepreneur-investors Yee Lee and Ariel Poler.

Vast amounts of power are locked away in the movements of the ocean, but because of technical challenges, the number of startups that have attempted to harness wave power thus far is relatively small when compared to wind or solar.

OreCon is the latest, with plans for a sort of giant, self-contained buoy that floats atop the water, each unit generating a megawatt and a half of energy. The company has raised $24 million, which it plans to use in building a full-scale example.

One of the problems with putting mechanical equipment in the ocean is that the salt and other chemicals in sea water tend to destroy moving parts. OreCon uses a design called the Oscillating Water Column to keep most of the parts well above water level.

In an OWC, which is a well-known setup, the pressure from waves outside the device causes water to rise and fall within it, which in turn pushes air in and out through a turbine, creating energy. They tend to be fairly inefficient, though. (See this brief animation to get a better idea of what happens in an OWC.)

OreCon’s innovation is using what it calls “multi-resonant chambers”. In its proprietary design, the company deploys multiple OWCs around a 40 meter platform that’s tethered to the sea floor a few miles off shore.

The first unit should be deployed somewhere off the coast of England in Cornwall, near Plymouth, where OreCon was founded six years ago. Closer to home, rival designs by Finavera Renewables and Pelamis Wave Power are planned for deployment off the coast near San Francisco.

The funding OreCon raised was for £12 million (about $24 million US dollars). The round was led by Advent Venture Partners, and Venrock, Wellington Partners and Northzone Ventures also participated.

We’ve been hearing whispers for weeks that Hollywood talent agency William Morris was planning to partner with a Silicon Valley venture firm to invest in digital media companies — maybe Accel Partners, maybe Venrock. Turns out, it’s both firms, plus mobile operator AT&T, as the New York Times reports.

The fund is being touted as a more successful sequel to dot-com era efforts by Hollywood and Silicon Valley investors to bring their industries together. This time, the investments will be small and targeted. The fund aims to invest as little as $250,000, focusing on Southern California companies, and ranging in scope from mobile software to social networks. The fund will be in the tens of millions of dollars — peHUB says it has heard the amount may be as high as $50 million.

As Accel’s Jim Breyer told the Times: “There is always a fear, I know, that the bubble is about to burst when a parade of actors and actresses comes through my door. This time the discussions are much more rational.”

The fund will be led by Richard Wolpert, former president of Disney Online and former chief strategy officer at RealNetworks. As VentureBeat readers may recall, Wolpert himself has already been actively investing in online game companies since 2006, including gaming site Kongregate and multiplayer online game GameLayers. He is also an advisor to Accel.

The fund will have an executive committee comprised of representatives from the venture firms and AT&T, along with a separate and larger committee that will decide which startups get funding.

The move is intended to help the fund’s partners themselves get a better understanding of each others’ industries. AT&T’s representative, Susan Johnson, went as far as to tell the Times that “we’re not in it for the return on investment,” but rather to learn about the digital content business.

This news follows earlier reports that valley firm Draper Fisher Jurvetson has been trying to raise a $150 million fund together with Hollywood agency Creative Artists Agency (our coverage).

There have also been rumors that one of the other “big four” Hollywood agencies, International Creative Management, has also been looking at creating a new media fund. We’re watching to see which valley venture firms may partner with it, or with the fourth agency, United Talent Agency.

Also, I’m going to be in Southern California this coming week. If you’re a startup or investor located in SoCal, let me know if you want to grab coffee. Email me at eric (at) venturebeat (dot) com.

In the olden days, you went to the store or a catalog and bought a game. Then, you played to your heart’s content, and never paid again.

That model has changed, as a variety of others appeared: Subscription-based online worlds, free ad-based online games, and micro-transaction games where you pay a small amount each time you want to enjoy a new feature of the game. That last category, according to Twofish Elements CEO Lee Crawford, will be the “next great wave of the web.”

Why? Crawford says he believes users are looking for interactive experiences online that are too costly to be paid for by ads alone, so micro-transactions are the logical next step.

Here’s the idea, at its simplest: You sign up for an online game and play for as long as you want, but certain premium items or features within the game require a small payment. With enough of those payments from a broad enough base of players, a gaming startup can make a tidy sum.

That’s where Twofish Elements comes in, with an offer to help game companies optimize these transactions.

Its software is a plug-and-play platform, and is a sort of combination of web analytics and Paypal for games. Twofish watches what players do and helps create transaction steps to optimize revenue. It handles the micro-payments (even those from players overseas) and protects against the risk of fraud and chargebacks.

The company is talking to “most of the major publishers,” although it won’t yet name who those are.

Whether micro-transactions sweep the web or not, it does seem to make sense to place them directly in the game. The alternative is an external portal like Live Gamer, a startup we recently covered that plans to oversee player-to-player trades for popular online gaming worlds.

Twofish took a round of $5 million back in 2006, from Venrock and Rustic Canyon Partners. It’s currently considering raising another round.

It’s been a couple years since we last wrote about TurnHere, which has given the video site time to find a business model and raise $7.5 million from Venrock and the Hearst Corporation.

A former real estate entrepreneur and journalist, Brad Inman started Turnhere with the intention of creating video snapshots of neighborhoods. The ’snapshot’ has remained, but now applies to much more, including book publishing, travel and leisure, and advertising.

To shoot its videos, TurnHere employs independent producers around the world. Shoots are done at low cost over the span of a single day, and when finished usually last between one and two minutes. A typical example would be a yellow page service paying a few hundred dollars for an introductory video about a laundromat or burger joint, which could then be attached to its online listing for the business.

In publishing, TurnHere’s producers shoot short profiles of authors, while hotels abroad sometimes ask for location-based shoots. Across all its verticals, TurnHere is currently receiving between four and five hundred orders each month. (For some recent examples of its work, go to bookvideos.tv.)

TurnHere originally intended to create its own portals, but found that the demand lay with outside content aggregators. That’s streamlined the business down to providing clients with a cheap, set format based on a platform the producers use — in Inman’s words, the company “automates a lot of the gnarly, difficult parts of content creation.”

He’s optimistic about demand, saying that the market has come to him in “a pretty aggressive way.” Across the millions of sites on the internet, says Inman, “people are slowly but surely looking at their content and realizing they need video.”

That’s also creating a new class of video makers who can exist comfortably outside of studios, fueled by a steady stream of small work from startups like TurnHere and Spot Runner, which makes ads for small businesses. The more skilled producers are invited to bigger projects within the company, or may find themselves receiving offers from outside the site.

The $7.5 million funding will be used to help build out a video editing and distribution platform for the site, and to continue ramping up business. It was the company’s first funding, outside a seed investment by William Hearst.

TODAY’S HEADLINES:

• Gelesis draws in $16M for obesity treatments (release)
• Tempo Pharma raises $8B for nanoparticle drugs (release)
• Calistoga Pharma receives additional $5M for cancer and inflammation drugs (release)
• Montreux Equity Partners closes $250M life-sciences fund (release)
• MTS Health Partners names Andrew Weisenfeld, Mark Epstein managing directors (release)
• T2 Biosystems names John McDonough as CEO (release)

Gelesis draws in $16M for obesity treatments — Gelesis, a stealthy Boston company working on “novel” obesity treatments, raised $16 million in a first funding round. Investors included Orbimed Advisors and existing investors.

According to this Boston Globe story, Gelesis is developing a capsule containing an undefined “substance” that would expand in the stomach once swallowed, creating a temporary sense of fullness. The substance, whatever it is, would later pass out of the body.

Tempo Pharma raises $8B for nanoparticle drugs — Cambridge, Mass.-based Tempo Pharmaceuticals, a biotech developing “nanoparticle” formulations for new and existing drugs, raised $8 million in a second funding round. Investors included Polaris Venture Partners, Venrock, Lux Capital, Bessemer Venture Partners, Alexandria Real Estate Equities and William Rastetter, the former chairman of Biogen Idec.

The funding is Tempo’s second in just seven months; last May, it raised $12.1 million in a first round. (See our coverage here.) Tempo says the round reflects a “significantly increased valuation.”

Like other nanoparticle-drug companies, Tempo aims to improve the safety and efficacy of existing drugs — here by packaging them together in tiny capsules that release two drugs sequentially, presumably maximizing their effectiveness while minimizing side effects. Other nanoparticle-based companies we’ve covered recently include Carigent Therapeutics (here) and Bind Biosciences (here).

Calistoga Pharma receives additional $5M for cancer and inflammation drugs — Seattle’s Calistoga Pharmaceuticals, a biotech focused on new cancer and inflammation drugs, raised an additional $5.2 million in its first funding round. That brings the total round to $26.2 million.

Current investors provided the new funds. Previous investors in the round included Frazier Healthcare Ventures, Alta Partners, Three Arch Partners, Amgen Ventures and Eli Lilly, according to this Fierce Biotech story.

Calistoga, which was spun out of Icos after its acquisition by Lilly, is developing drugs against a class of biochemical-signaling molecules known as phosphoinositide-3 kinase. It currently has two drug candidates in preclinical studies.

Montreux Equity Partners closes $250M life-sciences fund — The Menlo Park, Calif.-based VC firm Montreux Equity Partners closed a $250 million life-sciences fund. The firm said the fund exceeded a $200 million target.

Montreux said the fund has already invested in several pharmaceutical and medical-device startups, including Glaukos, Avantis Medical, Tobira Therapeutics and Sequel Pharmaceuticals. We previously noted their fundraising efforts here.

Featured companies: Fate Therapeutics, Medgenics, Satoris

UPDATED: Expanded items on Fate Therapeutics and Medgenics. The Satoris item is now a standalone post here.

Fate Therapeutics launches regenerative-medicine quest with $12M — In one of the splashiest launches in recent memory, Seattle’s Fate Therapeutics launched a new regenerative-medicine quest and raised $12 million to help it along. The company aims to develop drugs that redirect fundamental cell biology in ways that mimic the regenerative powers of stem cells, either by “reprogramming” normal cells into stem cells or by directing existing “adult” stem cells in the body to activate their regenerative powers.

I mentioned the hype, right? Fate’s release — and its Web site — prominently quotes one of its scientific advisors saying the company’s approach amounts to “the dawn of a new day in medicine,” so it seems safe to say that the company doesn’t lack for self-confidence. Fate also arranged a slew of positive press coverage timed to its announcement, including this story in Forbes.

Fate has assembled a team of scientific stem-cell luminaries — see the release for details — and the potential of this sort of approach is certainly huge. At the moment, most stem-cell companies are trying to use transplanted cells themselves to regenerate damaged or diseased tissues, still an unproven approach with a number of shortcomings — among them, the likelihood that patients receiving cell transplants will have to take immunosuppressive drugs to prevent transplant rejection.

By contrast, targeted drugs that can push existing cells back into a primordial, regenerative state could open up entirely new forms of medical treatment. Assuming, that is, that everything works — and that’s a big if at this point. Understanding of cells’ natural regenerative mechanisms remains in its infancy, so it’s probably worth taking Fate’s grander claims with a grain of salt until the company proves that it can do what it claims it can.

Here’s Forbes on what Fate has in store for us:

Already, Fate Therapeutics has treatments in clinical trials to improve the potency of cord-blood stem cells and to treat myelodysplastic syndromes, anemias that strike 10,000 Americans a year. Another drug program might help reduce the impact of the genetic disorder that causes Down syndrome. Other treatments could affect the same litany of diseases touted as targets for stem cell therapy: Alzheimer’s, osteoporosis and Parkinson’s, to name a few. Because tumors are caused by stem cells run amok, drugs to turn down their activity might be potent cancer medicines.

Fate, of course, isn’t alone in this quest. Plasticell, a fairly new U.K. biotech with a much lower profile than Fate, is also looking for non-invasive ways to tap cellular regeneration; see our coverage here.

Investors in the funding include Arch Venture Partners, Polaris Venture Partners, Venrock and OVP.

Medgenics raises £3.3M in London IPO — Vienna, Va.-based Medgenics, a biotech that aims to help patients produce genetically modified protein drugs within their own bodies, raised £3.3 million ($6.8 million) in an initial offering associated with its listing on the AIM market of the London Stock Exchange, VentureWire reports (subscription required). The company is developing “Biopumps,” which are tiny protein “factories” made from a patients’ own tissue that are designed to provide lasting drug treatment for chronic conditions such as anemia or hepatitis.

Quantenna Communications, seeking to exploit the rising number of mobile device users globally, says it is building a better semiconductor chip for wireless signal transmission in phones, laptops and other devices.

The chip includes multiple inputs and outputs for wireless signal transmission, and will be smaller, less power-hungry and more reliable than what competitors currently offer, the company claims.

Sunnyvale, California-based Quantenna has just announced a $12.7 million funding round from high profile investors: Sigma Partners led the round, with participation from Grazia Equity, Sequoia and Venrock. Amidzad was an earlier, seed investor.

It will spend its money on further chip development as well as on efforts to obtain its first customers. Quantenna hopes to launch in mid-2008.

Potential customers range from Nokia to Motorola to Cisco, founder Behrooz Rezvani told us yesterday.

The company is being secretive about the specifics of its technology, in the meantime. Rezvani wouldn’t reveal any more information, except to boast about the company’s technical prowess : More than a third of its 75 employees have PhDs. Farrokh Farrokhi, the company’s senior director of systems, was previously chief scientist at wireless transmitter company Optichron Inc. Quantenna’s chief technology officer is Andrea Goldsmith, a professor of electrical engineering at Stanford.

Rezvani himself previously founded Ikanos Communications, a broadband semiconductor company that went public in 2005.

Quantenna company previously raised a $12 million round in 2006.

Sigma Partners managing director Fahri Diner will join Quantenna’s board of directors.

If you’re an entrepreneur, you may want to avoid the Web 2.0 area, which is littered now with unpromising me-too ideas. You may want to consider something less sexy — data security, for example.

Vontu, a six-year-old Silicon Valley (Cupertino, Calif.) company which makes software to avoid data loss, said it has been acquired by Symantec, the maker of Norton security software, for a cool $350 million. That’s ten times the amount invested in Vontu by venture capitalists, meaning that management and investors both saw a nice profit.

Symantec said it plans to use Vontu to help customers prevent the loss of confidential information wherever it is stored.

There are lots of companies doing something similar to Vontu, but they all seem to have done well. There’s Oakley Networks (which was bought by Raytheon for $193 million), Port Authority (bought by Websense for $90 million), and others that are still private, including Tablus, Reconnex and Vericept.

Investors in Vontu include Venrock and Benchmark Capital, which had the lion’s share because of early investments, followed by U.S. Venture Partners and General Motors Asset Management.

This is a win by Benchmark partner David Beirne, who tried to hit big during the Internet boom with bets on companies like WebVan. WebVan, of course, was sexy, but was a notoriously bad investment, soaking up more than $1 billion in invetor’s money before going out of business. Vontu, on the other hand, is an example of how patience — over many years of toiling — can lead to solid, robust results. Benchmark first invested in 2002, after the hype of the bubble was long gone.

Vontu said it is close to profitability and expects to make $43 million in revenue this year.

Featured companies: Acceleron Pharma, Bledsoe Brace Systems, Eurobiobiz, Genoptix, Harmony Information Systems, ImmuneWorks, Pasteuria Bioscience, Renal CarePartners, Quantum Genomics, Synergy Software, Vitreo Retinal Technology

UPDATED: Expanded items on Genoptix and Acceleron Pharma.

Diagnostics biotech Genoptix prices IPO above range, raises up to $98M — Genoptix became one of the first biotechs in a long time to demonstrate some oomph with an IPO, pricing its shares above its expected range and then soaring nearly 50 percent in its first day of trading. Genoptix priced its shares at $17 apiece, above its expected range of $14 to $16, netting itself as much as $97.8 million in the process. (Actually, existing shareholders sold close to three-quarters of a million shares in the IPO, so the proceeds to Genoptix are more like $85.6 million.)

At the very least, the positive reception appears to support the notion that biotech investors are currently more interested in reliable service businesses such as Genoptix’s diagnostics work than they are in traditional biotech moon shots, since they offer lower risk even at the cost of slower growth. Perhaps there’s hope for Talecris Biotherapeutics after all.

We’ve covered the company here and here. The offering initially valued Genoptix at $265.2 million, although today’s share run-up to $25.35 now values the company at $395.5 million. Genoptix provides diagnostic services to cancer and blood-disease specialists in order to help with diagnosing and selecting appropriate treatments for various cancers.

Acceleron Pharma draws in $31M for tissue-regeneration drugs — Cambridge, Mass.-based Acceleron Pharma, a biotech focused on “regenerative” drugs that target a family of growth and development proteins, raised $31 million in a third funding round. Investors included Bessemer Venture Partners, MPM BioEquities, QVT Financial, Advanced Technology Ventures, Flagship Ventures, OrbiMed Advisors, Polaris Ventures, Sutter Hill Ventures and Venrock.

The company’s lead drug candidate, ACE-011, aims to stimulate bone regrowth in cancer patients. That drug should move into mid-stage clinical trials in the first quarter of next year. The company intends to begin early human tests of two other drugs — one designed to increase muscle mass and strength, the other an “anti-angiogenesis” cancer drug — next year.

OTHER HEADLINES OF NOTE:

• Medical-IT co. Harmony Info raises $28M, acquires Synergy Software (release)
• Vitreo Retinal Tech adds $3M to round for eye drugs (PE Hub)
• ImmuneWorks gets $300K for lung-disease drugs (release)
• Bledsoe Brace sells majority stake to Essex Woodlands (PE Hub)
• Quantum Genomics acquires Eurobiobiz (release)
• Renal CarePartners acquires two dialysis providers (VentureWire, sub req’d)
• Pasteuria Bioscience names David Duncan new CEO (release)

Tapioca Mobile, a San Diego company that lets publishers deliver video, images and audio through SMS messages on a cell-phone, has raised seed funding from Silicon Valley venture firm Venrock.

The company was founded this year by former employees of wireless companies Qualcomm, Nokia, and Openwave.

Venrock’s David Siminoff and Neeraj Choubey joined the board.

In a statement, Siminoff said the rise of mobile messaging is “astounding” and rivals the adoption of the Internet a decade ago. Tapioca Mobile gives media companies and advertisers the ability to deliver video and other “rich media” formats, such as images and audio, to cellphone users via the fast-growing Multimedia Messaging Service (MMS) protocol available on most mobile devices. MMS enables multimedia files to be attached to text-based SMS messages. MMS does have its challenges (scroll down).

Siminoff was a founding investor in 4Info, a Silicon Valley company that specializes in SMS-based search. Choubey worked earlier at Yahoo’s mobile division and began his professional career in the CDMA infrastructure division at Motorola.

(UPDATED at 6:40pm PT: See below.)

Featured companies: Nereus Phramaceuticals, KFx Medical, NeuroMed Pharmaceuticals, Adnexus Therapeutics, Masimo, Biofisica, Aegera Therapeutics, LymphoSign, InfuScience, Palmetto Infusion Services

Nereus Pharma raises $45M for ocean-derived cancer drugs — San Diego’s Nereus Pharmaceuticals, a biotech that searches for cancer drugs in marine microbes, raised $45 million in a follow-on to its fourth funding round.

The company features an all-star lineup of investors, which includes BankInvest, Roche Venture Fund, Astellas Venture Management, Boston Life Science Venture Corporation, Taiwan Global Biofund, Eminent Venture Capital, HBM BioVentures, Alta Partners, Forward Ventures, Advent International, GIMV, InterWest Partners and Pacific Venture Group.

From the press release:

The proceeds from the financing will be drawn down in two tranches and used to complete Phase I and begin Phase II clinical trials for Nereus’ two drug candidates. The first compound, NPI-2358, is being evaluated for the treatment of solid tumors and lymphomas in Phase I clinical trials. It is a potent, selective tumor vascular disrupting agent (VDA), a class of compounds that represents a novel approach to disrupting the intrinsic tumor blood flow, which leads to tumor cell death. NPI-2358 has favorable preclinical characteristics, such as a longer duration of action on tumor blood flow, activity against multi-drug resistant tumor cell lines and a favorable preclinical toxicology profile. The compound is one of 200 analogues that were produced after finding activity and novel chemistry from a marine fungal extract.

Nereus’ proteasome inhibitor NPI-0052 is in Phase I trials for solid tumors, lymphomas and multiple myeloma. Preclinical studies indicate that this next generation compound may be superior to Velcade(R), with broader target inhibition, faster onset of action, higher potency, oral and intravenous availability, and activity against myeloma cells resistant to Velcade(R) (bortezomib, Millennium), Thalomid(R) (thalidomide, Celgene Corporation), Revlimid(R) (lenalidomide, Celgene Corporation) and steroid therapy. NPI-0052 was derived from a marine-obligate gram-positive actinomycete (Salinispora tropica).

Rotator-cuff specialist KFx Medical raises $10M — San Diego’s KFx Medical, a Carlsbad, Calif., developer of minimally invasive repair systems for rotator-cuff injuries, raised $10 million in a second funding round. Investors included Alloy Ventures, Charter Life Sciences, Arboretum Ventures, Montreux Equity Partners, and MB Venture Partners.

It’s pretty difficult for a non-surgeon to figure out exactly how KFx’s system works better than current medical practice, but if you’re interested in a look, check it out here.

NeuroMed Pharma drops Merck work on pain drug, raises $36M — Vancouver-based NeuroMed Pharmaceuticals, a biotech focused on new pain meds, discontinued Merck-funded work on an experimental pain drug called MK-6721. The Merck collaboration, valued at as much as $475 million, will continue.

Separately, NeuroMed has raised $36 million toward a fifth funding round, VentureWire reports (subscription required). That round isn’t yet complete, and the investors haven’t been disclosed. The funding is designed to pay for completing late-stage human trials of a separate pain drug the company recently licensed from a J&J subsidiary.

Adnexus raises $15.5M against cancer — Adnexus Therapeutics, a Waltham, Mass., biotech developing a new class of drugs against cancer and other diseases, raised $15.5 million in a third funding round. Investors included HBM BioVentures (Cayman), Atlas Venture, Flagship Ventures, Polaris Venture Partners and Venrock. The company intends to use the proceeds to further clinical development of its lead candidate, Angiocept, which is currently in early-stage trials in cancer.

Masimo IPO raises $233 million, jumps 23% on first day — Irvine, Calif.-based Masimo, a major developer of non-invasive patient monitors, priced its IPO in the middle of its predicted range of $16 to $18 per share, raising as much as $232.9 million — just shy of the quarter-million-dollar mark we discussed here. Since the offering involved a hefty chunk of shares sold by existing shareholders, however, the company can only pocket up to $55.9 million of the proceeds. Investors received the offering warmly, pushing the stock up to $20.90 yesterday, a rise of 23 percent.

Biofisica raises $2M in venture debt for wound healing — Atlanta’s Biofisica, a medical-device maker focused on wound healing, raised $2 million in debt financing from Leader Ventures. The company makes an electrical-stimulation device designed to speed the healing of wounds, and currently sells it in the United Kingdom.

Aegera acquires LymphoSign, uniting two Canadian oncology biotechs — Aegera Therapeutics, a Montreal biotech focused on cancer, acquired Toronto’s LymphoSign, another cancer-specialized biotech, for undisclosed terms. Several shareholders also made additional investments in Aegera’s previously announced third funding round.

InfuScience acquires Palmetto Infusion Services — InfuScience, a Chicago provider of drug-infusion therapy, acquired Palmetto Infusion Services of Beaufort, S.C., for an undisclosed sum.

UPDATE (6:40pm PT): Added KFx Medical item.