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TODAY’S HEADLINES:

• Luminous Medical raises $24M for automated glucose monitoring (release)
• Alimera Sciences gets $30M for eye-disease drug (release)
• Vaccine maker LigoCyte draws $28M (release)
• Heartbeat tracker CardioNet trims IPO, aims for listing today (IPOhome)
• Axial Biotech takes in $6M for spinal diagnostics (release)
• Insulin bioengineer enGene receives $6.4M (release)
• GlucoLight raises funding for, well, glucose monitoring (release)
• Germany’s InflaRx gets seed funding for sepsis work (release)
• Cell imager Amnis pulls in $3.5M (VentureWire)
• Korea Bone Bank gets funding for bone transplants (release)

Luminous 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 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.

Insulin 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.

Vaccine 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.

TODAY’S HEADLINES:

• Q Thera takes in $15M for neural stem-cell treatments (release)
• Stroke clotbuster Concentric Medical withdraws IPO (IPOhome)
• Avera recaps with $9M to relaunch human tests of GI drug (VentureWire)
• Tissue repairer Nerites raises $5.7M (release)
• Semafore Pharma aims for $7.5M to launch new cancer-drug trials (VentureWire)
• Triage Wireless gets $6.7M for “cuffless” blood-pressure monitors (peHUB)
• MAKO Surgicals prices IPO, falls in first day of trading (WSJ)
• ImmunoCellular acquires assets of Molecular Antibody Technology (release)

Q Thera takes in $15M for neural stem-cell treatments – Q Therapeutics, a Salt Lake City biotech working on neural stem-cell treatments for neurological conditions, has received the first portion of a $15 million second funding round. Investors in the round included vSpring Capital, Invitrogen, Epic Ventures, Toucan Capital, University of Utah Research Foundation, Salt Lake Life Science Angels and Q management.

Q is taking aim at diseases such as multiple sclerosis and cerebral palsy that result when the protective myelin sheath that protects nerve fibers and the spinal cord deteriorates, often for little-understood reasons. The company is developing neural stem cells that can produce new glial cells, which in theory should be able to regenerate the damaged myelin. (Irritatingly enough, the company insists on calling its product “Q cells.”) The company aims to begin clinical trials in transeverse myelitis, a paralyzing form of MS, next year.

Stroke clotbuster Concentric Medical withdraws IPO – Concentric Medical, a Mountain View, Calif., developer of medical devices for removing stroke-causing blood clots, withdrew its proposed IPO. The company becomes the eighth life-science startup to abandon an IPO this year.

Concentric, of course, cited “unfavorable market conditions” as the reason for its withdrawal. The device maker, which is still unprofitable, reported working capital and cash and short-term investments of $20.3 million at the end of June and has been burning cash at a rate of about $7 million a year, so it’s not necessarily in dire straits. Concentric, in fact, today announced it had arranged a $15 million line of credit with Horizon Technology Finance, giving it an additional cushion.

The company makes and sells a catheter-based device that can be snaked through a patient’s blood vessels to the brain in order to physically “grab” and remove stroke-causing blood clots. Although Concentric won approval for the device in 2004, sales have grown more modestly — in part, perhaps, because Concentric hasn’t undertaken the clinical studies necessary to demonstrate the usefulness of its technique compared to other treatments, and has no plans to do so. (The company listed this point as a risk factor in its SEC filings.) What’s more, the Concentric device can sometimes damage blood vessels in the brain; in one of two studies, almost ten percent of patients suffered a cranial hemorrhage.

Our previous coverage of the company is here.

Avera recaps with $9M to relaunch human tests of GI drug – Avera Pharmaceuticals, a San Diego specialty pharma developing drugs against a variety of conditions, recapitalized with a $9 million “first” funding round, VentureWire reports. Such a recap usually amounts to a restart for a company, which in this case was prompted by a halted clinical trial of a drug for irritable bowel syndrome and overactive bladder.

Investors in the recap included all participants in the company’s previous funding round: Aisling Capital, SV Life Sciences, Aberdare Ventures, BioAsia Investments, H.I.G. Ventures, Montreux Equity Partners, Bay City Capital, BTG PLC, Frazier Healthcare Ventures, InterWest Partners, St. Paul Venture Capital and Windamere Venture Partners. The company declined to provide a valuation to VentureWire, but it’s almost certainly suffered a “down round,” or it wouldn’t be recapitalizing.

Avera shut down mid-stage trials of its drug, known as AV608, last year after animal testing turned up potential toxicity issues. The company has since redesigned the drug to eliminate a compound it called a “non-active metabolite,” and hopes to resume studies later this year. Avera had raised more than $72 million prior to the recap.

(UPDATED: Expanded items on LineaGen, BG Medicine. Pelikan Tech is described in a standalone item here.)

TODAY’S HEADLINES:

• Pelikan Tech raises $69M for diabetes glucose tests (release)
• Utah’s LineaGen draws $6M for genetic diagnostics (VentureWire, sub req’d)
• Beijing’s IKang Healthcare gets $25M for medical-service centers (VW)
• BG Medicine drops IPO price range, seeks up to $52M (Edgar)
• Sepragen completes acquisition of Cyto Biologic Tech (release)

Utah’s LineaGen draws $6M for genetic diagnostics — LineaGen (no Web site), a Salt Lake City biotech focused on genetic diagnostics, raised $6 million in a first round of funding, VentureWire reports. Investors included
Sanderling Ventures, vSpring Capital and Mesa Verde Partners.

The company aims to identify genomic markers — presumably the single-letter DNA variations known as single-nucleotide polymorphisms — for a variety of diseases, including autism, multiple sclerosis, cancer and lung disease. LineaGen is using detailed databases on Utah’s predominately Mormon population, which keeps careful genealogical records, to identify markers that it can then turn into diagnostic tests for those conditions.

A variety of other companies have been embarked on similar projects, most notably DeCode Genetics, which has been conducting genetic analyses on the Icelandic population for years. VentureWire notes that Genzion Biosciences has been doing the same for French Canadians.

BG Medicine drops IPO price range, seeks up to $52M — Waltham, Mass.-based BG Medicine, a developer of molecular diagnostics, dropped its IPO price range and now plans to raise no more than $52 million. The company, which had previously sought to offer up to 5.2 million shares at a price between $14 and $16, now aims for a price between $8 and $10. Its latest SEC filing is here.

The company’s setback is but the latest in its unusual IPO history. It first reported plans to go public on Amsterdam’s EuroNext exchange, then apparently scrapped that idea and filed to list on the Nasdaq Stock Exchange. At its previously price range, BG Medicine stood to raise as much as $83 million, so its latest decision represents a fairly significant haircut to its earlier hopes.

Featured companies: BioMicro Systems, Diasome Pharmaceuticals, FitLinxx, FitSense, Novartis, Radius Health

[NOTE: This is a catchup briefing, posted on 9/29/07. I’ve adjusted the item’s timestamp to keep the briefings in chronological order. Good news is that this should be the last one. –D.P.H.]

Diasome names new CEO, aims to raise $15M for nanotech diabetes drugs — Diasome Pharmaceuticals, a Conshohocken, Pa., biotech focused on nanotech drug delivery, named David Tierney as its new CEO and is close to raising $15 million in a combination of bridge and second-round financing, VentureWire reports (subscription required).

Tierney was most recently CEO of Valera Pharmaceuticals, and previous served as an executive at both Biovail and Roberts Pharmaceutical, a unit of Shire. He takes over from Diasome founder Len Rosenberg, who remains president and COO.

Diasome has already raised most of its bridge funding, but declined to tell VentureWire how much it sought. BioAdvance Ventures and various individuals provided that funding. The remainder of the $15 million should be wrapped up by the end of the year. Diasome makes nanotech particles designed to deliver drugs directly to liver cells, with the specific intent of treating diabetics by shuttling insulin specifically to the organ primarily responsible for regulation of blood sugar.

Radius Health adds $10M, strikes Novartis deal for osteoporosis — Cambridge, Mass.-based Radius Health licensed an osteoporosis drug candidate to Novartis in a deal worth up to $500 million. At the same time, the company raised an additional $10 million in third-round funding from Novartis via a fund managed by MPM Capital. The company’s release is here (PDF).

The drug in question, BA058, is a synthetic version of human parathyroid hormone-related protein, a key molecule for promoting bone growth. It is currently in mid-stage human testing for osteoporosis. VentureWire has more here.

Exercise-data firm FitLinxx acquires FitSense — Venture-backed FitLinxx, a Norwalk, Conn., developer of exercise-tracking devices, agreed to acquire FitSense, a Southborough, Mass., maker of wireless health-data technology. Details of the acquisition weren’t disclosed; the release is here.

BioMicro Systems draws $1.7M for microfluidic devices — The Salt Lake City company called down $1.7 million of a $2 million second round of funding, PE Hub reports, citing a regulatory filing. From PE Hub:

Shareholders include vSpring Capital and Glen Arden Associates. The company developers microfluidic biochip technologies for genomics, proteomics and diagnostics research.

(Note: This item has been copied over to the Life Sciences page from its original location on the VentureBeat main page. To view it in its original context, with comments, click here.)

Venture investors’ interest in early-stage biotech companies may finally be starting to revive, nearly six years after the collapse of a biotech-stock bubble quashed appetites for the industry’s riskiest but often most innovative companies.

Biotech fundraising is certainly booming. The industry newsletter BioCentury (no link available) recently reported that biotechnology pulled in nearly $2 billion in venture capital during the first quarter, topping the previous record of more than $1.7 billion in the fourth quarter of 2000. A recent survey by law firm Fenwick & West* revealed that 79 percent of Bay Area biotechs saw their valuations rise during 2006, compared to 65 percent in 2005. Those rising valuations follow years in which the dreaded “down round” — a funding event that lowers the dollar value of a company — had become commonplace.

The bigger question, however, has been whether VCs would also renew their interest in early-stage biotechs — companies so young it could them a decade or more to push a new drug or related product through development and the regulatory approval process. Once making up the bulk of biotechnology in the first place, early-stage companies fell out of of favor after the 2000 biotech-stock bubble collapsed. Battered VCs shifted their attention to more mature companies that offered quicker “exits” — that is, profits on the venture investments — via initial offerings or acquisitions. Some in the industry worried that innovative but risky drug development and technologies might languish as a result.

Although it’s still early, venture funding for early-stage companies may be starting to pick up. Last month, for instance, a genetics and molecular-imaging startup called Numira Bioscience raised $2.5 million in first-round funding, $2 million of that from vSpring Capital. A few days later, Affinium Pharmaceuticals, a proteomics company-turned-antibiotic developer, raised $18 million as part of its restructuring and drew in Forward Ventures as a new investor.

Since enthusiasm for biotech tends to wax and wane periodically, VCs such as Phillipe Chambon of New Leaf Venture Partners say the resurgence of interest in early-stage companies reflects “the pendulum swinging back in the opposite direction.” One main reason: Cash-rich Big Pharma companies are desperate to bolster their own drug-development efforts by acquiring biotechs. (Even established biotechs like MedImmune are feeling the pressure to put themselves up for sale.) Since the pharmas are increasingly willing to buy even less mature biotechs, venture capitalists see early exits growing more likely, which in turn makes them more comfortable about funding the industry’s youngest companies.

At least, so goes the theory.

(*Disclosure: Fenwick & West is a sponsor of VentureBeat)