VentureBeat

TODAY’S HEADLINES

• Cantimer takes in $2M for dehydration diagnostics (VentureWire)
• Recodagen launches, takes aim at cancer (release)
• Juniper Diagnostics spins out of ChemSensing (VentureWire)

Cantimer takes in $2M for dehydration diagnostics –The mystery of Menlo Park, Calif.-based Cantimer has resolved a bit. We wrote about this stealthy company back in December and reached the conclusion that the company was developing a particular type of nanosensor intended to identify water levels in human tissue.

Now VentureWire reports that Cantimer is doing just that, using a polymer-based sensor for measuring dehydration in saliva. The company plans to market the device in sports medicine and pediatric and elderly care as well as to hospitals and emergency rooms.

The startup also just raised $2 million in a first funding round. AWT Private Investments and angel investors provided the cash.

Recodagen launches, takes aim at cancer – Recodagen (no Web site), a newly launched Seattle biotech working on new cancer drugs, raised an undisclosed sum in a first funding round. The sum falls in the $2 million to $5 million range, according to John Cook’s blog.

Investors included Alexandria Real Estate Equities, Amgen Ventures, ARCH Venture Partners, OVP Venture Partners and WRF Capital.

Recodagen was incubated by Seattle’s Accelerator. The company’s technology originated at Washington State University.

Juniper Diagnostics spins out of ChemSensing with new funding– ChemSensing, a Champaign, Ill., developer of sensor arrays, is spinning out Juniper Diagnostics to commercialize its technology for detecting bacteria via breath, VentureWire reports. The new startup will launch with a multi-million-dollar funding round provided by Mariner Equity Management and ChemSensing.

Juniper’s technology involves panels of reactive dyes that change color in response to chemical exposure — in this case, to gases emitted by certain classes of bacteria in the breath of patients with tuberculosis or pneumonia. The company expects that FDA approval of the device may take 18 months to two years.

Alder Biopharmaceuticals, a Bothell, Wash., developer of antibody drugs, raised $40 million in a third funding round. Investors included Delphi Ventures, TPG Biotech, Sevin Rosen Funds, Ventures West, H.I.G. Ventures, and WRF Capital.

Alder develops antibody-based drugs for inflammation and autoimmune disease. The company’s lead candidate, ALD518, is currently in clinical trials as a treatment for rheumatoid arthritis and cancer, although neither Alder’s Web site nor its statement disclose when the drug began human tests.

Alder’s work is also noticeable because it produces its antibodies in genetically modified yeast cells, a new manufacturing technique that the company claims is faster and cheaper than traditional genetic-engineering methods involving mammalian cells. Not only does production in yeast allow companies to sidestep the need for expensive patent licenses that cover traditional methods, Alder claims it can speed the development process to months from years, making it possible to evaluate a much wider range of antibody candidates.

Alder also claims that ALD518 is the first full-length functioning antibody to be made on an industrial scale in yeast. For an additional information on the merits of yeast-based antibody manufacture, see our previous coverage of Adimab, a startup developing its own yeast-production system for similar reasons. If you’re a technical-detail junkie, don’t miss the discussion in comments.

Featured companies: Ablynx, Cardiosolutions, Carigent Thereapeutics, Elusys, Genome Corp., GlobeImmune, Novazone, Targanta Therapeutics, Waterfront Media

UPDATED at 5:45am on 9/27/07

GlobeImmune raises $41M for immune-system therapies — GlobeImmune, a Louisville, Colo., biotech focused on new forms of immunotherapy to treat viral infections and cancer, raised $41.2 million in a third funding round. Investors included Wexford Capital, Celgene, the Mellon Family Investment Company, the Richard King Mellon Foundation, Eminent Venture Capital, Boston Life Science Venture, WRF Capital, HealthCare Ventures, Morgenthaler Ventures, Sequel Venture Partners, Lilly Ventures, Medica Venture Partners, Adams Street Partners, Biogen Idec, Pac-Link Bioventures, China Investment and Development, Yasuda Enterprise Development, Partners Healthcare, and GC&H Investments.

GlobeImmune’s experimental drugs are based on genetically engineered yeast cells, which have been altered to produce proteins that stimulate the immune system to attack diseased cells. The company’s lead product targets hepatitis C, and has completed early-stage human trials. Another drug is intended for use in pancreatic cancer.

Waterfront Media pulls in $25M for online health info — New York’s Waterfront Media, which bills itself as the largest privately held provider of online health information, raised $25 million in a fourth round of funding. Investors included Scale Venture Partners, Foundation Capital, Rho Ventures, Time Warner Ventures, BEV Capital, and Neocarta Ventures.

Waterfront said it will use the funds to expand its Everyday Health Network, a health-information portal, and to make acquisitions in the goal of becoming the “number one health destination” on the Web.

Novazone seeks $20M for food-safety tech — Novazone, a Livermore, Calif., developer of food-safety technology, is looking to raise $20 million in a third funding round, VentureWire reports (subscription required). Novazone is developing an ozone-based disinfectant for food and water purification. The company previously raised $7 million in 2006 from Chrysalix Energy, Foundation Capital and Grauer Capital.

Cardiosolutions raises $7M for heart device — Stoughton, Mass.-based Cardiosolutions, a medical-device maker focused on minimally invasive repairs to the heart’s mitral valve, raised $7 million in a first funding round. BioVentures Investors led the round.

The company’s device is intended to restore function to the valve that separates the two left chambers of the heart without open-heart surgery. Cardiosolutions was founded in 2006 by STD Med, a Stoughton-based medical-technology firm.

Elusys wins $12M contract for anthrax treatment — Pine Brook, N.J.-based Elusys, a biotech focused on antibody-based treatments for infectious disease, won a $12 million federal contract that will support development of its anthrax treatment Anthim. That treatment targets the so-called “protective antigen” component of anthrax, theoretically blocking the bacteria’s ability to produce fatal levels of toxin.

Ablynx wins €1.9M grant for miniature antibodies — Belgium’s Ablynx, a biotech working to devise new therapies using miniature antibody molecules, received a €1.9 million ($2.6 million) grant from the Institute for the Promotion of Innovation by Science and Technology in Flanders. The company said the funding would allow it to pursue new uses for its “nanobodies” and to expand its intellectual-property portfolio.

Genome Corp. raises $250K for new sequencing technology — Providence, R.I.-based Genome Corp. raised $250,000 in seed financing to extend development of a new high-speed DNA sequencing technology. The Slater Technology Fund provided the financing.

Nanotech-drug developer Carigent Therapeutics raises seed funding — Yale spinout Carigent Therapeutics, a New Haven, Conn., biotech working on a nanoparticle-based drug technology, raised an undisclosed amount of seed funding, VentureWire reports. Saint Simeon Marketing e Investimentos provided the funding in May.

The idea is that engineered nanoparticles can specifically target particular proteins, theoretically making them ideal “carriers” for other drug molecules that attack cancer, infectious pathogens or other other disease-related substances. The company has also secured $250,000 in grants from the National Cancer Institute and the National Science Foundation, and plans to target cancer with its first product, it told VentureWire.

Antibiotic maker Targanta sets IPO price range — Cambridge, Mass.-based antibiotic developer Targanta Therapeutics said it now hopes to raise up to $92.6 million in an IPO by selling shares at a price of $12 to $14 apiece. Targanta has previously expected to pull in $86.3 million; I wrote about some of the risks inherent in the company’s plans to win FDA approval for an in-licenced antibiotic called oritavancin that it hasn’t even tested itself here.

So far, Targanta seems to have managed to assure investors that it can overcome those challenges, which include some potentially strong competition from a variety of sources. Its offering will still serve as a good test of the strength of the biotech IPO market, which has been iffy for well over a year.

Featured companies: Atritech, Avalon Partners, Ensemble Discovery, Hyperion Therapeutics, LifeBond, ReShape Medical, SafeStitch, Trophos, UltraShape

Hyperion Therapeutics raises $40M against GI and kidney disease — Hyperion Therapeutics, a South San Francisco, Calif., specialty pharmaceutical company, raised $40 million in a second funding round. Investors included Sofinnova Ventures, Highland Capital Partners, New Enterprise Associates and WRF Capital.

Hyperion, which buys the rights to test and market drug candidates from other companies, said the proceeds will allow it to complete a licensing agreement with Medicis Pharmaceutical’s Ucyclyd subsidiary, build out its management team and advance its clinical trials. The company’s two leading candidates address a genetic disease called urea cycle disorder, in which toxic ammonia builds up in the blood stream, and hepatic encephalopathy, a neurological complication of cirrhosis.

Atritech raises $22M for clot-prevention device — Plymouth, Minn.-based Atritech, a developer of a device designed to prevent dangerous blood clots, raised $22 million in a fourth funding round. Investors included SightLine Healthcare Vintage Fund, Prism Venture Partners and other existing investors.

Atritech’s device, which it calls the Watchman system, is essentially a tiny mesh basket designed to be implanted in the opening to the heart’s left atrial appendage, a small pouch on the top of the heart. That pouch is often the source of blood clots in patients with atrial fibrillation, a condition in which the heart’s upper chambers beat too fast. Ideally, the implanted basket will catch clots that threaten to escape into the bloodstream, where they could cause a stroke.

The funding will allow Atritech to finish enrolling patients in a late-stage trial of the Watchman device, which is being tested against a blood thinner typically given to prevent clots from forming.

UltraShape gets $15.1M for “body contouring” — UltraShape, an Israeli developer of ultrasound systems designed to break down fat cells for cosmetic purposes, raised $15.1 million in a fifth funding round. Investors included Meritech Capital Partners, Israel Seed Partners and Polaris Venture Partners. The company’s non-invasive device isn’t approved for use in the U.S.

Trophos raises $11.6M for neurological drugs — Trophos, a Marseille, France, biotech focused on developing new drugs for neurological conditions, raised $11.6 million (€8.5 million) in a third round of funding. Investors included OTC Asset Management, CM-CIC Capital Privé, Society General Asset Management (SGAM), Viveris Management, Turenne Capital Partners, Blue Medical and the Association Française contre les Myopathies.

Trophos develops drugs that it believes will promote the survival of neurons threatened by degenerative neurological diseases such as Huntingdon’s disease. Its leading candidates target neuropathic pain and amyotrophic lateral sclerosis, better known as Lou Gehrig’s disease.

SafeStitch goes public in reverse merger, raises $4M in debt — SafeStitch, a Miami medical-device maker without a Web site, went public in a reverse merger with the defunct firm Cellular Technical Services. The company will list its shares on the American Stock Exchange. As part of the deal, SafeStitch raised a $4 million line of credit from the Frost Group, a private-equity firm, and also takes control of $3 million in cash held by CTS. The company makes devices for minimally invasive gastrointestinal surgery.

NationsHealth acquires Diabetes Care & Education for $3M — NationsHealth, a Sunrise, Fla., provider of medical products and insurance-related services, acquired Diabetes Care & Education, a provider of insulin pumps and related supplies for diabetics. NationsHealth will pay $3 million, $2.5 million in cash and $500,000 in unregistered common stock.

Obesity-device maker ReShape Medical pulls in $3M — ReShape Medical, a Lake Forest, Calif., developer of minimally invasive medical devices to treat obesity, raised $3 million in a follow-on to its first funding round, PE Hub reported, citing a regulatory filing. Investors included New Leaf Venture Partners and SV Life Sciences. The company was previously known as Abdominis, and has now raised a total of $8 million.

Avalon Ventures raises $84 million in eighth fund — Avalon Ventures, a La Jolla, Calif., venture-capital firm specializing in life-science and wireless-technology companies, raised $84 million in an eighth fund, VentureWire reports (subscription required), citing a regulatory filing. Avalon previously raised $75 million for its seventh fund, which closed in 2005.

LifeBond gets $1.5M for new surgical bandages — LifeBond, a Jerusalem-based device company, raised $1.5 million. Investors included GlenRock Israel and the Zitelman Group.

LifeBond is developing a bandage that exudes a sticky gel when it comes into contact with blood, presumably creating a barrier that minimizes blood loss.

Ensemble Discovery , a Cambridge, Mass., biotech, named former Pfizer vice president Michael Taylor as its CEO. Ensemble is developing new drugs and tests based on large, repetitive molecules called macrocycles.

Ensemble raised $17 million in a first funding round in 2004, and in February VentureWire reported that the company was closing a second round in the “tens of millions.”

Farecast.com, the young Seattle start-up that now owns the niche of predicting airfares, and which continues to roll out new features (like letting you guarantee low fares), has raised $12.1 million more.

The round was led by Sutter Hill Ventures, and includes PAR Capital Management, Pinnacle Ventures, and Farecast board member and former Expedia CEO, Erik Blachford. Existing investors, Greylock Partners, Madrona Venture Group, and WRF Capital also participated — it has raised a total of $20.6 million. VP of Marketing Mike Fridgen told VentureBeat earlier today the funds are to help expand the team.

Indeed, this is a lot of cash, but it helps the company keep ahead in an area where some big players may eventually become eager to move.