VentureBeat

(UPDATED: See below.)

It’s been a rough few months for life-science IPOs, what with all the collapsed offerings and, often enough, miserable post-offering performance for those startups that have managed to inch their way across the finish line.

Yet the lure of the public markets remains strong, even with the Nasdaq down about 15 percent since the beginning of the year, and some startups simply will not be denied. That certainly seems to be the case with CardioNet, which just trimmed its expected IPO but expects to price it tonight, according to Renaissance Capital’s IPOhome site. Check out the company’s latest SEC filing for more.

CardioNet makes implantable wireless sensors designed to detect irregular heartbeats. Its complex IPO — which mirrors the complex structure of its last round of venture funding, itself tied rather tightly to the IPO — just got a little simpler. Where existing CardioNet shareholders had initially planned to sell 3.6 million shares alongside the three million shares the company itself was offering, the selling-shareholder portion has been scaled back to 400,000 shares.

CardioNet also dropped its expected offering price to a range of $18 to $20 per share, down from $22 to $24. That puts its maximum take from the offering, including possible overallotment sales, at $78.2 million — almost 20 percent lower than it figured just a month ago.

The reduction in shareholder sales should theoretically boost interest in the offering, since CardioNet and its shareholders won’t be competing for investors. That said, I can’t help wondering how much of a monkeywrench that tosses into the plans of CardioNet’s shareholders — many of whom, if I understand the deal correctly, invested in the company’s last round in exchange for shares to be issued the eve of the IPO.

In any event, I’m far more interested just to see how the company fares, given the generally awful climate for life-science IPOs and the fact that a similar startup — Transoma Medical — ended up withdrawing its IPO almost a month ago.

UPDATE: CardioNet changed up again. The IPO priced at the low end of its range, potentially raising the company as much as $63.2 million. But the selling shareholders sold a full 1.5 million shares, not the 400,000 planned. The company’s new ticker symbol is BEAT.

TODAY’S HEADLINES:

• RNAi developer PhaseRx gets $4M of a pledged $19M (Seattle Times)
• TyRx Pharma, drug-device combo maker, raises $25M (release)
• Agennix aims at $40M for cancer drugs (VentureWire)
• Starr Life Sciences goes after $1.6M for small-animal vital-signs scanner (VW)
• CardioNet sets IPO terms, aims to raise $96M (IPOhome)

RNAi developer PhaseRx gets $4M of a pledged $19M – Investor interest in RNA interference, an ancient cellular mechanism for silencing dangerous genes, continues apace. PhaseRx, a Seattle biotech, has raised $4 million of a pledged $19 million first funding round, the Seattle Times reports.

Investors included ARCH Venture Partners, 5AM Ventures and Versant Ventures. PhaseRx will draw down the rest of the cash as it achieves various milestones.

The company seems to have neither a Web site nor a press release, and the newspaper story isn’t particularly illuminating on the subject of what PhaseRx intends to do. This Seattle Post-Intelligencer article has more details, however; apparently PhaseRx plans to use some form of synthetic polymer to help RNAi molecules cross into cells. (It’s unclear whether the polymer would also help stabilize RNAi molecules, which are fragile and prone to disintegrate before reaching their targets.)

TyRx Pharma, drug-device combo maker, raises $25M – Monmouth Junction, N.J., medical device maker TyRx Pharma raised $25 million in a new financing round. Investors included Clarus Ventures and Pappas Ventures.

TyRx focuses on implantable polymer-mesh bags meshes that have been coated with drugs of some kind. Its first product, the succinctly named AIGISrx CRMD Anti-Bacterial Envelope contains two antibiotics and is intended as an enclosure for implantable defibrillators designed to prevent infection. (UPDATE: The AEGISrx is actually the company’s most recent product. It also sells the Pivit, a similar polymer-mesh pouch for hernia surgeries. Also, the current financing round is the company’s fifth, according to VentureWire.)

Agennix aims at $40M for cancer drugs – Houston’s Agennix, a biotech developing drugs for cancer and other conditions, hopes to raise $40 million in a late-stage round to fund clinical trials, VentureWire reports. The company hopes to close the round by mid-year. Agennix is developing a bioengineered version of a human protein called talactoferrin that plays an important role in regulating the immune system. Agennix plans to use the funding to fund two late-stage, phase III trials of the drug in lung cancer.

CardioNet sets IPO terms, aims to raise $96M – San Diego’s CardioNet, a maker of wireless cardiac-monitoring devices that hopes to buck the recent trend of IPO collapses, set terms of its proposed IPO and now hopes to raise as much as $95.8 million.

The overall IPO, however, would be much larger — as large as $182.2 million, in fact — because existing CardioNet investors plan to sell more shares than the company itself. While there’s certainly precedent for this sort of thing — Masimo, another Southern California diagnostic-equipment maker, raised nearly a quarter of a million dollars in its IPO last August, the vast majority of which went to selling shareholders, conditions now are far worse than they were six months ago.

CardioNet plans to price its shares between $22 and $24 apiece. Its IPO, it turns out, is part of a complex financial arrangement whereby its last round of funding — $110 million raised last spring — didn’t put a valuation on the company. Instead, those investors received a promise of common stock in the form of shares that convert on the eve of the IPO. The down side here is that if the IPO doesn’t go well, those investors may be hosed. See here for more details.

Now that the Bioheart IPO has doubly surprised everyone — first by happening at all, and second by coming out on such dreadful terms for the company — perhaps it’s time to take a closer look at exactly where the 2008 offering market for life-science companies stands. In fact, I’ll aim to make this a regular feature, because the IPO market is still a useful leading indicator for venture funding.

Data for the following analysis comes courtesy of Renaissance Capital’s site IPOHome, which is a pretty standout resource for this kind of thing. Twenty-three life-science startups are currently queued up for takeoff, although only two have even established a price range. Of the three that have made it through the IPO gate this year, only one — healthcare provider IPC — has seen its shares rise, while investors have greeted both MAKO Surgical and Bioheart with something less than enthusiasm.

Three startups have postponed their offerings indefinitely, while another five have withdrawn them outright. It’s looking pretty likely that we’ll see these numbers swell further before long.

Here are the numbers:

Pending IPOs

Priced IPOs

Postponed IPOs

Withdrawn IPOs

The embattled cell-therapy startup Bioheart finally limped across the IPO goal line yesterday, but it was a Pyhrric victory. The startup, which once sought $70 million, ended up netting as little as $1.5 million. And almost half of that amount came directly from Bioheart founder Henry Leonhardt instead of outside investors.

Bioheart, of course, has had no shortage of problems, which we’ve chronicled over at VentureBeat Life Sciences. For the latest installment, see here.

The New York Giants they ain’t, but the team at embattled cell-therapy startup Bioheart still managed to defy long odds and successfully dragged their company into the IPO endzone earlier today. No doubt football great Dan Marino — one of the Sunrise, Fla., biotech’s backers — fired everyone up with a suitable locker-room pep talk.

Not for Bioheart was the easy dodge of yanking its IPO due to “unfavorable market conditions” — although conditions are, in fact, pretty awful. The company’s long slog to the public markets, however, came at quite a cost. Just last September, Bioheart hoped to raise $70 million in its offering. Now, it stands to net as little as $1.5 million on the sale of 1.1 million shares once it accounts for underwriting, commissions and unspecified “offering costs” of $4.3 million. The offering values Bioheart at a bit over $75 million, which is pretty low for a public biotech, and a mere fraction of the $270 million market capitalization it once sought.

(For what it’s worth, the company says it will actually generate $4.6 million in cash from the IPO, since it’s already paid $3.1 million of those offering costs. On the other hand, the company’s founder and executive chairman, Henry Leonhardt, also apparently found it necessary to purchase just over 10 percent of the offering himself for roughly $600,000, which amounts to 40 percent of Bioheart’s net proceeds. You sure don’t see founders plunking additional cash into their companies at the time of the IPO very often.)

Any way you look at it, those proceeds represent a fairly miserable return on the year of effort Bioheart put into this offering. Since Feb. 13 of last year, the company has slashed its expected offering price twice, fired three of its underwriters (on two separate occasions), and cut the number of shares offered by almost 75 percent. This is one company that was determined to go public, no matter what it took.

I’ve given the company a fair share of grief over that time. Its leading product, a cardiac cell therapy called MyoCell, has shown decidedly mixed results in clinical trials, as I detailed back in July. Add to that its shaky cash position (just over $9 million in cash and cash equivalents as of last Sept. 30), the fact that it owes a $3 million on a technology license covering MyoCell and the looming expiration of a key MyoCell patent next year, and you still have what looks like a disaster waiting to happen. (I took a second whack at the company in October when its offering seemed to be on the brink of collapse.)

Still, I have to give the company credit for determination, if nothing else. Unfortunately, true grit only gets you so far — Bioheart’s shares traded down 25 cents today, closing at $5.

I should also note the interesting fact that two Bioheart officials — the aforementioned Henry Leonhardt and board member Peggy Farley — have apparently availed themselves of the opportunity to tout Bioheart and criticize our coverage in comments here at VentureBeat Life Sciences, despite the “quiet period” restrictions that companies normally labor under during the offering period. (Leonhardt’s comment appears here; Farley’s is here.)

I say “apparently” because I don’t have independent confirmation that these commenters are who they appear to be, although their statements do strike more or less exactly the tone of boosterism, belligerence and desperation I would have expected from folks in their position. The presumed Leonhardt comment — which came in response to an item on another Florida life-science startup slashing its offering price — includes this gem (emphasis added):

Raising $63.8 million is a great accomplishment! MAKO is another South Florida Biosciences success story! Home of Cordis, World Medical, Bolton and Bioheart, Inc. other great life science companies.

I guess $64 million does look pretty good when your own company wouldn’t have netted even $1 million without your own purchase of IPO shares. Leonhardt, by the way, now owns just over 32 percent of the company, a holding worth about $24 million at Bioheart’s current valuation. Ms. Farley, meanwhile, exercises control over a 3.4 percent stake in the post-IPO company, now worth about $2.5 million.

Separately, while I’ve previously described MyoCell as an “adult” stem-cell therapy, there’s apparently some disagreement in the scientific community as to whether the muscle-precursor cells used in MyoCell actually qualify as “stem cells.” To avoid confusion, I’ve used the term “cell therapy” here instead.

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.

TODAY’S HEADLINES:

• Arbor Surgical draws another $5.5M for heart-valve replacements (VBLS exclusive)
• AstraZeneca spinout Albireo raises $27M for GI drugs (release)
• Knee-implant maker MAKO Surgical slashes IPO price range (release)
• eScreen takes in $8M for automated drug screening (peHUB)
• GlucoLight gets undisclosed funding for glucose monitoring (release)
• Oddo et al. order $4M for odor-sniffer Odotech (release)
• Baird Capital Partners acquires med-device manufacturer Ellman Int’l (peHUB)
• Cancer biotech BiPar names Hoyoung Huh as CEO (release)

AstraZeneca spinout Albireo raises $27M for GI drugs – AstraZeneca spun out a new biotech startup, Albireo (no Web site), with the help of venture backers who provided $27 million in a first funding round. Investors included Nomura Phase4 Ventures, TVM Capital and Scottish Widows Investment Partnership.

Albireo, which will be based in Gothenburg, Sweden, will focus on unspecified gastrointestinal diseases. The company will take over one experimental drug that is already in clinical testing, plus a number of other candidates at earlier stages of development. Albireo anticipates expanding its first round of funding to as much as $40 million.

Knee-implant maker MAKO Surgical slashes IPO price range – Ft. Lauderdale, Fla.-based MAKO Surgical, a developer of knee implants and associated robotic-surgery systems, slashed its expected IPO pricing by 30 percent. The company now expects its shares to price between $10 and $11 apiece, down from an earlier range of $14 to $16.

MAKO now stands to raise no more than $63.8 million, down from as much as $93.8 million under its previous expectation. Following the offering — if it takes place — the company could have a market capitalization of as much as $202.4 million.

The retrenchment is the latest sign of trouble brewing in the life-sciences IPO market, which wasn’t actually all that healthy to begin with. Should MAKO fail to price its offering, it would become the eighth life-science startup to yank its IPO this year — assuming no other company gets there first, that is.

Fresh from the Department of Whistling Past the Graveyard in today’s VentureWire:

Back in the real world, seven life-science IPOs have gone down in flames so far this year. An eighth startup, robotic-surgery maker MAKO Surgical, just slashed its offering price.

Last year was a tough one for IPOs, as Matt noted earlier, and so far this year looks even worse. Aptamer-drug maker Archemix today became the third life-science startup this month to withdraw or postpone an IPO, and the sixth so far this year. We take a closer look at the worsening IPO climate and the contrast with still-bullish venture funding in the sector, over at VentureBeat Life Sciences.

It’s sure starting to look that way. News that Archemix, a Cambridge, Mass., developer of aptamer-based drugs, yesterday withdrew its $72.5 million IPO follows closely on the heels of several other recent several other IPO collapses, including those of implantable diagnostic maker Transoma Medical and biotechs Biolex Therapeutics and BG Medicine. (Our coverage is here, here and here.) Transoma, in fact, had set its offering terms just a few weeks earlier. Most everyone, of course, is citing ubiquitious unfavorable “market conditions” as a reason for the withdrawals.

None of this exactly comes as a surprise, given that the subprime-mortgage crisis and related fallout has blown off 20 percent of the Nasdaq’s value since its recent October high. Yet hope continues to spring eternal. Last week, MAKO Surgical just filed to raise as much as $94 million for its robotic knee-implant system. The previous week, hepatitis drug-developer Phenomix filed for an $86.3 million IPO, and in early January Bayhill Therapeutics began looking for $86.3 million.

The pace of IPO withdrawals, however, seems to be accelerating. By my count, only one life-science startup — arterial-stent maker Devax — yanked its IPO in December. (Precision Therapeutics also dropped its IPO that month, but went public via a reverse merger.) In January three more — Bioheart (our coverage), Elixir Pharmaceuticals (our coverage) and BG Medicine — followed. Now, in just the first week of February, another three offerings have gone down the tubes. At this rate, it should be a rout by next week.

Completed life-science offerings have also grown far rarer, even accounting for the generally anemic biotech-IPO market over most of 2007. In the last 60 days, only MedAssets, a healthcare-IT concern, and IPC, an inpatient-care provider, have made it through the IPC gate, and both have done quite well — IPC is up 38 percent since its Jan. 24 offering, while MedAssets has risen 24 percent since Dec. 12. Prior to that, you have to look back to three companies that priced at a discount in November — EnteroMedics (Nov. 14, now up three percent), ARYx Therapeutics (Nov. 7, now down 25 percent) and BioForm Medical (also Nov. 7, now down 29 percent).

As Matt noted last month, most life-science IPOs that have made it out of the gate over the past year or so haven’t performed very well. That stands in sharp contrast to buoyant venture-capital financings in the sector, which are apparently being sustained by the belief that big pharma and medical-device makers will continue to pony up major sums for startups with promising technology. It’s too soon to say whether that trend, too, has started to level off — my suspicion is that it may well have, although the desperation of Big Pharma, in particular, remains high — but there certainly haven’t been too many big deals in recent months.

UPDATE: Light Sciences Oncology just became the seventh IPO casualty this year.

TODAY’S HEADLINES:

• PEAK Surgical takes in $21M for electrosurgical tools (release)
• CellGate acquired by Australian cancer biotech ProGen for $2.5M (release)
• Traversa raises $2M for RNAi-delivery technologies (release)
• RemitDATA, Web-based healthcare-service co., takes in $5.5M (bizjournals.com)
• Spinal-implant maker Archus Orthopedics gets $10M venture loan (release)
• Promedior pulls down another $5.5M for fibrotic disease (release)
• Acrongenomics takes 11 percent stake in Molecular Vision (release)
• Hepatitis drug-developer Biolex withdraws IPO (IPO Home)
• Employee drug screener eScreen gets Carlyle investment (release)
• NovaMin raises $2.5M for dental-care products (VentureWire)
• Cardious receives $1.5M for heart-valve repair (VW)
• PE-backed Spire Healthcare buys PE-backed Classic Hospitals for £145M (FT)
• Aberdare Ventures promotes two principals to partner (release)

CellGate acquired by Australian cancer biotech ProGen for $2.5M –CellGate, a Redwood City, Calif., biotech working on new cancer drugs, sold itself to ProGen, an Australian biotech also focused on cancer, for the equivalent of about $2.5 million. The release is here. Needless to say, this represents a fire sale for a biotech that seems to have run out of time.

CellGate was pursuing drugs that aimed to shut down the growth of cancer cells either by inhibiting polyamine or by “turning down” the activity of cancer-related genes. ProGen will conduct an 18-month assessment of CellGate’s first drug candidate, a polyamine inhibitor that had already completed an early stage, phase I clinical trial, before deciding upon a mid-stage, phase II program. ProGen will also evaluate a stable of CellGate’s preclinical drug candidates.

ProGen will issue shares worth $1.5 million for CellGate’s assets, and will assume net liabilities of roughly another $1 million. The sale represents a significant loss for CellGate’s investors, including Healthcare ventures and New Enterprise Associates, who as recently as 2002 put $10 million into the company in a fourth funding round. I haven’t been able to piece together how much CellGate raised over its lifetime, although it’s certainly considerably more than that $10 million.

Traversa raises $2M for RNAi-delivery technologies – Traversa Therapeutics, a La Jolla, Calif., biotech working on ways to deliver RNA-based drugs to their cellular targets, raised $2 million in a first financing round. Investors included San Diego Tech Coast Angels, Mesa Verde Venture Partners and Morningside Group.

Traversa’s work is intimately involved with RNA interference, a newly discovered technique for “silencing” disease-related genes using short strands of RNA that trigger a natural cellular mechanism for shutting down genes. Getting those short RNA molecules into cells in the first place, however, isn’t particularly easy.

Traversa claims to have solved that problem, although it doesn’t appear to be saying how. The company will license its RNA-delivery approach to drug companies, and also offers it for use as a drug-screening technology.

RemitDATA, Web-based healthcare-service co., takes in $5M – Memphis, Tenn.-based RemitDATA, a provider of Web-based healthcare-data services, raised $5 million in a new funding round.Noro-Moseley Partners and SSM Partners provided the funding.

RemitDATA offers Web-based tools for individual physician practices designed to help them track insurance and Medicare reimbursements and scan paper records into digital form. The company also makes a sales-management tool for the homecare industry.

Promedior pulls down another $5.5M for fibrotic disease – Promedior, a Malvern, Pa., biotech focused on fibrotic disease, raised an additional $5.5 million as an extension to its first funding round. Polaris Venture Partners, Morgenthaler Ventures, HealthCare Ventures and Easton Capital participated in the financing.

Fibrotic disease is a general name for conditions that entail repeated bouts of inflammation followed by scarring that, over time, can lead to organ failure. Examples include heart failure, cirrhosis and kidney failure. Promedior aims to develop drugs that can slow or reverse the scarring process, and intends to begin clinical trials of its first drug candidate this year. The company previously raised $7 million in its first funding round.

Acrongenomics takes 11 percent stake in Molecular Vision – Acrongenomics, a Swiss company that acquires and develops life-sciences technology, took a 10.5 percent stake in Molecular Vision, a developer of credit-card sized diagnostic devices. Acrongenomics had previously announced its intent to acquire Molecular Vision, so presumably this is the first step in that plan. The release is here.

Hepatitis drug-developer Biolex withdraws IPO – Biolex Therapeutics, a Pittsboro, N.C., biotech developing ways to manufacture protein drugs in an aquatic-plant system, withdrew its planned $70 million IPO. We previously covered Biolex and its IPO dreams here.

NovaMin raises $2.5M for dental-care products – NovaMin, an Alachua, Fla., company working on tooth-remineralization products, raised $2.5 million in a third round of funding and expects another $2.5 million, VentureWire reports. Intersouth Partners provided the financing.

Cardious aims at $1.5M for heart-valve repair – Cardious, a Northfield, Minn., medical-device company working on a heart-valve bypass device, is raising $1.5 million in a first funding round, VentureWire reports. The company aims to raise the funds from angel investors. Cardious is developing an aortic-valve replacement that can be put in place on a beating heart, rerouting blood flow around the damaged valve.

TODAY’S HEADLINES:

• Taligen Therapeutics raises $65M for novel anti-inflammatory drugs (release)
• Dental-implant maker Biohorizons acquires Implant Logic (release)
• MAKO Surgical sets IPO terms, seeks $94M for knee implants and robots (Edgar)
• Canada’s Medical Ventures acquires two Israeli device startups (release)
• CRO Chiltern acquires Drug Development Solutions (release)

Taligen Therapeutics raises $65M for novel anti-inflammatory drugs –Aurora, Colo.-based Taligen Therapeutics, a biotech working on targeted anti-inflammatory drugs, raised $65 million in a second round of funding. The deal is one of the largest I can recall for an early stage company that’s not in the business of licensing in drugs from other companies for immediate clinical development.

Taligen’s focus is on the “complement system,” an arm of the innate immune system that reacts to threats by triggering a biochemical cascade that attracts immune cells and causes the release of inflammatory molecules such as cytokines. This sort of inflammation tends to rage out of control in autoimmune conditions such as rheumatoid arthritis or type 1 diabetes, eventually leading to serious tissue damage.

Existing targeted drugs for autoimmune disease typically take aim at only a few of the proteins involved in inflammation, leaving other “pathways” untouched. Taligen hopes to defuse the complement system at a more basic level, in particular by targeting “inhibiting factor B,” a protein that plays a key role in amplifying inflammatory response. As a result, the company hopes to merely tamp down activation of the complement system, not to block it altogether, which would likely leave individuals more vulnerable to infection.

Taligen’s drug candidates, which the company says will aim to treat both systemic and local inflammation, are still in preclinical development. That’s part of what makes the enormous size of the funding round such a surprise, since big bucks like these generally aren’t necessary until a biotech begins the expensive process of conducting human tests. In fact, though, the $65 million will be “tranched” and drawn down by the company only as necessary, so Taligen won’t have a huge pile of cash on its balance sheet until it’s ready to spend it.

Investors in the round included Alta Partners, Clarus Ventures, Sanderling Ventures, Tango and High Country Venture.

MAKO Surgical sets IPO terms, seeks $94M for knee implants and robots – MAKO Surgical, a Ft. Lauderdale, Fla., maker of knee implants and surgical robots, set its IPO terms and now hopes to raise as much as $93.8 million in its IPO. The company hopes to offer its shares at a price between $14 and $16 apiece.

MAKO markets a minimally invasive knee-repair system consisting of implants and a robotic-arm surgical devices. The aim is to minimize trauma to the knee in arthritic patients who might otherwise be candidates for full knee replacement. The MAKO system instead allows surgeons to “resurface” worn and damaged bones and then install small implants to restore their function. The company first received FDA approval for an early version of its system in 2005, and just this month was cleared to market its second major upgrade.

The company is still hemorrhaging cash — it reported a $15.9 million net loss on revenues of $355,382 in the first nine months of 2007. Most of its revenue to date has come from sales of implants and other disposable devices. MAKO says it has received some revenue from sales of the full robotic-surgery system, but that it can’t recognize it until it delivers version 2.0 of its system. The most recent release is version 1.2.

TODAY’S HEADLINES:

• Health-info site HealthCentral Network pulls in $50M (paidContent)
• BrightHeart Vet corrals $29M to acquire animal hospitals (release)
• AviaraDx raises $8M for cancer diagnostics (peHUB)
• Valor Medical aims for $15M for brain-aneurysm treatment (VentureWire)
• IPC, inpatient-care provider, raises as much as $56M in IPO (IPO Home)
• Phenomix, diabetes and hepatitis drug maker, files for $86M IPO (Edgar)
• TVM Capital promotes Keiarasch “Kia” Parssanedjad to principal in life sciences (release)

BrightHeart Vet corrals $29M to acquire animal hospitals — BrightHeart Veterinary Centers, an Armonk, N.Y., operator of veterinary hospitals, raised $28.5 million in a funding round intended to further the chain’s expansion. Investors included LLR Partners and Caltius Mezzanine.

BrightHeart currently runs facilities in New York, Connecticut, Illinois and Alberta, Canada, two of which it acquired just last week. The company intends to continue growing via acquisition.

AviaraDx raises $8M for cancer diagnostics — AviaraDx, a Carlsbad, Calif., developer of molecular cancer diagnostics, raised $8 million in a first funding round, peHUB reports, citing a regulatory filing. AviaraDx was spun out of the former Arcturus Bioscience, whose other assets were mostly acquired by Molecular Devices in 2006.

AviaraDx sells tests that identify tumors by their molecular “fingerprints” and predice which breast-cancer tumors are most likely to recur following surgery. The company isn’t providing much detail on its future development plans.

Valor Medical aims for $15M for brain-aneurysm treatment — Valor Medical, a San Diego device maker developing a new polymer-based treatment for brain aneurysms, is seeking $15 million in a second funding round, VentureWire reports. The company’s Neucrylate is a substance designed for use as a “filler” in aneurysms, which are dangerous arterial swellings that can rupture unexpectedly. Valor intends to begin clinical testing this year.

Phenomix, diabetes and hepatitis drug maker, files for $86M IPO — San Diego-based Phenomix, a biotech developing new drugs for diabetes and hepatitis, filed to raise $86.3 million in an initial offering. The company aims to be a “fast follower” that develops new drugs that address biological mechanisms that have been “validated” by successful drugs elsewhere.

TODAY’S HEADLINES:

• Mauna Kea Tech raises $30M for in-vivo cellular imaging (release)
• Knopp Neuro takes in $10M for Lou Gehrig’s drug (release)
• Cardiovascular Systems, arterial-plaque device maker, files for $86M IPO (Edgar)
• Diagnostics maker BG Medicine withdraws IPO (release)
• Signature Genomics Labs sells stake to Ampersand Ventures (release)
• Cambridge Temp raises £375K for new ovulation detector (release)

Mauna Kea Tech raises $30M for in-vivo cellular imaging — Mauna Kea Technologies, a Paris, France, developer of cellular-imaging technology, raised $30 million in a new financing round. Investors included the U.S.-based Psilos Group, France-based Seventure and Creadev.

Mauna Kea makes and sells instruments that image living tissue at the microscopic level, making possible minimally invasive examination of the gastrointestinal tract and lungs in a way that may make some tissue biopsies unnecessary. The funding will allow the company to expand its commercial operations and pursue clinical trials aimed at establishing its technology’s usefulness in diagnosing problems in the esophagus, colon, stomach and bile duct.

Knopp Neuro takes in $10M for Lou Gehrig’s drug — Pittsburgh-based Knopp Neurosciences, a company developing a drug for Lou Gehrig’s disease, raised $10 million in a second funding round. Investors included Saturn Partners II, Kramer Capital Partners and LaunchCyte.

The latest financing involved the exercise of milestone-based callable warrants held by existing investors. Knopp anticipates calling another $10 million in the second round once it begins mid-stage human tests of its lead drug candidate, KNS-760704.

Knopp is developing that drug as a potential treatment for amyotrophic lateral sclerosis, or Lou Gehrig’s disease, an irreversible and eventually fatal neurodegenerative disease. KNS-760704, however isn’t exactly a new drug — it’s an “enantiomer,” or mirror-image copy, of an existing neurological drug sold as Mirapex, a treatment for so-called restless-legs syndrome. Knopp claims that its version of that drug may help protect nerve cells from the relentless destruction they face in ALS, but without side effects that it says limit the use of Mirapex in this way. The drug has completed early “phase I” human tests in healthy volunteers and plans to launch a mid-stage safety study in ALS patients this year.

Cardiovascular Systems, arterial-plaque device maker, files for $86M IPO — St. Paul, Minn.-based Cardiovascular Systems, a developer of medical devices for the treatment of arterial plaque, filed to raise $86.3 million in an initial offering. The company makes and sells a sort of minimally invasive “rotary sander” with a diamond-head bit that grinds away artery-blocking deposits, or plaques, from peripheral blood vessels in the limbs.

Depending on who you believe, Cardiovascular has raised either $11 million (according to peHUB) or $12.5 million (according to VentureWire) over the past several months. The company’s artery-clearing device received FDA approval last September, but as of Sept. 30, 2007, it hadn’t generated significant sales, unsurprisingly. The startup has an accumulated deficit of $72 million since its formation in 1989. See our previous coverage of the company here (third item).

Diagnostics maker BG Medicine withdraws IPO — Waltham, Mass.-based BG Medicine, a developer of molecular diagnostics, withdrew its attempted IPO filing, citing market conditions. The company had previously dropped its expected share-price range by close to 40 percent (see our coverage here), but apparently failed to draw enough interest even at the lower price. That wasn’t the only setback BG Medicine faced — it had previously made plans to list its shares on Amsterdam’s EuroNext exchange, but apparently never followed through.

As a result, the startup is apparently in dire need of fresh investment. According to a December amendment to its IPO filing, BG Medicine had only $622,000 in cash and equivalents, plus another $5.3 million in “restricted” cash and short-term investments, on hand as of Sept. 30.

TODAY’S HEADLINES:

• Ulthera receives $23M for cosmetic ultrasound devices (release)
• Senexis raises £2.9M for Alzheimer’s drugs (PDF release)
• Elixir Pharma postpones IPO (IPO Home)
• Cancer Therapeutics names Randall Riggs as CEO (release)

Ulthera receives $23M for cosmetic ultrasound devices — Ulthera, a Mesa, Ariz., startup developing ultrasound systems for cosmetic procedures, raised $22.5 million in a second funding round. Investors included New Enterprise Associates and 3i.

Ulthera, whose Web site is still a stub, aims to use its ultrasound devices for face lifts and “skin rejuvenation.” The company says the ultrasound can penetrate and remove — “microabrades,” in its terminology — skin tissue that is several layers deep without disturbing the surface, or epidemis. Deeper treatment supposedly triggers a “natural healing effect,” which Ulthera’s CEO claims will lead to a “gradual lifting and tightening of skin tissue in and around the face.”

The product can produce ultrasound images of the area to be treated as well. Ulthera has regulatory clearance to sell its device in Europe and expects FDA approval soon as well. The company will use the funds it raised for global commercialization, product development and to conduct additional trials to expand the use of its technology.

Senexis raises £2.9M for Alzheimer’s drugs — Senexis, a Cambridge, U.K., biotech working on drugs for Alzheimer’s disease and other conditions related to aging, received £2.9 million ($5.7 million) from the Wellcome Trust. The funding came from the Wellcome’s “Seeding Drug Discovery” program, and and augments £700,000 Senexis raised last year from BTG, a London specialty pharma. BTG and the Wellcome had previously invested £2.4 million in Senexis.

The company is developing small-molecule drugs intended to prevent the misfolding of amyloid proteins, which clump together in plaques around nerve fibers. Many scientists believe that these amyloid plaques cause inflammation that ultimately kills nerve and brain cells in Alzheimer’s patients, although dissenters still argue that plaques may be a distraction or even a defensive reaction to the disease. At this point, no one can say for certain exactly what causes the disease.

Still, most Alzheimer’s drugs now under development target the clumping amyloid proteins, and Senexis is no exception. One of its two lead candidates is a small molecule designed to inhibit the misfolding and aggregation of amyloid proteins in Alzheimer’s patients. The other is intended to tamp down brain inflammation. Both are still in animal testing. Senexis also hopes to treat diabetes by inhibiting aggregation of an amyloid protein that the company appears not to have identified.

Elixir Pharma postpones IPO — Elixir Pharmaceuticals, a Cambridge, Mass., biotech focused on anti-aging and obesity drugs, postponed its IPO. The company had most recently planned to raise as much as $92 million in its offering.

It’s not entirely clear why Elixir, which I figured would follow in the footsteps of Sirtris Pharmaceuticals‘ successful IPO (our coverage here), chose to delay the offering — which is almost always code for pulling it entirely. One possible reason might be that Elixir co-founder Leonard Guarente, a MIT professor sometimes tipped as a future Nobel laureate, decamped from Elixir for Sirtris in November.

You can see our previous coverage of Elixir here and here.