VentureBeat

TODAY’S HEADLINES:

• Precision Thera merger with “blank check” Oracle Healthcare collapses (release)
• Sleep Solutions takes in $21M for sleep-apnea diagnostics (release)
• Trevena takes in $24M for drugs targeting G-proteins (release)
• “Specialty biotech” PanGenetics gets €23M for antibody drugs (release)
• Cancer-drug maker Unibioscreen pulls in €5M (release)
• Danish contract manufacturer CMC Biologics raises new funding (PDF release)
• Healthcare investor EDF Ventures postpones fourth fund (VentureWire)
• Global TB-drug alliance names former Sanofi-Aventis exec Jerome Premmeurer as CEO (release)
• Liquidia Tech names Neal Fowler as CEO (release)

(NOTE: Sorry for the minimal posting yesterday — I was at the Health 2.0 conference with extremely limited Internet connectivity. Normal posting resumes today.)

Precision Thera merger with “blank check” Oracle Healthcare collapses – This item is now a standalone post here.

Sleep Solutions takes in $21M for sleep-apnea diagnostics – Sleep Solutions, a Pasadena, Md., developer of diagnostic devices for sleep apnea, raised $20.5 million in a new funding round. Investors included TPG Biotechnology, MedVenture Associates, Emergent Ventures and Lava Ventures.

Sleep Solutions has developed a home-use diagnostic device for identifying sleep apnea, which are breathing difficulties during sleep. Diagnosing apnea has traditionally required patients to spend the night in a sleep laboratory. Left untreated, apnea can increase the risk of more serious problems, including stroke and heart attack.

Trevena takes in $24M for drugs targeting G-proteins – Trevena (no Web site), a Berwyn, Penn., biotech focused on a new area of drug discovery, raised $24 million in a first funding round. Investors included Alta Partners, Healthcare Ventures, New Enterprise Associates and Polaris Venture Partners.

Like many biotechs, Trevena plans to develop drugs that attack a particular biological mechanism rather than any particular disease. In this case, the company is targeting a class of proteins known as G-protein coupled receptors, or GPCR, which according to the company are affected by close to 40 percent of all drugs on the market today. The company didn’t describe its plans in any detail.

Healthcare investor EDF Ventures postpones fourth fund – EDF Ventures, an Ann Arbor, Mich., VC firm specializing in early-stage healthcare, has delayed a planned fourth fund, VentureWire reports. The postponement is related to the departure last year of managing director Beau Lasky, who left for Steamboat Ventures.

The firm intends to begin talking to potential investors again in several months. EDF didn’t say how much it hopes to raise in the new fund; its third fund closed in 2005 with $55 million in commitments.

TODAY’S HEADLINES:

• Adnavance pulls in C$3.7M for molecular diagnostics, names new CEO (release)
• “Personalized medicine” co. Proprius sells to Cypress Bio for up to $75M (release)
• Vaccinex raises $25M in wake of GSK deal for antibody drugs (VentureWire)
• Cianna Medical receives $9M for breast-cancer radiation treatment (release)
• Electron-microscope image provider NanoImaging takes in $1.5M (release)
• CrystalGenomics, ProQuest Investments create JV co. Palkion (release)
• Portico Systems, software maker for insurance plans, raises $7.7M (release)
• Stealthy biotech Affomic takes in $7M (peHUB)

Adnavance pulls in C$3.7M for molecular diagnostics, names new CEO – This item is now a standalone post here.

“Personalized medicine” co. Proprius sells to Cypress Bio for up to $75M – Proprius Pharmaceuticals, a San Diego diagnostics maker, sold itself to publicly traded Cypress Bioscience for up to $75 million in cash. The company’s release is here.

Cypress will pay $37.5 million up front, and another $37.5 million to Proprius shareholders as milestone payments. Proprius licenses and develops drugs and diagnostics for various forms or arthritis. Its most immediate product candidates include tests that aim to predict whether certain individuals will develop rheumatoid arthritis and that monitor patients’ response to methotrexate, a common treatment for RA.

Vaccinex raises $25M in wake of GSK deal for antibody drugs – Rochester, N.Y.-based Vaccinex, a developer of antibody drugs, raised $25 million in an add-on to its second funding round, VentureWire reports. Investors included Teva Pharmaceutical Industries, Pan Atlantic Bank and Trust and individual investors.

Earlier this month, Vaccinex and its partner EUSA Pharma licensed a Vaccinex antibody to GlaxoSmithKline for up to $44 million plus royalties. Vaccinex and EUSA will split any profits from GSK’s potential sales of the drug.

Cianna Medical receives $9M for breast-cancer radiation treatment – Cianna Medical, an Alisa Viejo, Calif., developer of devices for delivering local radiation in breast cancer, raised $9 million in a first funding round. Fog City Fund, Windamere Venture Partners and several private individuals provided the cash.

Cianna, which was spun out of BioLucent when it was acquired by Hologic last year, is working on new devices for brachytherapy, the general term for temporarily implanting radioactive material at the site of a tumor in order to provide localized radiation treatment. The Cianna device is designed to improve upon existing brachytherapy techniques in breast cancer.

Electron-microscope image provider NanoImaging takes in $1.5M – San Diego’s NanoImaging Services, a provider of imaging services involving transmission electron microscopy, raised $1.5 million in a funding round. Merck Capital Ventures led the round. The company specializes in the characterization of large biological molecules such as proteins, which are used in a variety of products such as vaccines and drugs.

CrystalGenomics, ProQuest Investments create new JV, Palkion – Today’s award for most baffling announcement comes courtesy of CrystalGenomics, an Emeryville, Calif.-based U.S. unit of the Korean drug-discovery company CG Pharmaceuticals, and ProQuest Investments, a New Jersey VC firm, who together have formed a joint venture they’re calling Palkion. Their release is here.

What is Palkion going to do? Beats me. Here’s what the release says:

Under this agreement, CrystalGenomics will receive up to $6 million in upfront and initial research funding from Palkion, in addition to development and sales milestone payments of potentially more than $200 million. CrystalGenomics will also initially own 50% of Palkion, Inc. ProQuest will capitalize Palkion with a Series A investment and also provide the management personnel for Palkion. CG will use its unique structure-based drug design capabilities to identify drug candidates while Palkion will oversee the clinical development of novel drug candidates.

So, let’s get this straight. CrystalGenomics and ProQuest form Palkion, in which they’ll hold equal stakes despite the fact that ProQuest seems to be putting all the capital and personnel into the venture. Palkion will then start handing the money to CrystalGenomics, which will continue trying to discover drugs while Palkion “oversees” the process of testing those drugs in people. All clear?

The best I can figure is that this is a roundabout way of putting a more “American” face on a basically Korean startup that — to judge from its Web site and, in fact, this press release — seems to have a certain amount of difficulty communicating clearly with a U.S. audience. That could certainly be a problem if its drugs make it into clinical trials, given how dialogue with the FDA becomes rather crucial at that stage. But that’s just my guess at this point.

Stealthy biotech Affomic takes in $7M – Affomic, a New Haven, Conn., biotech startup so stealthy that it can announce a funding without giving anyone a clue as to what it’s doing, raised $7 million in a first financing round, peHUB reports. Investors included Connecticut Innovations, Elm Street Ventures, and Four Seasons Ventures. It goes without saying that Affomic doesn’t have a Web site — in fact, the startup doesn’t even exist so far as Google is concerned.

HemCon Medical Technologies, a Portland, Ore., startup that makes and sells high-tech bandages, said it will acquire Alltracel Pharmaceuticals, a publicly traded but barely profitable Irish healthcare conglomerate that also has a wound-care focus. The release is here.

HemCon was only founded in 2001, but hit it big almost immediately with a new type of bandage, based on chitin found in shrimp shells, that binds to even the most severe wounds. As the Iraq War loomed, the company won FDA approval for its bandage in just 48 hours, and claims that it is now carried by every member of the U.S. Army in Afghanistan and Iraq. I wrote about them for the WSJ back at the time; a copy of that article is here.

The companies didn’t release financial details — Alltracel apparently didn’t even put out a release, which is odd for a public company — but Thomson Financial reports that HemCon will pay £20.8 million ($40.9 million) in cash for Alltracel. HemCon claims that the combined companies will post 2008 revenues in excess of $100 million.

That’s a pretty staggering estimate, since it looks like Alltracel barely cleared €20 million ($29.7 million) in revenue last year, and suggests that military sales and the ongoing war in Iraq have been very, very good to HemCon. The company says it’s expanding into consumer markets as well, and plans to launch an over-the-counter version of its bandage called KytoStat later this year.

HemCon last raised $12 million in March 2007; its investors included Camden Partners Holdings and Torch Hill Partners, two private-equity firms in the Washington, D.C.-Baltimore axis. The company didn’t say how it will finance the Alltracel acquisition, although HemCon is presumably taking on debt, as it named Bank of America the lead institution in the financing.

The Portland Business Journal has more here.

TODAY’S HEADLINES:

• HemCon Medical acquires Alltracel Pharma (release)
• Transoma Medical, implantable wireless device maker, withdraws its IPO (Edgar)
• Oracle Healthcare cuts Precision Thera acquisition price by roughly 15 percent (release)
• MedBillManager adopts change:healthcare name, aims for March 3 relaunch release

Another slow news day, as yesterday we covered most of the fundings other sites are writing about today. I’ll update if anything else crops up. In the meantime, feel free to check out yesterday’s briefing or any other items here.

HemCon Medical acquires Alltracel Pharma – This item is now a standalone post here.

Transoma Medical, implantable wireless device maker, withdraws its IPO – Transoma Medical, a St. Paul, Minn., maker of implantable wireless diagnostic sensors, formally withdrew its $77.6 million IPO. Transoma postponed its IPO earlier this month; unsurprisingly, the company cited “unfavorable market conditions” as the reason for its withdrawal.

Transoma is one of several startups working on ways to monitor the vital signs of sick or at-risk patients in ways that don’t require invasive procedures or constant visits to the doctor’s office. The company’s devices, which received FDA approval last October, involve an implantable recorder that monitors a patient’s heartbeat and a handheld wireless device that records the data and regularly transmits it to a physician’s office via a home-installed base station.

The company has raised just over $25 million in three funding rounds since its founding in 1984, when it was known as Data Sciences International. Although Transoma generates close to $40 million a year from sales of its older diagnostic products, it is still burning cash at a rate of roughly $4.3 million every quarter. As of Sept. 30, 2007, Transoma held $26.1 million in cash, equivalents, and working capital, so its cash situation isn’t yet dire; if those trends hold, it will be down to about $17 million by the end of March. Don’t be surprised if Transoma hits the fundraising hustings again before long.

MedBillManager adopts new name as parent company change:healthcare aims for March 3 relaunch – MedBillManager, a site that helps people sort through complex medical expenses, will adopt a new name and Web site as it relaunches on March 3. Its parent company, Nashville, Tenn.-based change:healthcare, is consolidating its various Health 2.0 properties under its own name; these will now be available at www.changehealthcare.com.

The company announced the changes in an email; for a Web version, see here. A screenshot of the new site suggests that change:healthcare will now be emphasizing social networking as part of services for medical-bill management, finding and rating doctors, and comparing prices across various healthcare providers.

Oracle Healthcare cuts Precision Thera acquisition price by roughly 15 percent – Back in December, the “blank check” acquisition company Oracle Healthcare Acquisition agreed to buy the Pittsburgh diagnostic biotech Precision Therapeutics in a transaction that was virtually impossible to value at the time. Only later did the companies indicate that the acquisition would cost Oracle around $150 million (based on the issuance of 19 million Oracle shares at a price of $7.90 apiece detailed in this prospectus).

Not any more, apparently. The two companies just agreed to reduce a key variable in the calculation that establishes how many shares Oracle will issue to Precision’s owners, cutting the deal’s value by approximately 15 percent to roughly $127.5 million. The details, however, remain a bit murky: The deal’s participants haven’t done anyone a favor by describing the ratio at which Precision shares will convert to Oracle shares in a dense, wordy paragraph. Complex calculations like this should be set out in an equation with clearly defined variables, dammit.

In addition, the proposed amendment to the merger deal will cause founders of Oracle to forfeit shares of the special-purpose acquisition company, or SPAC, currently worth $14.8 million. It will also eliminate a “top-up” provision that would have handed Precision shareholders extra Oracle stock if the SPAC’s share price declined.

What does all this add up to? It sure looks like everyone involved in the deal is getting a haircut of some kind, although why this is happening now isn’t remotely clear. I’m certainly tempted to think that Precision is turning out less of a bargain Oracle thought, but at this point, it’s impossible to know for sure.

For more about SPACs, see our coverage here.

UPDATE: The merger is dead.

TODAY’S HEADLINES:

• Sweden’s Elekta buys radiation-therapy software maker CMS for $75M (release)
• Infusion-services firm Critical Homecare withdraws $125M IPO for buyout (Edgar)

NOTE: It’s a slow news day thanks to the President’s Day holiday. I’ll update with whatever else comes over the transom later today.

Sweden’s Elekta buys radiation-therapy software maker CMS for $75M – CMS, a St. Louis, Mo., developer of software for planning and managing radiation-therapy treatments, sold itself to Sweden’s Elekta for roughly $75 million in cash. The release is here.

CMS is owned primarily by a private-equity fund managed by Brown Brothers Harriman. The company says its systems support more than 1,500 radiation-treatment sites worldwide. Elekta is makes and sells radiation-therapy and radiosurgery devices.

Infusion-services firm Critical Homecare withdraws $125M IPO – Critical Homecare Solutions, a Conshohocken, Pa., provider of home health care and infusion services, dropped its proposed $125 million IPO. The withdrawal isn’t related to the broader slump in health-related IPOs, which has claimed eight proposed offerings so far this year, as Critical Homecare agreed last week to go public via acquisition by a SPAC (special-purpose acquisition company) called MBF Healthcare Acquisition. MBF agreed to pay $420 million for Critical Homecare; the release is here.

For more on SPACs and their growing importance in the life-science sector, see our earlier story here. Critical Homecare is the third healthcare startup to go public via a SPAC acquisition since December.

The IPO market is getting ugly for many startups, but the sun is still shining for special-purpose acquisition companies, or SPACs — sort of shell companies with blank-checks to acquire other companies opportunistically.

SPACs are raising money hand-over-fist with public offerings, and since they have only 18 to 24 months to spend their stash, they’re eager to deal. Two SPACs, in fact, have recently cut deals with biotech startups, and chances are good they’ll be nosing around other venture sectors. Check out the SPAC phenomenon in this piece over at VentureBeat Life Sciences.

Life-science IPOs may be hitting the wall — so far this year, seven biotech and medical-device startups have yanked their offerings — but one part of the IPO market is booming. That’s the field of “special-purpose acquisition corporations,” or SPACs, which are essentially blank-check companies that raise money through initial offerings specifically for the purpose of acquiring other companies.

At Renaissance Capital’s IPOhome news page (partial screenshot here, as the flow of news will probably throw off the numbers), fully one-third of the IPO-related items involve SPACs filing, pricing or completing IPOs. Throwing things into an even starker light is the fact that most of the other items — 11 out of 27, to be exact — are all about IPO withdrawals or postponements.

SPACs can buy any target they can afford, but some have shown interest in private companies. In fact, a few have already been active in the life-sciences venture sector, and odds are good they won’t be the last. In December, a SPAC took out Precision Therapeutics, a maker of cancer diagnostics that looked shaky to me when it first filed for an IPO. Then just last week, a different SPAC bought up specialty pharma Dynogen Pharmaceuticals.

These sorts of transactions are often a pretty good deal for the startups involved, as they provide an easy route to the public market and, often enough, an infusion of capital on favorable terms. Conceptually, these deals are similar to reverse mergers, in which a listed shell company — often with few or no assets — “acquires” a startup for a minimal sum, then assumes the target’s name and carries on business without a hitch.

Another factor working in startups’ favor is the fact that most SPACs have only a limited time to make an acquisition. If it fails to close a deal within 18 to 24 months, a SPAC usually has to return its capital, minus expenses, to its investors and disband. That sort of deadline can definitely play to the advantage of entrepreneurs and VCs looking to get the best possible return on their investment. In fact, that’s exactly what the good folks at the In Vivo blog think probably happened in the Precision Thera case, which was a deal that didn’t seem to make a lot of sense on the surface.

There’s no easy way to tell how many SPACs may be prowling around the life sciences — although some are formed specifically to make acquisitions in particular sectors, many others are general-acquisition vehicles. I’m not aware of much SPAC activity in other venture sectors such as technology or cleantech, but I wouldn’t be surprised to find blank-check companies nosing around there for deals as well.

Coincidentally enough, Andrew Ross Sorkin has a good piece on SPACs in today’s NYT. He doesn’t touch on the venture-startup angle, but it’s a helpful primer on how these oddball vehicles work and the perverse incentives that favor doing a deal — even a bad one — over the alternative. In that sense, in fact, a burst of enthusiasm for SPACs looks like nothing so much as the last gasp of the stock-market bubble.

TODAY’S HEADLINES:

• H-P “great-grandchild” Alverix raises $7.7M for portable diagnostic devices (release)
• Moksha8 takes in $39M to commercialize drugs for Asia (peHUB)
• Dynogen Pharma goes public, gets $98M in reverse merger (release)
• EKR Thera raises funds, pays up to $170M to “reacquire” PDL BioPharma drug (release))
• R4 Vascular receives $4.4M for vascular-access devices (VentureWire)
• Medical tube and syringe maker Amsino Medical sells stake to Baring PE Asia (release)
• Implantable-diagnostic maker Transoma Medical postpones IPO (IPOhome)

H-P “great-grandchild” Alverix raises $7.7M for portable diagnostic devices – I’ve moved this item to a standalone post here.

EKR Thera raises funds, pays up to $170M to “reacquire” PDL BioPharma drug – This item is now a standalone post here.

Moksha8 takes in $39M to commercialize drugs for Asia – Moksha8, a stealthy San Francisco drug developer that commercializes “high-value” therapies for Asia and other markets, raised a combined $39 million in first and second funding rounds, peHUB reports, citing regulatory filings. TPG Biotech provided the $24 million first round, and was joined by Lit Tele of Brazil in a $15 million second round.

Actually, I call Moksha8 a San Francisco company because peHUB does, but I have my doubts. The company’s stub of a Web site lists offices in Hong Kong, SF, Philadelphia and London, and provides Hong Kong and Philadelphia-area phone numbers as its main points of contact. The company’s name, by the way, appears to be a reference to the Hindu term for liberation from the cycle of reincarnation. One more observation from the Web site: Moksha8’s “other markets” are likely in Central and South America, which is the only region besides Asia highlighted on a global-map background image there.

Dynogen Pharma goes public, gets $98M in reverse merger – Dynogen Pharmaceuticals, a Waltham, Mass., specialty pharma focused on gastrointestinal disease, went public in a reverse merger with Apex Bioventures Acquisition, a “specialty acquisition” corporation. Such entities are formed by investors specifically to acquire private companies, and frequently — as in this case — raise funds for later acquisitions via an IPO.

Dynogen shareholders will receive $98 million in Apex stock, and are eligible for two additional milestone-related payments of $23 million apiece. The combined company, which will be run by Dynogen’s CEO and operate out of Dynogen’s current offices, is expected to have up to $65 million in cash by the time the deal closes.

Implantable-diagnostic maker Transoma Medical postpones IPO – Transoma Medical, a St. Paul, Minn., maker of implantable medical-diagnostic devices, postponed its planned $77.6 million IPO, IPOhome reports. The company hasn’t yet formally withdrawn the offering, although that seems a foregone conclusion at this point.

Transoma makes implantable monitoring devices, such as a wireless gadget that monitors an individual’s heartbeat and transmits the information to a data center and then to a doctor’s office. Our previous coverage of Transoma is here and here; we’ve also written about startups working on similar devices, such as CardioMEMS and its implantable wireless sensors for measuring blood pressure, heart function and heart rate, here.

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:

• Arbor Surgical raises $20M for heart devices (release)
• Small Bone Innovations acquires ankle-replacement maker Link America (release)
• Active Implants adds $3M for hip and knee implants (VentureWire)
• Clarian Health Partners launches VC unit with $25M (release)
• Iroko Pharma acquires non-U.S. rights to Merck heart drug (release)
• Remmele Engineering acquires medical-device manufacturer EL-Tronic Precision (release)
• OpGen appoints former Affymetrix exec Noel Doheny as CEO (release)

Arbor Surgical raises $20M for heart devices – Arbor Surgical, an Irvine, Calif., medical-device maker, raised $20 million in a third funding round. Medtronic, the huge medical-device maker led the funding, which was linked to a licensing deal between the two companies. Existing Arbor investors also participated.

Arbor is developing technology for minimally invasive heart-valve replacement. The company began European trials of its device in 2005, and expects to start U.S. tests this year.

Active Implants adds $3M for hip and knee implants – Active Implants, a Memphis, Tenn., medical-device company, added $3 million in convertible notes and warrants in preparation for its first product launch, VentureWire reports. The company declined to identify its investors.

The company just released its first product, a hip-replacement implant, in Europe, and is readying clinical trials for an artificial knee-cartilage replacement. All told, the company raised slightly more than $10 million last year, and says it will be looking for an additional $20 million in a third round later this year.

Clarian Health Partners launches VC unit with $25M – Clarian Health Partners, an Indianapolis hospital chain, launched a venture-capital arm, Clarian Health Ventures, with an initial $25 million investment. The release is here.

Clarian aims to make early-stage investments that will benefit its parent company and to support economic development and innovation in Indiana. The fund expects to make initial investments in the range of $250,000 to $500,000, and as much as $3 million over the life of an investment. Clarian’s first investment was in the cancer-biomarker biotech CS-Keys, which we covered yesterday.

Small Bone Innovations acquires ankle-replacement maker Link America –Small Bone Innovations, a New York maker of orthopedic implants for the hand, elbow, foot and elbow, acquired Link America, a device company focused on ankle replacement. The release is here. The companies didn’t disclose financial terms of the deal.

TODAY’S HEADLINES:

• RNA-drug developer Quark aims for $30M after withdrawn IPO (VentureWire)
• Lilly takes stake in Gastrotech in irritable-bowel drug partnership (VentureWire)
• Health and wellness company Nurtur acquires Work/Life Innovations (release)
• Profectus Biosciences names Shawn Patrick O’Brien CEO (release)
• Lentigen appoints Tim Ravenscroft as CEO (release)

Lilly takes stake in Gastrotech in irritable-bowel drug partnership — Gastrotech Pharma, a Danish biotech focused on gastrointestinal disease, struck a partnership with Eli Lilly involving a drug candidate for irritable bowel syndrome in which Lilly agreed to take an equity stake in the startup, VentureWire reports. Neither company disclosed financial details of the partnership.

Gastrotech had previously licensed the compound, GTP-101, from Lilly and is running the experimental drug through clinical trials. The drug, an analogue of the natural metabolic hormone GLP-1, is under study as a treatment for both IBS and a painful GI condition called functional dyspepsia. Gastrotech now has exclusive rights to develop and market the drug as a treatment for both conditions.

Gastrotech is also looking to raise another round of funding by this summer. A bare-bones release from the two companies is here.

Health and wellness company Nurtur acquires Work/Life Innovations — Farmington, Conn.-based Nurtur, a self-described “health and wellness” company that develops long-term care programs for people with chronic disease, acquired Work/Life Innovations, another Connecticut firm that provides life-management, employee-assistance and concierge-services programs. Financial terms weren’t disclosed. The companies’ release is here.

TODAY’S HEADLINES:

• Teva acquires protein-therapeutic maker CoGenesys for $400M (release)
• ViewRay takes in $25M for MRI radiation-therapy guidance (release)
• NovaMed, Chinese clinical-research outfit, receives $14M (release)
• Progentix Ortho raises first funding round (release)
• Medical imaging co. Point Biomedical recaps with $25M (VentureWire)
• Lumidigm takes in $7M for optical-fingerprint ID systems (VW)
• Medical-software co. Compressus aims to close $14M round (VW)
• Channel Medical Partners aims for $150M med-tech fund (VW)
• Spinal-implant maker Scient’x names Michael Huggins as CEO (release)
• Specialty pharma Cardiokine names Manuel Worcel as CEO (release)
• Respiratory-disease co. Pulmatrix appoints Robert Connelly CEO (release)

Teva acquires protein-therapeutic maker CoGenesys for $400M — CoGenesys, a Rockville, Md., protein-drug biotech spun out of Human Genome Sciences in 2006, has been acquired by Israel’s Teva Pharmaceutical Industries for $400 million in cash. The companies’ joint release is here.

CoGenesys, like its former parent HGS, is focused on the development of protein and peptide drugs for a variety of conditions. The company’s two lead drug candidates aim to treat neutropenia, a depletion of white blood cells that puts people at risk of serious infection, and heart failure.

Teva said the acquisition advances its recently revised strategic goal of pursuing biotech drugs (”biopharmaceuticals”) and generic biologics (”biogenerics”). It’s not entirely clear whether Teva is interested in pursuing CoGenesys’ actual drug pipeline or simply putting its manufacturing technology to use in Teva’s existing international biogenerics business. No biogenerics have been approved for use in the U.S.

ViewRay takes in $25M for MRI radiation-therapy guidance — Gainesville, Fla.-based ViewRay, a developer of MRI-based cancer-radiation systems, raised $25 million in a second funding round. Investors included OrbiMed Advisors, Fidelity Biosciences, Aisling Capital and Kearny Venture Partners.

ViewRay claims its system will be the first to offer real-time “volumetric” imaging of tumors concurrent with radiation treatment, which ostensibly allows radiation oncologists to compensate for organ movement. The funding will go for additional staff and the manufacture and validation of advanced prototypes of the system. Our previous coverage of the company is here.

NovaMed, Chinese clinical-research outfit, receives $14M — NovaMed, a Chinese startup that performs outsourced commercial and clinical-trial management for Chinese and international drug companies, raised $13.8 million in a second funding round. Investors included Fidelity Asia Ventures, its US affiliate, Fidelity Biosciences, and Atlas Venture.

Founded in 2005 by a former AstraZeneca executive and a Chinese Internet entrepreneur, NovaMed essentially acts as a middleman for companies with drugs they’d like to sell or test in China. Depending on the client, NovaMed says it will do everything from running clinical trials and shepherding drugs through the Chinese regulatory process to manufacturing, distributing and selling pharmaceuticals.

The company had previously raised roughly $6 million. NovaMed said it will use the new funding to expand its operations and also to in-license new drugs for deveopment or sale in China.

Lumidigm takes in $7M for optical-fingerprint ID systems — Lumidigm, an Albuquerque, N.M., developer of multispectral fingerprint scanners, raised $7 million in a third funding round, VentureWire reports, citing a regulatory filing. Investors included Epic Ventures led the round, joined by new investor Sun Mountain Capital and existing investors Fort Washington Capital Partners, Motorola Ventures, Draper Fisher Jurvetson New England and Intel Capital. Lumidigm’s technology aims to read fingerprint information both from the skin surface and from subsurface layers to improve accuracy and foil attempts to spoof the technology.

Medical-software co. Compressus aims to close $14M round — Compressus, a Washington, D.C., software maker whose products link hospitals and doctors to government agencies for public-health monitoring and emergency response, is looking for an additional $1.3 million to close out a $14.3 million third funding round, VentureWire reports. The company, which was founded by three lobbyists, has so far raised more than $27 million from angel investors.

Channel Medical Partners aims for $150M med-tech fund — Channel Medical Partners, a Skokie, Ill., VC firm focused on medical-device investments, aims to raise a $150 million second fund, VentureWire reports. The new fund would be more than triple the size of its $40 million initial fund, raised in 2001. Channel aims to fund 12 to 15 startups with the new cash, and will concentrate on device firms, although it is open to investing in diagnostics, drug delivery and “specialty supply” companies as well.

TODAY’S HEADLINES:

• Follica pulls out $5.5M for hair loss (release)
• WuXi PharmaTech to acquire AppTec Lab for $151 million (release)
• U.S. Venture Partners names Laurence Lasky a venture partner (PDF release)
• Burrill & Co. promotes several life-science VCs (release)
• SV Life Sciences promotes Darren Black to partner (release)

Follica pulls out $5.5M for hair loss – Boston’s Follica, a biotech that aims to reverse hormone-related hair loss, raised $5.5 million in a first funding round. Investors included Interwest Partners and PureTech Ventures.

Follica was founded by a team of researchers from Harvard, UCSF and the University of Pennsylvania to commercialize a research finding reported last May. In that study, scientists found that rats could generate new hair follicles after suffering open skin wounds, a discovery that suggested the regenerative powers of skin cells may be much greater than previously believed when it comes to hair regrowth. (This Scientific American piece summarizes the finding.)

The startup hasn’t said exactly what approach it intends to take — heck, its Web site is still hosted on Puretech Ventures’ site — but presumably its scientists are looking into isolating the growth factors that encourage some skin cells to revert into follicular cells and incorporating them into some sort of topical salve or gel. It’s also not clear whether anyone trying this sort of product might have to abrade or otherwise injury their skin first, a requirement that might dampen enthusiasm for miracle hair regrowth. At the very least, it should give new meaning to the phrase, “It’s painful to be beautiful.”

WuXi PharmaTech to acquire AppTec Lab for $151 million – China’s WuXi PharmaTech, a publicly traded contract-research organization, agreed to acquire AppTec Laboratory Services of St. Paul, Minn., for roughly $163 million. The release is here.

The purchase price includes $151 million in cash plus the assumption of AppTech debt of roughly $11.7 million. AppTec does outsourced research, testing and manufacturing for life-sciences companies around the world.

TODAY’S HEADLINES:

• Romark Labs raises $18M for hepatitis drugs (release)
• Cubist buys Illumigen Bio, a hepatitis-drug biotech, for $9M (release)
• MedCap voices opposition to VaxGen-Raven Bio reverse merger (release)
• NeuroMetrix acquires EyeTel Imaging assets for $10M (release)
• Solstice Neurosciences appoints Dennis Smith as CEO (release)
• LeMaitre Vascular snaps up graft maker Biomateriali for €4M (release)
• Bosch Group acquires remote health-monitoring co. Health Hero Network (release)

Romark Labs raises $18M for hepatitis drugs – Tampa, Fla.-based Romark Laboratories, a biotech developing drugs for hepatitis and other conditions, raised $18 million in a an institutional financing. D.E. Shaw Group provided the funding.

Romark says its work on dysregulated cellular pathways led to its discovery of a new drug class known as the thiazolides. The company has already had its first product approved for the treatment of severe diarrhea, and is testing that drug in hepatitis, gastroenteritis and Crohn’s disease as well.

Cubist buys Illumigen Bio, a hepatitis-drug biotech, for $9M – Illumigen Biosciences, a Seattle biotech that develops drugs by studying beneficial human mutations, agreed to be acquired by Cubist Pharmaceuticals for $9 million in cash. The release is here.

Cubist will also pay Illumigen shareholders up to $75.5 million if it reaches certain milestones in the development of Illumigen’s lead compound, a protein-based drug for treating hepatitis C. If Cubist develops Illumigen products for othe viral diseases, payments of up to $117 million could apply. Upon commercialization, Cubist would make additional payments of up to $140 million.