VentureBeat

TODAY’S HEADLINES:

• InSound Medical raises $11M for “invisible” hearing aids (VBLS exclusive)
• Corventis takes in $20M for heart-failure therapy (VBLS exclusive)
• Molecular diagnostics user AssureRx raises $1M (Cincinnati Enquirer)
• Arresto Biosciences, cancer-drug developer, raises funds (VentureWire)
• San Diego’s Obalon raises $4.7M for drug discovery (peHUB)

InSound Medical raises $11M for “invisible” hearing aids – This item is a standalone post here.

Corventis takes in $20M for heart-failure therapy – San Jose, Calif.-based Corventis, a startup working on ways to monitor the vital signs of heart-failure patients, raised $19.9 million in a second funding round, according to Dana Mead, a Corventis board member and VC at Kleiner Perkins Caufield & Byers. Investors in the round included Kleiner Perkins, Mohr Davidow Ventures and DAG Ventures, Mead said.

Mead declined to further describe Corventis, which remains in stealth mode. The startup, however, is sponsoring a clinical trial (see its registration in the federal clinical-trials database) in which it intends to monitor heart-failure patients with some kind of “multi-sensor” device it calls the MUSE Clinical System.

While MUSE isn’t described in detail, it appears to be a non-invasive monitor of some kind designed to measure various aspects of the heart’s function, presumably including ejection fraction (a measure of how well the heart is pumping blood) and blood pressure within the heart, two measures that generally require doctors to thread sensors through a patient’s veins into the heart itself. The Corventis trial isn’t yet enrolling patients. (UPDATE: In a subsequent email, Mead said the trial has begun enrolling patients.)

Molecular diagnostics user AssureRx raises $1M – AssureRx, a Mason, Ohio, startup working on new molecular diagnostics for personalized medicine, raised more than $1 million in new funding, the Cincinnati Enquirer reports. The Health Foundation of Greater Cincinnati, the Cincinnati Children’s Hospital Medical Center, Blue Chip Venture Co., CincyTech USA and several individual investors provided the funding.

AssureRx is developing a new test licensed from Children’s Hospital and the Mayo Clinic intended to help doctors determine the best doses of antidepressants and other drugs for individual patients. The Enquirer story didn’t go into much detail, but it sounds as though the company may be measuring variation in genes that influence how quickly the body breaks down, or metabolizes, drugs, such as cytochrome P450.

UPDATE: Belatedly — as in a full week later — AssureRx put out this release on the funding. The only additional news seems to be that the startup’s tests look at several genes, not just one.

Arresto Biosciences, cancer-drug developer, raises funds – Arresto BioSciences, a Palo Alto, Calif., biotech developing a new class of cancer drugs, has raised an undisclosed sum in two funding rounds since last May, VentureWire reports. Investors included Kleiner Perkins Caufield & Byers and HealthCare Ventures.

Arresto is developing drugs that attack the “extracellular matrix,” a tissue layer that provides structural support to cells. Under certain conditions, changes in the extracellular matrix appear to play a role in the development of cancer, as well as “fibrotic” disease such as cirrhosis and pulmonary fibrosis.

San Diego’s Obalon raises $4.7M for drug discovery – Obalon, a stealthy San Diego drug developer, raised $4.7 million of an anticipated $7.7 million first funding round, peHUB reports. Investors included Domain Associates, Okapi Ventures and Phagia Technology.

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.

Featured companies: Apex Radiology, Arcxis Biotechnologies, EKR Therapeutics, Franklin & Seidelmann, Michelson Diagnostics, SensiGen, Vascular Closure Systems

UPDATED: Expanded items on Arcxis, Vascular Closure and Archemix.

Arcxis pulls in $2M for DNA tools — Arcxis Biotechnologies, a Pleasanton, Calif., biotech tool maker focused on analysis of DNA and proteins in biological samples, raised $2 million in a follow-on to its first funding round, VentureWire reports (subscription required). Investors included Kaiser Permanente Ventures and Claremont Creek Ventures.

Arcxis released its first product, a kit for anthrax detection, earlier this year. The company is in the process of raising a second round, which it hopes to complete by February. Arcxis previously raised $2.3 million from Claremont Creek in 2006.

Vascular Closure raises seed funding to close femoral-artery punctures — Palo Alto, Calif.-based Vascular Closure Systems, a medical-device maker focused on ways to close up the surgical punctures caused by minimally invasive heart procedures, raised an undisclosed amount of seed funding. The company didn’t disclose its investors.

Vascular’s technology, which the company doesn’t describe in detail, aims to make blood-vessel punctures more cost effective as well as easier for surgeons to learn and use. The device apparently comes in bioabsorbable, removable, and permanent-sealing designs. Such punctures are often used in heart procedures such as inserting stents to prop open blocked vessels; those devices are frequently put in place using a catheter that is threaded up through the femoral artery.

Aptamer-drug maker Archemix sets IPO range, aims for $72.5M take — Cambridge, Mass.-based Archemix, a developer of drugs based on nucleic-acid fragments called aptamers, raised its IPO sites and now plans to raise as much as $72.5 million. Archemix had previously outlined a $69 million IPO in July; our coverage is here.

The company now plans to offer up to 5.2 million shares at $12 to $14 apiece. The offering could value Archemix at as much as $261.2 million, which PE Hub notes is “virtually identical” to the company’s valuation at the end of its last VC round.

OTHER HEADLINES OF NOTE:

• Michelson Diagnostics gets £600K for tumor imaging (VentureWire)
• Franklin & Seidelmann acquires Apex Radiology, expands into full-service teleradiology(release)
• Specialty pharma EKR Therapeutics arranged debt facility (release)
• SensiGen draws $300K for molecular diagnostics (release)

(UPDATED: See below.)

Featured companies: FoldRx Pharmaceuticals, Ophthotech, Pevion Biotech, Restoration Robotics, Glide Pharma, Reliant Pharmaceuticals, Nanosphere, SurModics, BioFX Laboratories

FoldRx Pharma to receive $22M against cystic fibrosis — Cambridge, Mass.-based FoldRx Pharmaceuticals, a biotech focused on diseases that result from misfolded proteins, will get $22 million over the next five years from an affiliate of the Cystic Fibrosis Foundation to further its work against the genetic lung disease. The money will be paid as FoldRx meets various developmental milestones, including pushing two experimental drugs into early-stage human trials. The company’s current drug candidates, however, don’t target cystic fibrosis, and instead aim to take on a particular class of diseases known as amyloidosis and Parkinson’s disease.

The Boston Globe and the WSJ Health Blog have more.

Newly formed Ophthotech raises $36M against eye disease — Ophthotech, a newly formed Princeton, N.J., biotech with a focus on eye disease, raised a whopping $36 million in a first funding round. The company, founded by a bevy of former Eyetech Pharmaceuticals officials, is going to follow directly in the former company’s footsteps by taking aim at age-related macular degeneration with aptamers licensed from Archemix (which we wrote about here).

Investors in the round included SV Life Sciences, HBM BioVentures and Novo A/S. (See update below.)

Pevion Biotech gets $29M for vaccines — Pevion Biotech, a Bern, Switzerland-based vaccine developer, raised $29 million (CHF35 million) in a first funding round. Investors included BZ Bank Aktiengesellschaft, BB Biotech Ventures II, CC Private Equity Partners and Bachem Holding. The company is conducting clinical trials of vaccines against malaria, breast cancer and hepatitis C.

Hair-transplant automator Restoration Robotics raises $25M — Restoration Robotics, a Mountain View, Calif., developer of robotic surgery systems for hair transplants, raised $25 million in a second round of funding, PE Hub reports. The company’s Web site is a stub and the linked article doesn’t contain much information, but an April VentureWire store republished at Alta Partners’ site gets to the root of the matter:

Sutter Hill Ventures and Alloy Ventures, for example, have invested in the first and second rounds raised in 2005 and 2006, respectively, by Restoration Robotics Inc., which is testing a robotic device that performs hair transplants. Transplant-surgery outcomes vary according to the surgeon’s skill. Restoration’s robot — which is surgeon-controlled — produces uniform results in half the time, says CEO Jim McCollum. Investors hope this pushes hair transplants into the mainstream. Today, “people think of late-night commercials when they think of hair restoration,” says Sutter Hill Managing Director Jeffrey W. Bird.

Investors in the round include InterWest Partners, Alloy Ventures and Sutter Hill Ventures.

Glide Pharma raises $4.6M for needle-free drugs — U.K. specialty pharma Glide Pharma raised $4.6 million (£2.3 million). Investors included Oxford Technology 4 VCT and Oxford Capital Partners. The company is developing drugs that can be delivered via its own needle-free injection system. We’ve written about other startups pursuing similar technology, including StrataGent Life Sciences and Macroflux.

Reliant Pharma refiles for a $400M IPO — Reliant Pharmaceuticals, a Liberty Corner, N.J., specialty pharma that withdrew a planned $300 million IPO in 2005, is going to try again, only with more at stake. The company filed to raise as much as $400 million in an offering, despite the fact that it is on track to lose more than $100 million this year, which would be the third time in four years it has done so.

In the first six months of this year, Reliant reported a net loss to common shareholders of $56.4 million on revenue of $230 million. That net loss would have been only $21.8 million but for preferred-share dividends of $34.6 million in the half. Reliant sells a variety of unrelated second-hand drugs for cardiovascular problems.

Interestingly enough, Reliant made its last charge at the public markets with the famed Ernest Mario at the helm. Mario jumped from Reliant just last week, and is now CEO of the little-known Capnia (see our coverage here).

Nanosphere aims for outsized $100M IPO — Nanosphere, a Northbrook, Ill., developer of nucleic-acid and protein detection and diagnostic systems, filed to raise as much as $100 million in an IPO. As of March 31, the company had an accumulated deficit of $112.6 million. Earlier this year, it submitted its Verigene molecular-diagnostic system to the FDA for approval; Nanosphere intends to market the device to hospital laboratories that currently aren’t equipped to perform such tests in-house.

SurModics snaps up diagnostic-supply company BioFX for up to $22.7M — SurModics, an Eden Prairie, Minn., developer of drug formulations and other biological supplies, agreed to acquire BioFX Laboratories of Owings Mills, Md., for $11.3 million in cash and milestone payments worth up to $11.4 million. The release is here. The acquisition is the second for SurModics this month; it bought out Brookwood Laboraties on Aug. 2 (our coverage is here).

UPDATE (2:37pm PT): Added items on Glide Pharma, Reliant Pharmaceuticals, Nanosphere, and SurModics/BioFX Laboratories.

UPDATE REDUX: Over at Pharma’s Cutting Edge, Fred Cohen notes what I didn’t have time to, which is that Ophthotech essentially amounts to a do-over for the architects of Eyetech’s failure. Check it out.

Hayward, Calif.-based Singulex, a developer of sensitive molecular-detection systems, raised $19 million in a fourth funding round. The company’s release is here.

The company is developing an analysis system, called Erenna, plus related “assays,” or specially designed biochemical tests, that are designed to detect individual protein molecules in biological samples such as blood. Such tests could be useful for detecting or diagnosing disease, monitoring the effect of drug treatment, and other research and diagnostic purposes. For instance, Singulex says its system can identify previously undetectable cellular levels of cardiac troponin I, a protein biomarker that can be used to measure tissue damage following a heart attack. The company claims that its system can actually count the number of proteins in a given sample.

Singulex already offers its services to research centers at biotech and pharmaceutical companies, and hopes also to break into the field of molecular diagnostics — a much more challenging and heavily regulated area.

The round was led by OrbiMed Advisors, joined by existing investors Fisk Ventures (a venture fund of H. Fisk Johnson, CEO of S.C. Johnson & Son), Prolog Ventures, and Advantage Capital. Singulex has raised $31.6 million to date, according to VentureWire (subscription required).