VentureBeat

Featured companies: BioVex, FullTurn Media, Humanetics, N Spine, Novitas Capital, Reliant Technologies, Symbios, Vaxart, Virtual Radiologic, Winston Laboratories, Zosano Pharma

EXPANDING ITEMS: Stay tuned.

Vaxart receives $3.3M for oral vaccines — San Francisco’s Vaxart, a biotech developing novel adenovirus-based vaccines, raised $2.7 million in a first funding round. Vaxart also received a $600,000 small-business innovation grant from the NIH to assist in developing the company’s vaccine platform.

Vaxart’s vaccine technology involves a non-replicating adenovirus engineered to produce a particular bacterial or viral protein, or antigen, which stimulates an immune response. The vaccine, which consists of the adenovirus and an “adjuvant” designed to enhance the immune response, is packaged in a capsule that can be taken by mouth.

Vaccines that depend on viral “vectors” like adenovirus are promising because they can produce immunity without the need to rely on attenuated or killed disease virus. When injected, however, such vaccines frequently stimulate an immune reaction to the adenovirus itself, which can negate the effect of the vaccine or subsequent booster shots. Vaxart believes that oral delivery can sidestep that problem.

The company’s early candidates include vaccines against avian flu, seasonal flu, and biowarfare agents. Investors in the round included Quantum Technology Partners, Life Science Angels, Bay Partners and Sand Hill Angels.

Reliant Tech postpones IPO — Reliant Technologies, the Mountain View, Calif., maker of laser skin treatments, postponed its IPO indefinitely, PE Hub reports. The medical-device maker had previously filed to raise up to $86.5 million in an offer of 5.4 million shares.

Reliant Tech’s postponement comes just a day after EnteroMedics, a maker of obesity-control devices, almost halved its IPO pricing. Until recently, device makers had lived a charmed life where IPOs were concerned, but it’s beginning to look as though market turmoil may be taking its toll on this sector as well. Our previous coverage of the company is here and here.

On the other hand, at least IPO investors won’t get the company confused with Reliant Pharmaceuticals anymore.

N Spine acquired by Synthes for $30M — N Spine, a San Diego maker of spinal devices, was acquired by Switzerland’s Synthes for $30 million. The release is here. N Spine shareholders also stand to receive an additional $45 million in milestone payments if development of the company’s products proceeds as planned. Our previous coverage of N Spine’s fundraising is here.

Zosano Pharma raises $45M for needle-free drugs — Fremont, Calif.-based Zosano Pharma, a specialty pharma working on needle-free drug delivery, raised $45 million in the second half of its initial venture funding. The company said it has now raised a total of $90 million. Our previous coverage of the company, which used to be called Macroflux, is here (last item).

Investors included New Enterprise Associates, Nomura Phase4 Ventures, HBM BioVentures and ProQuest Investments. Zosano’s lead candidate is a patch for delivering the drug PTH through the skin to treat osteoporosis.

OTHER HEADLINES OF NOTE:

• Virtual Radiologic prices IPO mid-range, raises up to $78M (IPO Home)
• Cancer-drug maker BioVex closes $35M round (release)
• Humanetics gets $3.8M grant for radiation countermeasures (release)
• Symbios raises almost $2M for pain-drug delivery (VentureWire, sub req’d)
• FullTurn Media launches medical-education videos, seeks $5M (VW)
• PA Early Stage Partners changes name to Novitas Capital (release)
• Specialty pharma Winston Pharma goes public via reverse merger (release)

Featured companies: Formac Pharmaceuticals, Pradama, Protein Sciences, SantoSolve, Scandius BioMedical

UPDATED: Expanded items on Protein Sciences, SantoSolve, Scandius and Pradama.

Vaccine maker Protein Sciences gets $1M — Protein Sciences, a Meriden, Conn., biotech working on a faster way to make flu vaccines, raised $1 million in a convertible-debt offering. Diamyd Medical, a Stockholm-based biotech focused on diabetes, provided the funding.

The funding boosts Diamyd’s total investment in Protein Sciences to $4 million. Conversion of its earlier investment made the Swedish company Protein Sciences’ second-largest shareholder. According to VentureWire (subscription required), Protein Sciences had previously raised $9 million since mid-2004. That doesn’t appear to count the company’s earlier incarnation as MicroGeneSys, a controversial AIDS-vaccine company that successfully lobbied Congress for federal funding to test its product in the early 1990s. (It failed, and the company appears to have largely started anew since then.)

Protein Sciences’ big claim to fame is its work on “recombinant” flu vaccines, which can be genetically engineered quickly instead of grown using whole flu virus in chicken eggs or animal cells. The jury is still out on whether recombinant vaccines really work well, despite periodic waves of hype; my coverage of the last one involving Protein Sciences is here. the U.S. biotech is also manufacturing proteins for Diamyd products such as a therapeutic diabetes vaccine.

Sports-medicine specialist Scandius BioMed acquired by Covidien — Scandius BioMedical, a Littleton, Mass.-based medical-device startup focused on sports injuries, was acquired by Covidien, a publicly traded healthcare-products company in North Haven, Conn. The release is here; the companies didn’t disclose financial terms.

Scandius marketed several products for the reconstruction and healing of ligaments and bones that are often damaged in competitive athletics. According to the company’s Web site, it has raised $13.3 million in equity financing since its founding in 2000, with investors including Commerce Health Ventures, Ivy Healthcare Capital, KBL Healthcare Ventures and Stockton Partners.

Norway’s SantoSolve receives $7M for pain drugs — SantoSolve, an Oslo biotech working on a new class of pain drugs, raised $7 million in a new funding round. Investors included DnBNor, Gezina, Glastad Invest, Teknoinvest and InnovationsKapital.

SantoSolve, founded in 2002, said the funds would allow it to move its leading drug candidate, an arthritis pain drug called 2PX, into late-stage human testing. The company is also testing the drug against neuropathic pain.

Osteoporosis drug maker Pradama raises $1.2M — Louisville, Ky.-based Pradama, a biotech developing an oral drug for osteoporesis, raised $1.2 million in a first funding round, VentureWire reports. Investors included Kentucky Seed Capital Fund, Kentucky Science and Technology Corp., Triathlon Medical Ventures, Commonwealth Seed Capital and Cardinal Venture Fund.

From VentureWire:

Pradama, based in Louisville, Ky., is developing a means of targeting bone-building drugs for osteoporosis to the skeleton. To do this, it links anabolic therapies to a derivative of tetracycline that homes in on bone. One drug it’s considering using with the targeting technology is an estrogen derivative, Pierce said, though other undisclosed therapies are also being studied.

OTHER HEADLINES OF NOTE:

• Belgium’s Formac Pharma pulls in €1.7M for new drug-delivery tech (release)
• Osteoporosis drug maker Pradama raises $1.2M (VentureWire, sub req’d)

Featured companies: AstraZeneca, Atlantis Components, Cara Therapeutics, CardioMems, Corium International, New Ortho Polymers, Osprey Pharmaceuticals, Othera Pharmaceuticals, StrataGent Life Sciences

Corium acquires Stratagent, raises $25.1M for “transdermal” drugs — Corium International, a Menlo Park, Calif., biotech focused on drugs that can be delivered through the skin, said it will acquire StrataGent Life Sciences of San Jose, Calif., for an undisclosed sum. At the same time, Corium raised $25.1 million in a third funding round, and said it has commitments for another $15.2 million within the next 24 months.

StrataGent, whose origins lie in work performed at Stanford, has focused on “needle-free” drug delivery using a microjet system in a microprocessor-controlled device resembling an electronic patch. (See our previous coverage here.) The company raised a $16 million round in May, although the company never received more than $6.7 million of that. Corium has a much broader focus that incorporates a variety of technologies for delivering drugs via the skin or mucosal surfaces such as the nasal passages or mouth.

Although ostensibly a straightforward merger, StrataGent CEO Robert Thomas will run the merged company, while Ron Eastman of Essex Woodlands Health Ventures — a previous StrataGent investor — will assume the job of chairman. StrataGent will relocate to Corium’s Menlo Park address. Investors in the latest round include Essex, Quantum Technology Partners, Aphelion Capital and an unnamed “strategic investor.”

CardioMems raises $23.3M for implantable heart sensors — Atlanta’s CardioMems, a medical-device company at work on a new generation of implantable heart sensors, raised $23.3 million in a still-open fifth funding round, VentureWire reports (subscription required). Investors in the round included “most” of the participants in the company’s previous round, a group that includes Arcapita Ventures, Easton Capital Partners, Boston Millennia Partners, Foundation Medical Partners, Medtronic Inc. and Johnson & Johnson Development Corp.

CardioMems is still looking for new investors. Its first product is a wireless sensor that can measure the pressure inside an aneurysm — a weakened section of an arterial wall that’s susceptible to rupture — during surgery intended to repair it.

Othera Pharma arranges $7M debt facility for an eye treatment — Exton, Pa.-based Othera Pharmaceuticals, a specialty pharmaceutical company at work on a new treatments for glaucoma and macular degeneration, arranged a $7 million debt facility with Oxford Financial, a subsidiary of Japan’s Sumitomo. The funding will help Othera advance its lead drug candidate in exsting mid-stage clinical trials.

Cara Thera receives $4M, moves to Connecticut from New York — Cara Therapeutics, a biotech formerly based in Tarrytown, N.Y., has received $4 million in facilities funding from Connecticut Innovations to help fund its move to Shelton, Conn. Cara, which is developing new pain and inflammation treatments, plans to use the money to build laboratory space in its new headquarters.

Connecticut Innovations is a quasi-public economic development agency. In a separate investment, the agency provided $250,000 in seed funding to New Ortho Polymers, a maker of orthodontic appliances.

EffRx raises convertible debt for osteoporosis — EffRx, a Tequesta, Fla., company that repackages old drugs in new formulations, raised an undisclosed some from a convertible debt offering, VentureWire reports. The funding will allow the company to push an “effervescent” version — think of Alka-Seltzer — of the osteoporosis drug Fosamax to the market. The investors weren’t disclosed.

Osprey Pharmaceuticals names new CEO — Osprey Pharmaceuticals, a Montreal biotech that’s consolidating its headquarters operations in San Francisco, named Jack Anthony as CEO. Anthony, currently an Osprey vice president, will remain in San Francisco. Osprey is developing new drugs for kidney disease.

AstraZeneca unit buys dental-implant maker for $71M — AstraZeneca’s medical-technology subsidiary, Astra Tech, agreed to acquire Cambridge, Mass.-based Atlantis Components for $71 million. Atlantis makes customized “abutments,” which are tiny components designed to stabilize dental implants. The company had previously raised about $26.3 million in four funding rounds, VentureWire reports.

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

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

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

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

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

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

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

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

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

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

(UPDATED at 11am PT on Sunday, 8/26/07: See below.)

Featured companies: Clinical Data, Epidauros Biotechnologie, Precision Therapeutics, UMD, Zars Pharma

UMD to close $8M for menstrual pain and osteoporosis — Cincinnati’s UMD, a developer of vaginal drug-delivery technologies, expects to close up to $8 million in a fifth funding round, VentureWire reports (subscription required). The company has backing from an undisclosed new investor, and expects former investors Charter Life Sciences and Asset Management to join the round.

UMD is developing a new version of an off-patent anti-inflammatory drug called ketorolac that can be administered on the end of a tampon for menstrual pain, and hopes to begin mid-stage human tests this year. It plans a similar delivery formulation for the active ingredient in Merck’s osteoporosis drug Fosamax, which loses patent protection this year. The company doesn’t have a Web site.

Precision Therapeutics aims to raise $81M in IPO for personalized cancer tests — Pittsburgh’s Precision Therapeutics, a developer of diagnostic tests that aim to predict patient response to chemotherapy, filed to raise $80.5 million in an initial offering. The company’s tests use biopsied tumor cells to assess the likelihood that a given drug or drug combination will be effective.

This is a fairly low-tech sort of diagnostic — as its filing makes clear, Precision basically just removes tumor cells and then starts hitting them with various drugs in the laboratory to see whether they live or die. The company has only been marketing its current test, which it calls ChemoFx, for the last year or so; although it has had ChemoFx on the market since 1997, it ceased sales activity in 2003 and didn’t resume it until last year. Revenues have been predictably anemic, as until recently Precision didn’t have an active sales force, and last year the company managed the feat of posting a gross loss, in which its cost of sales in terms of lab expenses exceeded incoming revenue.

There’s other bad news, too. Precision notes that two respected organizations — the technology-evaluation center of the Blue Cross and Blue Shield Association and a working group of the American Society of Clinical Oncology — concluded in 2004 that “chemosensitivity/chemoresistance assays” such as ChemoFx lacked supporting data that would justify their routine use.

The company also parses several complex reimbursement decisions in a fairly convincing illustration of the risk that relatively few insurers may actually want to pay for its test. It further notes that clinical data supporting use of its test is “limited,” and although it cites the results of three studies carried out between 2002 and 2006, none of them look particularly convincing. In one of the few bright spots in its filing, Precision says it is currently conducting five additional studies, some of which appear to be fairly rigorous “prospective” studies of the diagnostic.

Zars Pharma sets IPO price target — Zars Pharma, a Salt Lake City specialty pharmaceutical company that reformulates pain drugs for delivery via skin patches, set a price range for its IPO and now seeks to raise as much as $92 million in the offering. (See our previous coverage here; the company has apparently changed its name to “Zars Pharma” from “Zars.”) The company plans to offer up to 5.75 million shares at a price of $14 to $16 apiece.

Clinical Data acquires Epidauros Biotechnologie for $11.8M — Clinical Data, a publicly traded diagnostics and personalized-medicine company in Newton, Mass., agreed to pay $11.84 million (€8.75 million) to acquire Epidauros Biotechnologie of Germany. Founded in 1997, Epidauros studies genetic factors that may determine how individuals respond to drugs.

UPDATE (11am PT on Sunday, 8/26/07): Added Clinical Data/Epidauros item.