VentureBeat

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.

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.

Featured companies: Alpex Pharma, Applied Computational Technologies, Separation Design Group, ThermalTherapeutics Systems

Switzerland’s Alpex Pharma raises $9M for plop, plop, fizz, fizz drugs– Alpex Pharma, a Mezzovico, Switzerland drug-formulation company, raised $9 million (CHF 10.9 million) in a second round of funding. Investors included BB Biotech Ventures and Signet Healthcare Partners.

The company essentially reformulates pharmaceuticals for other companies with technologies that make pills melt quickly, allowing them to be taken without water, or to “effervesce” — that is, dissolve — in liquid, much like Alka-Seltzer. Founded in 1988 under the name Aesculapius Pharma, Alpex was acquired by Elan Pharmaceuticals in 1992. Private-equity funds controlled by Sanders Morris Harris then acquired a majority interest in 2004 and changed the company’s name to Alpex.

Pittsburgh Life Sciences Greenhouse invests $450K in three firms — The Pittsburgh Life Sciences Greenhouse, which we last covered in the sixth item in this daily briefing, has struck again, funding three local companies to the tune of $450,000. The public-private partnership invested $200,000 in ThermalTherapeutics Systems, which is working on a more efficient pump for chemotherapy drugs. Applied Computational Technologies received a $150,000 investment for development of a radiation-dose calculation engine. Medical-oxygen concentrator Separation Design Group received $100,000.

Split Rock Partners names Jagi Gill entrepreneur-in-residence — Split Rock Partners, a VC firm with offices in Minneapolis and Menlo Park, Calif., made medical-device executive Jagi Gill an entrepreneur-in-residence. Gill, currently chairman of PhysioStream and the former CEO of Sage Medical Technologies, will aim to seed new medical-device companies for the firm.

Featured companies: Concentric Medical, Vertebration, Vision RT, Kemeta

Clotbuster Concentric Medical files for $69M IPO — Mountain View, Calif.-based Concentric Medical, which makes and markets devices for removing dangerous blood clots from the brains of stroke patients, filed to raise up to $69 million in an initial offering. The company’s devices consist of catheters that are threaded into the body’s circulatory system via the femoral artery in the groin and passed into the brain to the site of the clot. There, a wire at the end of the catheter coils around the clot, permitting its removal.

Although Concentric’s device has been approved since 2004, the company is still losing money despite briskly expanding sales. The company posted a $6.9 million net loss in 2006, down from $9.7 million in 2004. Sales rose to $11.3 million from $2.3 million over the same period.

Concentric’s clot-removal device is based on technology licensed from the University of California. Among the risk factors noted by the company is the fact that the device can malfunction and sometimes causes additional injury to the delicate blood vessels of the brain. Concentric said it has submitted 82 medical-device reports to the FDA as of June 30; in 56 of those events, the device’s tip fractured, and in 22 instances a blood vessel was damaged.

Spinal implant maker Vertebration raises $750K — Vertebration, a Columbus, Ohio, developer of spinal implants, raised a $750,000 seed round, VentureWire reports (subscription required). The funding consisted of $500,000 in venture debt arranged by NCT Ventures and a $250,000 private placement to angel investors.

The company may seek a first funding round of $3.5 million to $10 million later this year, according to VentureWire. Its Web site should be active next week.

From the VentureWire piece:

Columbus, Ohio-based Vertebration plans to take its first product, a spinal implant called Xycor, to market in late October. The implant works to restore the height and space between two vertebrae or a partial vertebra through a minimally invasive procedure. Xycor received 510(k) clearance from the Food and Drug Administration earlier this year. Vertebration is developing instruments to accompany its lead product, as well as other products for the spine market.

Vision RT gets $500K for radiation imaging — Vision RT, a London-based developer of three-dimensional imaging tools for guiding radiation therapy, raised $495,725 (£250,000) from the Capital Fund, VentureWire reports. The company’s tools provide a three-dimensional model of a patient in order to properly direct radiation-beam treatment for cancer and other diseases.

Kemeta takes equity investment from Dow Chemical for breath analysis — Kemeta, a Phoenix developer of breath-analysis systems, said Dow Chemical took a minority equity stake in the company. Details of the transaction weren’t disclosed.

Kemeta aims to produce a palm-sized analyzer that can measure breath acetone, a by-product of burning fat, for use in obesity. The sensor technology was originally developed by Dow.

ProCertus BioPharm, a Madison, Wis., company developing drugs to minimize the side effects of radiation and chemotherapy, raised $2.3 million in a first round of financing. The company will use the money to begin human tests of products such as DermX, which is supposed to prevent radiation-therapy induced dermatitis.

The round was led by Venture Investors, a significant Midwest-based healthcare and IT venture firm. Existing investors including the Novartis Venture Fund also joined the round.

These are serious players who presumably don’t throw their money around lightly, so it’s probably not wise to draw too many conclusions from ProCertus’ kitschy Web site, which is not only outdated (it refers to clinical trials planned for 2006 that apparently haven’t yet started) but inaccurate (it states that there are no competing products for treatment or prevention of cancer-treatment induced hair loss, dermatitis, or mucositis, a claim with which the folks at Amgen would presumably take issue).

The company’s announcement is here.

TomoTherapy, a Madison, Wis.-based maker of imaging and radiation-treatment systems for cancer therapy, raised $222.3 million in an initial offering after its shares priced higher than the company’s original range.

TomoTherapy shares, which now trade under the symbol TTPY, priced at $19, well above the company’s expected range of $15 to $17, yielding net proceeds to the company of roughly $185 million. The stock opened this morning at $24. TomoTherapy makes and sells integrated devices that provide radiation treatment for cancer guided by a built-in CT scanner.

Here’s the company’s announcement. TomoTherapy had previously raised approximately $79 million in venture capital from the likes of Venture Investors, Avalon Technology, the Endeavors Group, Open Prairie Ventures, Ascension Health Ventures and the Wisconsin Alumni Research Foundation, according to PE Wire.