VentureBeat

Featured companies: American TeleCare, Gliknik, Juvaris BioTherapeutics, Medsphere Systems, Primera Biosystems

UPDATED: Expanded items on Juvaris, Medsphere, Primera, American TeleCare and Gliknik. Moved Broncus Tech and Aegerion Pharma items to an IPO roundup here.

Vaccine maker Juvaris Bio raises $12M, aims for $30M more — According to VentureWire (subscription required), this Pleasanton, Calif., vaccine maker raised $12 million in its first funding round. That appears to contradict an earlier item from PE Hub that said Juvaris BioTherapeutics had raised $16 million, according to a regulatory filing. The VentureWire story, however, is based on an interview with the Juvaris CEO, so we’ll run with that for now.

Kleiner Perkins Caufield & Byers provided the funding. Juvaris is developing vaccines against cancer and infectious disease using “adjuvants” — composed of DNA complexes and fatty molecules known as lipids — that stimulate immune responses. For additional coverage of the company, see here.

Juvaris also aims to raise another $30 million early next year to launch four clinical trials. Those trials will involve vaccines for influenza, hepatitis B, hepatitis C and acute myeloid leukemia.

Health-IT developer Medsphere raises $9M — Medsphere Systems, an Aliso Viejo, Calif., developer of open-source healthcare-IT systems, raised $9 million toward a third funding round, VentureWire reports. The company previously said it will target a $15 million round.

Existing investors Thomas Weisel Venture Partners, Azure Capital and Wasatch Venture Fund provided the funding, although Medsphere plans to bring new investors into the round as well. Medsphere has so far raised $16 million in equity and bridge loans, according to VentureWire.

The new fundraising is a sign that the once-troubled company may be turning itself around. Medsphere, which is developing a version of the VA’s electronic medical-record system VistA, recently settled a lawsuit the company had filed against its co-founding brothers that stemmed from a dispute over open-source software. Our previous coverage is here and here.

Gene analyzer Primera Biosystems pulls in $2.5M — Primera Biosystems, a Mansfield, Mass., developer of gene-activity analysis systems, raised $2.5 million in a second tranche of its first funding round, VentureWire reports, citing a regulatory filing. Investors included Malaysian Technology Development Corp., Burrill & Co. and MPM Capital.

Primera’s system combines two technologies — real-time PCR and microarray analysis — for use in basic research and clinical applications such as measuring viral load and drug resistance. The company last raised $11 million in 2005.

Remote healthcare-device maker American TeleCare raises $1.6M — American TeleCare, an Eden Prairie, Minn., maker of communication devices and technology for remote healthcare monitoring, raised $1.6 million from angel investors, VentureWire reports. The company has previously raised $16 million from angels.

From VentureWire: “American TeleCare provides technology and devices to help monitor patients with chronic conditions. The company’s products include audio, video and monitoring technology, including a telephonic stethoscope, with the aim of improving communication of patient information across the healthcare industry.”

Stealthy drug developer Gliknik raises $1.2M — Gliknik, a stealthy drug developer in Ruxton, Md., raised $1.2 million in seed funding, VentureWire reports. The company has drug candidates for cancer and autoimmune disease, although none are in human tests yet.

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)

(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.

Read the rest of this entry »

Read the rest of this entry »

Zurich’s GlycoVaxyn, a biotech developing new “conjugated vaccines”, raised a $9.3 million first funding round. Sofinnova Partners and Index Ventures supplied the investment.

The company will use the funding to push forward with the development of vaccines for bacterial infections, and plans to begin clinical trials by 2009.

Vivaldi Biosciences, a San Francisco developer of flu vaccines and therapies, raised $2 million in a first round of funding, VentureWire reports (subscription required). The initial funding was raised through Bay City Capital.

Vivaldi is reportedly working on live attenuated vaccines for influenza and a potential drug for treating the flu. The company plans to push some of its candidates into the clinic by the middle of next year, and plans to focus on the elderly, who are particularly susceptible to the flu.

Now that AstraZeneca has made the bold — or impulsive — decision to snap up MedImmune for $15.6 billion in cash, one big question is whether the U.K. pharmaceutical giant has kicked Big Pharma’s appetite for biotech acquisitions into high gear.

The green-eyeshade types are generally still scratching their heads over the rich price, which amounted to a 21 percent premium over MedImmune’s close on Friday. The biotech was known primarily for Synagis, an antibody-based drug that prevents a common respiratory infection in babies, and FluMist, a so-far underperforming influenza vaccine that’s delivered via a nasal spray instead of injection. MedImmune has next-generation versions of both drugs in development, but neither seems likely to set the world on fire. The company also reportedly has more than 40 other experimental drugs in its pipeline, but of course it’s far from certain that any of them will ever even make it to market, much less become the blockbusters that AstraZeneca is presumably looking for.

In fact, odds are good that AstraZeneca fell victim to the “winner’s curse,” the well-known tendency of bidders to overpay, sometimes dramatically, in competitive auctions. The WSJ reports that at least four large companies, including Eli Lilly, had been involved in the MedImmune bidding — a classic blueprint for overheated competition. Somewhere, Carl Icahn is smiling.

So, of course, are other biotech investors, who have to be hoping that whatever fever AstraZeneca came down with continues to spread. The WSJ story notes that the deal is “sure to push up valuations for similarly sized companies,” and indeed the Amex biotechnology index bumped up almost two percent on the news. Other blogs are now rife with speculation over which companies might now be in play — the WSJ Health Blog thinks Biogen Idec, Medarex and some specialty pharma companies could be next, while over at Pharmalot, Ed Silverman tosses ImClone Systems, Xoma, PDL BioPharma and Telik into the mix.

Should the expected free-for-all materialize, it will obviously have major implications for venture investors, who are already plunging more deeply into the sector. At the same time, I’d also expect to see more blood on the floor on the pharma side, as it’s far from clear to me that buyers like AstraZeneca really understand what they’re getting into. I suspect that many biotech acquisitions by pharma don’t end well — the cultures are very different, and it’s very easy for even a substantial biotech like MedImmune to get lost inside the vast structure of a $26 billion behemoth like AstraZeneca.

That, at least, was generally the logic behind the rage for pharma-biotech partnerships, in which drug companies could trade cash for future rights to experimental drugs without all the messiness that acquisitions entail. But it seems the desperation of Big Pharma knows no bounds these days.

One additional point: Little noted in all the hoopla is the fact that the acquisition takes out the last North American maker of flu vaccines, following last year’s purchase of Chiron by Novartis and that of Canada’s ID Biomedical by GlaxoSmithKline the year before. So far, the concentration of vaccine production in the hands of European pharmas hasn’t seemed to concern U.S. regulators much. And it probably won’t, either — at least until the next avian-flu scare, that is.