Cleveland biotech Athersys raises $65M with reverse-merger

Athersys, a Cleveland, Ohio biotech, went public via reverse merger and raised $65 million in a private placement. The company’s release is here.

Founded in 1995, Athersys is active in a bewildering number of areas. Its lead product candidate is an appetite-suppressing drug that acts on a serotonin receptor in the brain called 5HT2c, and in general the company describes itself as focused on metabolic and neurological conditions. But it is also at work on an adult-derived stem-cell treatment for heart disease, stroke and bone-marrow transplant patients. None of these products, however, appear to be in human trials yet, which is sort of intriguing given how long the company has been around.

It turns out that Athersys is also a biotech chameleon. In 2000, it filed to raise $115 million in an IPO. According to its S-1 registration statement, the company was then a “functional genomics” company, which essentially means it surveyed large numbers of genes in an attempt to determine their function. Although popular during the genomics bubble of 1999-2000, this sort of business tended not to pan out for many companies. Athersys withdrew its proposed IPO six months after it was filed.

The Athersys funding was led by Radius Ventures, joined by OrbiMed Advisors, RA Capital Management, Accipiter Capital Management, Hambrecht & Quist Capital Management, MPM BioEquities, and Pappas Ventures.