Recent Financings of Private Companies (11/2003)

Each month, Start-Up presents a comprehensive review of young, private life science companies that have received venture funding during the month, including companies in the pharmaceutical, medical device, diagnostic and research instrumentation & reagent sectors.

In Vitro Diagnostics

Biospect Inc.

(S. San Francisco, CA) — www.biospect.net — 650-952-4350

Biospect raises $27mm with private placement

Oct.—Biospect (technologies to detect biomarker patterns) has raised about $27mm with its Series A private placement to Prospect Venture Partners (its incubator), Advent Venture Partners, Venrock Associates, and Versant Ventures in addition to undisclosed individual European investors.

Biospect, which was founded in 2002, is developing an integrated system that consists of separations, detection, and informatics technologies for identifying and assaying protein biomarker patterns that reflect and differentiate states of health and disease. Using biological samples obtained through minimally invasive procedures, the system will analyze the samples for patterns, protein fragments, and peptides. Its initial application will be in the clinical diagnostics arena, but Biospect expects to expand its use to research and drug development.

Pharmaceuticals

Ambrx Inc.

(San Diego, CA) — www.ambrx.com — 858-731-3608

Ambrx closes $12.5mm Series A round

Oct.—Ambrx (develops new protein therapeutics) has closed a $12.5mm private placement of Series A preferred stock to 5AM Ventures and Tavistock Life Sciences.

Ambrx's core technology was developed by company founders Peter Schultz, Richard DiMarchi, and Troy Wilson at the Scripps Research Institute. The technology can genetically engineer proteins that have more than the usual twenty amino acid building blocks. Ambrx seeks to apply its medicinal chemistry expertise to the biosynthesized proteins to create better drugs with new physical, chemical, and pharmacological characteristics. With the financing, Tavistock's Shehan Dissanayake, PhD and 5AM Ventures' John Diekman, PhD will take seats on Ambrx's board.

Barrier Therapeutics Inc.

(Princeton, NJ) — www.barriertherapeutics.com — 609-945-1200

Barrier Therapeutics grosses $32mm with Series C financing

Oct.—Barrier Therapeutics (develops dermatological therapeutics; Johnson & Johnson spin-out) grossed $32mm in a Series C private placement. New investor MPM Capital led the financing and was joined by all of the company's previous institutional backers: Johnson & Johnson Development Corp., TL Ventures, JP Morgan Partners, Perseus-Soros BioPharmaceutical Fund, Baker-Tisch Investment Partners, and KBC.

Barrier's most advanced candidates are in Phase III trials--Zimycan to treat Candida-associated diaper dermatitis and Seboride for seborrheic dermatitis--and it has two entering Phase III for fungal infections and congenital ichthyosis/severe psoriasis. The company also has six at earlier stages including candidates for acne, skin inflammation, atopic eczema, allergies, and wound healing. Barrier was created to develop and market dermatological products based on IP initially licensed from Johnson & Johnson affiliates Janssen Pharmaceutical Products, Ortho-McNeil Pharmaceutical, and Johnson & Johnson Consumer Companies Inc. Since its founding in 2001, the company has raised a total of $78mm.

Bioventis AG

(Vienna, Austria) — www.bioventis.com — (43) 2062 0220

Intercell AG

(Vienna, Austria) — www.intercell.com — (43) 120 6200

Intercell spins out Bioventis

Sep.—As part of a restructuring to focus its resources on developing cancer vaccines, biotech company Intercell AG completed its first spin-off, creating from its research department the drug development firm Bioventis AG.

The new company will develop antibiotics using Intercell's Antigen Identification Program (AIP) technology, initially focusing on resistant bacteria that cause respiratory diseases and sepsis. The antibiotics will be based on two protein targets the company has exclusively licensed from Intercell. The spin-out was motivated by Intercell's discovery that AIP, which is designed to identify almost all vaccine suitable antigens for a wide range of pathogens, was adaptable to the development of new antibiotics when combined with structure-based bioinformatics analysis and microbiology tools. Bioventis completed a seed round and got funding for its R&D program and a business plan from Intercell, which holds a 24.9% stake in the company. The new firm will be headed by Intercell's CSO Uwe von Ahsen.

BioVex Ltd.

(Abingdon, UK) — www.biovex.com — (44) 123 544 1900

BioVex grosses £17mm

Oct.—Gene therapy and functional genomics company BioVex Ltd. (cancer, chronic infectious diseases, and nervous system disorders) raised £17mm ($24.4mm) with its Series C private financing, almost $3mm more than it was originally seeking.

New investors were Scottish Equity Partners (which led the round), ABN AMRO Capital, Avalon Ventures, Credit Lyonnais Private Equity, and Sitka Health Fund. Also participating were return investors Merlin Biosciences Fund, West Deutsche Landesbank Girozentrale, GeneChem Management, Temasek Holdings, Lloyds Development Capital, and Technomark Medical Ventures. BioVex will use some of the money to fund Phase II clinical trials of its lead agent OncoVex GM-CSF, an oncolytic cancer vaccine candidate against several types of solid tumors, and ImmunoVex, a dendritic cell vaccine candidate against malignant melanoma. It will also use the money to move into clinical trials its infectious disease vaccine candidates for HSV II and HIV (it is developing the latter in collaboration with the National Institutes of Health).

CoTherix Inc.

(Belmont, CA) — www.cotherix.com — 650-486-2100

CoTherix raises $55mm in Series C round

Oct.—CoTherix (formerly known as Exhale Therapeutics; treatments for pulmonary hypertension) completed its Series C financing, raising $55mm. The round was led by MPM Capital, and included new investors Sofinnova Partners, Frazier Healthcare Ventures, and Thomas Weisel Healthcare Ventures, as well as existing shareholders Alta Partners, BioAsia Investments, and Spray Venture Partners.

The company plans to use a majority of the proceeds to fund US commercialization of Ventavis, a treatment for primary pulmonary hypertension in-licensed by Schering AG earlier this month. It will also use some of the funds for additional product acquisitions, mainly in the fields of pulmonary medicine, infectious diseases, and oncology. In connection with the financing, MPM Capital's Nick Simon will join CoTherix's board.

Critical Therapeutics Inc.

(Cambridge, MA) — www.criticaltherapeutics.com — 617-354-9311

Critical Therapeutics gets $56mm in second round

Oct.—Critical Therapeutics (critical care medicine) raised $56mm through its Series B private placement led by Advanced Technology Ventures and Johnson & Johnson Development Corp. MedImmune's MedImmune Ventures and Oxford Bioscience Partners participated, along with existing investors MPM Capital and HealthCare Ventures.

The company is continuing clinical and preclinical development of its anti-inflammatory product candidates. Its lead compound is a controlled-release drug to prevent and treat asthma. It also has CTI-01, a cytoprotective drug in Phase I trials to reduce vascular and organ damage in trauma patients. Earlier this year, Critical Therapeutics entered into a deal with MedImmune to develop drugs that target the cytokine HMG-B1--a protein that is potent in inflammatory diseases such as rheumatoid arthritis, hemorrhagic shock, endotoxemia, and acute lung injury. Concurrent with the financing, Advanced Technology's Jean George and J&J Development's Ting Pau Oei will join Critical Therapeutics' board.

GenPath Pharmaceuticals Inc.

(Cambridge, MA) — www.genpathpharma.com — 617-250-5950

GenPath gets $42.7mm from Series B round

Oct.—GenPath Pharmaceuticals, a biotech specializing in developing therapeutics for cancer and cardiovascular, metabolic, and neurodegenerative diseases, closed a $42.7mm Series B financing which was led by Flagship Ventures.

Other participants were Highland Capital Partners, Oxford Biosciences, private European investors, and returning investors Venrock Associates, MPM Capital, Prospect Venture Partners, Greylock, A. Grant Heidrich, and former Bristol-Myers Squibb vice chairman Kenneth E. Weg. Flagship's Muzammil Mansuri, PhD and Highland Capital's Robert Higgins get seats on GenPath's board. GenPath has engineered mouse models that have tumor-specific genes. These models are designed to reveal which genes are necessary to a tumor's maintenance and progression. Once the gene target is discovered, GenPath determines the ability of an RNAi knockdown of that gene to block tumor growth. The company uses genomics, proteomics, and bioinformatics technologies to narrow down suitable drug candidates.

LifeCycle Pharma AS

(Valby, Denmark) — www.lcpharma.com — (45) 7033 3300

LifeCycle Pharma completes initial round

Sep.—LifeCycle Pharma AS (develops better formulations for existing drugs that have inadequate water solubility) has raised DKK22mm ($3.25mm) in its first financing round. The investors were H. Lundbeck, Novo AS (Novo Nordisk's investment group), and Nordic Biotech.

The company got its start in 2002 as a spin-out of technology from Lundbeck and has a nonexclusive license to produce improved formulations of two of the former parent's CNS compounds. LifeCycle's MeltDose technology boosts the bioavailability of potentially high-value drugs by decreasing the particle size of drug substances to individual molecules--smaller than nanoparticles--and forming them into easily absorbed tablets. The company is also developing a modified-release technology.

Lipid Technologies Provider AB

(Karlshamn, Sweden) — www.lipid.se — (46) 045 482 239

DSM and CIMON invest in Lipid Technologies

Oct.—Lipid Technologies Provider AB (lipid carriers used in functional food ingredients, drug delivery, and skin care) raised an undisclosed amount of equity financing. LTP's majority shareholder, CIMON Medical, took part in the round, and the lead investor was DSM Venturing, a VC unit of the chemicals and drug ingredients firm DSM NV.

Although no terms of a research relationship were announced, LPT commented that in developing its product portfolio it will benefit from DSM's technological and industrial experience. LTP's lead product, nearing launch, is Reducal, a functional food ingredient made from palm and oat oils. In it, the delivery system approach traditionally used for drugs is applied to nutrients. The product is used in weight management to prolong the feeling of satiety from eating. Results from human studies show that when Reducal is used in place of milk fat, it is possible to reduce calorie intake by 20-30% in subsequent meals. In skin care, LTP already markets a lipid-based moisturizing skin cream called Galactobase.

Metabasis Therapeutics Inc.

(San Diego, CA) — www.mbasis.com — 858-587-2770

Metabasis brings in $24.9mm with third private placement

Oct.—Metabasis Therapeutics (small-molecule drugs to treat liver and related metabolic diseases) has brought in $24.9mm with its third private placement of preferred shares. New investors Maverick Capital, Wellcome Trust, Itochu Corp., and Pan-Pacific Venture Capital were joined by return investors MPM Capital, InterWest Partners, and the Sprout Group.

Metabasis will use the funds to further develop MB07133 (in Phase I/II trials to treat primary liver cancer) and to expand its product pipeline. The company will also use some of the money to create a second-generation gluconeogenesis inhibitor for Type II diabetes. Its first one, CS-917, is under development with Sankyo Co. and is currently in Phase II studies. Metabasis has used its HepDirect technology to create, along with Ribapharm, Hepavir B, which is a Phase I/II drug candidate for hepatitis B.

Miikana Therapeutics Inc.

(Fremont, CA) — www.miikana.com — 510-818-2751

Miikana Therapeutics gets $4.25mm with Series A

Oct.—Miikana Therapeutics (cancer therapeutics) has raised $4.25mm with its Series A private placement of shares to lead investors 5AM Ventures and Aravis Ventures. Novartis Venture Fund and Queensland Asset Management also participated.

Miikana will use the funds to continue its drug discovery and development efforts. The company, which was established in 2002 by members of the University Health Network's Ontario Cancer Institute and the former Amgen Research Institute in Toronto, is using its knowledge about molecular disease mechanisms to develop anticancer therapeutics. Miikana plans to in-license preclinical and early-stage cancer drug candidates to complement its own research efforts.

Nuevolution AS

(Copenhagen, Denmark) — www.nuevolution.com — (45) 7020 0987

Nuevolution raises DKK94mm in first close of Series B

Oct.—Drug discovery company Nuevolution AS raised DKK94mm ($15mm) in the first close of its Series B financing. Scandinavian Life Science Venture led the round, and was joined by SEB Foretagsinvest and existing investors Novo AS (Novo Nordisk's investment group), Nordic Biotech, and the Danish Investment Fund.

The company plans to use the proceeds to continue developing its Chemetics library-generating drug discovery technology. The platform is a combination of wet chemistry and molecular biology designed to perform rapid synthesis and selection of billions of compounds in a single test tube. Drug leads from the library are screened by in vitro assays, ADMET testing, and in vivo studies to produce product candidates faster and more effectively than standard high-throughput screening techniques. Investment Banks/Advisors: Fortis Bank

OncoGeneX Technologies Inc.

(Vancouver, BC, Canada) — www.oncogenex.ca — 604-736-3678

OncoGeneX Technologies grosses $11.5mm

Sep.—OncoGeneX Technologies, an antisense firm with clinical-stage cancer therapeutics, raised US$11.5mm in its second venture financing.

Ventures West led the oversubscribed round; other new investors were HIG Ventures and the Working Opportunity Fund of GrowthWorks Capital. Returning backers Business Development Bank of Canada and Milestone Medica also participated. Aaron Davidson of Ventures West and Craig Burson from HIG will take seats on OncoGeneX's board. Antisense, a technique for inhibiting production of disease-implicated proteins, may result in drugs that are more selective and less toxic than traditional therapeutics. The company says its second-generation candidates show improvements over the original technology in the areas of potency, tolerability, and dosing convenience. Leading OncoGeneX's pipeline is OBX-011 (Phase I), a sensitizer that helps resistant tumors respond to existing therapies like chemo, radiation, and hormone ablation. Candidate number two is OGX-225, designed to slow the growth and spread of a variety of solid tumors. OncoGeneX recently strengthened its intellectual property position by in-licensing technology in antisense chemistry from its development partner, Isis Pharmaceuticals.

Polymerix Corp.

(Piscataway, NJ) — www.polymerixcorp.com — 732-457-9300

Polymerix raises $3.9mm in private placement

Oct.—Polymerix (develops drugs based on polymers) brought in $3.9mm with a private placement led by Sherbrooke Capital Partners, making a $2.5mm investment. Existing investors AMT Capital and Rutgers University also participated in the financing.

The company is discovering new chemical entities called PolymerDrugs, which are polymerized forms of the active pharmaceutical ingredients in existing drugs. PolymerDrugs are made of drug molecules that form the polymer backbone and enable high potency for sustained drug delivery. These compounds can be used as medical device coatings or may be created into microspheres for depot delivery. Polymerix is initially focusing on developing PolyAspirin polymers that contain salicylic acid derivatives and linker molecules that modulate their physical properties. Such compounds have applications in anti-inflammatories, analgesics, and antiseptics because they have qualities of the active ingredient in aspirin and similar compounds.

Targeted Molecules Corp.

(San Diego, CA) — www.targetedmolecules.com — 858-777-2800

Targeted Molecules gets $4mm with VC funding

Sep.—Targeted Molecules (focuses on cardiovascular and inflammation problems) has raised $4mm with the private placement of Series D shares to Neuro Discovery Ltd., Trian Equities, GeneChem Therapeutic Ventures, IngleWood Ventures, and Linkagene, a start-up company developing therapeutics for atopic complex polygenic diseases.

The company, which was founded in 2000 as a spin-off of the Burnham Institute, will use the proceeds to begin clinical development of its lead compound, TMC-2001, and to continue preclinical work on other drug candidates. TMC-2001 is a preclinical nonhemorrhagic antithrombotic compound that inhibits platelet adhesion. Targeted Molecules anticipates filing an IND for the candidate in 2004. The company has several other compounds in preclinical trials, including TMC-2003 for inflammation, thrombosis, and angiogenesis; TMC-2004 for obesity, diabetes, and cardiovascular indications; TMC-2002 for inflammation; and four compounds for angiogenesis.

TiGenix NV

(Leuven, Belgium) — www.tigenix.com — (32) 1639 6060

TiGenix raises €12mm with private placement

Oct.—TiGenix (osteoarthritis drugs) has raised €12mm ($14mm) with the private placement of shares. Lead investors ING Private Equity and Capricorn Venture Partners were joined by Auriga Partners and Fagus (managed by Fortis Private Equity).

Concurrent with the placement, Gemma Frisius Fund (a seed fund of the University of Leuven) and the University of Ghent have converted an outstanding loan, which has increased the fund's equity investment and made the university a shareholder in TiGenix. The company was founded in 2000 as a spin-off from the Universities of Leuven and Ghent to develop therapeutics for joints that have been damaged or have osteoarthritis. The company will use the funds for clinical trials and potential marketing of its lead candidate, ChondroCelect, a cell therapy that helps repair the joint surface in the knee and other joints. Investment Banks/Advisors: Fortis Bank

Research/Analytical

Genstruct Inc.

(Cambridge, MA) — www.genstruct.com — 617-547-5421

Bioinformatics start-up Genstruct gets $6.5mm in venture round

Sep.—Genstruct, a start-up bioinformatics company, sold $6.5mm of its Series A stock in a private placement co-led by AM Pappas and Flagship Ventures (one of Genstruct's founders).

Art Pappas, managing partner at AM Pappas, gets a seat on Genstruct's board. Genstruct uses computational tools and techniques to determine the effects of compounds on biological systems. Its Molecular Epistemics platform applies biological knowledge to genomic, proteomic, and metabolic data. The company's business strategy is to form drug discovery agreements with Big Pharma to analyze and find mechanisms of actions for their compounds. Before starting Genstruct, Keith Elliston, PhD (Genstruct's president and CEO) co-founded discovery informatics firm Viaken Systems Inc. At Gene Logic he was chief scientific officer and president of the bioinformatics division, and at Bayer the global head of bioinformatics. At Merck, Elliston spearheaded the company's first genomics projects.

Supplies, Equipment & Devices

3F Therapeutics Inc.

(Lake Forest, CA) — www.3ftherapeutics.com — 949-380-9333

3F Therapeutics brings in $14.2mm with first tranche

Oct.—3F Therapeutics (cardiac and circulatory devices) has brought in $14.2mm with the first tranche of its Series D financing. New investor Boston Scientific Corp. led the private placement and was joined by returning investors Domain Associates, Cardiac Concepts, and 3i Bioscience. The company anticipates raising another $10mm with the second tranche. Stifel, Nicolaus & Co. assisted with the transaction.

The company, which was established in 1998, is developing devices that can be used in minimally invasive surgery and transcatheter delivery. 3F is conducting European and US clinical trials of its 3F Aortic Bioprosthesis aortic heart valve replacemnt device and has developed the 3F Mitral Apparatus, which it intends to have in human clinical trials by the end of 2003. 3F signed an agreement last year licensing the use of Percutaneous Valve Technologies' minimally invasive heart valve replacement technologies.

ArthroSurface Inc.

(Stoughton, MA) — www.arthrosurface.com — 781-297-7265

ArthroSurface gets $5.3mm in Series A round

Sep.—ArthroSurface (develops devices for cartilage repair) raised $5.3mm in its Series A private placement of preferred stock. Boston Millennia Partners was the only investor in the round.

The proceeds from the financing will support ongoing and future clinical trials of the company's CAP system as well as sales and marketing efforts later on. ArthroSurface, which was founded in late 2002, has developed the system to repair isolated articular cartilage defects and damage to major joints using minimally invasive surgical procedures. The product has already been approved by the FDA for use in the in the hip and shoulder, but the company plans to soon begin clinical trials to get approval for its use in the knee. ArthroSurface's CAP system is designed to offer orthopedic surgeons an alternative option for treating patients with certain types of joint disease.

Conor Medsystems Inc.

(Palo Alto, CA) — www.conormedsystems.com — 650-812-1850

Conor Medsystems closes $28mm second round

Oct.—Conor Medsystems (developing stents to treat vascular disease) closed its second private financing round, raising $28mm. Easton Hunt Capital Partners led the round, and was joined by existing investor Highland Capital, as well as new investors Hambrecht & Quist, Maverick Capital, Radius Ventures, and Brookside Capital (managed by Bain Capital).

Conor is developing drug-eluting stents for the controlled delivery of antirestenosis drugs, anticancer treatments, and antithrombins. Its lead technology is the Conor MedStent, a paclitaxel eluting stent currently in clinical trials to reduce restenosis in the coronary artery following angioplasty. The device is designed to hold more than one kind of drug--such as micro- or macromolecules, cells, oligonucleotides, or microspheres--in the same or different concentrations for controlled, localized delivery over a certain period of time. With the financing, Easton Hunt's John Friedman, H&Q's Frank Gentile, PhD, and Radius Ventures' George Milne, PhD, will join Conor's board. Investment Banks/Advisors: Musket Research Associates

Converge Medical Inc.

(Sunnyvale, CA) — www.convergemed.com — 408-774-1700

Converge Medical raises $25mm in Series D round

Oct.—Converge Medical (minimally invasive devices for cardiac surgery) raised $25mm in its Series D round that was led by BA Venture Partners. Tullis-Dickerson, Global Life Science Ventures and existing investors St. Paul Venture Capital, Forward Ventures, Hamilton Apex Technology Ventures, JAFCO Ventures, and Edwards Lifesciences also participated.

The company plans to use the funds to complete clinical trials and begin marketing its Converge Anastomotic Coupler. The device is a two-piece nitinol frame coupler designed to clamp cardiac tissue together without sutures. Surgeons can use the instrument for closure during endoscopic cardiac surgery, providing a less invasive alternative to traditional open-heart procedures and resulting in improved patient recovery and fewer post-surgical complications.

MicroVention Inc.

(Aliso Viejo, CA) — www.microvent.com — 949-768-1184

MicroVention completes $10mm Series D financing

Sep.—MicroVention (endovascular aneurysm products) has raised $10mm with its private placement of Series D shares to Crosspoint Venture Partners, Advanced Technology Ventures, De Novo Ventures, Delphi Ventures, Asset Management Partners, US Venture Partners, and AG Edwards Capital.

The company will use the funds to continue its sales, marketing, and product development efforts. MicroVention markets the HydroCoil embolic system, a device to treat cerebral aneurysms (which occur when a weak area of a blood vessels balloons), especially neck anatomies that may be hard to treat. It also sells the MicroPlex coil system, which is made up of a microporous hydrogel polymer and detachable coil that fills cerebral aneurysms and prevents regrowth and recurrence.

OmniSonics Medical Technologies Inc.

(Wilmington, MA) — www.omnisonics.com — 978-567-9980

OmniSonics raises $26mm in round three

Oct.—OmniSonics Medical Technologies (developing a device that applies therapeutic acoustic energy to break up occlusions in blood vessels) raised $26mm in its Series C financing round.

New investor GE Asset Management (runs GE's pension funds) led the financing and was joined by returning backers Domain Assocs., Prism Venture Partners, Canaan Partners, and H&Q Capital Management, plus other new participant New England Partners. OmniSonics' platform, OmniWave, is designed to be broadly applicable against peripheral and coronary vascular occlusive conditions. The lead device candidate is called Resolution System. By delivering low-power acoustic energy over a thin titanium wire placed into a clogged vein or artery, the device resolves clots into particles the size of red blood cells. Surrounding materials, like the walls of arteries, veins and synthetic grafts, are not adversely affected. Resolution System already has the CE mark and is available in Europe; it is in clinical studies in the US.

OsteoBiologics Inc.

(San Antonio, TX) — www.obi.com — 210-690-2131

OsteoBiologics closes $9.2mm financing

Oct.—OsteoBiologics (bioabsorbable polymeric scaffolds) raised $9.2mm in a private placement led by Thomas, McNerney & Partners and the Vertical Group. Early-stage venture capital firm Woodside Fund also participated.

OsteoBiologics plans to use the proceeds for ongoing R&D and for the launch and commercialization of its products for bone and cartilage repair in arthroscopy and sports medicine. The company's PolyGraft bone graft substitute, which received FDA marketing approval earlier this year, is made of a patented blend of polylactide-co-glycolide, calcium sulfate, and polyglycolide fibers, and is designed to fill bone voids that result from trauma or surgery. PolyGraft is the first device of its kind that has received approval from the FDA. OsteoBiologics has also developed the IMMIX CB line of cartilage repair products, which have not yet been cleared by the FDA. With the financing Thomas, McNerney & Partners' James Thomas and Vertical Group's Richard Emmitt will take seats on the company's board.

Raymedica Inc.

(Bloomington, MN) — www.raymedica.com — 612-885-0500

Returning investors put $10mm into Raymedica

Oct.—Private orthopedic device company Raymedica raised $10mm--half came from returning investor Viscogliosi Brothers LLC, and the remainder from other return participants Chartwell Capital, Stephens Group, Pathfinder Venture Capital, JF Shea, and certain private investors.

The company will use the funds to advance US clinical trials for its PDN-SOLO prosthetic disc nucleus device. (Just prior to this private placement, Raymedica received FDA approval to begin those trials.) Made of a hydrogel material, PDN-SOLO is implanted in patients with low back pain who have undergone discectomies, and is designed to replace and restore the function of the spinal disc nucleus. The device has been marketed in Europe, Asia, and Latin America since mid-2002--Medtronic Sofamor Danek is Raymedica's European marketing partner.

Sleep Solutions Inc.

(Palo Alto, CA) — www.sleepsolutions.com — 650-320-8090

Sleep Solutions raises $6.1mm privately

Oct.—Sleep Solutions (sleep disorder diagnostic and monitoring devices) has raised $6.1mm in the first closing of a private placement in which it hopes to bring in up to $11mm. Lava Ventures led the financing that included return investors J&J Development Corp., MedVenture Associates, Atherton Venture Partners, and Thomas Fogarty, MD, company co-founder and board member.

The funding will provide the company with an opportunity to offer its NovaSom QSG to a wider client base and expand distribution channels for its MediTrack patient management system. The five-year-old company specializes in at-home diagnosis of obstructive sleep apnea, a sleep disorder marked by episodes of loud snoring and the involuntary cessation of breathing for short periods, which can lead to complications such as heart failure, hypertension, or stroke. NovaSom QSG is a self-administered OSA diagnostic device for use in patient homes. The system collects sleep data such as snoring intensity, blood oxygen saturation, pulse rate, and respiratory information for three nights and is then shipped back to the company to analyze and report back to the patient's physician for diagnosis. The Internet-enabled MediTrack is a networked logistics and database system designed to perform many tasks including generating reports, and electronically tracking ordering and billing, patient records, and residential deliveries.

Spine Wave Inc.

(San Diego, CA) — 858-350-7950

Spine Wave brings in $22.25mm with Series B round

Oct.—Spine Wave (founded 2001; spinal repair devices) has raised $22.25mm in a Series B round led by new investor Morganthaler Ventures, which was joined by returning participants New Enterprise Associates, Canaan Partners, Thoma Cressey Equity Partners, Collinson Howe & Lennox, California Technology Ventures, New Venture Partners, NeuroVentures Capital, and Spring Ridge Ventures.

Spine Wave will use the proceeds to move into clinic development its two main technology platforms, both currently in the research stage. Incorporating technology acquired in its 2002 purchase of VERTx (a maker of vertebral repair devices), the company hopes to create a product--using a series of mechanical devices--that restores function, stability, and comfort to bone that has been compacted due to a vertebral compression fracture. This type of fracture occurs when the spinal bones become broken as a result of trauma. Its other device (with technology licensed from Protein Polymer Technologies) is an in situ nucleus injected into the spine after a discectomy (vertebral disc removal) that is designed to replace or strengthen natural disc tissue. To date the company has raised over $44mm privately.