Recent Financings of Private Companies (10/2005)

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

SpinX Technologies

SpinX Technologies gets $12.5mm with Series B round

Sep.—SpinX Technologies (assay technology) brought in €10mm ($12.5mm) with its Series B financing led by Bio Fund Management. Index Ventures, Auriga Partners, DFJ ePlanet Ventures, and the CERN Pension Fund also participated in the round.

The company will use the proceeds to continue developing and eventually commercialize its programmable microfluidics instruments for use in performing assays. SpinX's microfluidics platform consists of disposable plastic cards that form a 384-well plate, a bench-top device that combines liquid handling and fluorescent readout, and assay protocol software. The platform allows researchers to quickly design experiments with more flexibility and less manual labor. As part of the round, Bio Fund's Seppo Mäkinen and Auriga's Philippe Peltier will become company directors, and DFJ ePlanet's Mir Imran will take a seat on the board.

Pharmaceuticals

Algeta ASA

Algeta raises €23mm in Series A round

Sep.—Algeta ASA (anticancer radiopharmaceuticals) has raised €23mm ($29mm) in its Series A financing round. New investors HealthCap, Advent Venture Partners, and SR One joined existing backers Selvaag Venture Capital, NorgesInvestor, Marlin Verdi AS, and other smaller investors.

This financing brings the total amount raised by the company to approximately €31mm. Algeta plans to use the proceeds to continue Phase II clinical trials of its lead radiopharmaceutical candidate Alpharadin. Based on the alpha emitter radium-223, Alpharadin accumulates in bone metastases and kills tumor cells with alpha radiation while sparing surrounding healthy tissue from damage. Algeta is initially studying the candidate for prostate cancer, but believes it can also be applied to cancers of the breast, lung, and renal system. It hopes to seek partnering opportunities when Alpharadin gets closer to Phase III trials. In connection with the financing, HealthCap's Per Samuelsson, Advent's Patrick Lee, and SR One's Dr. Kent Gossett will join Algeta's board of directors. Investment Banks/Advisors: BioScience Managers Ltd.

Amicus Therapeutics Inc.

Amicus Therapeutics raises $55mm with Series C round

Sep.—Amicus Therapeutics (develops small-molecule drugs for genetic disorders) raised $55mm through a Series C financing round led by Quaker BioVentures. Also participating in the round were other new backers Palo Alto Investors and the Garden State Life Sciences Venture Fund (managed by the New Jersey Economic Development Authority), and existing shareholders Canaan Partners, CHL Medical Partners, Frazier Healthcare Ventures, New Enterprise Associates, Prospect Venture Partners, and Radius Ventures.

Last year, Amicus raised $31mm with a Series B round it thought would give they company enough cash to take it through 2006. The present funding should now last through 2008. The company has a technology that fixes mutant proteins, helping them to fold correctly into their normal three-dimensional conformation (most genetic diseases are associated with folding and conformational problems). Its lead candidate, Phase II Amigal, which has orphan-drug status, fixes the folding defect in the enzyme alpha-galactosidase A that underlies Fabry's disease, an inherited lysosomal storage disorder that leads to diseases of the central nervous system, heart, kidneys, and skin. Amicus's four other candidates are preclinical development--its most advanced, AT2101, is ready to enter the clinic in the first half of 2006 for Gaucher disease. Concurrent with the financing, Quaker's Sherrill Neff will take a seat on Amicus's board.

Avontec GMBH

Avontec brings in €14.5mm with its Series B financing

Aug.—Avontec GMBH (uses its decoy-oligonucleotide platform to develop therapeutics) has brought in €14.5mm ($17.9mm) with its Series B financing. The round was co-led by a fund managed by Bio-Sight Capital (and founded by gene therapy company AnGes MG and Nikko Principal Investments) and DVC Deutsche Venture Capital. In addition, BioMedinvest and KFW were joined by existing backers InnovationsKapital, ubg, and Mediport Venture Fond.

The company will use the proceeds to continue two Phase IIa studies of drug candidates for moderate-to-severe asthma and psoriasis. Avontec is also developing compounds for transplant rejection and cardiovascular and autoimmune conditions. Just a day before the financing was announced, the company signed a cross-licensing agreement with AnGes for the use of Avontec's decoy-based transcription factor IP, which it will use to develop anti-inflammatories for respiratory and skin conditions. Concurrent with the financing, AnGes's Lee Cheng Liu, PhD, and Hongzhi Bai, MD; BioMedinvest's Dr. Marcus Hosang; and DVC's Dr. Joerg Neermann will join Avontec's board.

Biofrontera AG

Biofrontera brings in €20mm with the sale of convertible notes

Aug.—Biofrontera AG (developing dermatology therapeutics) has raised €20mm ($24.6mm) with the private placement of 200k convertible debentures to institutional investors. The five-year 8% notes were priced at €100 each and will convert at €16.13 apiece.

Close Brothers Seydler AG acted as placement agent for the transaction. Biofrontera is using the financing to prepare for its IPO. The notes may be exercised as early as three months after the company trades its shares on a stock market (or experiences a change in control of the company). Biofrontera is developing two Phase II compounds--the histidine decarboxylase inhibitor BF-Derm-1 for antihistamine-refractory urticaria and the photosensitizer aminolevulinic acid (ALA) for actinic keratosis. Biofrontera is also conducting preclinical studies on a migraine preventative.

Biolex Inc.

Biolex gets $36mm in Series B round

Sep.—Biolex (recombinant human proteins) raised $36mm in its Series B financing led by Polaris Ventures. Existing investors Intersouth Partners, Quaker BioVentures, Johnson & Johnson Development Corp., Mitsui & Co. Venture Partners, and Kitty Hawk Capital also participated.

Biolex will put some of the funds towards development of its lead product candidate Locteron, a recombinant human alfa interferon entering Phase I trials for hepatitis C. The compound is a controlled-release formulation of the company's BLX883, and is partnered with OctoPlus. Biolex also has BLX155 in early development as a fibrinolytic to treat peripheral arterial occlusive disease. Aside from developing its candidates, the company is also advancing its biomanufacturing capabilities, for which it has arranged a recent partnership with Johnson & Johnson's Centocor unit. Earlier this year, the companies signed an agreement to develop and manufacture up to ten Centocor proteins using Biolex's LEX System (Lemna Expression System). J&J Development Corp., an investor in this round, also made an equity investment in Biolex as part of that deal. In connection with the Series B round, Polaris's Terry McGuire will join Biolex's board of directors.

Chiasma Inc.

Chiasma gets $6.2mm with first close of Series B round

Sep.—Drug delivery company Chiasma raised $6.2mm through the first close of its Series B financing co-led by first-time backers F-2 Ventures and Ofer Hi-Tech Group. Returning shareholders InnoMed Ventures and Yissum (the R&D arm of Hebrew University) also participated.

The company, which could bring in an additional $5mm by year-end, plans to use the funding to move its two lead candidates from preclinical studies through Phase II. The compounds are being developed for oral delivery, as opposed to injectable delivery like similar large-molecule drugs. Chiasma's Selective Cargo Delivery technology encapsulates therapeutics with nanoparticles, enabling the exclusive delivery across the epithelial barrier into the bloodstream where the pharmaceutical agent is released. Chiasma is in the process of moving its headquarters to Boston but said its will keep an R&D facility in Jerusalem. F-2 Ventures' Bard Geesaman and Ofer's Muriel Zohar have joined Chiasma's board.

GlobeImmune Inc.

GlobeImmune closes $34.3mm Series B round

Sep.—GlobeImmune (therapies for cancer and infectious diseases) brought in $34.3mm with its Series B financing of preferred shares led by first-time backer Lilly Ventures. Other new investors Medica Holdings, Adams Street Partners, Biogen Idec, Genentech, Partners HealthCare, and GC&H Investments participated along with returning shareholders HealthCare Ventures, Morgenthaler Ventures, and Sequel Venture Partners.

The company will use the funding to continue clinical development of its lead candidates, GI4000 for pancreatic cancer and GI5005 for chronic hepatitis C, hoping to complete a Phase II trial for the former and a Phase Ib study for the latter. (GI4000 is also in Phase I for cancers of the lung and gastrointestinal tract.) GlobeImmune's compounds are based on its Tarmogen technology which uses genetically modified yeast to express one or more protein targets that stimulate the immune system against diseased cells. Specifically, Tarmogens activate killer T-cells against the desired target. With the round Lilly Ventures' Darren Carroll and Medica Holdings' Dr. Ehud Geller join GlobeImmune's board of directors, while Biogen Idec's Dr. Robert Peach takes a seat on the company's scientific advisory board.

Inotek Pharmaceuticals Corp.

Inotek brings in $25mm with first tranche of its Series B round

Aug.—Inotek Pharmaceuticals (developing therapeutics for cancer and cardiovascular and inflammatory diseases) has raised $25mm with the first tranche of its planned $35mm Series B preferred stock venture round. Pitango Venture Capital led the financing and was joined by current backers Care Capital, Rho Ventures, and MedImmune Ventures.

The company, which was established in 1996, will use the funds to continue developing compounds in its pipeline, including four drug candidates in Phase I or II trials, and three in preclinical studies for inflammatory conditions and cancer. Inotek's lead compound is a poly (ADP-ribose) polymerase inhibitor in two Phase IIa studies for acute cardiovascular conditions and two Phase Ib cancer trials. Its Phase I candidates include an adenosine 1 agonist for atrial fibrillation, a xanthine oxidase inhibitor for congestive heart failure, and an inosine analogue for ulcerative colitis. Concurrent with the financing, Pitango's Dr. Nissim Darvish will take a seat on the company's board of directors.

Kereos Inc.

Kereos brings in $19.5mm with Series B round

Sep.—Kereos (targeted molecular imaging and therapeutics for cancer and cardiovascular diseases) raised $19.5mm in its Series B venture financing. New lead investors Prolog Ventures, Triathalon Medical Ventures, and Charter Life Sciences were joined by existing backer RiverVest Venture Partners.

Additional new investors Alafi Capital, Apjohn Ventures, Harris & Harris Group, Lux Capital, MB Venture Partners, Sigvion Capital, and Vectis Life Science also took part, along with new buyer and collaborator Barnes Jewish Hospital and Kereos business partners Genentech and Royal Philips Electronics. Kereos will use the funds for Phase I/II clinical trials of its lead imaging agent KI0001 to detect solid tumors via MRI, and KI1001, a targeted paclitaxel designed to deliver strong doses of the chemotherapeutic directly to a tumor. The company is also developing KI0002, in collaboration with Bristol-Myers Squibb, to detect unstable atherosclerotic plaque.

OncoMed Pharmaceuticals Inc.

OncoMed raises $13.9mm in Series A round

Sep.—OncoMed (large and small-molecule cancer drugs) has completed its Series A financing round, raising $13.9mm from investors including Latterell Venture Partners, US Venture Partners (USVP), Morgenthaler Ventures, and the Vertical Group.

OncoMed, which was founded in 2004, will use the proceeds to increase its staff and to continue developing its preclinical compounds that target cancer stem cells. Discovered by University of Michigan professors Drs. Michael Clarke and Max Wicha, cancer stem cells are malignant cells located in solid tumors that are responsible for metastases of cancer to other parts of the body. In contrast to embryonic stem cells, which are normal fetal cells that have been shown to positively impact tissue and organ growth, cancer stem cells have a negative impact by promoting the spreading of cancer. OncoMed plans to develop therapeutics that stop cell growth and potentially cure cancerous cells. In connection with the financing, Latterell Ventures's Laurence Lasky, PhD; Jonathan Root, MD of USVP; Morgenthaler's James Broderick, MD; and the Vertical Group's Jack Lasersohn all joined OncoMed's board.

Protez Pharmaceuticals Inc.

Protez closes $15mm Series B round

Aug.—Protez Pharmaceuticals (develops antibiotics) raised $15mm in its Series B financing co-led by new investors BioAdvance Ventures (managed by Quaker BioVentures) and Birchmere Ventures. Other first-time backers L Capital Partners and SR One were joined by returning shareholder BTG Ventures.

The company will use the funding to further develop its lead compound SMP601 (carbapenum), currently in preclinical studies; Protez expects to commence clinical trials next year. The company licensed exclusive European and North American development and marketing rights to SMP601 from Sumitomo Pharmaceuticals in May. The candidate has demonstrated potential as a broad-spectrum injectable antibiotic against hospital-acquired drug-resistant gram-positive and many gram-negative bacteria.

Regado Biosciences Inc.

Regado Biosciences closes $20mm Series B round

Aug.—Regado Biosciences (antithrombotics) has raised $20mm with its Series B venture round, which was co-led by Domain Associates and Quaker BioVentures. Returning backer Aurora Funds and individual investors also participated.

The company, which was spun out of Duke University Medical Center in 2001, is using its technology to design drug (modified RNA-based aptamers) and antidote (complementing oligonucleotides) pairs that act against a target. Its lead candidate, preclinical REG1, is an anticoagulant for coronary revascularization procedures (CABG and PCI) in patients with acute coronary syndromes, and for other indications that require anticoagulants or antithrombotic therapeutics, such as deep vein thrombosis. In connection with the financing, Domain Associates' Jesse Treu and Quaker BioVentures' P. Sherrill Neff have taken seats on the company's board.

Replidyne Inc.

Replidyne closes $62.5mm Series D round

Sep.—Anti-infective drug developer Replidyne raised $62.5mm with its Series D venture round led by new investors Duquesne Capital Management, HealthCare Investment, and MDS Life Sciences Technology II funds (managed by MDS Capital). Returning backers HealthCare Ventures, TPG Ventures, Morgenthaler Ventures, Perseus-Soros BioPharmaceutical Fund, Sequel Venture Partners, Temasek Holdings, and Quintiles also participated.

Aquilo Partners acted as the placement agent for the financing. Replidyne will use part of the funding to launch its lead compound, Phase III faropenem, to treat respiratory tract infections. It intends to use additional money to commence clinical trials of its topical antibiotic, REP8839, for infections such as methicillin-resistant Staphylococcus aureus. The company licensed faropenem daloxate in August 2004 from Daiichi Suntory. Later this year, Replidyne plans to file an NDA for faropenem, with an anticipated launch in late 2006. The product would be the first penem oral antibiotic available on the US market. Concurrent with the round, Healthcare Investment's Henry Wendt takes a seat on the company's board.

TargeGen Inc.

TargeGen brings in $30mm with its Series C round

Aug.—TargeGen (focused on developing cardiovascular, ophthalmic, and cancer therapeutics) has raised $30mm with its oversubscribed Series C venture round. Lead (and new) investor BB Biotech Ventures was joined by H&Q Capital Management and current backers Forward Ventures, Enterprise Partners, William Blair Capital Partners, Chicago Growth Partners, CDP Capital-Technology Ventures, VantagePoint Venture Partners, China Development Industrial Bank, and AM Pappas.

The company's lead drug candidate, TG100115, is in Phase I/II trials for patients that have experienced a heart attack. It is also conducting preclinical studies for TG100801 to treat macular degeneration, diabetic macular edema, and diabetic retinopathy, as well as two compounds for non-small cell lung cancer and colorectal cancer. TargeGen, which was established in 2001, brought in $30mm with its Series B round in early 2004. Concurrent with the financing, BB Biotech's Dr. Juerg Eckhardt will take a seat on TargeGen's board.

Xigen SA

Xigen brings in CHF26mm with Series A round

Sep.—Xigen SA (developing stroke, myocardial infarction, and cancer therapeutics) has brought in CHF26mm ($21.1mm) with the closing of its Series A venture round. Tilocor Life Sciences led the round (and now owns more than 50% of the company) and was joined by Venture Incubator and Initiative Capital.

The company, which was formed in 2002, will use the funds to bring XG102 into Phase II studies by the end of next year and to continue developing its early-stage cancer compounds, which it plans to bring into the clinic by 2008. XG102 is a neuroprotectant that intercellularly inhibits the JNK kinase discovered by researchers at the University of Lausanne. In preclinical studies it has shown to reduce brain damage by 80% if administered within six hours of a stroke, and may be effective up to 12 hours after experiencing a stroke.

Supplies, Equipment & Devices

Adiana Inc.

Adiana closes $23mm Series D venture round

Aug.—Adiana (permanent contraceptive device) has raised $23mm with its Series D venture round. New investor Tullis-Dickerson led the financing and was joined by additional new backer OrbiMed Advisors, plus existing shareholders Alloy Ventures, Boston Scientific, Delphi Ventures, Abingworth Management, Forward Ventures, Oakwood Medical Partners, and the Kaiser Permanente Foundation.

The company, which was established in 1997 and has 40 employees, will use the funds to finish up clinical trials, gain regulatory approval, and to launch its non-surgical permanent contraceptive device. Adiana's device is inserted during a 10-12 minute procedure performed in a physician's office via a catheter using electrothermal energy that leaves an implant (consisting of a spongy matrix that blocks the fallopian tubes) in place. The device is currently in a Phase III trial to test for safety and effectiveness in over 600 women; Adiana anticipates approval for the device by early 2006. Concurrent with the financing, Tullis-Dickerson's Joan Neuscheler and OrbiMed's Jonathan Silverstein will take seats on the company's board.

Arbor Surgical Technologies Inc.

Arbor Surgical brings in $20mm with its Series B round

Aug.—Arbor Surgical Technologies (cardiovascular medical devices) has raised $20mm with its Series B venture round. Lead (and new) investor Baird Venture Partners was joined by other new backers Affinity Capital Management and Fisk Ventures, as well as existing shareholders Delphi Ventures, Alloy Ventures, Johnson & Johnson Development Corp., Three Arch Partners, Sapient Capital, Kaiser Venture Capital, and Sage Venture Partners.

Individual investors Thomas J. Fogarty, MD, who co-founded the company, and David Chonette also participated in the private placement. The company, which was founded in 2002 and has 30 employees, will use the funds for clinical studies of a group of aortic and mitral heart valve products. Its valves use a handheld device instead of traditional sutures to secure the valve, making it easier to implant. Arbor Surgical is also working on a method to prepare the valve tissue to prevent calcification. Concurrent with the financing, Baird's Pete Shagory will take a seat on Arbor Surgical's board.

Bioheart Inc.

Bioheart closes $19mm Series D venture round

Sep.—Bioheart (focused on the repair of damaged heart muscle) has raised $19mm with the closing of its oversubscribed Series D venture round. Advent-Morro Equity Partners, Astri Group, Magellan Group, Presidential Capital Partners, Dan Marino Investments, Minnesota Biomed Partners, and New World Angels all participated.

Individual investors included Cordis Corp. founder Dr. William Murphy and David Gury, former chairman and CEO of Nabi Biopharmaceuticals. The company is developing MyoCell, a formulation of myogenic cells that consists of adult muscle repair cells (myoblasts) removed from a patient's thigh muscle and cultured for 2-3 weeks. A surgeon then delivers them to the heart via MyoCath, Bioheart's minimally invasive injection catheter. MyoCell is in several Phase II/III studies throughout Europe and will start Phase I trials in the US soon. The company says it should gain European approval during early 2007, and US approval about a year later. Bioheart is also working on the development of a biological pacemaker.

Intercytex

Intercytex brings in £12mm with Series D round

Aug.—Intercytex (cell therapy for wound care) has raised £12mm ($21.2mm) in its Series D round. Existing investors Avlar BioVentures, Merlin Biosciences, 3i, Cambridge Gateway Partnerships, NIF Ventures, and Scottish Equity Partners all participated.

The company will use the proceeds to support upcoming Phase III clinical trials of its lead wound care product ICX-PRO, a human fibrin-based gel matrix infused with donor fibroblast cells that is designed to stimulate cellular repair in chronic wounds. Intercytex will also apply some of the funds to its earlier-stage candidates--ICX-TRC, which is in Phase I for hair regeneration, and ICX-SKN, a preclinical skin replacement being developed for use in skin graft procedures. The company's CFO Richard Moulson reported that Intercytex's current funds will take it through 2007, at which point the company may pursue an initial public offering or, at the least, another venture round.

ISTO Technologies Inc.

ISTO Technologies closes $10.8mm private financing

Sep.—Orthobiologics company ISTO Technologies raised $10.8mm through a private financing led by Zimmer Holdings with additional participation from Alafi Capital, Life Science Partners, and Mid-America Transplant Services.

The company plans to use the proceeds to bring its candidates for cartilage repair into the clinic. ISTO is developing cell-based products for use in minimally invasive procedures to regenerate damaged and diseased cartilage and fully restore its function. The company takes donated cartilage (chondrocytes) from young individuals, whose cells can regenerate cartilage matrix much faster than adult cells. It is initially focusing in the areas of knee joint and spinal disc repair.

KFx Medical Corp.

KFx Medical closes $6.2mm Series A round

Aug.—Start-up medical device firm KFx Medical raised $6.2mm in an oversubscribed Series A financing led by Charter Life Sciences with additional participation from Arboretum Ventures, Montreux Equity Partners, and MB Venture Partners.

The company plans to use funding from the round to prepare for a US launch of its minimally invasive percutaneous device that repairs injured rotator cuffs without tying sutures. It believes the system is easier for shoulder surgeons to use than currently available minimally invasive procedures and offers better results for patients. KFx says the product will compete directly with Opus Medical's AutoCuff arthroscopic rotator cuff system. With the financing, Charter Life Sciences' Barr Dolan, Arboretum's Tim Petersen, and Montreaux's Dr. John Savarese take seats on KFx's board while MB Ventures' Ted Davis becomes an observer. In 2003, the company raised $800k in seed funding.

Replication Medical Inc.

Replication Medical closes $15mm Series D round

Sep.—Replication Medical (implantable hydrogel devices) raised $15mm with its Series D financing to Abbott Spine (formerly Spinal Concepts; spinal implants and minimally invasive surgery).

The company plans to use the funding for ongoing development of its hydrogels and implants to treat degenerative spinal disc disorders. Abbott's investment represents the company's commitment to supporting promising technology in the spinal market. Replication Medical's NeuDisc spinal nucleus implant is currently undergoing clinical development in Europe; US trials are expected to begin next year. The device is inserted into the spine and forms a protective shield to eliminate painful rubbing between discs.

Sightline Technologies Ltd.

Sightline Technologies closes $10mm Series D round

Aug.—Israeli company Sightline Technologies (endoscopic medical devices) raised $10mm in a venture round of Series D preferred shares led by NGN Capital with additional participation from other first-time backer Infinity Venture Capital and returning shareholders Vitalife Life Science Ventures, InvenTech Investments, and the Fishman Group.

The company will use the funding for sales and marketing efforts of its FDA-approved ColonoSight system, including hiring additional staff and conducting studies analyzing the cost-effectiveness of the device. Studies have shown that the product enables gastroenterologists to quickly and accurately diagnose and treat abnormalities in the large intestine. ColonoSight incorporates the EndoSight colonoscope, IntraPull power-assisted technology to advance the scope, disposable ColonoSleeve tube and sheath, and a light emitting diode (LED) source. NGN Capital's Kenneth Abramowitz takes a seat on Sightline's board.