Recent Financings of Private Companies (03/2010)

Start-Up's monthly comprehensive review of emerging life science companies that have received venture funding during the month, including companies in the pharmaceutical, medical device, diagnostic and research instrumentation and reagent sectors.

In Vitro Diagnostics

Aviir Inc.

Aviir gets $4.2mm through early-stage financing

Jan.—Aviir (molecular diagnostics for cardiovascular and metabolic diseases) has raised $4.2mm through the sale of equity, debt, and other rights to six undisclosed investors.

Rapid Diagnostek Inc.

Rapid Diagnostek gets $4mm in Series B money

Jan.—Rapid Diagnostek (formerly Intellignostics; developing a handheld device to detect infectious diseases from samples of body fluids) has raised $4mm in its Series B financing led by Peak Ridge Capital, which contributed $1mm. Other investors were not disclosed.

Rapid Diagnostek's IntelliProbe Immunosensor ( IPI) battery-powered device uses a sensor with a biological coating that specifically binds to disease markers and pathogen-associated molecules when exposed to a sample of blood, urine, or saliva. The sensor technology provides a read-out within one minute, which enables physicians to quickly determine a treatment option or course of action for the patient. Rapid Diagnostek hopes to commercialize the device for animal use in 2011 and for humans the following year. The company's 2008 Series A round generated $1.3mm.

Pharmaceuticals

Alnara Pharmaceuticals Inc.

Series B results in $35mm for Alnara

Jan.—Alnara Pharmaceuticals (developing oral protein therapeutics for metabolic disorders) raised $35mm in its Series B financing led by first-time backer MPM Capital, which was joined by returning shareholders Third Rock Ventures, Frazier Healthcare, and Bessemer Venture Partners. The company will use some of the funds to help gain approval for and launch its liprotamase to treat exocrine pancreatic insufficiency, and for ongoing development of a liprotamase formulation aimed at cystic fibrosis in pediatric patients. A member of MPM will take a seat on Alnara's board.

Archimedes Pharma Ltd.

Archimedes raises £65mm from new and existing investors

March—Archimedes Pharma (therapeutics for cancer, pain, and neurology) raised £65mm ($100mm) through its latest financing round. New investor Novo Growth Equity (managed by Novo AS) participated, along with Archimedes' major returning investor Warburg Pincus. Proceeds from the round, which is being called the largest by a private European biopharmaceuticals company in 15 years, will be used to establish operations in the US, and to globally launch Archimedes' PecFent, a fentanyl nasal spray for breakthrough cancer pain.

Asmacure Inc.

Asmacure brings in $3.9mm through its Series B round

Jan.—Asmacure (respiratory therapeutics) has raised $3.9mm through the closing of its Series B venture round to three undisclosed investors.

Cellular Dynamics International

Cellular Dynamics raises $31.3mm via late-stage round

Jan.—Cellular Dynamics International (creating stem cell therapies from adult tissue) has raised $31.3mm through its latest venture round to seven investors.

Curaxis Pharmaceutical Corp.

Voyager re-emerges as Curaxis; gets $1.5mm from 72 backers

Feb.—Curaxis Pharmaceutical (collaborating with Durect on a leuprolide implant for Alzheimer's) has sold $1.5mm in equity to 72 investors. The company, which was formerly called Voyager Pharmaceutical, announced in May 2009 that it hired a consulting firm to explore a potential reverse merger in order to go public.

Eleven Biotherapeutics

Eleven Biotherapeutics raises $35mm through Series A round

Feb.—Protein therapeutics start-up Eleven Biotherapeutics Inc. has raised $35mm through its Series A financing. Flagship Ventures and Third Rock Ventures, which both helped form the company in 2009 with $1mm in seed funding, co-led the round.

Key researchers from Harvard University (Drs. Reza Dana and Gregory Verdine), Stanford University (Dr. K. Christopher Garcia), the University of Alabama (Dr. Casey Weaver), and MIT (Dr. K. Dane Wittrup) joined the VCs in establishing the company, which is concentrating on drug development based on protein engineering and structural biology. While specific candidates and diseases have not yet been disclosed, Eleven's pipeline shows projects approaching the optimization stage for coagulation disorders, inflammation, and muscle wasting conditions, with an initial focus on the Th27 pathway and related cytokines. The company's business development plan anticipates work on clinically validated drug targets, the discovery of new targets, and in-licensing Phase I/II-stage compounds.

Excelimmune Inc.

Open Series B brings initial $1mm for Excelimmune

Feb.—Therapeutic antibody developer Excelimmune raised $1mm in its Series B financing, which remains open. Undisclosed new and returning shareholders participated.

Founded in 2006, the company will use the funds for ongoing development of its preclinical human recombinant polyclonal antibody (HRPA) candidate Staphguard for methicillin-resistant Staphylococcus aureus. Excelimmune is creating HRPA compounds against infectious diseases using its automated technology that is designed to clone and screen human donor-derived antibodies. In September 2009, Excelimmune received a Phase I grant from the National Institutes of Health to develop a HRPA against Clostridium difficile.

Intercept Pharmaceuticals Inc.

Genextra puts additional $25mm into Intercept via Series B

Jan.—Intercept Pharmaceuticals (targeting bile acid-regulated nuclear receptors for liver diseases and diabetes) completed a $25mm Series B financing from its majority shareholder Genextra SPA, an Italian biotech. The CEO of Genextra has joined Intercept's board as chairman.

Merus BV

Merus raises €21.7mm through its Series B round

Jan.—Merus (cancer, inflammation, and infectious disease therapeutics) has raised €21.7mm ($30.7mm) through its Series B venture round. New investors Novartis Option Fund, Pfizer Venture Investments, Bay City Capital, and Life Science Partners co-led the financing and were joined by current shareholder Aglaia Oncology Fund.

Concurrent with this financing, six-year-old Merus granted Novartis the option for an exclusive license to an undisclosed oncology program. Merus is using its MeMo transgenic mice and biospecifics and Oligoclonics technologies to produce combinations of therapeutic antibodies from one cell that are more potent than single antibodies. The company is targeting surface-expressed molecules on tumor cells, cytokines, and viruses. Merus' early 2006 Series A round brought in €2.5mm.

Mirrx Therapeutics AS

Newly formed Mirrx gets undisclosed amount in seed round

Feb.—Concurrent with its spin off from Stealth Biotech, antisense company Mirrx Therapeutics has raised an undisclosed amount in its seed financing from Seed Capital, Inventure Capital, and Vecata Invest.

Mirrx will use some of the proceeds to complete in vivo proof-of-concept studies on its Blockmir microRNA-silencing technology, which aims to reduce unintended effects on gene activity by regulating certain mRNAs. Blockmirs are antisense oligonucleotides that bind to specific microRNAs in a target mRNA to prevent an miRNA-mRNA interaction. Because of the specificity in regulating only one mRNA, the Blockmir does not affect normal function of the miRNA. The technology has potential in preventing microRNA from facilitating hepatitis C viral replication.

NABsys Inc.

DNA sequencing firm NABsys completes $7mm Series B round

Feb.—NABsys (sequencing the human genome by integrating electronic single-molecule detection and semiconductor technology) has raised $7mm in its Series B financing. Stata Venture Partners, which led the round and contributes a new board member, was joined by five other investors including Series A backer Point Judith Capital.

Pearl Therapeutics Inc.

Pearl Therapeutics gets in $15mm in pre-Series C debt financing

Feb.—Pearl Therapeutics (respiratory diseases) has raised $15mm from current backers Clarus Ventures, New Leaf Venture Partners, and 5AM Ventures. The money was brought in via a loan facility that converts into stock when Pearl completes its Series C round. The company will use the funds to begin a Phase IIb trial of PT003 for COPD.

Semprae Laboratories Inc.

Semprae Laboratories closes $3.1mm Series A

Jan.—Semprae Laboratories (women's health products) has added $3.1mm to its Series A venture round. There were nine investors, including company officials and Quaker BioVentures. The first undisclosed portion of the Series A funds were brought in during 2008.

With help from Quaker, Semprae was formed two years ago to acquire $2.5mm in assets from now-bankrupt Zestra Laboratories. Included in the purchase was hormone-free Zestra, which is an over-the-counter topically applied product made from botanical oils and extracts for female sexual arousal.

Somnus Therapeutics Inc.

CTI Life Sciences leads $15mm Series A for Somnus

Feb.—CTI Life Sciences Fund has led the $15mm Series A financing for start-up insomnia-focused Somnus Therapeutics and contributed a new board member. Returning investor Care Capital also participated.

In 2007, shortly after it was founded, Somnus signed its first major deal--it in-licensed from SkyePharma exclusive worldwide rights to the sleep disorder candidate SKP1041 in exchange for $4mm up front, $31mm in total milestones, and sales royalties. SKP1041, a controlled-release form of the non-benzodiazepine GABA agonist zaleplon (marketed as a generic for insomnia), aims to prevent patients from waking up during the night, an underserved market referred to as sleep maintenance. It uses SkyePharma's Geoclock system to administer the drug over a pre-set period--the tablet is formulated to produce a pH-independent lag time before the main ingredient is delivered. Somnus currently faces no competition in the pursuit of a delayed-release version of zaleplon. Alexza had been working on a rapid delivery form using its Staccato device, but halted development at the end of last year. The Series A money will fund Somnus' Phase II trial for SKP1041.

TheraVasc Inc.

Newly formed TheraVasc brings in $500k in Series A money

Jan.—TheraVasc (repurposing existing drugs for vascular indications) has raised $500k through the closing of its Series A venture round. JumpStart and Portal Capital each made a $250k equity investment.

Formed last year, TheraVasc is using an oral formulation of sodium nitrite (TV1001) for vascular diseases including peripheral artery disease (PAD). TheraVasc is set to begin Phase I trials with the new money and the $100k loan it received from the Innovation Fund of the Lorain County Community College Foundation. Sodium nitrite has shown to promote regrowth of blood vessels in tissues denied blood due to PAD, a condition that afflicts about 14 million Americans and has an annual market estimated to reach up to $3.3bn. The compound may also be used as a treatment for patients with diabetic leg and foot problems.

Tioga Pharmaceuticals Inc.

Second round draws $18mm for Tioga

Feb.—In its second financing round, Merck KGAA spin-off Tioga Pharmaceuticals (therapeutics for gastrointestinal disorders) raised $18mm from returning shareholders Forward Ventures, New Leaf Venture Partners, and BB Biotech Ventures, and first-time backer Genesys Capital Partners. The funds will support a Phase III trial of its lead compound asimadoline for diarrhea-predominant irritable bowel syndrome. The candidate is licensed to Ono Pharmaceutical in Japan, South Korea, and Taiwan, where it is expected to begin clinical trials shortly. Tioga's January 2006 Series A generated $24mm.

Tragara Pharmaceuticals Inc.

Second round brings in $5mm for Tragara Pharmaceuticals

Jan.—Tragara Pharmaceuticals (mainly oncology therapeutics; also has a personalized cancer diagnostic kit in development) raised $5mm from seven investors in its second financing round. Another $5mm is expected. While specific buyers were not disclosed, Tragara's Series A investors (which together put $40mm into the company in 2007) included Domain Associates, ProQuest Investments, Morgenthaler Ventures, Oxford Bioscience Partners, and Mitsubishi.

Medical Devices

Arsenal Medical Inc.

Arsenal Medical raises $2mm through sale of debt

Jan.—Arsenal Medical (cardiovascular and ophthalmic devices) has raised just over $2mm through the sale of debt to nine undisclosed investors.

AxoGen Inc.

Nerve repair firm AxoGen raises $3.4mm in late-stage financing

Jan.—AxoGen, which sells grafts that preserve peripheral nerve tissue, pulled in $3.4mm through a late-stage financing of equity and other rights. Eight investors participated. The round could bring in another $1.3mm according to the Form D. A few months prior to this transaction, the company sold $2.6mm worth of debt and other rights (one industry source called this earlier fundraising the Series D).

BioBehavioral Diagnostics Co.

BioBehavioral Diagnostics completes first tranche of Series B

Feb.—BioBehavioral Diagnostics (sells a diagnostic monitoring system that assesses attention state and other ADHD symptoms) raised $7mm in the first tranche of its $10mm Series B round, which was led by returning shareholders Sevin Rosen and Tullis Dickerson. The proceeds will fund further clinical studies on the Quotient device as well as sales and marketing efforts.

CardioInsight Technologies Inc.

CardioInsight Technologies gets $5.7mm through its Series B

Jan.—CardioInsight Technologies (noninvasive ECG imaging) has raised $5.7mm through its Series B venture round to eight investors, including company management, Dr. Michel Haissaguere (an electrophysiologist), and current shareholders Draper Triangle Ventures and Case Technology Ventures.

Three-year-old CIT was formed by Case Western Reserve University's Drs. Charu Ramanathan and Ping Jia with assistance from Jumpstart and Draper Triangle Ventures. CTI licensed CWRU's technology, which it has developed into a real-time, single-beat heart-mapping system that produces a detailed three-dimensional image of a patient's heart activity using external sensors. It has been tested on animals and humans as a tool to help diagnose and treat heart abnormalities, including congestive heart failure, ventricular tachycardia, and arrhythmia. The device can also be used for cardiac resynchronization therapy.

Ekos Corp.

Ekos to raise $3.5mm through Series E venture round

Jan.—Ekos (using ultrasound to treat vascular thrombosis) has raised $2mm of a potential $3.5mm through a Series E venture round to 19 investors.

Insite Medical Technologies Inc.

Insite Medical Technologies raises $1.06mm in Series A round

Jan.—In what appears to be its Series A financing, Insite Medical Technologies (epidural access devices) has raised $1.06mm from 12 investors. The round could bring in an additional $1.01mm.

The start-up is concentrating on the safe delivery of regional anesthesia, including epidurals, without the need for a sharp needle. The company's Epiphany delivery system provides the anesthesiologist with highly controlled access when placing the epidural catheter in the epidural space--a small area next to the dura, which is the thin protective covering of the spinal cord. Stanford University's Biodesign program fellows Zachary Malchano, Stephen Eichmann, James Wall, MD, and Kenneth Wu invented and designed an initial prototype of the device, and have tested it in early proof-of-concept studies. Besides the current investment, Insite has also received $500k in angel funding and received $100k in a Phase I SBIR award from the National Science Foundation.

MicroTransponder Inc.

Device start-up MicroTransponder brings in $7mm via Series B

Feb.—Series A backers and first-time angel investors have participated in neurostimulator developer MicroTransponder's $7mm Series B financing. The company also received a $2.6mm National Institute of Neurological Disorders & Stroke SBIR grant, which together with the equity round will support clinical studies and regulatory filings of the investigational SAINT ( Subcutaneous Arrangement of Implantable Neural Transponders) minimally invasively wireless implant for chronic pain.

NeoMend Inc.

NeoMend raises $30mm through Series D round

Jan.—NeoMend (surgical sealants) raised $30mm through its Series D round. Existing investor Clarus Ventures provided $17mm, and was joined by other returning backers Sanderling Ventures, Novo Ventures, Vivo Ventures, and Prospect Venture Partners.

The company, which was founded in 1999, says the funds will allow it to break even financially. NeoMend's patented ProGEL bioadhesive hydrogel technology--a combination of human serum albumin and a cross-linked component of PEG--forms the basis for its wound healing products in development. The FDA granted premarket approval earlier this month for the ProGEL pleural air leak sealant, which will give NeoMend visibility in the thoracic surgery market. Its other candidates-- ProGEL-AB, designed to seal wounds and prevent adhesions, and ProGEL-VS, for sealing vascular punctures--could have applications in spinal, gynecological, and general surgeries.

Orthocare Innovations LLC

First round for Orthocare Innovations brings in $3mm

Jan.—In its first venture round, Orthocare Innovations (developing prosthetic and orthotic devices) has raised $3mm from the sale of equity to Schooner Capital and an unnamed investor.

Orthocare, which was founded in 2007, will use the funds to help launch its products such as vacuum suspension and self-aligning limb systems. The company's portfolio includes the Compas and Smart Pyramid prosthesis alignment tools, StepWatch gait monitoring system, Contineo upper extremity prosthetic device, Edison augmented vacuum suspension system, Galileo system that assesses amputee functional activity, and Newton self-aligning limb component.

Pulmonx Corp.

Pulmonx raises $32mm through its Series C venture round

Feb.—Two years after withdrawing its IPO, Pulmonx (devices to diagnose and treat pulmonary disorders) has raised $32mm through its Series C venture round. New backers HealthCap and Kleiner Perkins Caufield & Byers, which co-led the financing and each contribute a board member, were joined by current shareholders DeNovo Ventures, Latterell Venture Partners, MedVenture Associates, Montreux Equity Partners, and Posco BioVentures and nine undisclosed investors. The company is preparing for the commercial launch of its Chartis pulmonary assessment system and Zephyr endobronchial valve for emphysema.

Resoimplant GMBH

Resoimplant's third round generates €2.5mm

Feb.—Resoimplant GMBH (resorbable polymer implants) has raised €2.5mm ($3.5mm) in its Series C financing to first-time contributor Bavarian Investment Company and returning shareholders S-Refit, High-Tech Gründerfonds, Bayern Kapital, and FVW Beteiligungsgesellschaft.

The company, which was founded in October 2006, will use the proceeds for commercialization activities of the Resofix two-piece expansion system and to enhance its pipeline to include a fixation system for shoulder and ankle surgeries. As its name implies, Resoimplant has developed resorbable implant systems designed to repair tendons, ligaments, and bone fragments. Its patented technology allows the implants to be absorbed naturally, eliminating the need for a second surgery to remove them as is required for those made of metal.

Valtech Cardio Ltd.

Valtech Cardio brings in $17.8mm through its Series B

Feb.—Valtech Cardio (heart valve repair and replacement technologies) has raised $17.8mm through its Series B venture round to returning shareholders Oxo Capital Valve Ventures, NGN Biomed, and Peregrine VC, and unidentified new investors.

Valtech is based in Israel but has a US office in Massachusetts. The company is developing devices for minimally invasive surgeries and transcatheter mitral valve repair to improve valve function and limit or eliminate mitral regurgitation. The devices are an alternative to open-heart procedures that are currently performed.