Life Science Start-Ups: Venture Funding, July-August 2014

Derived from Strategic Transactions, a fully searchable premium source for tracking life sciences deal activity, the Venture Funding column provides a comprehensive monthly review of emerging life science companies that have received venture funding, including companies within the In Vitro Diagnostics, Medical Devices, and Pharmaceuticals sectors. This month’s column covers deals announced May through June 2014.

IN VITRO DIAGNOSTICS

Senseonics Inc.

Senseonics closes $20mm late-stage round

Senseonics Holdings Inc. (formerly Sensors for Medicine & Science; developing a continuous glucose monitoring system) raised $20mm in what looks to be its Series E round to returning shareholders Anthem Capital, Delphi Ventures, Greenspring Associates, Healthcare Ventures, New Enterprise Associates, as well as six unnamed investors. The money will be used to finish up US and European clinical trials needed to obtain regulatory approvals. (Jun.)

MEDICAL DEVICES

Benvenue Medical Inc.

Benvenue Medical raises funds via Series E and debt sale

Benvenue Medical Inc. (devices for minimally invasive spinal repair) raised $40mm in its Series E round led by first-time backer InterWest Partners, which adds a board member and was joined by returning investors De Novo Ventures, Domain Associates, Technology Partners, and Versant Ventures. The company also sold $24mm in debt to Silicon Valley Bank. Some of the proceeds will support US commercial expansion and scale-up manufacturing. Benvenue believes the size of the investment was due to the successful launch earlier this year of its Kiva system for vertebral compression fractures. (Jun.)

Definiens AG

Definiens raises €15mm through Series D round

Definiens AG (digital pathology image analysis) raised €15mm through its Series D round. Wellington Partners and Gilde Healthcare co-led, and were joined by returning backers Cipio Partners and TVM Capital. Wellington takes a seat on the company’s board. Funds will go toward continued advancement of Definiens’ Tissue Phenomics digital biomarker image analysis platform, which is used by pathologists and drug development firms for oncology research. Definiens' previous financing activity includes an undisclosed amount raised in 2000, €2mm in 2006, and €10mm in 2012. (Jun.)

Proteus Digital Health Inc.

Proteus Digital brings in $120mm from new investors in Series G round

New undisclosed institutional investors in the US, Europe, and Asia invested $120mm in Proteus Digital Health Inc.'s Series G round. Proceeds will help the company fund development of "digital medicines," technology that integrates ingestible sensors with pharmaceuticals to provide patients and physicians with means to electronically track medication management and health statistics. Jonathan Symonds (current chairman of HSBC Bank, and formerly the CFO of Novartis) joined Proteus' board; Novartis invested in Proteus through previous rounds. (Jun.)

Spinal Kinetics Inc.

Series C lands $34mm for Spinal Kinetics

In its third financing round, Spinal Kinetics Inc. (developed the M6 artificial disc) raised $34mm from 33 investors, including lead and returning backers Scale Venture Partners, Lumira Capital, De Novo Ventures, SV Life Sciences, and HLM Ventures. The money will support an FDA-approved trial of its M6-C artificial cervical disc and expand global commercialization. (Jun.)

XLV Diagnostics Inc.

XLV Diagnostics raises $Cdn3mm through Series A round

XLV Diagnostics Inc. (mammography technology) raised $Cdn3mm ($2.76mm) in its Series A round from the Bernard M. Gordon Charitable Remainder Unitrust. (May)

XLV was spun out of the Thunder Bay Regional Research Institute (TBRRI) in 2011, and received seed funding from MaRS Innovation, the Ontario Institute for Cancer Research, TBRRI, and Sunnybrook Research Institute, plus $Cdn600k in non-dilutive financing last year from the Canadian government’s development organization FedNor. The company is designing direct conversion detection digital imaging systems that will provide high quality mammogram images at a lower cost than traditional machines. XLV plans to use the Series A money to install the first clinical mammography machine at Thunder Bay’s Regional Health Sciences Centre, and to obtain Canadian, US, and European regulatory approval for marketing.

PHARMACEUTICALS

Aduro BioTech Inc.

Aduro BioTech raises $55mm through Series C round

Aduro Biotech Inc. (oncology immunotherapies) raised $55mm from Morningside Group and other new and existing investors in its Series C round. One of the first-time buyers is Johnson & Johnson Development Corp.; last month, Aduro granted J&J's Janssen Biotech exclusive rights to prostate cancer candidates based on Aduro’s live-attenuated double-deleted (LADD) Listeria monocytogene platform. Series C proceeds will go toward an ongoing Phase II trial of the company's GVAX Pancreas compound for metastatic pancreatic cancer, and will also support development activities for mesothelioma and high-grade glioma as well as additional indications, and a small-molecule program targeting the STING receptor. Including the current round, Aduro has raised $84mm to date. (Jun.)

Armo BioSciences Inc.

New and existing investors put $30mm into Armo through Series B round

Armo BioSciences Inc. (immunotherapeutics) raised $30mm through its Series B round. New investor NanoDimension was joined by Series A buyers Kleiner Perkins Caufield & Byers, OrbiMed, and DAG Ventures. Proceeds will fund expansion cohorts of a Phase I trial studying Armo's AM0010, a PEGylated recombinant human interleukin-10, for solid tumors. (The compound is also being investigated for idiopathic pulmonary fibrosis, hypercholesterolemia, and inflammatory disorders including inflammatory bowel disease.) (May)

Chase Pharmaceuticals Corp.

CNS drug repositioning company Chase Pharma completes $21mm Series B round

Chase Pharmaceuticals Corp. (redesigning and enhancing existing products for brain function disorders) raised $21mm in a two-tranche Series B financing, which was led by first-time backer New Rhein Healthcare Investors. Other new buyers included Edmond de Rothschild Investment Partners and Indian pharmaco Cipla Ltd.’s Cipla Ventures (which put in $1.5mm for a 14.6% stake, and pledged another $4.5mm upon the achievement of milestones), plus returning shareholder Brain Trust Accelerator Fund. (May)

A New Rhein partner joined Chase’s board as chairman, and representatives from Edmond de Rothschild and Cipla were added as members. Chase is targeting the symptomatic treatment of Alzheimer’s disease by improving the effects of existing AD drugs on cognition, reducing side effects, and allowing for less frequent dosing. Chase is developing proprietary combinations of marketed drugs, led by CPC201 for AD-related dementia. The Series B funds will pay for the planned Phase IIa/b trials. Cipla agreed to advise on the finished dose form and may provide low-cost access to CPC201 in India and South Africa. Chase is also developing preclinical CPC252, a transdermal formulation for AD and Parkinsonism dementia. The company was founded in 2007 and is named after Thomas N. Chase, MD, the CSO and previously the National Institute of Neurological Disorders & Stroke’s scientific director. Dr. Chase and Kathleen Clarence-Smith, MD (who used to run CNS development at Sanofi, Roche, and Otsuka), invented the underlying pharmacologic IP behind Chase’s candidates. They have an issued patent covering the combination of an acetylcholine esterase inhibitor with a nonselective peripheral anticholinergic agent. The identities of the combination molecules are unknown, but Chase is conducting a study of Alzheimer’s medication rivastigmine (Exelon) with overactive bladder treatment trospium (Sanctura). In 2011, Chase completed a $1.2mm Series A round from Brain Trust Accelerator Fund.

Chrono Therapeutics Inc.

Series A round brings $33mm to smoking cessation company Chrono Therapeutics

Canaan Partners and 5AM Ventures led a $33mm Series A financing for transdermal drug/device company Chrono Therapeutics Inc. Fountain Healthcare Partners, Mayo Clinic, GE Ventures, and 26 undisclosed investors participated. Executives from Canaan Partners, 5AM Ventures, and Fountain joined Chrono’s board. (Jun.)

Chrono, founded in 2004, partnered with the [University of Basel] and other affiliated academic centers to develop SmartStop (previously known as ChronoDose), an anti-smoking device containing a transdermal patch that can be programmed to noninvasively deliver nicotine in a controlled-release manner. It may be worn on the wrist, torso, or arm. Chrono believes SmartStop will be more effective than existing nicotine replacement therapies (gums and patches) because it takes into consideration individual nicotine craving cycles and provides sufficient amounts of nicotine at the appropriate time. The system can be programmed to automatically adjust the nicotine doses delivered to coincide with those cravings throughout the day and prevent the urge to smoke, particularly at the times when cravings are most powerful, such as mornings and meal times. The drug/device incorporates wireless Bluetooth connectivity to mobile devices, allowing for personalized data collection, notifications, and smoking cessation encouragement. Beyond smoking, SmartStop may also have potential in drug addiction and Parkinson’s disease.

Clarus Therapeutics Inc.

Clarus gets $31.5mm through sale of notes

Clarus Therapeutics Inc. (developed the Rextoro testosterone replacement therapy) sold $31.5mm in 8% convertible promissory notes due on July 31, 2015 to C-Bridge Capital (lead and adds a board member), BioVeda Capital, and Pavilion Capital. Funds will be used to gain the NDA for and commercialize Rextoro. (Jun.)

Complexa Inc.

Complexa closes $13mm Series B round

JAFCO Life Science Investment led a $13mm Series B round for Complexa Inc. (inflammatory and fibrotic disease therapeutics). Undisclosed existing investors also participated. (Jun.)

Complexa, formed in 2008, is studying endogenous nitro-fatty acid signaling mediators and their implications in the development of inflammatory, metabolic, and fibrotic diseases, with an initial focus on acute and chronic kidney disease. The Series B funds will support work on the company’s first candidate CXA10, which just began Phase I trials for contrast imaging-induced nephropathy (a form of acute kidney injury caused by imaging dyes). Second-generation compounds are also being investigated in early studies for Type II diabetes, atherosclerosis, pulmonary and systemic hypertension, and inflammatory gastrointestinal diseases.

Corbus Pharmaceuticals Inc.

Corbus brings in $10.3mm via financing

Corbus Pharmaceuticals Holdings Inc. (developing treatments for rare inflammatory-fibrotic diseases) raised $10.3mm in an early-stage private equity financing to undisclosed investors. Aegis Capital’s SternAegis Ventures was the placement agent. (Jun.)

Corbus was founded in 2009 based on a patent portfolio discovered by the University of Massachusetts Medical School’s Sumner Burstein. The company currently has one product in development, Resunab, which is expected to enter Phase IIa later this year for cystic fibrosis and diffuse systemic sclerosis. Funds from the round will support those trials. (The IND filing is expected during the second half of 2014.) Resunab is designed to bind to CB2 receptors and exhibit anti-inflammatory and antifibrotic activities.

Inception 5

Inception Sciences Inc.

Inception 5 Inc., focused on multiple sclerosis, gets funding from Versant

Inception 5 Inc., the fifth spin-off from drug discovery group/incubator Inception Sciences Inc., raised an undisclosed amount of financing from Versant Ventures. (Jun.)

Using a remyelination drug screening platform invented at the University of California, San Francisco, Inception 5 plans to develop small molecules that promote remyelination in multiple sclerosis. Roche will provide milestone-based research funding and has an exclusive option to acquire the company upon filing of its first IND.

KemPharm Inc.

Deerfield loans $25mm up front to KemPharm, potential for another $35mm

Abuse-deterrent CNS medication developer KemPharm Inc. secured up to a $60mm loan from Deerfield Management, which contributes a new board member. The company initially received $25mm ($10mm through a convertible note and $15mm via a senior term debt facility), and may get an additional $35mm upon achieving milestones. The new funding will support Phase III KP201 (acetaminophen and benzhydrocodone) for acute moderate-to-severe pain. (Jun.)

Lysogene SAS

Lysogene raises €16.5mm via Series A led by Sofinnova

Lysogene SAS (genetic neurodegenerative diseases) raised €16.5mm ($22.6mm) in a Series A financing led by seed backer Sofinnova Partners. First-time shareholders Bpifrance-affiliated Innobio and Novo Seeds co-led. Each investor contributed a board member. (May)

Established in 2009, Lysogene is developing gene therapeutics delivered intracerebrally, focused initially on the lysosomal storage disorder mucopolysaccharidosis Type IIIA (also known as Sanfilippo syndrome Type A). In late 2013, Lysogene received exclusive worldwide rights to use ReGenX Biosciences’ NAV-based recombinant adeno-associated virus rh20 (rAAVrh20) vector to administer lead candidate SAF301, which is a functional human form of the N-sulfoglucosamine sulfohydrolase (SGSH) and sulfatase modifying factor 1 (SUMF1) genes. SAF301 is designed to completely cure Sanfilippo Type A in a single dose, as opposed to just treating its symptoms. Last year Lysogene completed the Phase I/II study. SAF301 has orphan drug status in the US and Europe. The Series A funds will help expand clinical studies of SAF301 and support work on a second Lysogene gene therapeutic in another genetic CNS indication.

Nanotherapeutics Inc.

Nanotherapeutics raises $30mm through debt financing from Hercules

Nanotherapeutics Inc. (large- and small-molecule drug delivery, devices, and biodefense products) raised $30mm through a debt financing from Hercules Technology Growth Capital. The loan will support Nanotherapeutics’ manufacturing infrastructure; the company has cGMP manufacturing facilities that scale-up, formulate, and produce preclinical and clinical-stage candidates for partners. (Jun.)

The company was founded in 1999 and has several business segments. Its nanotechnology drug delivery systems include NanoQUAD and NanoDRY, which are able to regulate the release rate, the extent of drug intake, and improve bioavailability in various types of formulations such as injectable, nasal, inhaled, topical, and oral. In 2009 Nanotherapeutics acquired several assets from DelSite, which went bankrupt. That deal included the GelVec nasal powder technology, which incorporates the GelSite resorbable biopolymer. Nanotherapeutics is working on a GelVec/GelSite influenza vaccine. That same year, Nanotherapeutics bought two Phase II candidates from companies that were also folding operations: Oscient Pharmaceuticals’ antibiotic ramoplanin for Clostridium difficile-associated disease, and Epix’s PRX3140 for Alzheimer’s. In addition, Nanotherapeutics’ pipeline contains projects for acute myeloid leukemia (Cloretazine) and solid tumors (Triapine) (both acquired from the defunct Vion Pharmaceuticals), plus opioid dependence (NanoBUP). Outside of pharmaceuticals, the company has the biodefense countermeasure products Radiogardase to reduce effects of radioactive cesium, and is developing NanoDTPA for radionucleotide exposure. In the device space, Nanotherapeutics markets the 510(k)-cleared NanoFUSE demineralized bone matrix (DBM) bone graft filler. To date, the company has been financed with over $100mm in government contracts and grants.

Navitor Pharmaceuticals Inc.

Navitor Pharmaceuticals raises $23.5mm in Series A financing

Navitor Pharmaceuticals Inc., which studies the effects of nutrient signaling pathways on diseases, raised $23.5mm in its Series A round from Polaris Partners, Atlas Venture, Johnson & Johnson Development Corp., SR One, and the Longevity Fund. (Jun.)

Founded in 2009 as Calorics Pharmaceuticals, Navitor focuses on cellular nutrient signaling involved in protein synthesis and cell growth, specifically the mammalian target of rapamycin complex 1 (mTORC1), a pathway regulated by nutrient sensing, especially to amino acids, to either promote or reduce cellular growth. Diseases of interest include those caused by irregular signaling due to dysfunctional mTORC1. Navitor’s scientific founder David M. Sabatini, MD, PhD, of MIT’s Whitehead Institute for Biomedical Research, has done pioneering work in the mTORC1 field, including discovering the two multi-protein complexes of mTOR kinase; Navitor holds exclusive rights from Whitehead to Dr. Sabatini’s IP covering nutrient sensing via mTORC1. The company’s drug discovery technology includes know-how, tools, and other methods to elucidate mTORC1, including reagents and assays, drug screens, and pathway analysis techniques. Navitor says targeting mTORC1 only, without affecting the activity of the other multi-protein mTOR kinase mTORC2, will avoid side effects seen with existing chronic medicines that interact with the broader mTOR kinase. The biotech plans to develop selective up- or down-regulators of mTORC1 for metabolic, neurodegenerative, autoimmune, and musculoskeletal diseases, plus rare metabolic and mitochondrial disorders including Leigh’s syndrome and Friedreich’s ataxia.

Neuway Pharma GMBH

German start-up Neuway completes €2.7mm Series A financing

Neuway Pharma GMBH (neurological drug candidates) raised €2.7mm ($3.7mm) in a Series A financing led by Wellington Partners IV Life Sciences Fund, which adds two members to the company’s advisory board. (May)

In April 2014 Neuway spun out of Life Science Inkubator (LSI), which has been incubating the start-up since 2010 (LSI will retain a significant stake). The company will use a drug delivery technology that enables therapeutics to cross the blood-brain barrier to treat orphan and genetic brain diseases. In addition to in-house development, Neuway plans to out-license its delivery system for additional CNS indications. The biotech previously received €2.3mm in government funding from the Federal Ministry of Education and Research.

Nordic Nanovector AS

Nordic Nanovector closes oversubscribed NOK250mm mezzanine round

Nordic Nanovector ASA raised NOK250mm ($41.57mm) through an oversubscribed pre-IPO private placement. New and existing investors (including the company's largest shareholder HealthCap) participated in the round, which was originally only anticipated to bring in NOK150mm. Proceeds will fund continued development of Betalutin, a radionucleotide-antibody conjugate in Phase I/II for non-Hodgkin lymphoma. (Jun.)

Investment Banks/Advisors: ABG Sundal Collier ASA; DNB ASA

Rodin Therapeutics Inc.

Rodin Therapeutics raises $12.9mm in Series A financing

Returning investors Atlas Venture and Johnson & Johnson Development Corp. led a $12.9mm Series A financing for Rodin Therapeutics Inc. (Alzheimer’s and other cognitive disorder treatments targeting epigenetic modifications). The start-up will use the funding to move lead candidates into Phase I. Its pipeline includes a chemical series recently licensed from the Broad Institute. (May)

Seres Health Inc.

Seres Health closes $10.6mm B round

Seres Therapeutics Inc. (developing Ecobiotic therapeutics for various diseases by targeting the underlying biology of the microbiome) raised $10.6mm in its Series B round to returning shareholders Flagship Ventures and Enso Ventures, and first-time backers Mayo Clinic (which also concurrently entered into a drug discovery and development partnership with the company), Alexandria Venture Investments, and six private investors. Funds will support development of Seres' pipeline, which includes lead candidate SER109 (Phase I) for C. difficile. (Jun.)

Spark Therapeutics LLC

Spark Therapeutics closes $72.8mm Series B financing

Only seven months after spinning off from Children’s Hospital of Philadelphia (CHOP) and receiving $50mm in committed Series A funding, Spark Therapeutics Inc. (gene replacements in ophthalmic, blood, and neurodegenerative diseases) completed an oversubscribed $72.8mm Series B round led by first-time backer Sofinnova Ventures. (May)

Other new buyers Brookside Capital, Deerfield Management, Rock Springs Capital, and funds and accounts affiliated with T. Rowe Price Associates, Wellington Management, and two undisclosed dedicated health care funds also participated along with CHOP, which invested $20mm in the current financing. Spark says the new money will support operations over the next three years, including expanding its team and advancing lead Phase III candidate for retinal dystrophies (including Leber congenital amaurosis Type II, a rare form of blindness) caused by mutations in the RPE65 gene.

SteadyMed Therapeutics Inc.

SteadyMed closes $19.6mm late-stage round

Drug delivery firm SteadyMed Ltd. raised $19.6mm in what looks to be its Series E preferred share financing to returning shareholders KB Partners and Samson Ventures, which were joined by individuals and private funds. The money will be used to finish development of and submit the NDA--expected in 2H 2015--for its Trevyent, which uses the company’s PatchPump to administer treprostinil to treat pulmonary arterial hypertension. (Jun.)

Trevi Therapeutics Inc.

Trevi Therapeutics closes $25mm Series B to pay for nalbuphine ER trials

Skin disorder start-up Trevi Therapeutics Inc. closed a $25mm Series B financing led by existing shareholder TPG Biotech, which invested $15mm in the first tranche. Angel backers also joined. Trevi will use the money to pay for studies of Phase I nalbuphine ER in uremic pruritus and prurigo nodularis, both chronic pruritus indications. (Jun.)

Western Oncolytics Ltd.

Western Oncolytics completes $275k seed round

Western Oncolytics Ltd. (viral gene drug delivery for cancer) raised $275k in its seed round. (Jun.)

Founded in 2013, Western Oncolytics is taking a two-pronged approach to treating cancer, based on a method discovered by the University of Pittsburgh’s Stephen Thorne, PhD (also the start-up’s scientific advisor). First, oncolytic vaccinia viruses are delivered and infect only cancer cells, destroying them through natural viral replication. Simultaneously, immune-modulating genes are transferred by the virus to instruct the immune system to fight off the cancer by re-directing T-cells to the tumor site. The genes also modify the tumor environment, allowing the immune system to mount its attack. Initially Western Oncolytics will focus on kidney cancer, and plans to begin Phase I/II trials soon for lead candidate WO12. In the future the company may also develop WO12 for other solid tumors including breast, ovarian, head and neck, melanoma, prostate, liver, pancreatic, and colorectal cancers.