San Diego Biotech Startups Raise New Cash to Treat Anemia, Heart Disease and More

8/19/09Follow @bvbigelow

Three life sciences companies in the San Diego region have raised venture capital lately, according to our scan of filings from the Securities and Exchange Commission. All three are concentrating on developing new drugs. Here’s a roundup:

Palkion, a San Diego developer of anemia drugs, has raised $2.5 million from investors, according to an SEC filing earlier this week. The company was formed in February 2008 by ProQuest Investments and CrystalGenomics, a Korean drug discovery company with operations in Emeryville, CA. Palkion is headed by Wendy Johnson, a ProQuest venture partner, and CrystalGenomics’ CEO Joong-Myung Cho is a board member.

Palkion said in June it has initiated preclinical studies of a drug to treat anemia that is based on the discovery and development of oral agents that inhibit prolyl hydroxylase enzymes. Blocking those enzymes should help to increase the production of oxygen-carrying red blood cells which are lacking in anemic patients.Plus,an oral drug promises greater convenience and dosing flexibility than current injectable drugs. This is a potentially huge market, given that anemia drugs are one of the franchises that made Thousand Oaks, CA-based Amgen (NASDAQ: AMGN) the world’s largest biotech company.

— San Diego-based Sequel Pharmaceuticals has raised $3 million of a planned $8.4 million round, according to a regulatory filing earlier this month. The company’s board includes venture partners from Domain Associates, Forward Ventures, InterWest Partners, Skyline Ventures, and Montreux Equity Partners. On its website, Sequel says it has significant capabilities in cardiovascular drug development, and is developing and commercializing novel, clinical-stage drug candidates. Sequel’s CEO, Randall Woods, is well known on the San Diego biotech scene from his past stints at Corvas International, Boehringer Mannheim, and Eli Lilly.

Auspex Pharmaceuticals, based in Vista, CA, disclosed in a regulatory filing earlier this month that it has raised $3 million in new capital. The company, founded in 2001, says it is developing drugs based on “deuterium chemistry” in multiple therapeutic areas, and it has been working to secure a proprietary position on several hundred compounds and initiate development of multiple clinical drug candidates.

Auspex said last year it raised $13.875 million in a Series B financing led by Thomas, McNerney & Partners that was joined by CMEA Ventures and Costa Verde Capital. In January, we reported that Auspex had recruited former SGX CEO Michael Grey to head the company. Grey did not return phone calls seeking additional information about Auspex.

Deuterium modification is an emerging field in the biotech business, especially since June, when GlaxoSmithKline signed a partnership with one of the experts in the field, Lexington, MA-based Concert Pharmaceuticals. That deal could be worth more than $1 billion to the smaller company if it meets milestones over time. If Auspex can duplicate that, its latest batch of financial backers will undoubtably be quite happy.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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