Cypress Bio Gets Buyout Offer, Trius Prepares for IPO, Arena Gains Following Vivus Setback, & More San Diego Life Sciences News

7/22/10Follow @bvbigelow

San Diego’s life sciences companies continued to raise big money, which is a good thing, since a survey shows that venture funding for biotech and medical device companies accounted for more than 80 of all second-quarter VC deals in San Diego. We’ve rounded up all that and more for you here:

—San Diego’s Cypress Bioscience (NASDAQ: CYPB) said its board will review an unsolicited buyout offer with its financial and legal advisers, and advised the company’s shareholders to “take no action at this time.” New York-based Ramius, a $7.8-billion hedge fund group, owns almost 10 percent of Cypress and offered $4 a share, or about $160 million, to acquire the rest.

—San Diego-based Trius Therapeutics is back on track after it was forced to postpone its planned IPO earlier this year to accommodate new FDA guidelines for a late-stage trial of its antibiotic. The company’s initial stock offering is expected next week.

An expert panel that advises the FDA voted 10-6 against approving an obesity drug developed by Mountain View, CA-based Vivus (NASDAQ: VVUS), saying the negative effects outweighed the weight-loss benefits. After the ruling, shares of San Diego’s Arena Pharmaceuticals (NASDAQ: ARNA) climbed toward its 52-week high of $5.93 a share, but San Diego-based Orexigen Therapeutics (NASDAQ: OREX) continued to trade around $4 a share. Both San Diego biotechs are developing obesity drugs of their own.

—Alzheimer’s drug developer Sonexa Therapeutics ranked as San Diego’s No. 1 venture deal during the second quarter, when the biotech raised $37.23 million. The MoneyTree survey showed that venture firms invested $170.6 million in 24 local companies during the quarter—with more than 80 percent of the capital going to life sciences deals.

—San Diego-based Zogenix, a four-year-old startup developing drugs for treating neuroscience disorders and pain, said last week it raised $50 million in an undesignated round that includes a $15 million venture investment from its existing investors and $35 million in debt financing led by Oxford Finance and Silicon Valley Bank. The returning venture investors are Clarus Ventures, Domain Associates, Scale Venture Partners, Thomas, McNerney & Partners, Abingworth Management, and Chicago Growth Partners.

—San Diego authorities have charged a 59-year-old man, Kent Thomas Keigwin, with murder in connection with the death of John G. Watson, a retired biotech executive and angel investor who was found dead in his La Jolla home on June 8. Prosecutors said Keigwin also was charged with identity theft, grand theft of personal property, burglary, and forgery of documents in connection with $7.5 million that was unlawfully transferred from Watson’s brokerage account.

Auspex Pharmaceuticals of Vista, CA, has raised an additional $12 million from investors to continue development of deuterium-based analogs of clinically validated drugs in multiple therapeutic areas. The biotech raised almost $13.9 million in a previous round from Thomas, McNerney & Partners, CMEA Ventures, and Costa Verde Capital.

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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