Tandem Diabetes Care, a San Diego medical device maker founded in 2008, has raised $12 million of a financing round that could eventually total nearly $13.7 million, according to a recent regulatory filing. The company has applied to the FDA for clearance for its insulin pump, according to VentureWire.

The company’s website says its wearable insulin pump is an alternative for people with type 1 diabetes who have difficulty managing their diabetes on multiple daily injections. The device features touchscreen controls and a graphical user interface, and can be connected via a USB port to a Web application the company has developed to upload as much as 90 days of insulin pump data or blood glucose meter data.

Tandem Diabetes applied for 510(k) clearance from the FDA, VentureWire reports, meaning it believes its insulin pump is similar to other devices already on the market.

Indeed, as Luke reported last year, the company faces a market with many established insulin pump makers, including Minneapolis-based Medtronic; Bedford, MA-based Insulet; Switzerland’s Roche; New Brunswick, NJ-based Johnson & Johnson; South Korea’s Sooil; and Japan’s Nipro.

The $13.7 million offering described in the new filing is a combination of equity, debt, and options. In January, 2010, Tandem raised $52.3 million from investors that include Delphi Ventures, Domain Associates, HLM Venture Partners, Second Technology Capital Investors and TPG Biotech.

Tandem’s board of directors includes CEO Kim Blickenstaff, who joined the company in 2007, after Inverness Medical Innovations acquired his previous company, San Diego-based Biosite, for $1.8 billion; Amylin Pharmaceuticals founder Howard “Ted” Greene; Dick Allen, a prominent startup investor; John Livingston, a former executive with MiniMed; Tandem founder Paul DiPerna; Jesse Treu of Domain Associates; Keith Grossman of TPG Biotech; Doug Roeder of Delphi Ventures; and Ed Cahill of HLM Venture Partners.

An estimated 23.6 million people in the United States have diabetes, according to the American Diabetes Association. Type 1 diabetes, also known as juvenile-onset diabetes, occurs when the body loses insulin-producing cells in the pancreas.

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Clif Alferness has made a long and decorated career out of inventing medical devices. But until about five years ago, he never thought seriously about a practical invention for his own illness—Type 1 diabetes. Now, after years in stealth mode, the latest startup he helped launch is on the verge of creating a new category of device that delivers insulin cheaply, easily, and effectively.

The company, founded as Seattle Medical Technologies in 2006, is now based in Redwood City, CA, and goes by the name Calibra Medical. CEO Jeff Purvin, one of the featured speakers at “San Diego’s Fight Against Diabesity” coming up this Thursday, recently gave me a demo of how this new technology is designed to work. The big idea is to stake out a middle ground between the cheapest and easiest options for delivering insulin (syringes, pre-filled pens) and the more discreet, but complex and expensive alternatives (insulin pumps).

“The mantra that Jeff repeats at every opportunity is ‘small and simple,’” Alferness says. “But, in fact, it is very difficult to make something simple that works really well. That is what the engineers at Calibra have accomplished. It is small and simple for the patient, but works really, really well. I am anxious to try it myself since I inject insulin many times daily using syringes.”

Purvin adds: “We’ve really got something nobody else has.”

Entrepreneurs like Alferness and Purvin have been trying for years, and mostly failing, to deliver insulin a more convenient way than with a syringe. No one has had any luck in the market with making insulin inhalable or turning it into a nasal spray or something else less invasive. An estimated 6 million people in the U.S. rely almost entirely on classic vials and syringes, or more convenient pre-filled syringes to get their insulin.

Calibra CEO Jeff Purvin

Many more people are heading down this road to insulin dependency, as one leading insurer, UnitedHealth Group, has warned that about half of the U.S. population could have diabetes or pre-diabetes by 2020. So anyone who can invent a better mousetrap for delivering insulin, cheap and easy enough for millions of people to use, obviously could have a megahit.

Calibra got its start when Alferness, Daniel Hawkins, and John Adams put their heads together on a new concept for insulin delivery in about October 2006. The company got going with $8.6 million in Series A venture capital financing from Three Arch Partners and Frazier Healthcare Ventures. It has now raised two more rounds of capital that have brought the company’s total financing to $44 million, Purvin says. Canaan Partners and InterSouth Partners have joined the syndicate.

The R&D effort has resulted in a pair of FDA approvals of Calibra’s system, which is branded under the name Finesse. The tool is cleared to deliver two major forms of insulin—Novo Nordisk’s Novolog, and Eli Lilly’s Humalog. Calibra hasn’t yet started marketing its device in the U.S., because it wants to make one more design modification to bring down the cost of raw materials more, so it can … Next Page »

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Tandem Diabetes Care, a San Diego-based company developing insulin pumps for diabetics, has raised a whopping $52.3 million round of equity financing that began last May, according to a regulatory filing.

The company is led by CEO Kim Blickenstaff, the co-founder and former CEO of Biosite, a diagnostic company that was acquired by Inverness Medical Innovations for $1.8 billion in June 2007. The filing doesn’t say who invested, although it has some prominent people on its nine-member board, including Amylin Pharmaceuticals founder Howard “Ted” Greene; and venture capitalists from Delhi Ventures, HLM Venture Partners, TPG Biotech, and Domain Associates.

Tandem didn’t respond to a request for comment Saturday, so if I hear anything from them I’ll be sure to update this story. But it’s really not too hard to see what the company is trying to accomplish from looking at its website. The company says it is “deep in product development” of new kinds of insulin pumps that will enable diabetics to remain active. This is a big business opportunity as the incidence of diabetes, a lifelong condition in which people struggle to maintain normal blood sugar levels, keeps on climbing. An estimated 23.6 million people in the U.S.-about one out of every 13 people—have the disease, according to the American Diabetes Association.

Tandem says it is seeking a better way to manage the disease with wearble insulin pumps, which essentially make it so patients can get fast-acting insulin continuously throughout the day using a catheter, instead of giving themselves periodic injections.

“Tandem Diabetes Care is a company with experience; not in age, but through the wisdom that has been shared with us by more than 1,000 clinicians and current pump users,” the company says on its website. “Experience also comes from our on-staff insulin pump users and the former executives of leading life science companies who are committed to creating and offering products that provide people with freedom, style, and peace of mind. We also believe that “one size does not fit all” when it comes to pump therapy—therefore, we hope to offer consumers an array of product choices that fit their individual needs.”

Tandem is entering a market with a number of established competitors. Current insulin pump models are made by Minneapolis-based Medtronic, Bedford, MA-based Insulet, Switzerland-based Roche, New Brunswick, NJ-based Johnson & Johnson, South Korea-based Sooil, and Japan-based Nipro, according to reviews on diabetesnet.com.

Besides Blickenstaff, Tandem’s board includes Dick Allen, a prominent startup investor; Greene, the co-founder of Amylin; John Livingston, a former executive with MiniMed; Tandem founder Paul DiPerna; Jesse Treu of Domain Associates; Ned Brown of TPG Biotech; Doug Roeder of Delphi Ventures; and Ed Cahill of HLM Venture Parnters.

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New England has a deep pond with many of the very biggest fish in the global life sciences industry, but it also has its share of minnows, and they are getting eaten alive in the downturn.

That finding leaped out at me after I scoured through financial data on 85 publicly traded life sciences companies in greater Boston, Seattle, and San Diego as part of our regular Biotech Survival Index feature. The final numbers aren’t pretty for Boston. Just 15 of the 46 public life sciences companies we follow in Massachusetts had more cash on their balance sheet at the end of June 2009 than they did on New Year’s Day, based on a review of the most recent round of quarterly financial filings with the Securities and Exchange Commission. (Companies were included if they were listed on the NASDAQ or NYSE, and had market capitalization of at least $100 million).

Even though jobs have been cut, drug candidates have been shelved, and some last-ditch partnerships have been struck, all that frenzied activity didn’t really add up to a strengthened financial future for a majority of the region’s money-losing companies. The cash crunch has prompted a couple of Massachusetts companies to fold this year (Altus Pharmaceuticals and Epix Pharmaceuticals), a couple more to sell out for a pittance (Targanta Therapeutics and NitroMed), and one company that actually improved its financial position to move to Wisconsin (Exact Sciences).

While those companies were vanishing, there was some good news to be found in the filings. Some of Boston’s anchor tenants took advantage of their financial strength to beef up their cash balances, pay down debt, or otherwise tidy up financial matters. Essentially, the rich (Biogen Idec, Genzyme, Thermo Fisher Scientific, and Millipore, to name a few) got richer.

But what really shocked me the most was how poorly Boston’s life sciences companies have coped with the downturn compared with peers in the two other cities where Xconomy follows life sciences—Seattle and San Diego. Granted, neither of those cities has anywhere near the number of profitable life sciences companies that Boston does (18). And many of the little biotechs in those cities were backed into a corner in the first half of 2009, and either had to do or die—and things don’t appear quite that dire yet at many companies in Boston. But a majority of companies in Seattle (7 of 12) actually strengthened their balance sheets during the first half of the year. The same pattern emerged in San Diego, where 15 of the 27 companies built up their cash reserves in the same period.

If you combine those two hubs into a West Coast cluster that has a sample size similar to Boston’s (39 companies versus 46), the Bay State doesn’t look so resilient in comparison. About 56 percent of companies on the West Coast (22 of 39) strengthened their financial position in the first half of the year, while just 33 percent of the companies in Boston (15 of 46) did that well.

Read on for a complete rundown of the financial position for all 46 Massachusetts companies, listed in alphabetical order. To purchase a much expanded version of this report, in PDF format, click the “Add to Cart” button below. The expanded version, available for $95,* includes an assessment of each company’s financial position at the end of June compared to six months earlier, the projected length of time it can survive on its existing cash reserves, and an analysis of the strategic moves it has made to stay afloat in the current environment. Click here to see a sample entry. *Price is subject to change without notice.

We intend to repeat this analysis regularly to monitor the financial health of the life sciences companies we follow in San Diego, Seattle, and Boston. Please send feedback to editors@xconomy.com.

Abiomed (NASDAQ: ABMD)
Cash on hand: $54.5 million
Related Xconomy coverage:
“Abiomed Wins FDA Approval of Heart Pump”

Alkermes (NASDAQ: ALKS)
Cash on hand: $380.4 million
Related Xconomy coverage:
“Alkermes Knocks on Door of Biotech Big Leagues, Aims to Make Drugs of its Own”
“Alkermes, Swinging for the Fence, Touts New Anti-Addiction Drug”
“Alkermes’ Ambitious Builder, Richard Pops, Grabs Reins to Re-Ignite Growth Phase”

Alnylam Pharmaceuticals (NASDAQ: ALNY)
Cash on hand: $473.8 million
Related Xconomy coverage:
“Alnylam Takes Time to Mull Over RSV Game Plan”
“Alnylam, With Tekmira and New Northwest Firm Alcana, Look to Push Borders of RNAi Delivery”
“Alnylam Pushes First RNAi Drug That Circulates Through Body Into Human Test”
“Alnylam’s In the Money, Expects $500 Million in Bank At Year End”
“Alnylam Looks to Spinoffs to Unleash RNAi Technologies for Stem Cells, Vaccines“ … Next Page »

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More than one of our readers has noted recently that the Boston area is home to a mighty cluster of companies dedicated to providing new treatments and devices for diabetics. So, after a bit of investigation, we’ve compiled a list of local firms that represent some of the most promising advances in diabetes care.

Of course, New England is home to one of the largest life sciences sectors in the country—and we’ve got significant numbers of companies focused on improving the lives of people with cancer, cardiovascular disease, and many other serious ailments. “In all facets of healthcare we have great local talent,” says Michael Greeley, managing general partner of Boston venture firm Flybridge Capital Partners. “It just happens that diabetes is a huge problem that these multiple firms, through therapeutic or devices or health IT, all address.”

A huge problem indeed: the Centers for Disease Control and Prevention reports that there were 23.7 million Americans with diabetes in 2007 and growing. And the increase in patients has increased demand for new ways to treat, diagnose and monitor various forms of the disease—including Type 1 diabetes, in which the pancreas stops producing insulin, and Type 2 diabetes, the most common form of the disease, in which the body’s tissues fail to respond normally to insulin.

Below are nearly a dozen firms in Boston and environs dedicated to developing new drugs, medical devices, or diagnostics to combat diabetes. (As always, please leave a comment if you think we’ve missed a company or two that should be on the list.)

DEVICES AND DIAGNOSTICS

AgaMatrix
Salem, NH

AgaMatrix makes blood-glucose meters designed to provide ultra-sensitive readings, using digital signaling algorithms that measure variables such as altitude that can cause readings to be inaccurate. The company was co-founded by former MIT graduate student Sonny Vu, who now serves as chairman of the board.

GI Dynamics
Lexington, MA

GI Dynamics is developing a single device that could help people with Type 2 diabetes lower their blood sugar while helping them lose weight. The startup aims to gain regulatory clearance to sell its so-called EndoBarrier, which is a sleeve that lines a section of the small intestine, as a treatment for both Type 2 diabetes and obesity. Luke wrote a great post about some of the firm’s latest progress in clinical trials.

Insulet
Bedford, MA

Insulet (NASDAQ:PODD) to set out to solve another problem in diabetes care—convenient and discreet insulin delivery. The company’s OmniPod system … Next Page »

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Insulet (NASDAQ: PODD) a diabetes-management firm in Bedford, MA, priced its secondary offering of 4.9 million shares at $23.25, according to an SEC filing. The shares were offered by Insulet shareholders, so no proceeds will go to the company.

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There was a lot of acquisition activity last week (not even counting the Biogen Idec excitement). Here’s more on that, along with the rest of the week’s news.

—Lexington, MA-based Cubist Pharmaceuticals announced it will pay $4.7 million, plus another $1 million in research and operating costs, for an exclusive option to buy Seattle’s Illumigen Biosciences. Illumigen’s lead compound is a protein-based treatment for hepatitis C. If Cubist exercises its option it will pay $9 million upfront, plus development and regulatory milestone payments that could surpass $330 million.

—Burlington, MA, speech and imaging firm Nuance Communications (NASDAQ: NUAN) announced it had reached an agreement to acquire Dallas, TX’s Vocada, which produces technology for the automated distribution of medical test results. Terms of the deal were not disclosed.

—Northbrook, IL-based Idex (NYSE: IEX) announced it’s acquiring Isolation Technologies of Hopedale, MA, for just under $30 million. Isolation develops hardware and accessories for analytical chemistry instruments used for such applications as drug discovery quality control.

—In non-acquisition news, Millennium Pharmaceuticals (NASDAQ: MLNM) of Cambridge, MA, won a new FDA approval for Velcade, which was already approved for certain multiple myeloma and lymphoma patients, and is currently the company’s only marketed drug. The new approval allows the drug to be used in the significant subset of multiple myeloma patients who have impaired kidney function.

—Bedford, MA, diabetes-management firm Insulet (NASDAQ: PODD) filed with the SEC for a secondary public offering of some 4.8 million shares. Insulet went public in May with an offering of 7.7 million shares at $15 per share. The stock closed Friday at $23.77.

—And there were several notable venture financings announced last week. Acton, MA-based optical networking firm Mintera closed a $19 million Series C round; the deal was led by Polaris Venture Partners and RRE Ventures. New Haven, CT, diagnostics developer Ikonisys raised $30 million in Series E financing. And peHUB’s Dan Primack reports that Woburn, MA-based molecular imaging firm VisEn Medical took in some $7.5 million in a Series B round, and Hartford, CT’s Genomas closed a Series C financing worth $2.5 million.

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Diabetes-management firm Insulet (NASDAQ: PODD) of Bedford, MA, filed with the SEC for a secondary public offering of some 4.8 million shares. Insulet went public in May with an offering of 7.7 million shares at $15 per share. The stock closed Friday at $23.77.

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