Natick, MA-based Corindus has corralled $5.3 million of a proposed $10 million round of equity financing, according to an SEC filing. The firm is developing a robotic system that helps surgeons control the position of guidewires in veins in procedures to implant vascular stents, according to the firm’s LinkedIn profile. A call to company CEO David Handler was not immediately returned today, and it’s not stated in the SEC filing who participated in the financing. Prior to this financing, the firm raised $12.8 million in a Series B financing in spring 2008, according to a story I wrote about the deal for Mass High Tech.

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Isis Pharmaceuticals (NASDAQ: ISIS) likes to talk about how its gene-silencing technology known as antisense creates so many innovative ideas for new drugs that it can’t commercialize them all itself, so it spins a few off into what CEO Stanley Crooke calls “satellite companies.” One of the more interesting ideas orbiting around Isis in Carlsbad, CA is a startup called Excaliard Pharmaceuticals.

This company is the brainchild of Nick Dean, who spent 13 years at Isis, including a stint as vice president of functional genomics and oncology before he became the founder and chief scientist of Excaliard in 2006. The idea was to take one of the most intriguing projects on the back burner at Isis—a new drug that could curb excess skin scarring—and make it the foundation for a new company.

“It was a bit of a skunk works thing, that people worked on after hours, on weekends, or with academic collaborators,” Dean says. “It never quite made the cut at Isis, because the company was focused on cardiovascular disease and metabolic disease.”

But Excaliard found a receptive audience two years ago from Alta Partners, ProQuest Investments, and RiverVest Ventures, who pumped $15.5 million in Series A financing into the company. Two years later, Excaliard is still a virtual company with just four employees, but it has made a lot of progress—it is on track to complete enrollment in its first clinical trial by the end of this year, and start a more rigorous mid-stage trial in the first half of 2010, Dean says.

The concept at Excaliard is to protect the body from excess scarring and fibrosis, Dean said. The Excaliard drugs use antisense technology to silence specific genes that control scar formation and fibrosis at the site of wounds. The company has its eye on developing this as a way to make scars less visible and bumpy, like those from the 1 million Caesarian section births performed each year, knee surgeries, and reconstructive plastic surgeries. It could also be used for some rarer dermatology conditions like hypertrophic scars that are red, raised, itchy and swollen, or keloids, that are large and raised above the skin like a benign tumor.

Dean was intrigued partly by the science, and partly by the market opportunity. The science is built on increasing knowledge of genes that control pathological scar formation, as well as proprietary compounds that Excaliard says can be delivered in a localized part of the body to curb that excessive scarring.

From a business standpoint, this is an untapped market, with no real effective therapy approved by the FDA that works the same way. Patients get by with lotions, creams, or corticosteroids that control swelling but don’t really fix the root of the problem. Any drug like Excaliard’s …Next Page »

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Kirkland, WA-based Pathway Medical Technologies has to be considered one of the bright spots in the recent history of Seattle life sciences. The medical device maker won FDA approval for its first product about 15 months ago, raised $42 million in venture capital, and recruited a CEO with loads of experience in commercializing medical devices. Back in February, co-founder and chairman Tom Clement said the company showed signs of becoming “a real winner.”

If only the story were that neat and tidy.

Even with that good fortune, Pathway has had some hard knocks. The company introduced its tool that drills through and vacuums out blockages in leg arteries right in the middle of the recession, as patients were losing health insurance and hospitals were tightening their belts. The old medical device business model of simply pitching a cool new toy to doctors who place orders appears to be morphing into a new paradigm in which hospital purchasing committees are calling more of the shots, and demanding more proof that such a treatment is cost-effective. These changing market forces are at least part of the reason why Pathway wasn’t able to meet its aggressive internal sales forecasts in the first half of this year.

In May, it axed one-fifth of its workforce. CEO Paul Buckman made clear then that the company had raised $120 million from investors, and with a plan to turn profitable in 2011, it needed to lower the burn rate so it wouldn’t have to raise any more venture capital.

So while Pathway hasn’t been quite the overnight success that it might have been with its nifty tool a few years ago, Buckman offered a candid assessment in a recent interview of how the company is adjusting parts of its plan while sticking to its long-range philosophy. Buckman says he sees encouraging evidence of acceptance from physicians even while Pathway has learned the hard way about what it still needs to prove.

Pathway doesn’t disclose absolute revenues or net losses, but it did say last month that it has seen 172 percent sales growth over the past two quarters. About 200 to 215 hospitals have ordered Pathway’s Jetstream products as of the last week of September, and they have treated about 2,500 patients, according to a conservative estimate, Buckman says. Some of the early adopter physicians …Next Page »

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Loyalty has its rewards, and in the case of San Diego’s Accumetrics, that means the company’s existing investors have just completed a fifth round of venture funding—putting another $16.5 million into the medical diagnostics company.

The Series E funding brings Accumetrics’ overall investment close to $68 million, although, as I explained in June, that includes a false start after founder Robert Hillman re-acquired the company five years after he started it. The company has been re-energized further since Timothy Still was named CEO last year.

Still sees a potential multibillion-dollar market for the company’s VerifyNow system, a blood-assay device that helps doctors quickly calibrate the right dosage for the most widely used anti-clotting drugs, including aspirin, clopidogrel (Plavix), prasugrel (Effient), and others. Because patients respond to antiplatelet medications differently, Accumetrics says doctors can use the automated diagnostic device in a quick blood test to measure a patient’s individual response to an anti-clotting drug.

Of course, it also helps to have backing from an investment syndicate that includes such prominent healthcare venture firms as Essex Woodlands Health Ventures and Kaiser Permanente Ventures. Accumetrics’ chairman Tony Arnerich, whose firm Arnerich Massena is the company’s largest investor, says in a statement released by Accumetrics, “We view the VerifyNow platform as a breakthrough technology in one of the most important remaining areas of cardio-diagnostics.” Two other firms, BBT Fund/Apothecary Capital, and RiverVest Venture Partners also returned to invest in the current round, which is expected to fully finance the company into 2011.

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Tom Steinke says he founded San Diego’s Minnow Medical out of an abiding conviction of the limitations of the medical stent, a mesh tube inserted in arteries to help prop open clogged blood vessels.

Steinke came to this view after spending 20 years developing medical devices in the cardiovascular industry. His previous startup was San Diego-based Reva Medical, which he founded in 1998 around a novel slide-and-lock design for a metal stent that does not deform as it expands. Before that, he was a product group director for Medtronic, director of engineering for Sonotek, and a development engineer at Advanced Cardiovascular Systems, which became Guidant, the maker of heart pacemakers and defibrillators.

“I know the industry,” Steinke says. With a metal stent, he says, “you’re going to have an ongoing inflammation to a foreign body… Even a [stent with a] drug coating doesn’t last forever; eventually the coating dissolves.” As Denise has reported, drug-coated stents represented a major innovation for the industry, and one that caught Reva off-guard. As the industry shifted to drug-coated stents, Steinke helped Reva reinvent itself in 2003 by developing a bio-absorbable stent that fully dissolves over time.

By the end of 2003, though, Steinke had moved on.

Tom Steinke

He founded Minnow Medical that year, and tells me the company sprang from his “altruistic desire to improve health care for the masses.” Now, after six years of development, Steinke is working to commercialize the technology that sprang from his convictions.

Steinke tells me that during his first couple of years at Minnow, he searched for alternatives to vascular stents. The founder and CEO says he self-funded Minnow until he had identified a way to improve the medical device used in balloon angioplasty to treat arteries that have narrowed and hardened due to atherosclerotic disease, the build-up of waxy plaque along the inside walls of an artery. In the process, Steinke also focused on …Next Page »

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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.

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The people at San Diego’s Amira Pharmaceuticals are certainly breathing easier today. The respiratory drug development company is reporting that an experimental drug for idiopathic pulmonary fibrosis reduced lung scarring in mice, bringing Amira closer to its goal of beginning human tests of the oral medication during the first half of next year.

In results presented this afternoon, Amira says that mice receiving the drug AP2966 for 14 days experienced a 40 percent to 60 percent reduction in fibrosis and inflammation. The findings were presented at an American Societies for Experimental Biology conference in Carefree, AZ.

Idiopathic pulmonary fibrosis is an incurable disease in which scar tissue builds up in the lung, making it difficult to breathe. It kills about 40,000 people in the U.S. each year. Amira’s drug targets a receptor called LPA1 that plays a role in inflammation and wound healing. It is believed that this receptor is up-regulated in people with pulmonary fibrosis.

“This is a very big announcement for us,” CEO Bob Baltera told me by phone. Amira was founded in 2005 by a dream team of scientists from Merck who specialized in developing drugs for asthma and inflammation. The company is developing drugs for respiratory and cardiovascular disease with pharmaceutical giant GlaxcoSmithKline, but plans to develop AP2966 on its own.

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Genzyme is getting to the point where the law of large numbers start to look really daunting. The Cambridge, MA-based biotech company has been so successful for so long, it gets harder every year to sustain the breakneck sales and profit growth that investors in the company have come to expect.

So what to do? The company has assembled an R&D portfolio that includes its traditional strength in treating rare genetic diseases, and expands into the high-stakes, highly competitive markets of cardiovascular disease, cancer, and multiple sclerosis. The company’s executives, led by CEO Henri Termeer, offered glimpses yesterday into how this strategy is evolving at the annual investor day.

Before diving too deep into the details, Genzyme executive vice president Peter Wirth showed an intriguing slide on how far the company has come. Back near the peak of the high tech bubble in January 2000, Genzyme (NASDAQ: GENZ) ranked No. 14 among all biotech companies in stock market valuation, with a relatively puny $3.8 billion. Nine years later, Genzyme has more than quadrupled in value to about $16 billion, and now ranks behind only Amgen, Gilead Sciences, and Celgene by that measurement. Interestingly, Genzyme is one of only seven of the top 15 biotech companies from those heady days at the turn of the millennium that have had the staying power to remain independent. (The slide is in the Section 1 presentation if you’d like to see the full list for yourself.)

It’s an impressive record, but like I said, it’s not easy to boost revenues as much as 20 percent a year when you’re working from a baseline of $5.15 billion to $5.35 billion—which is Genzyme’s ballpark forecast for this year. To keep the pipeline moving, the company is going to carefully sock away a lot of the $5.6 billion in cash it expects to generate between now and the end of 2011. It plans to spend about one-third of this—$1.9 billion—to expand and maintain global infrastructure, another $1 billion on share buybacks to boost the stock price, and another $700 million for milestone payments to potential partners with promising drugs in early stages of development. Keeping the pipeline stocked with multiple drugs with decent sales potential, rather than relying on one or two megahits, is clearly a key to the plan.

“All products have life cycles, and you need multiple products, and multiple life cycles, to create a sustainable future for a company,” Wirth said.

So which ones are the innovative new medicines that Genzyme thinks will help patients, and the company’s bottom line? Here are highlights of what the company had to show investors:

—Genzyme is clearly pumped about its new oral pill for Gaucher’s disease (pronounced go-SHAYZ). The new drug, called GENZ-112638, was designed to be a more convenient way to maintain treatment of patients who rely on Cerezyme, an injectable drug that is Genzyme’s biggest seller. But it turns out that a Phase II trial showed it might be better than just a maintenance therapy. Patients on the oral drug …Next Page »

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In this ugly economy, it takes a special recipe of compelling science and willing investors to launch a new biotech startup. Newly hatched biotech TargAnox, which is focused on developing drugs to curb a sometimes disease-related biochemical condition called oxidative stress, has stirred that recipe together in recent months and closed a $5.1 million Series A round of financing, company officials tell Xconomy.

Ascent Biomedical Ventures in New York led the round, providing the majority of capital. Partners Innovation Fund, the venture arm of the Partners HealthCare System in Boston, invested $250,000 in the financing round and helped draw up the initial business strategy for TargAnox, says Roger Kitterman, acting president of TargAnox. Kitterman is a partner at Partners Innovation Fund, which was formed in 2007 by Partners’ founding medical centers, Massachusetts General Hospital and Brigham and Women’s Hospital.

TargAnox is commercializing discoveries from the lab of its scientific founder, Joseph Loscalzo, who is chief of medicine at Brigham and Women’s in Boston. The firm aims to develop drugs—likely biotherapeutics such as antibodies—that protect cells from oxidative stress caused by diseases, Kitterman says.

Oxidative stress is caused by an imbalance of reactive oxygen molecules that can harm cells and even cause cellular death. Protecting cells from oxidative stress could provide new treatments for multiple illnesses including cardiovascular disease, diabetes, and Alzheimer’s disease. Kitterman says that the company hasn’t yet decided which diseases it will target. “We’re going to …Next Page »

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Most of the headlines in the RNA interference world go to Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY). While that company says it has amassed enough intellectual property—and cash—to dominate this emerging field of gene-silencing technologies for years, they aren’t the only game in town. One intriguing upstart of the RNAi field is a privately held company in Watertown, MA called Dicerna Pharmaceuticals.

Xconomy first covered the Dicerna story when it started in November 2007, and the company first hit my radar screen in July, when it raised $8.4 million to cap off a first-round financing of $21.4 million. It got the cash from Abingworth, Oxford Bioscience Partners, and Skyline Ventures. These people aren’t dabblers—Doug Fambrough of Oxford is a molecular biologist who invested in Sirna Therapeutics before that company was sold for $1.1 billion to Merck in 2006, and Steve Hoffman of Skyline was a fellow Sirna investor who also bet early on Alnylam. So I figured it was worth hearing more from Dicerna CEO Jim Jenson a couple weeks ago at the JP Morgan Healthcare Conference in San Francisco.

The idea behind RNAi-based drug development is to shut down disease at its roots, by using specially engineered RNA molecules to shut down production of specific disease-causing proteins. Dicerna was founded on the belief that there’s more than one way to achieve this; the company says it is working on a “second doorway” of RNA interference, by designing drugs that are a little longer than so-called small interfering RNA molecules being developed by Alnylam and others. The Dicerna method may have the added advantage of being more potent—meaning they can be given in lower doses, and could be cheaper to manufacture—and they may last longer in the body, meaning they could be given in fewer shots. Plus, they have a feature that will allow RNAi drugs to be bound together with other compounds like antibody fragments or peptides that could give them extra kick, say, against cancer cells.

All of this work is still being done in animals, so there’s no proof this works in people. But even with that limited evidence, and a grim investing climate, Jenson said he saw no shortage of interest among potential pharmaceutical partners at the JP Morgan meeting.

“It’s the real deal, the next game changer in drug development,” Jenson says. “Stay tuned, there is a very strong interest in our programs. Many people see the importance of this.”

Most small interfering RNA drugs tend to be 21 nucleotides, or chemical letters, long. The Dicerna drugs are a little longer, 27 nucleotides. This enables …Next Page »

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