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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Some San Diego life sciences companies reported a burst of new financing, while embattled Sequenom told investors it’s trying to conserve its available cash. Here’s our rundown of the latest highlights:

—San Diego’s Trius Therapeutics, a venture-backed biotech developing a new antibiotic for treating acute and life-threatening bacterial infections, disclosed plans to raise as much as $86 million in an initial public stock offering. With additional funding, the company will proceed to Phase 3 clinical trials of torezolid, which Trius describes as a second-generation successor to linezolid, the Pfizer antibiotic known as Zyvox.

—Life Technologies (NASDAQ: [[ticker: LIFE]]), the Carlsbad, CA-based provider of biotech instruments and lab supplies, agreed to acquire Woburn, MA-based BioTrove, which has developed a high throughput gene expression and genotyping analysis system.

— SpectraScience, the San Diego medical device maker, has raised more than $4.3 million through a private placement that combines preferred shares and warrants. SpectraScience (OTCBB: [[ticker: SCIE]]) CEO Jim Hitchin told Bruce the offering closes a $5 million round the company began earlier this year.

—PaxVax, a San Diego startup backed by Seattle’s Ignition Capital, has raised $2 million of a planned $6 million investment round. The biotech founded in early 2007 is developing a new type of vaccine that is administered as oral tablets and avoids much of the requirements that conventional vaccines require.

—Sequenom, San Diego’s embattled diagnostics company, said it expects to end the year with $39 million in cash—but that’s not enough to get through 2010 without raising funds or slowing spending. In April, Sequenom (NASDAQ: [[ticker: SQNM]]) disclosed that it had “mishandled data” from a prenatal Down syndrome diagnostic test, indefinitely postponing that product launch.

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Healthcare deals are going one way, tech deals another. That’s my read from the past week in the Northwest, where we’ve seen some of the biggest biotech deals around, even as a prominent Seattle tech venture firm (and software financings in general) head south.

—Bothell, WA-based Alder Biopharmaceuticals scored one of the biggest biotech partnerships of the year, as Luke reported today. The company has formed a collaboration with Bristol-Myers Squibb (NYSE: BMY) to develop Alder’s experimental rheumatoid arthritis drug, ALD518, and the deal could be worth more than $1 billion. In exchange for granting Bristol a worldwide exclusive license to develop ALD518 for all uses except cancer, Alder will get $85 million upfront, as much as $764 million in development and regulatory milestone payments, sales-related milestone payments that could exceed $200 million, and royalties on product sales.

—I took a look at the venture and debt financings for Washington companies last month (and the previous two months), and concluded that large investments in software startups aren’t coming back anytime soon. The data, courtesy of New York-based ChubbyBrain, shows most of the money is in healthcare and life sciences.

—Kirkland, WA-based Clearwire has secured an additional investment of $1.5 billion from Sprint, Comcast, Time Warner Cable, and Intel, as first reported by the Wall Street Journal. Google, a previous investor, is not participating in the round. The money will support Clearwire’s (NASDAQ: CLWR) deployment of its WiMax broadband network.

—Verathon, a Bothell, WA-based maker of ultrasound technology, has been acquired by Sarasota, FL-based Roper Industries (NYSE: ROP) as part of a pair of transactions worth a combined $356 million, as Luke reported. The price of Verathon’s sale by itself was not announced. The company develops a 3-D diagnostic imaging tool that helps doctors diagnose bladder disorders.

—One of Seattle’s most prominent tech VC firms will not be raising another fund or making new investments. Len Jordan of Frazier Technology Ventures confirmed the news as he announced he’s moving to Madrona Venture Group at the beginning of next year.

—Bellevue, WA-based Light Sciences Oncology has lined up $35 million in follow-up financing to develop its drug-device treatment for cancer, as Luke reported. The investors weren’t disclosed, but the deal gives Light Sciences the right to access a $23.3 million line of credit, and $11.8 million more if investors choose to exercise warrants. The company raised $40 million from undisclosed VCs last year.

—Seattle startup Movaya Wireless has been acquired by Digby, a mobile commerce firm based in Austin, TX, for an undisclosed price. Movaya was founded in 2006 by Phil Yerkes and Stanley Wang, and focuses on making digital goods storefront applications for the iPhone, Android, and mobile Web platforms. The company’s development team in China will serve as the basis for Digby’s operations in Asia.

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Beverly, MA-based Hamilton Thorne, which makes laser equipment used in stem-cell research labs and fertility clinics, has raised $2.2 million in a private stock placement and debt conversion deal, according to an announcement released last week. A the same time, the company, which recently completed a merger with Ottawa, Ontario-based Calotto Capital, will soon be listed on the TSX Venture Exchange, a Canadian stock exchanged headquartered in Calgary, Alberta. Meg Spencer, Hamilton Thorne’s CEO, said in a press release that joining the TSX will give the company—which had previously raised about $13 million in venture backing from Brook Venture Partners and StarLake Capital—access to “a larger pool of capital to further advance our commercialization strategy.”

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SpectraScience, the San Diego medical device maker, has raised more than $4.3 million through a private placement that combines preferred shares and warrants, according to a regulatory filing today. As I reported previously, SpectraScience (OTCBB:SCIE) acquired its optical biopsy technology when CEO Jim Hitchin acquired certain assets from the bankruptcy of Minnesota’s GV Medical. In its filing, SpectraScience says the company sold 433,000 units at $10 a share. Hitchin tells me the offering closes a $5 million round the company began earlier this year.

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Seattle-based Calypso Medical Technologies announced today it has signed a strategic development agreement with Siemens Healthcare to jointly develop products for radiation therapy of pancreas and lung cancer, as well as prostate cancer. Financial details weren’t given. Calypso makes tracking technologies that help deliver pinpoint radiation to tumors. The company raised $50 million in September, and also has partnerships with Varian Medical Systems, Elekta, and Philips Medical.

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There’s a big argument over whether venture capitalists and even angel investors are doing as many early stage or small deals these days. The general sentiment is that no, they aren’t. Since we began our monthly roundup of Massachusetts venture deals back in June, however, we’ve argued that the data doesn’t support that view: virtually every month, the number of seed and Series A rounds has topped the number of later-round financings, and often by a wide margin.

Now comes what could be another blow to the small-deal naysayers: new data on the extremely small deals—those between $100,000 and $1 million—that typically aren’t reported in financing tabulations. As my colleague Greg Huang, Xconomy’s Seattle editor, wrote in his own look at small deals in the Northwest earlier this week: “Though small in size, these investments need to be included along with the bigger deals that get more press, if you want a more complete picture of the funding landscape in the innovation community.”

It turns out there were 10 of these “under the radar” high-tech deals—7 in Massachusetts, 2 in Connecticut, and 1 in New Hampshire (see table below)—in New England in September, according to data supplied by our partner ChubbyBrain, a New York-based information services company that tracks VC, angel, and other investments in private companies.

Six of the 10 deals involved equity investments; the remaining four were debt financings. And they spanned a wide range of fields from medical displays to tracking tags to new approaches to education. To me, the most interesting was OmniGuide, a Cambridge, MA, company we’ve written about before that took in $249,999 (you gotta wonder why that figure). OmniGuide, which raised $1.8 million in May, $25 million last year, and some $50 million before that (it’s a long story, go here), makes highly precise optical laser scalpels; its chairman is Analog Devices founder Ray Stata, and the CEO is MIT materials scientist Yoel Fink.

As the parent of two teenagers, I was also highly interested in the Westonian Group, which raised $170,250. The Westonian Group doesn’t appear to have a website, but it is the company behind Abroad101, a website for sharing information about study abroad programs.

Here, then, are our 10 “under the radar” deals from September.

Carrot Medical (Waltham, MA)                 Equity           $635,000
Ultra-high-definition displays for medical images

SoundTag (Braintree, MA)                         Equity          $535,000
Tracking tags for priority shipments

TenMarks Education (Newton, MA)          Debt            $350,000
New approach to math, science, and English education for children

SpecPage (Attleboro, MA)                           Equity          $313,000
Product marketing information exchange for food service and janitorial industries

SeeClickFix (New Haven, CT)                    Debt              $265,000
Technology for reporting and tracking non-emergency issues via the Internet

OmniGuide (Cambridge, MA)                   Equity             $249,999
Designs and manufactures highly precise optical laser scalpels.

Validus DC Systems (Brookfield, CT)         Debt              $204,000
Direct current power infrastructure for data and telecom centers

Paneve (Florence, MA)                                 Debt               $175,000
Software and hardware to reduce the costs of delivery and display of video media content

Westonian Group (Weston, MA)                Equity             $170,250
Company behind Abroad101, an interactive online community around study abroad programs

EnerTrac (Hudson, NH)                               Equity              $125,000
Fuel, oil, and propane tank monitoring products

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They are the deals that slip through the cracks unnoticed. They are worth less than $1 million, but at least $100,000. Though small in size, these investments need to be included along with the bigger deals that get more press, if you want a more complete picture of the funding landscape in the innovation community. And there were at least 16 of these deals in the Northwest in September (see table below), according to ChubbyBrain, a New York-based information services company tracking VC, angel, and other investments in private companies.

It’s probably too soon to talk about trends, because this is the first month we’ve had access to ChubbyBrain’s data on these smaller deals, which were compiled from regulatory filings, user submissions, and other sources. But here are some quick observations.

About two-thirds of the deals (11 of 16) were equity investments, while one-third (5 of 16) were debt financings. Half the investments (8) were in software companies, while about a quarter each were in biotech/medical (4) and cleantech (3) firms. The majority of the deals were in the Seattle area (10), but a significant number were near Portland or in Oregon (6). Anecdotally, all those breakdowns seem consistent with the deal flow we’ve been seeing and reporting on in the Northwest for the past year or so. The data didn’t include the investors or the stage of the investments.

Without further ado, here are the 16 “under the radar” deals from last month:

Vantos (Seattle)                                            Equity        $873,487
Investigation software

InEnTec (Bend, OR)                                     Equity        $800,000
Cleantech fuels

WA 32609 (Redmond, WA)                           Equity         $800,000
Biotech

Inson Medical Systems (Bellevue, WA)      Equity         $642,536
Biomedical drug delivery

Napera Networks (Mercer Island, WA)         Debt           $600,000
Networking software

Acucela (Bothell, WA)                                    Equity         $439,603
Biotech drugs

Adometry (Kirkland, WA)                               Equity         $400,000
Analytics software

Smilebox (Redmond, WA)                              Equity         $399,999
Consumer software

Asemblon (Redmond, WA)                             Debt            $386,000
Cleantech/materials

Ohio River Clean Fuels / Baard Energy (Vancouver, WA)    Debt            $245,000
Cleantech fuels

Safetec Compliance Systems (Vancouver, WA)                    Debt            $235,000
Software for chemical compliance

Second Porch (Portland, OR)                          Equity         $225,000
Social software

SynapticMash (Seattle)                                    Equity         $200,000
Educational software

Silere Medical Technology (Kirkland, WA)      Debt            $120,000
Medical devices

BallLogic (Portland, OR)                                   Equity         $100,000
Consumer devices

Site 9 (Portland, OR)                                          Equity         $100,000
Web development software

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There’s a new tech startup incubator in town. The Founder Institute is accepting applications for its four-month training program, which begins in Seattle on December 7. The program is designed to mentor very early-stage entrepreneurs, with the goal of creating new companies across a wide variety of tech sectors including software, social media, consumer electronics, e-commerce, medical devices, and cleantech.

The program fits with a trend of increasing resources for entrepreneurs in the Seattle area. The Founder Institute was started by Adeo Ressi, the founder of the venture capitalist rating site TheFunded. The incubator recently completed its first session in Silicon Valley, graduating 54 companies (three of which have since rustled up outside funding), and has also announced expansions to San Diego and Washington DC.

Chris Early is leading the Seattle program. He’s a game industry veteran who was most recently general manager of Windows Gaming Technology at Microsoft. He left the company earlier this year, and caught up with Ressi around a month ago over drinks. (The two had known each other for years from the game industry.) Early suggested that Ressi should expand his program to Seattle, and it sounds like it didn’t take much convincing. “It’s been a whirlwind month putting it together here,” Early says.

As he explains, the concept behind the Founder Institute arose from what Ressi was seeing with TheFunded. “A large number of people were coming through at a pre-company stage,” and they were looking for mentorship and money to get started, Early says. So the Founder Institute provides classes on every step of the startup process, led by experienced mentors, including Derrick Morton, the CEO of FlowPlay, and Bryan Starbuck, the CEO of TalentSpring. About a third of the mentors will come from out of town, including David Kidder of Clickable.com and Bryan Thatcher of Empressr (both from New York). The ideal students are entrepreneurs with new companies—less than two years old—or just promising ideas. The goal is for every student to have a business plan and a polished pitch for their company by the end of four months.

OK, so everyone knows entrepreneurs, especially first-timers, need a lot of mentorship. But what’s different about the Founder Institute compared with incubators like Y Combinator …Next Page »

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A quiet epilogue to last spring’s heated Amylin proxy battle was the lead story in an otherwise slow week for San Diego life sciences news.

—Eastbourne Capital, which won a partial victory in a proxy fight against Amylin Pharmaceuticals earlier this year, sold its entire stake in the San Diego diabetes company. The San Rafael, CA-investment firm owned 12.5 percent of Amylin (NASDAQ: [[ticker: AMLN]]) during the proxy contest. One of its three nominees, Kathleen Behrens, was elected to the Amylin board.

—San Diego ranked second last year to Cambridge, MA, in total venture capital investment in medical technology firms, according to a report from Ernst & Young. San Diego saw $151 million invested in 15 deals, compared to $169 million in nine deals for Cambridge. E&Y said 2008 was tough for medical device companies, in part because of the economy and concerns about health care reform. Southern California, which E&Y defines as San Diego and Orange County, has 82 venture-backed and 41 public medical technology companies, one of the highest concentrations in the country.

—Illumina (NASDAQ: ILMN) acquired worldwide rights to commercially develop Orchid Cellmark’s (NASDAQ: [[ticker: ORCH]]) single base nucleotide extension technology for forensics and diagnostics. Under the deal, Illumina paid Princeton, N.J.-based Orchid $850,000 up front and agreed to pay $150,000 in milestone payments.

—Avanir (NASDAQ: AVNR), which is located just across the San Diego border in Orange County, said its experimental drug for treating unprovoked emotional outbursts reached secondary endpoints in a clinical trial of people who had either multiple sclerosis or amyotrophic lateral sclerosis. Data presented at the annual meeting of the American Neurological Association in Baltimore showed that patients diagnosed with pseudobulbar affect experienced a statistically significant improvement in their mental states. Avanir previously announced that the drug dextromethorphan/quinidine, or DMQ, met the primary endpoint of reducing PBA symptoms—episodes of uncontrollable laughter or crying—by a clinically meaningful 30 percent. The drug could receive FDA approval during the second half of 2010.

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Venture financing perked up last month, at least for a handful of Seattle-area startups and young companies. VCs and corporate investors poured $76.9 million into five Washington-based companies in September, according to data provided to Xconomy by ChubbyBrain, a New York-based information services company that develops tools for investors, startups, and entrepreneurs. There were also two debt financings worth a total of $8 million.

The total funding of Washington companies, $84.9 million, is up from $51.4 million in the previous month (and that figure included a couple of companies whose headquarters are out of state). But the September increase is largely due to one especially big transaction.

The largest deal by far was Seattle-based Calypso Medical’s $50 million Series E financing, led by Skyline Ventures and Frazier Healthcare Ventures. It’s the biggest venture deal in the Northwest so far this year, and you can read about the story behind the financing here—Calypso has overcome some challenges in the past year. The company makes a medical device that pinpoints radiation in ways that are supposed to help minimize the side effects of prostate cancer treatment.

The September deals were concentrated in medical devices and healthcare, with a few smaller deals in software and tech. The biggest financing in software was Bellevue-based VoiceBox Technologies, which raised about $13 million from corporate investors in Asia, including AutoNavi, Inventec, MiTAC, and the Morningside investment fund. But that money was raised over the course of the past year, with the company officially announcing it in September after a regulatory filing let the cat out of the bag. VoiceBox makes speech recognition systems for cars and mobile applications.

The venture deals (see Table below) were spread evenly among early, mid, and late-stage financings. The only Series A deal was Seattle-based Integrative Diagnostics, which raised $7.5 million for early cancer detection. The company was founded by biotech pioneer Leroy Hood.

In addition to the venture deals, Redmond-based Spiration (which makes a medical device for treating lung diseases) raised $7 million, and Kirkland-based SchemaLogic (which makes software to manage metadata) raised $1 million in a pair of debt financings.

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Irish healthcare products giant Covidien (NYSE:COV) has reached an agreement to purchase Aspect Medical Systems (NASDAQ:ASPM), a Norwood, MA-based company specializing in braining monitoring technology, for approximately $210 million in cash, Covidien announced today. Aspect, founded in 1987, will become part of Covidien’s Oximetry and Monitoring product line inside the Medical Devices segment, according to a statement.

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Healthcare-IT is a hot topic in Seattle these days—and it’s about to get even hotter. Sources with knowledge of the company tell me Appature, a two-and-a-half-year-old Seattle startup focused on improving marketing and customer relationship management in the healthcare industry, is close to getting its first round of venture funding—and may even be the subject of a bidding war between venture capital firms in both the Seattle area and Silicon Valley.

I won’t reveal the identities of the VCs involved, because the deal hasn’t closed yet, but let’s just say they are some of the more prominent investors in software and tech. Appature was apparently considering a local deal (with a very different structure) when another Seattle-area venture firm swooped in with great interest—and probably a lot more money. Appature’s founders did not return e-mails seeking comment on the company’s strategy or funding status.

Appature is already profitable and has some big customers, including Johnson & Johnson and Microsoft Health Solutions Group. The company has been bootstrapped up to this point. In the past few months, we’ve reported on Appature’s Twitter search engine, Chatterfly, and CEO Kabir Shahani’s tech entrepreneurship award from BusinessWeek.

The startup is known for its marketing software, which helps companies in the broader healthcare industry do things like deliver targeted and personalized marketing campaigns (and measure their effectiveness in real time), track marketing activity and the performance of their corporate and community websites, and learn more about their customers via sophisticated business intelligence and analytics tools.

Appature was founded in early 2007 by Shahani and senior engineer Chris Hahn. They had met previously at Seattle-based social networking startup Blue Dot, which was backed by prominent angel investors including Richard Fade (now with Bellevue, WA-based Ignition Partners), and former Starbucks senior vice president Donald Valencia, who passed away in late 2007. In an early interview with Seattle-based nPost, Shahani said his startup’s main opportunity was in improving customer relationship management for medical device, pharmaceutical, and healthcare companies. Appature helps these companies “understand what’s going on in their organizations in regards to their customer segments and how they can drive more revenue,” he said.

Earlier this month, Appature was featured as “startup of the day” by Microsoft’s BizSpark program. In a published interview, Shahani said Appature has 11 full-time employees (five are developers), and is planning to expand its team by the end of the year. “We are in the fundraising process to commercialize our product and increase our time-to-market,” he said.

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‘Tis the season for startup-pitching events. Last week, it was the Zino Society’s investment forum in Seattle. Today it’s the DEMOfall09 conference in San Diego, where four Northwest companies are presenting. And tonight there is nPost’s networking and demo event for tech startups at the Columbia City Theater in South Seattle.

But there is also a notable newcomer to the scene. Alibaba, the Hangzhou, China-based Internet commerce firm, and Inc. magazine announced today the semifinalists in their U.S. entrepreneur competition, called “Newpreneur of the Year.” Thirty entrepreneurs will compete in six cities across the country, including Seattle, for 12 spots in the next round of competition, where the public will vote for the businesses they think have the most potential to revive the economy. (The other cities are New York, Chicago, Miami, Dallas, and Los Angeles.) The final round will take place on Nov. 18 in San Francisco, where one winner will take home $50,000, and four others will split another $50,000.

The Seattle semifinalist event is on Oct. 20 at the Edgewater Hotel. Five local entrepreneurs will pitch their companies and ideas, ranging widely from alternative energy, medical devices, and retail, to the decidedly low-tech world of kitchen and fashion accessories. The winners will move on to the final 12 in the nation. Here’s a snippet on each of the Seattle contenders:

—Jessica Aceti will be pitching Cap-sac, a modern line of convertible accessories, including a fanny pack for your head. The product folds into itself and can also be used as a purse. (This I have to see, though it’s safe to say I’m not the target audience.)

—Steven Bohannon from Bainbridge Island, WA, will pitch Feed Your Mind, a vending machine company focused on providing healthy, nutritious, and entertaining alternatives to traditional vending offerings. Its product mix includes crossword puzzles, games, new and used books, playing cards, maps, and nutritious snacks. Machines will be placed strategically where consumers get stuck waiting—at hospitals, airports, bus and ferry terminals, and so forth.

—Burt Hamner of Seattle will pitch Hydrovolts, the renewable energy company we’ve profiled before in Xconomy. Its key technology is a hydrokinetic turbine that can be placed in a water current (like a canal or stream) to provide electricity for up to a dozen homes. Hamner is no stranger to pitch competitions; Hydrovolts won the “audience favorite” prize at the Northwest Entrepreneur Network’s First Look Forum last March, and took home the $50,000 prize in the Zino Society Green Investment forum in May.

—Cindy Sawyer of Bothell, WA, is pitching ToweLocs, a locking device that keeps kitchen and hand towels secured, and prevents them from falling to the floor. It may sound mundane, but it’s the kind of simple, stylish home accessory that might just take off if it solves a real problem for people.

—Joel Smith of Edmonds, WA, will pitch Forward Mobility, a line of medical mobility products to help disabled customers maintain their independence. The company is looking for funding to finish the production tooling of its new walking leg brace, the Freedom Leg, which allows a person to walk on an injured leg with zero weight put on the knee and below.

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Tadayoshi Kohno spends his career looking at life through the eyes of a criminal, and he’s teaching University of Washington students to do the same. The UW computer science and engineering assistant professor studies computer security and privacy, which to Kohno means anticipating the bad guy’s moves before he does. I chatted with him recently to find out more about the “security mindset,” how you teach it, and what this mysterious bad guy could do using ingenious technology hacks.

“We’re seeing computers in all aspects of our lives, in medical devices, exercise equipment, cars, airplanes, utility systems, power lines, everywhere,” Kohno said. “One of my main concerns is that while we’ve thought a lot about security for our desktop computers, computing is much broader than that, and we need to address security for all of it.”

Kohno’s interest in security goes back to his teenage years, when as a 10th grader he won the Colorado History Day competition with an essay about the history of cryptography. During his doctoral work, Kohno revealed security flaws in the software of electronic voting machines. The machines, which were rising in popularity following the 2000 presidential election, could easily be hacked to manipulate votes or reveal people’s voting choices, Kohno said.

Since then, he and his graduate students at the UW have pointed out security holes in technologies such as implantable cardiac defibrillators, pacemakers, radio frequency identification tags (which are used, among other places, on many credit cards and Washington state’s new enhanced driver licenses), and the Nike + iPod sport kit (the workout tracker that fits inside running shoes). His group has also recently developed software that causes messages or data to self-destruct after a set period of time. The program, Vanish, is one step towards a security answer to the problem of putting all your information into the “cloud” of sites such as Facebook or Google, Kohno said, where it might be backed up and never fully deleted.

I found his group’s revelations about implantable medical devices especially chilling. Right now, devices such as cardiac defibrillators signal wirelessly only over short distances, to allow doctors to adjust them without surgery. But in the future, Kohno said, he can see technology advancing to the point where those wireless signals have a longer range, and that’s where the real danger to the patient comes in. Beyond just gleaning a patient’s medical and other personal information, a defibrillator hacker could send signals to shut off the device or send electric shocks to the patient’s heart. In 2008, Kohno’s group managed to perform these potentially fatal hacks on a real defibrillator (not in a person).

“This is a wake-up call for the industry and the FDA that these are serious issues, or could become serious in the future,” Kohno said. “I believe that providing the first concrete evidence is the first step toward having a broader impact.”

To figure out which piece of technology he’s going to hack into next, Kohno asks what the next big thing in technology is going to be over the next five to 10 years, that people might not have examined for security gaps. Then he tries to think of every damaging thing a devious person could do with that technology, if they hacked into it. “I think I have always liked to play the game of looking for holes in the system,” Kohno said, when I asked him how he first got interested in security.

Kohno, who is kicking off the Technology’s Alliance’s Science and Technology Discovery Series with a lecture this morning, also teaches undergraduate and graduate classes on computer security at UW, and is planning a security lecture or event for middle school and high school students sometime in the next year. Even though most of his students won’t go on to become security professionals, Kohno sees his courses on the “security mindset,” or how to think one step ahead of the hackers, as valuable for the computer industry, so that those working on new technologies will know when to call in the experts. “I want students have the habit of saying ‘what if’ when they see a new system,” he said. “The gritty details are much less important than having the mentality of asking, ‘What if something bad happens?’”

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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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San Diego has long been known as an incubator for new technology companies. But as the hometown for established Fortune 500 companies, San Diego is barely on the map. You can count San Diego’s Fortune 500 companies on three fingers: Qualcomm (at No. 244), Sempra Energy (No. 252), and SAIC (No. 266).

This is because San Diego operates like a botanical nursery. Technology startups seeded here are typically sold and often transplanted. Sometimes part of a company’s operations remain in San Diego while corporate finance and other executive functions are consolidated elsewhere. That’s the way it was in 1996 when Dublin, OH-based Cardinal Health paid $920 million to acquire San Diego-based Pyxis, a medical technology startup that pioneered the development of computerized drug dispensing systems for hospitals. And again in 2004, when Cardinal paid $2 billion to acquire San Diego’s Alaris Medical Systems, a leading maker of intravenous drug pumps.

But now we’re watching a complete turn of the great corporate circle of life. Cardinal decided more than a year ago it was time to spin off its medical technology business—which includes Pyxis and Alaris—as CareFusion, a full-blown publicly traded company with 15,000 employees and roughly $3.7 billion in annual sales. David Schlotterbeck, who was a vice chairman at Cardinal and the CEO of Alaris, is heading CareFusion—which is headquartered in San Diego.

“I am very happy to see San Diego regain a large publicly traded company headquarters,” Pyxis CEO Ron Taylor said in an e-mail last week. “Over the years we have sold many local companies to bigger out-of-town buyers and lost the HQ.”

The spinoff becomes official tomorrow (September 1), when trading in CareFusion shares begins on the New York Stock Exchange under the symbol CFN. CareFusion shares began trading provisionally under the symbol CFN-WI just over a week ago, on Aug. 21, to establish a market for the stock, according to CareFusion spokesman Jim Mazzola. At noon today,  they were trading at $19.02 a share, giving the new San Diego company a market valuation of more than $4.3 billion.

The split leaves Cardinal Health, the country’s No. 2 drug distribution company, with a more centralized focus on its core business. It also enables CareFusion to focus …Next Page »

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Here are two reasons to believe that there are investors out there willing to make a bet on your young startup: BL Healthcare and Daktari Diagnostics, both of which reported in SEC documents over the past few days that they’ve raised private capital.

Formed last year, Daktari appears to be the younger of the two life sciences startups. The Arlington, MA-based firm reported that it raised $2.5 million of a proposed $3 million in financing. The company says on its website that it’s developing a handheld device that integrates microfluidics and electrochemical sensing to measure CD4 immune cell levels in patients. The CD4 test is a standard measurement of HIV progression, and the firm indicates that there’s a big need for its technology in developing countries.

Xconomy has learned that the investors in the round include Waltham, MA, medical devices investor Norwich Ventures, Partners Innovation Fund, the venture arm of Boston-based Partners HealthCare System, and Mass Medical Angels, a Boston-area angel group that focuses on healthcare investments, according to a e-mails from company directors Roger Kitterman and Aaron Sandoski. Kitterman is both a partner at Partners Innovation Fund and a cofounder of Mass Medical Angels. He noted in his e-mail that Mass Medical Angels cofounder Rich Anders also invested in the company. Sandoski is managing director and co-founder of Norwich.

Daktari was founded by Bill Rodriguez, the former chief medical officer of President Bill Clinton’s William J. Clinton Foundation, and Mehmet Toner, a professor of biomedical engineering in the Harvard-MIT Division of Health Sciences and Technology, according to the firm’s website. The firm’s technology was licensed from Massachusetts General Hospital and Purdue University. We were unable to contact the company this morning, but we hope to learn more about this firm in the days to come.

Foxboro, MA-based BL Healthcare’s founder and CEO Michael Mathur apparently doesn’t give up. I first interviewed him about the company—which makes an FDA-cleared TV set-top box designed for the remote healthcare market—about two and a half years ago, at which time he told me he was on the hunt for about $3 million to $5 million in Series A venture capital. An SEC filing this week shows that Mathur has managed to raise $2.9 million of a planned $5 million financing round—right around where he told me he wanted to be with the Series A.

The company’s TVx box is engineered to offer video conferencing, on-demand health videos, vital signs monitoring, and other features to enable patients to receive healthcare outside of traditional medical clinics in places such as their homes. Mathur chatted with my former Mass High Tech colleague Rodney Brown about the financing yesterday.

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Sports fans know how a knee injury ruined the last season for beloved New England Patriots quarterback Tom Brady, and many other athletes before him. Now Connective Orthopaedics , a Waltham, MA, medical devices startup, is quietly researching new products that could potentially improve recoveries for people after they undergo knee surgery.

Connective CEO Dean Banks told me that the vision of the company is to eventually provide products that help torn ACLs (short for anterior cruciate ligaments) in the knee to heal themselves, as opposed to the standard treatment of replacing the damaged ligaments with tissue taken from other parts of a patient’s body or from a donor source. The startup has been attracting attention in the sports world by adding Boston Celtics CEO Wyc Grousbeck to its board of directors in June. (It turns out that Connective’s Banks and the Celtics’ Grousbeck go way back—they used to work together at Highland Capital Partners in Lexington, MA.)

Banks declined to give specifics about his company’s technology, but he showed me a recently published study to give me an idea. The study indicated that pigs that had reconstructed ACLs that were wrapped in a collagen-platelet scaffold healed back to normal better than the pigs that went without the scaffolds to help mend their ACLs after reconstructive surgery. Collagen is the ubiquitous protein that supports organ structure in the body, and platelets are blood cells that contain growth-stimulating proteins. Though Connective isn’t saying whether it’s developing a collagen-platelet product, the firm is clear that it wants to develop products that promote tissue healing. The secrecy is one indication of the fierce competition Connective is facing.

“We are really, really intent on staying in stealth mode because …Next Page »

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San Diego medical device maker SpectraScience, (OTCBB: SCIE) has raised $930,000 of a planned $5 million round, according to a recent SEC filing. The funding is being raised from individual investors, according to CEO Jim Hitchin, who founded SpectraScience on optical biopsy technology salvaged from the bankruptcy of GV Medical, a Minnesota medical technology company.  He says SpectraScience plans to use the capital mostly to expand its sales and distribution network for equipment it has developed for examing the colon, cervix and other internal tissues for signs of cancer.

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