Author: Erin Kutz

Erin Kutz wrote:

Headlines from both long-established pharma companies and stealthy biotech startups made it a busy life sciences news week for us.

—It was a life sciences-focused week for us, with the introduction of our new life sciences columnist, Sylvia Pagán Westphal, a journalist who’s covered biotech for big-name publications. Her inaugural post likened the lack of disclosure behind the recent Goldman Sachs scandal to the self-interest that’s fueled myriad missteps in life sciences companies.

—Hygeia Therapeutics, a Holden, MA-based maker of topical medicine, raised $1 million in Series A funding to go toward testing a topical synthetic estrogen drug to treat age-related skin thinning, and developing an anti-androgen.

—Cambridge-based Javelin Pharmaceuticals (AMEX: JAV), a developer of pain treatments, accepted a $145 million buyout offer from specialty drugmaker Hospira, nixing a previous merger agreement with Myriad Pharmaceuticals (NASDAQ: MYRX). Lake Forest, IL-based Hospira (NYSE:HSP) plans to pay $2.20 per share for Javelin common stock, and will also loan the company money to repay loans from Myriad and cover expenses related to breaking the agreement.

—Dyax, a Cambridge drug developer, will collect as much as $12 million from Paul Capital Healthcare for selling the rights to royalties and fees from its hemophilia treatment, with $10 million upfront and up to $2 million in milestone payments related to the drug’s sales.

—Luke took a closer look at Catabasis Pharmaceuticals, a seven-person Cambridge startup that’s developing drugs to treat inflammation diseases, particularly diabetes. He first broke the news last week that the stealthy company had pulled in $7.7 million of a planned $39.6 million Series A round from SV Life Sciences, Clarus Ventures, and MedImmune Ventures; the company said it will get the remaining funding if it meets certain development goals.

—HemaQuest Pharmaceuticals, a biotech founded in Newton, MA that moved to Seattle sometime last year, announced it completed a $12 million Series B funding round. New investors Aberdare Ventures, of San Francisco, led the round, which also included a slew of returning backers and will go to …Next Page »

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UNDERWRITERS AND PARTNERS

Erin Kutz wrote:

Pluromed, a Woburn, MA-based maker of medical devices, has raised $1.1 million of a planned $3.9 million equity offering, from 16 investors, according to an SEC filing. Founded in 2003, Pluromed develops devices designed to control bleeding in a range of surgeries, from cardiac and vascular to reconstructive procedures, that can also be used to treat kidney stones. The company, which was unavailable at press time for further comment on the new funding, received a $500,000 loan last year from the Massachusetts Life Sciences Center, an agency in charge of implementing the state’s $1 billion plan for advancing the life sciences industry.

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Erin Kutz wrote:

Earlier this week, my colleague Bruce took a look at venture capital activity across the country in the first quarter of 2010, and found that investors were sinking more cash into startups than they did a year ago.

We track these deals with data provided by private company intelligence platform CB Insights, Dow Jones VentureSource, and MoneyTree, a report compiled by PricewaterhouseCoopers and the National Venture Capital Association using data from Thomson Reuters. Each has their own way of tracking venture dollars and defining deals, so the figures for first quarter venture investing ranged from $4.7 billion to $5.9 billion.

But we also like to provide a closer look by highlighting the top 10 deals for each of the regions we cover, which offers a sense of the trends in the size of individual transactions, the sectors that have gotten the most cash, and the companies that are growing in prominence. The list I have here for the top 10 deals from January to March is drawn mainly from the MoneyTree data, and checked against our Xconomy archives, as well as the Dow Jones and CB Insights numbers.

The highest deal came in at $36 million to TransMedics (we originally reported the deal at $35.4 million based on an SEC filing, but the company later announced it as a $36 million round). The Andover, MA-based company develops systems for transporting organs for transplant. The next three transactions followed closely at TransMedics’ heels, each with $35 million. All four top spots went to life sciences companies (as did another three on the top 10 deals list from Q1 2010).

It’s no surprise to me that seven of the top 10 deals in the first month of this year went to life sciences firms. We track venture investing dollars monthly, thanks to data provided to us by CB Insights, and the sector was the leader in venture dollars in February and March, and a close runner-up in January.

But that doesn’t mean other sectors are necessarily flagging. Energy had a pretty strong showing on the top 10 deals list, with …Next Page »

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Erin Kutz wrote:

Knome, a Cambridge, MA-based genomics sequencing and analysis company, received $5 million from France’s bioMérieux in exchange for an equity stake. It’s part of a partnership deal in which the French company will use Knome’s technology to develop in vitro diagnostics for cancer and infectious diseases, the companies announced today. As part of the deal, bioMérieux will appoint its CEO Stéphane Bancel as a director on the Knome board. Ryan profiled Knome in January.

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UNDERWRITERS AND PARTNERS

Erin Kutz wrote:

Qualtré, a maker of motion sensors for consumer electronics such as cellular handsets, navigation devices, and gaming controllers, has closed an $8 million Series B round of funding, the Marlborough, MA-based company announced today. Matrix Partners and Pilot House Ventures participated in the round, which will go to product development, sales, and operations, and brings the company’s total funding raised to $13 million.

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Erin Kutz wrote:

Cambridge, MA-based car-sharing company Zipcar announced it has acquired Streetcar, a U.K.-based car club that operates under a similar model. Zipcar chairman and CEO Scott Griffith said in the company statement that “when considered along with our investment in the largest car sharing company in Spain in late 2009, this transaction gives us a very strong base from which to expand to additional European markets.” The announcement did not reveal the financial details of the deal, which brings the combined membership of the two companies to over 400,000, but the Wall Street Journal pegged it at $50 million.

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Erin Kutz wrote:

Hygeia Therapeutics, a Holden, MA, developer of hormone-based topical drugs, has closed a $1 million round of Series A funding, the company announced today. Hygeia did not reveal the investors in the round, but said the funding will go to testing its topical synthetic estrogen drug designed to treat age-related skin thinning, and will fuel the development of a topical anti-androgen drug.

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Erin Kutz wrote:

Looks like last week’s flurry of information technology news is long gone. Headlines of partnerships, board appointments, and venture funding in biotech companies made it a busy life sciences news week for us.

—MedVentive, a Waltham, MA-based provider of software for tracking medical data, raised a $10 million series C round. MedVentive got part of the boost from included Clarian Health Ventures, the investing unit of one of its key customers.

—Ryan tracked the growing fervor, on the part of both investors and biotech companies, in developing drugs for rare diseases, as opposed to the traditional focus on big patient populations like those with heart disease, arthritis, or cancer. Alnara Pharmaceuticals, a Cambridge, MA, drug developer backed by Third Rock Ventures, is among the companies taking a cue from Genzyme (NASDAQ: GENZ), whose three best-selling drugs each target diseases affecting fewer than 10,000 patients. Bigger pharma companies are also taken on developments in rare disease treatments as a way to offset potential losses from generic knockoffs of their big-selling mass-marketed drugs.

—Cambridge-based Mersana Therapeutics, a maker of drugs designed to last longer in the bloodstream, announced its first big partnership deal, with Israel’s Teva Pharmaceutical Industries, which could be worth as much as $334 million over time.

—Alkermes (NASDAQ: ALKS) filed an application with the FDA to start marketing a long-lasting version of its naltrexone drug (Vivitrol) to help treat people addicted to opioid-based narcotics. The once-monthly injection from Waltham-based Alkermes is already FDA-approved for treating alcohol dependence.

—Two area biotech companies announced they had brought on new CEOs. Bedford, MA-based MicroCHIPS, a maker of wireless medical implants, hired Ajit Gill, who previously helped lead startup Nektar Therapeutics to an IPO. And Marlborough, MA-based Xcellerex, which is developing methods for more efficiently manufacturing biomolecules, tapped Thermo Fisher Scientific veteran Guy Broadbent to lead the company.

—Third Rock Ventures plans to raise $400 million for a second fund, according to a filing with the SEC. The Boston-based firm targeted life sciences companies with its maiden $378 million fund, which closed in 2007. Luke profiled Third Rock’s strategy around financing disruptive biotech ideas, back in September 2008.

—PerkinElmer (NYSE: PKI), a Waltham-based maker of scientific instruments, will acquire Spokane, WA-based Signature Genomic Laboratories for about $90 million, it revealed in a regulatory document.

—Foundation Medicine pulled in the first tranche of a planned $25 million Series A round, which will go toward …Next Page »

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UNDERWRITERS AND PARTNERS

Erin Kutz wrote:

MassChallenge, a Boston-area nonprofit focused on encouraging innovation, is “convinced that entrepreneurship is the answer” for everything to unemployment to the housing crisis to pollution, in the words of CEO and co-founder John Harthorne.

To put its money where its mouth is, the organization is unleashing a global startup competition with $1 million available in award money. MassChallenge officially launched the contest Wednesday to a standing room-only crowd at the new Fan Pier building on Boston’s waterfront, which will also be the organization’s future home.

From now until June 11, early stage startups from around the world can register for the contest online. Immediately they’ll get access to online training, discounts on services, and access to a network of companies in similar positions. The organization will select 300 semi-finalists for in-person pitches in July.

Up to 100 finalist businesses will actually have the opportunity to move into MassChallenge’s new office space in Boston’s seaport area, which has been designated an “innovation district” by Mayor Thomas Menino’s office. There, they’ll pair up with mentors, get strategic advice from industry experts, and link with members of the Massachusetts support system for entrepreneurs, including investors. At the inaugural competition’s conclusion in October, as many as 20 winning companies will receive $50,000—no strings attached (meaning that MassChallenge won’t require an equity stake in the companies, as many venture incubators do).

“MassChallenge is a celebration of these risk-takers,” Harthorne says.

The competition is drawing some pretty fresh entrepreneurs, including three senior students from Worcester, MA-based Clark University whom I chatted with at the launch event. They’re taking advantage of MassChallenge to turn their class project—a company called Delish Nutrish that makes allergen-free food products—into a business reality.

“We really want this to get somewhere. We don’t want it to just be a year-long project,” says co-founder Eva Fang. Another co-founder noted that MassChallenge will be particularly helpful in getting the students the contacts they lack as young entrepreneurs.

State and local officials lauded the MassChallenge organizers’ goals of promoting job creation and economic recovery in Massachusetts. “Our economy here in the Commonwealth has always been about what’s next,” said Massachusetts Governor Deval Patrick.

Mayor Menino, who also spoke at the launch, repeatedly exuded pride over MassChallenge’s impending relocation to Boston. (The organization previously had office space in Kendall Square’s Cambridge Innovation Center, but will move in July to the Fan Pier space—which oddly enough currently resembles the CIC’s unfinished expanded space). “Where else can you find such intellectual firepower and such a strong network of supportive services?” Menino asked.

The competition’s reach will go beyond the companies directly involved in it, says Brian Burke, the northeast director for state government affairs at Microsoft, a top-level sponsor for the competition. In increasing its presence in Massachusetts, Microsoft also sought to invest in other startup efforts and further fuel the innovation economy, Burke says. “The Challenge is a core part of our DNA,” he says of the startup competition.

I caught up with one attendee who says his business will benefit from the influx of startups that MassChallenge will encourage. “MassChallenge is doing a great job promoting entrepreneurship from a business standpoint; we’re trying to do it from a legal standpoint,” says Benjamin Hron, a co-founder of two-person firm VC Ready Law Group, which seeks to provide cost-effective legal services to startups.

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