Thursday, June 09, 2011

Financings of the Fortnight Goes Double-Dipping

Much of the macroeconomic chatter this past week has focused on the dreaded DD -- even the President stuck his snow cone into the conversation to tell everyone to chill out -- but here at FOTF HQ we've been deep in the depths of a different double dip. Yes, Mr. and Mrs. Financings have a new baby girl, our second, and all the wonderful things to go along: the exquisite smallness that's hard to believe even when you've been through it before; the newborn top-of-the-head smell; the softest skin and hair you've ever felt; and best of all, the tiny weight on your chest as you doze off in the rocking chair.

No, scratch that: best of all are the hallucinations brought on by sleep deprivation. Recreational drugs are so 1967; FOTF prefers to get out-of-body the natural way. We remind ourselves constantly: it's not torture, it's an enhanced interrogation technique.

Then again, if you're three years old and a newly-anointed big sister, the best part of the deal is the multiple bribes, er, treats that your once-principled parents suddenly, desperately lean on to coerce compliance. A cookie on the way home from school and ice cream after dinner? That's surely the kind of double dip the President can get behind. (Just don't tell Michelle.)

We're cutting short this week's column to push the stroller around the block -- yet again -- but having used up our vacation time for newborn duty, FOTF from here on out will be busy all summer. So much to do: check in on the A-List, glean tidbits from Start-Up magazine's first-ever venture survey (coming soon!), find new subjects to profile for our new Capital Matters column, and of course keep a close eye on how the macroeconomics are affecting the ways biotechs are raising cash. And if there's a biotech out there working on a combination ibuprofen/caffeine/martini/weight-loss pill, formulated perhaps with an estrogen antagonist to keep the pink-princess claptrap from taking over the house, Mr. FOTF will gladly double-dip into his personal fortune to fund the seed round. Until next time, folks, I scream, you scream, we all scream for...

Shield Therapeutics: Switzerland has become a hot spot for Series A financings in Europe this year. Four Swiss companies have raised Series A money totaling about $60 million since the start of the year, with the latest funding going to Shield. The Wollerau-based company has raised $12 million, to be released in two equal tranches over the next two years, to support the Phase II/III development of its oral iron deficiency product, ST10-021. This contains ferric iron tightly bound to sugar carrier molecules, with the iron being taken up from the gastrointestinal tract by a specific ferric iron carrier. Any iron that is not absorbed is excreted unchanged from the body because of the tight binding to the carrier, which is a key property of ST10-021, says Shield CEO Carl Sterritt. In contrast, in competing oral iron products that contain ferrous rather than ferric iron, any non-absorbed iron can dissociate from its carrier and cause side effects. Only one VC firm, Inventages Venture Capital, was involved in the Shield financing, but Sterritt said he preferred it that way to keep the board as simple as possible. Life-science specialist Inventages has backing from Swiss conglomerate Nestle and more than 30 companies in its portfolio. Shield had previously raised €6 million from private investors, Sterritt said. Shield plans to evaluate ST10-021 first in patients with ulcerative colitis and Crohn's disease in Europe, and it is currently drawing up plans for US development. The other three Swiss A-round recipients this year are Vaxxim, Anergis, which we wrote about here, and Delenex Therapeutics, which topped off its previously disclosed Series A with a $19 million tranche. -- John Davis

Cyterix Pharmaceuticals: Spun out of the University of Dundee in Scotland last year, oncology drug discovery firm Cyterix has set up shop in San Francisco with $9.2 million in Series A money from two U.S.-based investors. The Column Group supplied an initial installment of funding in February, and SV Life Sciences followed with a second tranche to close the round in April. Cyterix aims to develop new prodrugs activated by specific versions of cytochrome P450 enzymes that exist outside the liver and are over-expressed in tumor cells. By combining that activation mechanism with known “warheads” -- well-studied cytotoxic or molecularly-targeted compounds -- Cyterix hopes to create new drugs that solve toxicity issues by administering lower doses that affect tumors without harming healthy tissue. While the company is aiming for proof-of-concept in one or two compounds of its own, it may also partner with pharmas to develop new versions of drugs that have stalled in development due to toxicity issues. Former University of Dundee professor Steve Everett will lead the virtual company, based in San Francisco, alongside UCSF professor and CYP enzyme specialist Paul Ortiz de Montellano; a third co-founder, longtime Genentech clinical development executive and Threshold Pharmaceuticals CMO John Curd, passed away unexpectedly in April. -- Paul Bonanos

Intrexon: Blacksburg, Va.-based synthetic biology startup Intrexon said May 31 it completed a $100 million Series E round of funding intended to support its industrialized transgenetic manufacturing technology. The round includes company founder Randal Kirk, his investment firm Third Security, and an unspecified number of institutions and high-net-worth individuals; new investors accounted for more than half the round. The company has now raised $259 million since its inception in 1998, including a $67 million Series D round accumulated through several closings in 2010 and early 2011. The company is commercializing its UltraVector technology, which senior vice president Robert Beech says is a high-throughput manufacturing technique that allows mass production of complex synthetic DNA with sophisticated control capabilities. The company is engaged in multiple areas, including agricultural biology, animal science and industrial products. To date, Intrexon has announced two biopharma partnerships. The most recent was announced earlier this week, a license of Halozyme Therapeutics' recombinant human hyaluronidase for use in Intrexon's formulation of a subcutaneous alpha 1-antitrypsin for patients with genetic defects that lead to deficiencies of the protein and potentially lung and liver diseases. Kirk, a longtime major investor in the company, was the majority stakeholder in New River Pharmaceuticals, the developer of ADHD drug Vyvanse (lisdexamfetamine dimesylate), prior to its acquisition by Shire for $2.6 billion in cash in 2007 and a large shareholder of Clinical Data Inc., bought by Forest Labs this year for $1.2 billion. -- P.B.

Constellation Pharmaceuticals: GlaxoSmithKline continues to fuel competition in the epigenetics space, with Constellation adding $15 million to a Series B round that it began last year with a $22 million tranche led by GSK's SR One venture arm. All current investors, including SR One, Third Rock Ventures, and The Column Group, participated in the extension. It's quite a haul for a firm with no publicly declared compounds in the clinic, and it underscores how even in risk-averse times a handful of venture investors, often with a lot of help from pharma venture groups, are placing big bets on cutting-edge platforms. Glaxo is -- ahem -- double-dipping in epigenetics, having signed a potentially lucrative R&D partnership with EpiZyme in January that gives GSK access to small number of undisclosed histone methyltransferase targets, with EpiZyme doing the preclinical discovery work and handing off development candidates to the larger partner. As our STARTUP colleagues so ably explain here and here, the rapidly evolving field of epigenetics revolves around molecular modifications affecting the packaging of DNA into chromosomes, which allows individual cells to dial up or down the activities of different genes in a highly specific manner. Misregulation of epigenetic enzymes are thought to result in disease, particularly cancer, metabolic disorders and neurodegenerative diseases.

Photo courtesy of flickrer Funkdooby via a Creative Commons license.

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