Thursday, March 31, 2011

Financings of the Fortnight Buys Me Some Peanuts and Cracker Jack

Sometimes you go looking for a recovering economy's green shoots and instead you find a pristine swath of outfield grass and a stadium full of fans ready to shake off winter. It's Opening Day, a national holiday in waiting if we could ever rid the Congress of all those football fans.

If you're not in the US, we're talking about baseball. Though it's possible at this moment someone somewhere is getting ready for bog snorkelling season.

And it's also possible they're celebrating in Europe the large Series A round just raised by Swiss biotech Anergis, which we detail below. Big fundings across the pond are few and far between these days, so we can't blame optimists for seeing fundraises like those from Anergis and Acacia (also below) as signs of better things ahead. In venture these days, however, much more optimism is emanating from emerging markets, as this survey suggests.

Ah, regional differences. Without them we wouldn't have such wonderful things as truffle pigs, Diwali, funny Canadian accents, and fish tacos. (And bog snorkelling, of course.) But regional differences also contribute to suspicion, tribalism, and persecution. Sometimes such divisiveness is justified. You simply shouldn't trust certain people.

Regional venture differences are actually a topic for another day, or for op-ed pieces like this one, which piles on anecdotes of bad capitalization and even worse manners to explain the difference between US and European venture fortunes. Today, we cheer the men who take the field as world champions, celebrate our quasi-holiday, and sing. You know the words. Take me out to the ballgame, take me out with....

Anergis: Birch pollen. It sounds so woodsy. Makes you want to pack a lunch and take a hike. But it's no picnic for allergy sufferers, who often have bad reactions to many foods, too, including apples, carrots, peaches and potatoes. Swiss biotech Anergis said this week it has raised a Series A round of CHF 18 million (nearly $20 million) to fund a Phase II trial of its lead allergy vaccine, AllerT, for patients with birch pollen allergies. Before the Series A round, the company had raised CHF 3 million from private investors and a grant from the Swiss Innovation Fund (CTI). Anergis CEO Vincent Charlon told our "Pink Sheet" colleagues he expects to look for additional financing and/or development partners in about two years to advance AllerT into Phase III clinical trials. Anergis' vaccine technology, Contiguous Overlapping Peptides (COP), consists of a mixture of synthetic peptides each identical to a small part of the allergen. Between them they represent the allergen's complete amino acid sequence. The vaccine is administered in five injections over two months to induce immune tolerance. Because the allergen is in sections, the three-dimensional structure of the complete allergen is not present and so cannot bind to immunoglobulin E (IgE) to induce hypersensitivity reactions. This potentially means higher doses of COP-based products can be administered than with other allergy products like intravenous injections or sublingual tablets, and tolerance should occur sooner, in months rather than years. The round was led by Vinci Capital-Renaissance PME and BioMedInvest (managed by BioMedPartners AG), both based in Switzerland, as well as Copenhagen-based Sunstone Capital. -- John Davis

Acacia Pharma
: We couldn't make this up if we tried. Not only is Acacia also European, based in Cambridge, UK, but it's named after a tree often blamed for bad allergies. Much maligned, apparently. The tree, that is, not the company, which certainly isn't allergic to tidy sums of venture cash. Acacia
said March 31 it has raised a $10 million Series A round from Lundbeckfond Ventures and Gilde Healthcare. Nothing to sneeze at, indeed. The cash will help complete Phase II trials for its two lead compounds: one treats nausea and vomiting in post-operative patients; the other treats severe dry mouth in patients with advanced cancer. Acacia says it aims to build its own hospital-focused sales force for cancer support care in Europe and outlicense its products elsewhere. If you're wondering about Lundbeckfond, why yes, it is related to the drug firm H. Lundbeck. Known as LFI Life Science Investments until late last year, it was founded in 2009 through the holding company that owns the family shares in the pharma company. The evergreen venture firm operates independently, however, in an arrangement similar to the relationship its Danish counterpart Novo Ventures has with the diabetes specialists Novo Nordisk. Our START-UP colleagues delved into Novo Ventures' hot streak in this November 2010 piece. -- Alex Lash

Arena Pharmaceuticals
: Buy low, sell high, isn't that how it goes? Not for Arena. Rebuffed by the Food and Drug Administration late last year, Arena said March 29 it raised $35.5 million by selling stock at $1.46 a share, near its all-time nadir. Half the cash will pay down existing debt from the same investor, Deerfield Management, that bought low this week. The only time Arena's stock dropped lower came last November, soon after FDA rejected its obesity treatment Lorquess (lorcaserin) with a complete response letter.
The regulatory decision was hardly a surprise; an advisory committee voted in September against approval because of troubling indications of tumors in rats and marginal efficacy. The tumor problem particularly galled analysts and investors, as it had surfaced months before with Arena management downplaying its significance. Arena has said it will re-file lorcaserin this year in the US with its partner Eisai and stump for European approval, as well, though analysts wonder if the company is better off doing a 12-month study to better define the cancer risk. Meanwhile, with $150 million in cash at the end of 2010, Arena is buying financial time. Deerfield bought 12.15 million shares of common stock at $1.46 a share and 12,150 shares of preferred stock at $1,460 a share. The preferreds are convertible to common at any time unless the conversion bumps Deerfield above 9.98% ownership, according to SEC filings. In addition to the stock sale, Arena also repriced more than 14 million warrants held by Deerfield from an exercise price of $3.45 to $1.68 a share. Since Arena's setback, the outlook for obesity treatments has worsened. Development partners Amylin Pharmaceuticals and Takeda Pharmaceutical Co. recently halted Phase II trials of a combination therapy. And FDA has slapped two other drugs with complete response letters: Qnexa (phentermine/topiramate) from Vivus and Contrave (bupropion/naltrexone) from Orexigen Therapeutics. -- A.L.

AssureRx Health
: Until now backed primarily by angel groups and individual investors, the personalized medicine startup AssureRx said March 25
it has completed a new Series B round worth $11 million that includes Sequoia Capital, Claremont Creek Ventures and Allos Ventures, alongside several existing investors. Led by Sequoia and Claremont Creek with a smaller contribution from Carmel, Ind.-based Allos, the round exceeds AssureRx’s stated goal of raising $9 million, and builds on $7 million in Series A money that it raised in several installments since 2006. The startup’s product, GeneSightRx, allows physicians to examine a patient’s pharmacogenetic profile via a cheek swab, shedding light on risk factors for specific antidepressant and anti-psychotic drugs and their dosage levels in an effort to avoid trial-and-error prescriptions. Based near Cincinnati, AssureRx also plans to use the funds for a second-generation product. Returning investors for AssureRx’s new round included the Cincinnati Children’s Hospital Medical Center, the Mayo Clinic, and CincyTech; Claremont Creek took two seats on the startup’s board, expanding its membership to seven. Sequoia and Claremont Creek also invested side-by-side in a $17 million Series C round for molecular diagnostics company Gene Security Network in November 2010. -- Paul Bonanos

Photo courtesy of flickr user ShutterBugChef under a Creative Commons license.

No comments: