Integra Ventures: Life Science Investments

MediQuest Vying to Get First Drug Across FDA Goal Line, Put Raynaud’s in Your Vocabulary

Punch “Raynaud’s disease” into a simple Google search, and the first site you get is one from the Mayo Clinic that says it’s a condition of limited blood circulation that causes numbness in the fingers and toes in cold temperatures. “For most people, Raynaud’s disease is more a nuisance than a disability,” according to the site. Usually, it means people with the condition have to avoid the ice cream aisle at the grocery store, or wear a pair of gloves.

To the people at MediQuest Therapeutics, a privately-held biotech company in Bothell, WA, it represents a lot more. Like the chance to become an enterprise with products to sell for the first time, potentially reach as much as $400 million a year in sales, and relieve the pain of millions of people who have basically been told to suck it up and live with it.

“All too often, the physicians don’t take it as seriously as the patients. If it’s your fingers that are hurting, it’s more than a nuisance,” says MediQuest CEO Fred Dechow, during a visit to the company’s offices.

MediQuest’s pursuit of Raynaud’s is one of those rare stories in biotech, of a company that limped along for years, reinvented itself, and then got its act together. Founded as Oridigm with angel investment in 1994, the company originally developed anti-cancer compounds that didn’t work, because they couldn’t penetrate cell membranes. In 2002, Dechow was brought in from PrimeCyte, and decided to shift gears to develop the anti-cancer drugs as topical formulations that could treat skin conditions, without needing to be absorbed in the bloodstream like most drugs.

Six years later, with just $31 million of venture capital (including cash from Seattle-based Integra Ventures) and a staff of just 29 employees, MediQuest is approaching the mother of all milestones for a fledgling biotech company. The FDA is giving the company an expedited six-month review of its product, with an official deadline of October 25 to say yes or no to MQX-503, the company’s squeeze-on gel for patients with Raynaud’s. It could be the day MediQuest gets clearance to sell its first product in the U.S., and the first-ever treatment specifically for Raynaud’s. An estimated 2.1 million people, mostly women, have a severe enough case of the disease that they have sought medical treatment, Dechow says.

The opportunity is too big for a small company like MediQuest to handle, so it is negotiating with potential partners who could deploy a sales force of about 400 representatives across the country to get the word out about the new drug. Dechow says they will aim the pitch at rheumatologists as a specialty, primary care physicians who see most patients, and possibly help put together a direct-to-consumer TV ad campaign designed to raise the profile of Raynaud’s. Somewhat like Restless Leg Syndrome, a once-obscure disease with limited treatment options, MediQuest wants to transform Raynaud’s into a new pharmaceutical market worth hundreds of millions to companies like London-based GlaxoSmithKline (NYSE: GSK), the world’s number-two drugmaker

“We want a partner willing to address the market with the right sales force, the right resources, and let people know there is finally something available for Raynaud’s,” Dechow says.

First, though, is the matter of persuading the FDA to give the green light. MediQuest filed its application with the agency based on two pivotal clinical trials that showed its product was better than a placebo. The gel, which is squeezed on the fingers with a spongy material the size of a quarter, showed improvement in a patient-reported scoring system that measured the number of Raynaud’s flare-ups, how long they lasted, and the severity of pain, numbness, and tingling, said Jeffrey Gregory, the company’s chief medical officer. The drug was 13 percent better than the placebo in one trial and showed 24 percent improvement in the other, he says.

The product works by delivering nitroglycerin, a high-blood pressure medicine, through the skin to open up blood vessels and bring back blood flow to the extremities when encountering cold weather. The product is given as a daily pill to some patients with Raynaud’s, but only a small fraction stick with it because it causes headaches, Dechow says. However, the headache rate for patients on the MediQuest drug was about the same as those on a placebo, he says.

“We will need to let people know that you can finally treat this disease. There’s a patient education program, and a physician education program that will be necessary,” Dechow says. “The feedback we get is that patients really like the idea of a local solution to a local problem.”

Blue Heron Strives to Replace Gene-Making Grunt Work with Custom Manufacturing

It used to take weeks of labor for a drug company to make a batch of genes for an experiment. Those days are fading, as Blue Heron Biotechnology of Bothell, WA, and an emerging group of competitors have found ways to pump out industrial quantities of custom-manufactured genes, cheaper and faster than before.

The market for custom-ordered building blocks of life has grown from virtually zero in Blue Heron’s founding days of 1999 to an estimated $60 million this year and growing, said John Mulligan, the company’s founder, chairman and chief scientific officer. The price per base pair, or chemical unit of DNA, has plummeted to about a tenth of what it was then, meaning it is now cheaper for drug companies to order manufactured genes than assign the task of making them to young scientists, said Joe Piper, managing director of Integra Ventures in Seattle, and a director of Blue Heron.

The trend has made it possible for large drugmakers to run all sorts of industrial-scale experiments that weren’t feasible before, Mulligan said. Demand has surged to the point where Blue Heron counts 19 of the world’s 20 largest pharmaceutical companies as customers. Unwieldy genes with as many as 50,000 chemical units of DNA (more than most any biologist needs) can now be custom made, error-free. After surviving some manufacturing snags a couple years ago, Blue Heron can now deliver an average order within two to four weeks.

“It’s a real business now,” Piper said. “Early on, you had to wonder if there was demand.”

Besides Blue Heron, Germany-based GeneArt, DNA2.0 of Menlo Park, CA, and at least until recently, Codon Devices of Cambridge, MA, have emerged as leaders among at least 40 companies offering the service, Mulligan said. The companies offer a way for large drugmakers (think Merck and Pfizer, although no one’s saying for sure) to buy large quantities of genes with slight variations, so they can run vast experiments to see which of their drug candidates ought to work best.

The demand has surged so much that the manufacturers have struggled to keep up. About two years ago, Blue Heron’s orders more than doubled on a monthly basis, Piper said. That led to some struggles to keep up with demand, which have since been resolved, Mulligan said.

Growth, and growing pains, aren’t just happening at Blue Heron. More recently, Codon Devices was hit with a spike in demand that it couldn’t handle from September 2007 to February 2008, says Mulligan, whose company received some customer referrals as a result. (Codon said last week it is switching its strategy to concentrate more on synthetic biology, constructing new biological products potentially for uses like cleaning up oil spills.)

GeneArt, the German competitor, has done well enough to go public in Germany and hire 190 employees. Thanks in part to a big contract signed with the U.S. National Institutes of Health, based in Bethesda, MD, GeneArt said its sales surged 61 percent in the first quarter. It expects 2008 sales of $16.5 million to $18 million Euros ($25.6 million to $28 million at current exchange rates).

The better/faster/cheaper evolution of custom gene manufacturing opens the door to making all sorts of biological organisms that don’t exist now, hence the term “synthetic biology.” J. Craig Venter, the human genomics pioneer, has talked publicly about his desire to someday synthesize entirely new organisms that might be able to clean up environmental pollutants or become renewable energy sources.

At least for today, it’s more likely that what a drug company would want from gene manufacturer like Blue Heron is many copies of genes with slight variations that would enable massively parallel experiments that could help explain, for instance, why some patients respond to a drug while others don’t. If scientists can know that ahead of time, their success rate for developing new medicines would go way up.

That’s a critical need in the pharmaceutical industry, where only 1 out of 10 drugs that enters clinical trials ever survives to become a marketed product.

“We’re seeing people tackle projects in new ways with the industrialization of molecular biology,” Mulligan said. “People are tackling research in a more rational, compelling way.”

For the sake of everyone who wants new therapies, especially patients and investors, let’s hope the industrialization of molecular biology will help drugmakers raise their batting average.

Tepha Announces First Human Usage of Medical Devices Derived from New Class of Resorbable Polymers

Tepha Corporate Partners, Aesculap and Tornier, Conduct Clinical Evaluations of TephaFLEX(R) Suture Products.

Tepha, Inc., a developer of medical devices derived from a new class of polymers, announced today that two of its corporate partners, Aesculap and Tornier, are conducting initial clinical evaluations of the Company's new TephaFLEX(R) suture products. These clinical evaluations, conducted in both the United States and Europe, represent the first human usage of medical devices derived from Tepha's new class of resorbable polymers called polyhydroxyalkanoates ("PHA's"). The Tepha PHA polymer family is a product of the Company's patented recombinant DNA technology which allows the engineering of resorbable medical devices with mechanical and biologic properties that are matched to specific tissue repair and replacement applications. TephaFLEX(R) monofilament suture is up to 30% stronger, more flexible, and has longer strength retention than currently marketed resorbable sutures.

Dr. Simon Williams, President and CEO of Tepha, commented, "The first human usage of a medical device based on our proprietary polymer technology is an important milestone in Tepha's history. We are grateful for the support of such capable and committed partners as Aesculap and Tornier, and we look forward to these collaborations progressing to the successful commercialization of TephaFLEX(R) suture products."

Aesculap AG, a Tepha corporate partner since 2004, currently is conducting a European trial evaluating suture products based on TephaFLEX(R) fiber in 150 patients undergoing abdominal wall repair procedures. The results of this trial will be submitted to European regulatory authorities to support Aesculap's application for CE Mark approval. Based in Germany, Aesculap is a division of B. Braun Melsungen AG, focused on products for core processes in operative medicine. Aesculap's product range includes sutures, implants for orthopedic and spinal surgery, surgical instruments, endoscopes, surgical motor systems, container and storage systems, and vascular therapy products.

Tornier, a Tepha corporate partner since 2007, recently supported the clinical evaluation of the TephaFLEX(R) Absorbable Suture by several leading orthopedic surgeons in the United States. The TephaFLEX(R) Absorbable Suture, FDA 510(k) cleared in February 2007, was utilized in a range of orthopedic soft tissue repair procedures. Tornier, based in Edina, Minnesota, is a leader in the extremity orthopedics market and is collaborating with Tepha on several products for orthopedic soft tissue repair.

Millipore, Guava to Integrate Flow Cytometry Reagents, Instrumentation
NEW YORK (GenomeWeb News) - Millipore and Guava Technologies have agreed to integrate their flow cytometry instrumentation, reagents, and support capabilities in an effort to target cell biologists, the companies said today.

Under the terms of the partnership, Millipore will develop co-branded reagent kits for Guava's flow cytometers. Millipore also has exclusive rights to distribute and service Guava's non-clinical instrumentation within certain regions of North America, Europe, and Asia.

The companies said they also plan to “work together to develop a new generation of instrumentation with enhanced performance and functionality.”

The first co-branded products under the partnership will be released in July.

Guava specializes in micro-capillary flow cytometry systems, which require smaller sample volumes, generate less waste, have lower operating costs, and are easier to set up and run than traditional flow cytometry technology, according to the company.

Higher crop yields, more biofuel
November 19, 2007

Seattle plant genetics startup Targeted Growth and Texas biodiesel producer Green Earth Fuels have formed a joint venture called Sustainable Oil that will attempt to sell camelina plants to farmers for use in the production of biofuels, according to News.com.

It also reports that the majority of the plants will be grown on arid land in Montana, with plans by 2010 to obtain enough camelina oil to make 100 million gallons of biodiesel. The joint venture is to be formally announced Tuesday.

Targeted Growth raised $22 million earlier this year, with Chief Executive Tom Todaro saying that its genetic enhancements can increase crop yields by as much as 20 percent. At the time, Todaro estimated that it would be four or five years before its genetically-altered seeds would became commercially available.

"It will be awhile before you fill up your car with our technology in it, but we believe the demand for fuel is going to be around for a reasonably long period of time," he said.

Patent Awarded to MediQuest Therapeutics
Company developing non-toxic skin lightening therapy
October 29, 2007

MediQuest Therapeutics, Inc., a specialty pharmaceutical company focused on developing topical therapies for inflammatory and infectious diseases, today announced it was awarded a European patent for technology that can be used topically to inhibit skin pigmentation, thus lightening skin.

The Company’s patented technology uses small molecule inhibitors to regulate a key enzyme within skin melanocytes that is responsible for producing melanin, which is the pigment found in the skin, hair, and eyes. This is the first patent awarded to the Company for skin lightening technology and additional U.S. and foreign patents are pending. Individuals affected by skin disorders in which too much pigment is present, such as age spots and melasma, could benefit.

“This patent provides us with a new platform to develop topical products for dermatological and cosmeceutical purposes,” Dr. Thomas P. Dooley, chief scientific officer said. “This is another step in the Company’s progress and continued efforts in developing topical formulations to treat skin disorders.”

Both prescription and non-prescription products currently on the market to lighten skin use a potentially toxic agent called hydroquinone, Dooley said.

“It is our intent to develop a non-toxic way to regulate the body’s production of melanin and effectively lighten skin,” Dooley said. “If successful, there is an estimated annual market potential of hundreds of millions of dollars.”

MediQuest now holds 14 U.S. patents and has filed for about 150 worldwide.
In addition to this patent, MediQuest’s ongoing developmental efforts have generated a robust pipeline that includes three drug candidates in clinical trials, one at the pre-clinical stage and others at the research stage. The company develops first- and best-in-class topical therapies to treat patients suffering from inflammatory and infectious diseases.

Integra portfolio company Blue Heron Biotechnology featured in NYT Article
September 12, 2007

INDUSTRIAL age foundries made cast-metal parts. Information age foundries, or “fabs,” produce computer chips. Now come foundries for the biotechnology age, churning out the stuff of life itself.

Such “biofabs” produce made-to-order genes, the stretches of DNA that contain the instructions for living creatures. The foundries take orders over the Internet from pharmaceutical companies or academic scientists and ship back the finished genes in as little as a week or two. The genes can be used to genetically engineer bacteria or other cells to make proteins, or in various types of biological research.

Sales of the gene-synthesis industry are estimated at only $50 million a year, but they are growing rapidly. One foundry, GeneArt, in Regensburg, Germany, has gone public. It says it expects sales this year to increase at least 60 percent, to 12.5 million euros, or about $17 million.

Fueling the surge is the productivity of DNA synthesis, which has increased 700-fold in the last decade, according to Bio Economic Research Associates, a consulting firm. The cost per base pair, the basic chemical unit of a DNA molecule, has dropped to less than $1, from about $30.

The ability to make genes has given rise to a field called synthetic biology, which might lead to artificial life in a few years. For now, though, most of the biofabs’ business is coming from transforming the practice of 30-year-old “conventional” genetic engineering.

“The prices have come down to the point where it is less expensive for many researchers to have a gene synthesized than to make the equivalent molecule themselves,” said John Mulligan, chairman and chief scientist at Blue Heron Biotechnology, a gene-synthesis company in Bothell, Wash.

Genetic engineers generally extract a gene from an organism. Then they might modify it or put it in a different organism. The gene for insulin, for instance, can be extracted from human cells and put into bacteria, which will produce insulin for use by diabetics. It is a cut-and-paste operation, like writing a phrase by snipping the necessary words out of magazines and gluing them together in the proper order.

Gene synthesis, by contrast, is like typing the phrase on a word processor. Scientists specify the sequence of the desired gene and have it “printed” at the foundry. They can do this because the complete genome sequences of humans and many other species are available in databases.

Peter Kuhn, an associate professor at the Scripps Research Institute in San Diego, has been studying the proteins made by the virus that causes SARS, which killed nearly 800 people in 2003.

Before the introduction of gene synthesis, Mr. Kuhn had to isolate the genes from the virus itself, then put them into bacteria to have them produce the proteins. Now he orders the genes from DNA2.0, a foundry.

“If we were starting this today, I wouldn’t even bother trying to get any of this from the natural source,” Mr. Kuhn said. “I would just order everything.”

DNA is made up of four chemical units called bases, usually represented by the letters A, C, G and T. The bases are paired to form the rungs of the twisted ladder structure of DNA.

The first mail-order DNA companies sprung up about two decades ago, selling short, single-stranded pieces of DNA, usually 20 bases to 60 bases long. These strands, called oligonucleotides, or oligos, are used to help find and amplify full genes.

Sales of DNA oligos are about $700 million a year, according to BioInformatics, a market research firm, though some executives say that figure is too high. Production is automated and competition is cutthroat, with prices of 10 cents to 50 cents a base.

Customers “want to have it delivered to them the next day and they really don’t want to pay much for this custom service,” said Mary Buchanan, a business manager at Invitrogen, a leading supplier of oligos. Other major participants include Integrated DNA Technologies and Operon Biotechnologies.

The newer biofabs make complete double-stranded genes, usually hundreds to about 2,000 base pairs long, though in a few cases, longer than 10,000. Leaders in this business include GeneArt, Blue Heron, DNA2.0, which is in Menlo Park, Calif., and Codon Devices of Cambridge, Mass.

Customers usually place orders — a sequence of hundreds of As, Cs, Gs and Ts — through a biofab’s Web site or by e-mail. “It’s really not possible to take an order like that over the phone or even by fax,” said Jeremy Minshull, president of DNA2.0.

Manufacturing is a prime example of what is called mass customization, highly automated production with every single product being different.

The machines that string together bases make so many mistakes that they cannot make a full gene flawlessly. So the companies make shorter oligos and splice them together. Error checking is crucial.

A new opportunity for foundries could come from synthetic biology, which involves designing cells almost from scratch to perform specific tasks, like producing biofuel. Synthetic biologists envision writing the DNA code for such cells the way computer programmers write software. Then the DNA would be manufactured and put into cells.

Ultimately, it might be possible to create artificial life. The scientist J. Craig Venter is trying to do that by synthesizing the 580,076-base genome of a simple bacterium, which would be inserted into some other bacterium.

Some biofabs are distancing themselves from such talk, fearing it could arouse public distrust. “We are not in the business at Codon of creating life,” said John P. Danner, president of Codon Devices.

There is concern that DNA synthesis might be used to make pathogens. In 2002, scientists at Stony Brook University announced that they had synthesized the polio virus, using its published genome sequence and mail-order oligos. It took them three years, but a sequence that long, 7,500 bases, can now be made in weeks.

The foundries say they screen orders against a database of pathogen DNA sequences and verify that customers are from reputable institutions. The leading companies have formed a consortium to write other safeguards and regulations.

But critics say governments should devise the regulations. ETC Group, a technology watchdog, said that regulations were needed to prevent ill-advised or careless applications, not just nefarious ones.

“The danger is not just bioterror,” ETC said in a report earlier this year, “but ‘bioerror.’ ”

PLx Pharma announces that 2005 Nobel Laureate Professor Barry J. Marshall, FRACP FAA FRS joins its Scientific Advisory Board
September 11, 2007

PLx Pharma is pleased to announce that Professor Barry J. Marshall, co¬recipient of the 2005 Nobel Prize in Physiology and Medicine for the elucidation of the role of Helicobacter pylori in gastric ulcerogenesis, and recipient of many internationally distinguished awards including the Albert Lasker Award, has agreed to serve on its Scientific Advisory Board. “I am intrigued by the promise of a G-I safer NSAID which has been demonstrated by PLx’s NSAID-PC technology in at risk osteoarthritis patients and look forward to assisting them as they continue with the development of additional NSAID-PC products such as Naproxen-PC and Aspirin-PC” said Professor Marshall. “PLx’s pipeline of NSAID-PC products has the potential to provide GI safer alternatives to products now being taken by millions of patients.”

Barry Marshall is Clinical Professor of Microbiology and Medicine at the University of Western Australia. He graduated from the University of Western Australia in 1975 and performed internship and residencies in internal medicine at the Queen Elizabeth II Medical Center (Sir Charles Gairdner Hospital) and Royal Perth Hospital where he met pathologist Dr J. Robin Warren and they made their Nobel Prize winning discovery in 1982. Dr Marshall continued his research into Hp at the University of Virginia in the USA. Pursuing an interest in the commercialization of technology he successfully collaborated with Proctor and Gamble on a bismuth drug and with Tri-Med on the diagnostic tests CLOtest® and Pytest®. He is now devoting time to a new venture, Ondek, that is developing a vaccine based on his innovative technology. He moved back to Perth with his family in 1995 to take up his current position at the University of Western Australia.

“We are very pleased to have Professor Marshall joining Dr. Ferid Murad, also a prominent Nobel Laureate, and our other internationally recognized NSAID and gastroenterology experts on PLx’s Scientific Advisory Board,” said David Anderson, PLx’s Chairman of the Board. “Our advisors recognize the critical need for GI safer pain medications and we are gratified that they are willing to contribute their time, expertise and years of experience in assisting us in commercializing our pipeline of NSAID-PC products.”

Professor Marshall joins Ferid Murad, Ph.D., M.D., Professor, University of Texas Medical School and Director of the Institute of Molecular Medicine, Haile Debas, M.D., Executive Director of Global Health Sciences, University of California, San Francisco, Brendan Whittle, Ph.D., internationally recognized expert in gastrointestinal pharmaceutical research and development, Kim Rainsford, Ph.D., recognized expert and author of many books and publications related to NSAIDs, Joe Wernicke, Ph.D., M.D., Sr. Research Physician, Eli Lilly and Company, Sandor Szabo, Ph.D., M.D., Chief of Staff and Chairman of Pathology and Laboratory Medicine, VA Medical Center - Long Beach and Associate Dean and Professor, UC-Irvine, and Gilbert Castro, Ph.D., a recognized expert on gastrointestinal mucosal inflammation and now retired from senior leadership positions within the University of Texas System, on the PLx Scientific Advisory Board.

MediQuest on Cusp of Marketing First Product
August 16, 2007

By ANDREA JAMES, Seattle P-I Reporter

If fortune -- cleverly disguised as the Food and Drug Administration -- smiles upon MediQuest Therapeutics Inc., 2008 could be the year that the small Bothell-based specialty biotech markets its first product.

After 13 years of tinkering with drug formulas, MediQuest is on the cusp of a major expansion and is preparing to submit the first drug in its pipeline for FDA approval. In the past year, the company has grown from eight to 28 employees.
Part of Chief Executive Fred Dechow's job is to travel the world promoting MediQuest and raise money to keep research going. He came on board in 2002, and pointed the company toward a focus on inflammatory infectious diseases that affect the skin and nails, such as psoriasis, Raynaud's disease, onychomycosis and actinic keratosis.

Vascana, the proposed name for MediQuest's upcoming drug, can be applied to the fingers to fend off or treat a Raynaud's attack. The disease causes a painful sudden restriction of blood flow to the fingers and toes, causing them to turn white. After the attack dies down, blood rushes back, creating red, tingly digits.

More than 2 million people in the U.S. seek treatment each year for the disease, and MediQuest expects the market for its new drug to be worth more than $700 million. As the company prepares to commercialize Vascana, it plans to grow to more than 100 employees within the next 12 months.

MediQuest was founded in 1994 under the name Oridigm Corp. to research cancer therapies. Its scientists developed compounds that were soon deemed problematic -- a certain quality prevented the active ingredient from being absorbed into the bloodstream and carried to the problem spot. From 1994 to 2002, not one of the compounds or discoveries made it through the animal testing phase; the company was kept afloat with the help of angel investors.

When Dechow joined, he realized that those compounds would be more effective in treating diseases of the skin and nails. "What I did was change the focus of the company so we could take advantage of that property," Dechow said. "Instead, what you do is apply it where the problem spot is." Today, the company holds 14 U.S. patents and has filed for about 150 worldwide.

Dechow suffers from a mild form of Raynaud's himself in his toes, he explained, a result of frostbite that struck him as a child in northern Michigan. In 2006, the company secured $16.4 million in venture capital, and the company is seeking more. It hopes to raise between $20 million and $40 million for its second round, Dechow said.

Integra Ventures in Seattle and Novo A/S of Denmark co-led the first round, which also included money from Masa Life Science Ventures and Janus.
Much of the lab work is done in the lower level of MediQuest's Bothell building, a compact space full of rooms of beakers, vials, microscopes and scientists in white lab coats who scurry around scribbling formulas on available surfaces.

In a lab tour this week, Dechow showed a formulation that is thicker than a lotion but more fluid than an ointment. The substance, slightly fragrant, leaves no residue and carries active therapy ingredients through thick skin and nails.

Being able to deliver therapy directly to an affected spot, rather than in the form of a pill, is what sets the company apart, he said. The Raynaud's treatment, for example, would compete with several other drugs that, according to the Mayo Clinic, are ingested as tablets and usually used to treat high blood pressure.

In another of the lab rooms, he showed a contraption that measures how much of a drug can penetrate skin. Researchers place toenails from cadavers or human skin samples -- sometimes taken from tissue of people who've had elective surgery -- in a small glass jar. Then scientists test the water that is flushed below the sample to see how much of the drug passes through the skin.
Low regulatory risk and faith in Dechow were two factors that, in part, drew Integra to invest in the company, said Joe Piper, the managing director of Integra Ventures.

Dechow, who has a doctorate in physical chemistry, has spent his career in the pharmaceutical industry and has run three companies before MediQuest.

"Here's a guy, who, on very little money can get fairly large market opportunities," said Piper, who has been MediQuest's chairman of the board since May 2006. MediQuest has "really been under the radar screen of other VCs and the financial community."
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Tepha, Inc. Announces $10.7 Million Venture Capital Financing
June 6, 2007

Tepha, Inc., a privately held medical device company, today announced that it had closed a $10.7 million financing led by The Vertical Group. Also participating in the financing were Integra Ventures, Novartis Venture Fund, and Westfield Life Sciences Fund. The funds will be used to support the further development of Tepha's unique biopolymer technology platform including materials processing, device testing, and regulatory submissions.

Simon Williams, President and CEO of Tepha, stated "We are very pleased to complete this significant financing which will permit us to sustain the momentum that has been generated by recent FDA 510(k) releases. We also are pleased to welcome Westfield Life Sciences as a new investor in Tepha, and we look forward to the benefit of their expertise in life sciences and medical technology to develop Tepha's breakthrough biopolymer technology."

The TephaFLEX(R) biopolymer technology, licensed from Metabolix, Inc. (Nasdaq: MBLX) and based on research done at the Massachusetts Institute of Technology (MIT), significantly extends the range of material properties available for the development of absorbable medical devices. In February 2007, Tepha received FDA 510(k) clearance for its TephaFLEX Absorbable Suture, and in April 2007, the Company received its second 510(k) clearance for the TephaFLEX Surgical Mesh indicated for hernia, pelvic floor, and other soft tissue temporary wound support.

Several leading medical device companies are currently working with Tepha to apply the new biopolymer technology to the development of other medical devices, taking advantage of the TephaFLEX biopolymer properties that include flexibility and toughness, coupled with the ability to form some of the world's strongest absorbable fibers. Products under development include surgical meshes, anti-adhesion films, hemostats, intra-cardiac devices, absorbable stents, ligament and tendon repair devices, embolization agents, and drug delivery systems. Tepha's current corporate partners include: Aesculap AG, HemCon Medical Technologies, LifeCell Corporation, NMT Medical, and Tornier, Inc.

Tepha Receives FDA Clearance for 1st Medical Device Derived from New Biopolymers
April 9, 2007

Tepha, Inc., a privately held medical device company, today announced that the FDA has cleared its TephaFLEX(R) Absorbable Suture product for marketing in the U.S. The TephaFLEX Absorbable Suture is the first medical device derived from a new class of biopolymers that is the product of patented recombinant DNA technology developed by Tepha and licensed from the Massachusetts Institute of Technology (MIT). The TephaFLEX material has biological and mechanical properties that are uniquely suited for implantable medical devices. Tepha and its corporate partners are pursuing a wide array of medical device applications for the TephaFLEX technology.

Dr. Simon Williams, President and CEO of Tepha, stated, "We are delighted that the FDA has cleared the TephaFLEX Absorbable Suture, and determined that devices of this type will be regulated as class II (510k) devices. The Company's novel biopolymer technology can now be further applied to the development of a range of medical devices to meet unmet clinical needs."

TephaFLEX polymer is a member of a new class of biopolymers with mechanical and biological properties that are uniquely applicable to implantable medical devices when compared to conventional synthetic and biologically derived polymers. Compared to synthetic polymers such as polylactic acid (PLA) and polyglycolic acid (PGA), TephaFLEX material is tougher and more flexible with an absorption rate and degradation profile that are compatible with human tissue repair and replacement applications. However, unlike other biopolymers such as collagen and hyaluronate, TephaFLEX polymer is a thermoplastic and can be fabricated into virtually any shape or form -- including fibers, films, tubes, foams, textiles, microspheres, and molded constructs -- using a wide range of conventional melt and solvent processing techniques.

The TephaFLEX Absorbable Suture is engineered to be one of the strongest absorbable fibers known, offering up to 50% greater tensile strength than currently marketed monofilament absorbable sutures. In addition to high strength, the TephaFLEX Absorbable Suture also offers surgeons improved flexibility, good knot security, and prolonged strength retention when implanted.

The new class of biopolymers to which the TephaFLEX polymer belongs is a product of Tepha's patented recombinant DNA technology. This technology allows the Company to engineer materials with a range of biological and mechanical properties for specific tissue repair and replacement applications. After the repair process, the biopolymers degrade in the body to natural metabolites in a biocompatible, cell-friendly manner.

Professor Anthony Sinskey of the MIT Department of Biology, and a co-inventor of the recombinant DNA technology, commented: "This breakthrough technology will allow Tepha and its partners to progress beyond the constraints of traditional medical device materials to offer new solutions for the unmet needs of physicians and their patients."

Several leading medical device companies have recognized the unique properties profile of TephaFLEX material for human tissue repair and replacement applications. Tepha's current corporate partners are pursuing a wide array of products including sutures, surgical meshes for orthopedic and hernia repair, anti-adhesion films, hemostats, intra-cardiac devices, absorbable stents, ligament and tendon repair and replacement devices, embolization agents, and drug delivery systems. Tepha's current partners include Aesculap AG, HemCon Medical Technologies, LifeCell Corporation (Nasdaq: LIFC), NMT Medical (Nasdaq: NMTI), and Tornier, Inc.

The development of the TephaFLEX Absorbable Suture was supported by grants from the National Institutes of Health (NIH), and the U.S. Department of Commerce's National Institute of Standards and Technology Advanced Technology Program (NIST ATP).

Tepha was formed as a sister company to Metabolix, Inc. (Nasdaq: MBLX). Both companies are engaged in commercializing new polymers derived from recombinant DNA technology licensed from the Massachusetts Institute of Technology. Tepha is focused specifically on in vivo medical applications of the technology. Metabolix, which recently had its initial public offering (IPO), is focused on using the technology in the development of environmentally sustainable alternatives to petrochemical-based plastics, fuels, and chemicals.

Tepha's institutional investors include The Vertical Group, a New Jersey based venture capital firm specializing in medical devices and biotechnology; Integra Ventures, a life science venture capital firm located in Seattle, WA; The Novartis Venture Fund, based in Basel, Switzerland, the venture capital arm of Novartis -- one of the world's largest life science companies; and Westfield Life Sciences Fund, a Boston-based fund specializing in health care companies since 2000.

Wellpartner, Inc. Completes $7.5 Million Series C Financing
March 19, 2007

Wellpartner, an innovative provider of pharmacy fulfillment solutions that is focused on increasing access to medications for uninsured individuals, today announced it has completed $7.5 million in Series C financing. The funding will be used for working capital and to support the Company’s strategic growth initiatives to provide pharmacy fulfillment solutions for commercial, government and safety-net providers nationwide. The funding, which was co-led by 3i Venture Capital and Buerk Dale Victor, also included significant commitments from Integra Ventures, Mediphase Venture Partners and Greenwoods Capital.

This financing will allow us to expand the breadth of our product and service offerings to Commercial payers and State Medicaid organizations as well as the growing network of health care providers that serve our least fortunate population," said W. Michael Wright, Wellpartner CEO. "We are rapidly establishing a leadership position with innovative approaches to help increase access to medications and lower overall costs for America’s underserved and we are excited to have new partners in our growth.“

Wellpartner serves a variety of commercial health plans, Medicaid health plans and safety-net providers with pharmacy fulfillment, pharmacy administration and professional service solutions. The Company has particular expertise in the Public Health Service 340B program, a drug discount program created by the federal government to provide medications to America’s most vulnerable individuals at substantially reduced prices. Wellpartner is the largest provider of 340B contract pharmacy services in the country, a market with over $3.5 billion in drug sales annually.

As part of this financing round, David Shapiro of 3i, Todd Marker of Buerk Dale Victor, Hans Lundin of Integra Ventures and Keith Mullins of Greenwoods Capital have joined Wellpartner’s Board of Directors.

“Wellpartner has a strong management team and is broadly recognized as a thought leader in developing programs to bring prescription drug coverage to the 47 million Americans who lack adequate access to health insurance,” noted Todd Marker. “With this latest round of financing, the company is well positioned to strengthen its role as a preferred provider in the rapidly changing market for prescription drug coverage.”

“Today, an estimated 41 percent of working age Americans with moderate to middle incomes lack adequate health coverage in this country,” said David Shapiro. “As more and more employers abandon traditional health insurance coverage for their employees, these individuals will need the innovative distribution and management programs that Wellpartner excels in to gain access to lower cost medications.”

Hans Lundin concurs. “Virtually every governor in the nation this year is seeking ways in which they can provide expanded health coverage for residents of their states. Health care delivery, and particularly, pharmacy benefit delivery, in this country is changing and companies like Wellpartner that excel in transparent cost- based drug fulfillment programs are positioned to capitalize on this shift.”

About Wellpartner
Wellpartner, Inc., is a rapidly growing provider of pharmacy distribution solutions for commercial and Medicaid health plans, and health care safety-net providers nationwide. Offering transparent pass-through cost-plus pricing on medications and personalized pharmacy fulfillment programs, the Company has realized significant growth among commercial and Medicaid insurers, and pharmacy benefit administrators. The Company’s extensive knowledge of the federal Public Health Service 340B drug discount program, combined with its pharmacy fulfillment solutions has enabled it to provide contract pharmacy services for a growing network of safety-net providers in the U.S. In 2006, the Company became the largest provider of contract pharmacy programs serving the safety-net community in the U.S. using the federal 340B prescription pricing program, sized at $3.5 billion annually. More recently, the Company has extended its knowledge of the 340B program and Medicaid to provide professional services that enable organizations to maximize their savings and revenue potential using a variety of program strategies.

Wellpartner has been recognized as one of the fastest growing private companies in the U.S. and was recently ranked #119 in Inc. Magazine’s list of the 500 fastest growing companies in the U.S. for 2006.

Targeted Growth Gets $22.3M
February 8, 2007

Targeted Growth said Thursday it has raised $22.3 million in private-equity funding for a technology that can boost yields of biofuel crops by about 20 percent.

Investors included Capricorn Management, AllianceBernstein, GrowthWorks Canadian Fund, Integra Ventures, WRF Capital, and Investment Saskatchewan. The round, Targeted Growth’s fifth, brings its total funding to $39.7 million.

Ethanol and biodiesel industries are limited by the supply of farm crops, so technology to increase the amount that farmers can grow per acre could play an important role in growing those industries. According to the U.S. Energy Information Administration, 20 percent of the land in Europe and the United States would be needed to grow crops to replace 5 percent of transportation fuel with biofuel.

Rising corn and soybean prices, as well as an Earth Policy Institute study finding ethanol will require twice the corn as previously expected in 2008 (see Ethanol=Soaring Corn Prices?), has raised pressure for the industry to solve the “food vs. fuel” problem.

Tom Todaro, CEO of Targeted Growth, said the company can modify the gene that controls plants’ growth to increase yields of the corn, soy, and canola used to make ethanol and biodiesel.

“If we want to help reduce stress on the competition between food vs. fuel, the best mid-term solution is just to make more of it [crops],” he said. “If you increase yields by 20 percent, you reduce the pesticides, herbicides, and fertilizers by 20 percent—which is very good for the environment—and you also relieve some of the pressure on food vs. fuel.”

Cells have a natural signal that tells them when to stop or slow their dividing process, he explained. Targeted Growth is able to change the signal, encouraging the cell to keep dividing longer, he said.

The Seattle-based company, founded in 1998, has spent seven years and “tens of millions of dollars” developing the technology, he said.

He added that Targeted Growth can also modify the plants to get them to yield more starch, more protein, or whatever is needed to make them ideal for specific applications, including food.

“This is a wonderful example of how technology can be applied to solving our energy crisis in innovative ways, and if the technology delivers as promised looks to be a very smart investment,” said John Balbach, a managing partner at the Cleantech Venture Network. “There is another facet to consider; namely the larger policy debate regarding the increasing use of food as fuel, an issue which we believe will grow in importance over the course of the next two years.”

But not everyone approves of genetically modified crops, particularly for crops used for food.

“We’re trying to convert the world’s farmland to organic for food, and if crops are going to be used for fuel, people won’t care how they are farmed,” said Rona Fried, editor of Progressive Investor, a green investing newsletter, in May (see Biofuel Firm Altra Gets $50M). “Basic crops like corn, soy, and rapeseed will be genetically modified and will invade organic crops used for food.”

Mr. Todaro said Targeted Growth is the “friendly version” of genetic modification because the company modifies a gene that already exists in the plants, and isn’t introducing any foreign DNA. The company is also aggressively working on a way to make these high-yield seeds without genetic modification, he said.

Anyway, more than 80 percent of corn and soybean plants are already genetically modified, he said. “We believe we can demonstrate why this is an incredibly safe and benign technology and is enormously socially advantageous,” he said.

Targeted Growth says it’s testing its plants in demonstration and regulatory trials in 10 locations in North American and another half dozen in South America.

The company expects to commercialize the plants in four to six years. Mr. Todaro said he doesn’t yet know how much the plants will cost.

Targeted Growth also has plans further into the future. It’s developing a crop specifically for biodiesel production—canolina, an even oilier relative of canola that’s not generally eaten as food—and also is working on crops could help break down their own cellulose and lignin so ethanol manufacturers will be able to turn currently unusable plant parts into more ethanol.

Cancer research may help biofuels
By Michael Kanellos
February 9, 2007

Nearly a decade ago, Tom Todaro was talking to researchers at the Fred Hutchinson Cancer Research Center about techniques the institute had devised to slow down tumor growth by slowing the rate at which tumor cells divide.
Then they had an idea. Why not exploit the reaction in reverse and get cells to grow faster?

The result was Targeted Growth, a company that has come up with techniques for increasing crop yields with canola, corn and other crops. In their natural state, these crops stop growing after a certain point in the season. Targeted Growth manipulates a plant's genetic code so the cells continue to divide past their ordinary stopping point.

In the end, the genetic manipulation leads to increased seed size and seed count. In experiments, the technique has increased overall crop yield by as much as 20 percent. It also works in a similar fashion in different plants.

"It turns out that cell cycle regulating pathways are genetically similar," he said in an interview. "Cell division is the fundamental component in life, if you think about it."

This week Capricorn Management, the investment firm of former eBay President Jeff Skoll, led a $22.3 million investment in the company. With the influx of cash, Targeted is going to test out how its technology works in a wider variety of crops in a diverse range of ecosystems.

The company, which licenses technology from the Hutchinson Center but also has devised its own technologies, does not integrate foreign genes into a plant, which creates so-called transgenic plants. Instead, it removes genes from a species, modifies them and then reinserts them.

Founded in 1999, the company has primarily worked with agribusiness concerns like Monsanto but in the past few years has begun to more closely examine using its technology for ethanol and biodiesel production. Alternative fuels have become a major focus of interest for universities, governments, the public and researchers.

There is one big problem, though: they currently cost more than gas. If oil stays below $55 a barrel, most alternative car fuel technologies stop making economic sense, according to Dan Arvizu, director of the National Renewable Energy Laboratory. Oil has bounced between $50 and $60 a barrel recently. As a result, most biofuels are currently supported by subsidies.

Genetic modification helps ameliorate the problem by allowing farmers to generate more starch, which can be converted to ethanol or biodiesel, per acre. The company has already grown a dozen or so fields each of canola, corn, soybeans and camolina, a similar plant to canola.

"Now I want four dozen for each, and I want to do them worldwide," he said. Commercially, fuels enhanced by Targeted's technology may hit pumps in four years or so.

Genetic modification, Todaro admits, isn't popular with the public, but it enjoys strong support in many parts of the scientific community. It cuts down pesticide use, can help farmers earn more profits, and the evidence that it hurts humans is shaky at best.

"One of my favorite stats is that more people are killed by falling coke machines every year than genetically modified foods," he said. "Eighty percent of the corn and soy sold worldwide has biotech inside of it. You ate a transgene at breakfast this morning if you had cereal; I guarantee it."

Skoll's investment is also another example of eBay alumni in action. Many former executives of the company and its PayPal subsidiary have participated in each other's ventures since the go-go Internet days. Skoll, for instance, is also in an investor in Tesla Motors, partly founded by PayPal founder Elon Musk. Todaro came out of PayPal.

Biodiesel seeded by big crop yields
February 9, 2007

One of the big hurdles with the push toward ethanol and biodiesel is that U.S. farmers can't produce enough crops to actually make a dent in the oil needs of the country.

Put another way: If every acre of corn in the country were used for ethanol, it would replace only about 12 percent of our oil consumption.

Targeted Growth is working on that problem. And the Seattle company -- started by scientists at the Fred Hutchinson Cancer Research Center who decided to apply lessons from human biology to botany -- just secured $22.3 million to speed up research efforts. The investment follows a $10 million venture round last spring, with Chief Executive Tom Todaro saying that the company could have raised $60 million or more. Investors include AllianceBernstein and Capricorn Management, the investment firm of former eBay President Jeff Skoll.

"We had opportunities to raise substantially more than we chose to," Todaro said.

Targeted Growth says it can increase the yields of corn, soybeans and canola -- the principal feed stock of biofuels -- by about 20 percent. That means farmers who plant the company's genetically altered seeds could grow bigger crops, which in turn would produce more of the oils used in biofuels.

Increasing the amount of corn or canola grown on an acre of farmland is one of many ways in which companies are trying to tap into the alternative fuel business, said Douglas Tiffany, a research fellow at the University of Minnesota who has studied the economics of ethanol and biodiesel.

"It is an incremental step in the right direction," Tiffany said. "There is certainly a market in this. But they have some competition in this game already from some major seed companies."

Syngenta, DuPont and Monsanto -- big players in the agriculture industry -- are all experimenting with ways to enhance crops for the emerging biofuels market. Thousand Oaks, Calif.-based Ceres Inc., for example, is working with Monsanto to transform native prairie grasses into ethanol.

Though Targeted Growth is eight years old, it is still in the early stages of development. Todaro says it could be four or five years before its seeds are commercially available.

"It will be awhile before you fill up your car with our technology in it, but we believe the demand for fuel is going to be around for a reasonably long period of time," he said.

The biofuel business received a boost last month when President Bush introduced a plan to reduce gasoline consumption by 20 percent in the next 10 years. In order to do that, Bush increased goals for the amount of ethanol and other alternative fuels to be blended into gasoline.

However, some have questioned whether there is enough farmland to meet the new plan or those of the Energy Department, which has called for displacing 60 billion gallons of gasoline with ethanol by 2030.

To do that, Michael McElroy, an environmental studies professor at Harvard University, wrote in an essay late last year, it would require harvesting crops on 225 million acres. In 2004, 73.4 million acres were used to harvest corn in the U.S., which represented 23 percent of the nation's total cultivated land, McElroy said.

At current crop yields, it would be virtually impossible to meet the goals with U.S. agricultural production.

"On a very practical level that can't happen, unless we have no corn for consumption or no soybean oil," Tiffany said.

That would mean either importing crops for biofuels -- as Seattle-based Imperium Renewables plans to do with palm oil from Asia for its 100 million-gallon biodiesel refinery in Grays Harbor County -- or creating ways to produce more fuel from existing crops, which interests many researchers.

That's the big market opportunity facing Targeted Growth, which believes it can not only boost yields but create crops that can grow on land that was previously unsuitable for farming.

"If you could get 20 percent more yield in an acre of corn, that is 20 percent more that you can consume for domestic production of ethanol without increasing corn prices for consumers," Todaro said. "And if you couple that with other new technologies in the ethanol space, I think you can put a pretty substantial dent in petroleum needs domestically."

The 30-person company has planted test crops in Eastern Washington, Montana, Indiana, Canada and other sites, with plans to expand trials this year to South Korea, Australia and other countries. Rigorous testing is required because the crops are genetically modified, an idea that scares some farmers and consumers.

But Todaro said the company's genetic manipulation is pretty "benign as transgenic technologies go."

"We are not introducing any foreign substances into the plant," he said. "All we did was find a mechanism that allows us to encourage the cells to divide for a couple days or a couple weeks longer than they normally would. And that simple change allows dramatic yield effect."

At this time, the company's most advanced trials are in canola. But Todaro said that trials in corn and soybeans are not far behind, adding that the technology could be a potential solution to the "near- and mid-term energy needs."

Todaro admits that challenges lie ahead.

"Trying to improve the food and fuel supply of the whole world is a non-trivial event and as a consequence there are lots of things that need to be thought through carefully before they are executed," he said.

"Whenever you take on a project of this magnitude, there will be potential stumbling blocks. We think that six or seven years of very dedicated work has removed the majority of those. But the thing you have to worry about is never the thing you think of."

Calypso® Medical Technologies, Inc., Advances Position with $42.2M in Private Funding
January 5, 2007

Today, Calypso® MedicalTechnologies, Inc., announced closure of its Series D private equity financing,totaling $42.2 million. Apothecary Capital, LLC (Chicago, IL), Glenview CapitalManagement (New York, NY), and Pequot Capital (Westport, CT), joinedCalypso Medical’s existing investors in one of the largest private medical devicefunding events in 2006. Proceeds will provide expansion capital to support themarket launch of the Calypso® 4D Localization System™ for use in patientsundergoing radiation treatment for prostate cancer. With these additionalresources the company intends to accelerate development of this vital platformtechnology for use in tumor sites throughout the body. Future developmentincludes product applications for cancers of the breast, lung, head and neck andother organs treated with radiation therapy.

Radiation therapy is used to treat approximately one million cancer patients inthe U.S. each year, and is very effective in destroying cancer cells; however,doctors must guard against damaging healthy tissues that surround the tumorcaused by misalignment and unpredictable tumor motion. In prostate cancertreatment the most common side effects arise when the radiation beam missesthe prostate but irradiates adjacent healthy organs causing urinary, rectal andsexual dysfunction side effects.

Cleared by the FDA to guide radiation delivery for prostate cancer, the Calypso®4D Localization System enables doctors for the first time to objectively pinpointa tumor’s location with great accuracy and continuously monitor its positionthroughout treatment. This technology utilizes miniature electromagnetic sensors,called Beacon® transponders. Transponders are implanted in the prostate tocontinuously monitor position and motion of the organ in real-time. The firstcommercial system is installed at the Swedish Medical Center/ Swedish CancerInstitute in Seattle, Washington.

“We are very pleased with the support and endorsement from both the clinicaland investment community clearly signifying the importance of managing theresponse to organ motion in radiation therapy. With this capital raise, CalypsoMedical can fully implement our business plan of offering our novel localizationplatform for the majority of patients undergoing radiation therapy and, therefore,provide greater confidence in the delivery of radiation therapy,” notes Eric R.Meier, Calypso Medical president and CEO.

Dr. Timothy P. Mate, radiation oncologist with the Seattle Prostate Institute(Swedish Medical Center, Swedish Cancer Institute, Seattle, WA) and foundingmember of the Calypso Medical scientific advisory board comments, “Detectingprostate motion continuously during radiation treatment will allow doctors tomanage the delivery of radiation therapy with increased precision, accuracy andconfidence. And, importantly, we expect this technology to have a role in clinicalapplications in tumors throughout the entire body in the future. This 4Dmonitoring technology is a key building block in advancing radiation therapydelivery.”

About Calypso® Medical Technologies, Inc.Calypso Medical Technologies, Inc. (“Calypso”) is a privately held, vibrant and rapidlygrowing medical device company located in Seattle, WA. The Company’s proprietarytumor localization and tracking system utilizes miniaturized implanted devices (Beacon®electromagnetic transponders) to continuously, accurately, and objectively pinpoint thelocation of tumors for improved accuracy in radiation therapy. Calypso addresses twomajor issues in modern radiation oncology: errors in treatment set-up and tumor motionduring treatment. In addition, the Calypso® 4D Localization System’s non-ionizingelectromagnetic guidance has the potential to improve work flow efficiency andtreatment room utilization. The technology is designed to enable clinicians the ability tomanage organ motion body-wide in for tumors of the prostate, breast, lung, head, neckand other radiation therapy target organs. FDA 510(k) clearance was received in 2006for use in prostate cancer. For more information, visit www.calypsomedical.com or call888-48-TRACK (1-888-488-7225).

Raven Biotechnologies, Inc. to Present at the JP Morgan 25th Annual Healthcare Conference
January 5, 2007

Raven biotechnologies, inc., a privately held company focused on the development of monoclonal antibody therapeutics (MAbs) for treating cancer, announced today that George Schreiner M.D., Ph.D., Chief Executive Officer of Raven, will present at the JP Morgan 25th Annual Healthcare Conference in San Francisco. Dr. Schreiner will discuss Raven’s recent breakthroughs related to its platform for the discovery of novel monoclonal antibody therapies, and the clinical development progress of its lead product candidate, RAV12. The presentation will be delivered at the Westin St. Francis Hotel in San Francisco, Calif., on Thursday, January 11, 2007 at 2:00 p.m PST. A copy of the presentation will be available on Raven’s web site at www.ravenbio.com following the meeting.

About Raven
Raven biotechnologies, inc.(www.ravenbio.com) is a privately held biotechnology company focused on the development of monoclonal antibody therapeutics for treating cancer. Raven’s lead product candidate, RAV12, targets adenocarcinomas and is in clinical development for the treatment of gastrointestinal and other cancers. Raven’s discovery process simultaneously identifies cell-surface drug targets and the antibody therapeutics to regulate them. Our focus on biological function allows us to rapidly identify novel target antigens and therapeutic candidates in their native configuration in the intact cell membrane. Our integrated approach is based on proprietary methods for optimizing the production of MAbs targeting cell-surface proteins, including the use of human tissue-specific progenitor and tumor stem cell lines developed at Raven.

To date Raven has identified multiple candidate therapeutic MAbs for many cancer indications including lung, colon, pancreatic, prostate, breast, brain, and ovarian cancer.

Contact:
Stephen Worsley, Vice President, Business Development
1-650-624-2662 or sworsley@ravenbio.com
Daryl Messinger of WeissComm Partners at 1-415-946-1062 or daryl@weisscommpartners.com.

Raven Biotechnologies, Inc. And Wyeth (WYE) Partner To Evaluate And Develop
Multiple Antibody Products
January 4, 2007

Raven biotechnologies, inc., a privately held company focused on the development of monoclonal antibody therapeutics (MAbs) for treating cancer, today announced it had entered into an agreement with Wyeth Pharmaceuticals, a division of Wyeth , to develop and commercialize selected MAbs from Raven's portfolio of antibodies to a specified target.

The agreement gives Wyeth the option to obtain an exclusive license to develop and commercialize therapies arising from the use of these designated Raven antibodies. Terms of the agreement, which include an upfront payment, milestone payments and royalties based upon the net sales of products developed from the Raven technology, were not disclosed.

The antibodies included in the agreement were discovered using Raven proprietary immunization technology and tumor-derived stem-cell lines, and were screened to select antibodies that are active alone or in a conjugated form.

"We are pleased to partner with Wyeth and believe this agreement further validates our approach," said George F. Schreiner, M.D., Ph.D., Raven's Chief Executive Officer. "Raven proprietary antibody discovery processes rapidly create monoclonal antibodies and allow researchers to quickly assess the importance of those proteins in the disease process."

To date Raven has identified multiple candidate therapeutic MAbs for many cancer indications including lung, colon, pancreatic, prostate, breast, brain, and ovarian cancer.

Contact:
Stephen Worsley, Vice President, Business Development
1-650-624-2662 or sworsley@ravenbio.com
Daryl Messinger of WeissComm Partners at 1-415-946-1062 or daryl@weisscommpartners.com.

Guava Technologies Names Sanderling's Huffman CFO
By Lorie Konish
8/10/2006

Guava Technologies Inc., a developer of systems for cell analysis, has named Donald D. Huffman to the position of chief financial officer.

This is a newly created position, Guava President and Chief Executive Lawrence F. Bruder said, adding that the company is contemplating an initial public offering in the next year and a half.

"We are at a point where we will not need to raise more money for operational purposes," Bruder said, indicating that they would raise money for "strategic reasons" only. "We are looking at that [IPO] as a way to grow the organization through the acquisition of other capabilities or technologies that would allow us to grow into other markets."

Huffman previously served as chief financial officer and principal at biomedical venture capital firm Sanderling Ventures. Before that, he served as the chief financial officer at Genteric Inc., as well as several publicly traded companies, including Microcide Pharmaceuticals Inc., Celtrix Pharmaceuticals Inc. and EndoSonics Corp.

Hayward, Calif.-based Guava has developed micro-capillary cytometry systems embedded with embedded absolute cell counting capability. The technology is currently used in the life science, pharmaceutical and biotechnology industries, as well as in clinical testing institutions. Guava currently has customers in the United States, Europe, Japan, India and other parts of southeast Asia.

Last December, Guava received $10 million in debt from Hercules Technology Growth Capital Inc. In November last year, the company closed $7 million of Series E funding for expansion purposes, which was led by Abingworth Management Ltd., and included Granite Global Ventures, HLM Venture Partners, MDS Capital Corp., ProQuest Investments and Skyline Ventures.

Founded in 1998, Guava currently has about 70 employees.

Calypso Gets 510(k) For Tumor Localization Technology
By Lorie Konish
8/9/2006

Seattle-based Calypso Medical Technologies has been granted 510(k) clearance from the Food and Drug Administration for its 4D Localization System, which enables clinicians to monitor organ motion during cancer radiation therapy.

The 4D system allows for radiation to be applied directly to the cancer and reduce the amount of time for set up, as it does not require an x-ray or ultrasound. Calypso specializes in developing technology for detecting the location and movement of cancers.

Evaluation of the Calypso system took place in patients undergoing prostate radiation treatment in clinical studies in cancer centers between 2003 and 2006. The 510(k) is required for companies who intend to market a medical device.

Founded in 2000, Calypso last raised a $44 million Series C round in mid-2005. That round was led by Arnerich Massena & Associates Inc. and BB Biotech Ventures. Other participants in the round included Mitsui & Co. Venture Partners, Merlin BioMed Group, Rockport Ventures and the company's existing shareholders.

Before the Series C round, Calypso raised $36.6 million through Series A, B and seed funding rounds. Investors included Integra Ventures, Rivervest Ventures, Kaiser Permanente, Softbank and Mosaix.

Gilead Exercises Option To Pay $365M For Corus
By Tom Salemi
7/20/2006

Following the withdrawal of a lawsuit that has hobbled Corus Pharma Inc. for nearly two years, Gilead Sciences Inc. agreed to exercise its option to acquire the company for $365 million.

The acquisition, which should close in the third quarter, came after Gilead negotiated an agreement with Novartis Vaccine and Diagnostics Inc. to dismiss its litigation in exchange for an "undisclosed payment," according to a release.

Terms of the agreement may be discussed today when Gilead's management talks about the deal in their second quarter earnings conference call.

Corus Chief Financial Officer Donald "Guy" Seaton said his company negotiated the purchase price with Gilead in April when the publicly traded biotech made a $25 million investment in the company.

Corus had withdrawn plans for its $100 million IPO two months earlier and, with the threat of the lawsuit, faced bleak prospects for raising additional capital from venture investors, he said. Venture investors already had committed $123.5 million to the company.

The $25 million stake made Gilead the second largest shareholder in Corus. More importantly, it gave the company time to get comfortable with Corus' legal standing, Seaton said.

"Gilead did enough due diligence [to learn] that Chiron's allegations appeared to be groundless," Seaton said. But given that the case would be heard before a jury, the company couldn't risk acquiring Corus outright, he said.
The $25 million investment presented a "much lower level of risk while locking in a front row seat" and a fixed purchase price it could exercise when the case cleared up, he said.

The lawsuit - initially filed by Chiron Corp., which was acquired by Novartis last year - charged that Corus management started the company in 2001 with research and technology they developed while they were at Pathogenesis. Chiron acquired Pathogenesis in 2000 and claimed ownership of the technology, suggesting the technology transfer violated employment agreements.

The threat of losing the lawsuit - which targeted much of Corus' intellectual property - limited the company's ability to raise additional capital, Seaton said. Chiron filed the suit on Nov. 9, 2004, two months after Corus filed to go public in August 2004.

The case finally went to trial on July 10. The case was dismissed yesterday. "No one at Corus knows what agreement Gilead and Novartis [agreed to]," he said, saying he understood it involved more than just the dispute with Corus.
Corus' lead product is Corus 1020 or Cayston, a potential treatment for respiratory infections that attacks people with cystic fibrosis. Seaton said the company hopes to start seeing data from Phase III clinical trials at the beginning of next year.

The FDA granted Corus fast track designation, which would speed regulatory review so if the tests are successful the company could file for a new drug application and have its product on the market in 2008.

William Blair & Co. LLC suggests the market for Cayston could be $500 million. It's expected to compete with Chiron's TOBI, a neublized antibiotic that's used by cystic fibrosis patients.

The purchase price of $365 million would produce respectable returns for venture investors who committed $123.5 million to the Seattle-based biopharmaceutical company. But, with the potential of having a product on the market in 2008, the company might have been worth considerably more if it had gone public.

Investors in the company include AIG Sun America Ventures, Anthem Ventures, Bear Stearns Health Innoventures, Burrill & Co., Cascade Investment, Hambrecht & Quist Capital Management, Integra Ventures, JP Morgan Partners, MDS Capital, Montgomery & Co., MPM Capital, Novo A/S, OrbiMed Advisors, Pacific Rim Ventures, Radius Ventures, RBC Capital, T. Rowe Price Associates, Washington Research Foundation, WestRiver Capital and WRF Capital.

Seaton said Corus will become part of the Foster City, Calif.-based Gilead but is expected to retain its 95 employees in Seattle.

MediQuest Therapeutics Raises $16M Series A
By Lorie Konish
6/16/2006

MediQuest Therapeutics Inc., a biotechnology company developing treatments for infectious and inflammatory skin diseases and conditions, said it has closed a $16 million Series A funding round.

The Series A round was led by Integra Ventures and Novo A/S. Other participants in the round included Janus Investment Fund and Masa Life Science Ventures.

MediQuest President and CEO Frederick J. Dechow said he expects the Series A funds to last for at least 12 months.
"We anticipate doing another round before that," Dechow said, adding that the financing will be a Series B funding round. "The amount of money that we would be looking to raise at that time would be in the $20 million range."

MediQuest is using its proprietary topical amphi-matrix technology in conjunction with treatments to develop treatments for Raynaud's disease, nail psoriasis and actinic keratosis. The company's treatment for Raynaud's has completed Phase III testing. Its treatment for nail fungus has been licensed out to Ivrea Pharmaceuticals Inc. Its treatment for nail psoriasis is just starting to get into a clinical program.

Raynaud's disease is a disorder that causes arteries to narrow and limit blood supply to certain areas of the body - including fingers, toes and the tips of your nose and ears - brought on by cold temperatures or stress.

Dechow said the company's treatments aim to enable the active agents to go through the nail to treat the disease, as with nail psoriasis. This prevents a patient from having to take oral medications that would create systemic exposure to the whole body, instead just treating one specific site of the body.

Founded in 1994, MediQuest has been funded with roughly $20 million from angel investors, according to Dechow. That angel funding came in over several different series of round and convertible notes, he said.

Several of the angel investors also participated in the Series A funding, Dechow said, with "a very small portion" of their stock converting to Series A stock. The rest was converted to common stock.

The Series A funding will be used for the late stage clinical trials, recruitment of the management team and advancing some of the research stage projects into the clinic.

Dechow said he expects the company will use the Series B funding for preparing for the commercial launch of its lead product, which has finished Phase III testing for the treatment of Raynaud's disease in May.
Dechow attributed the interest of MediQuest's investors to the stage of the company's products, the valuation and its management team.

"Our pre-money valuation was approximately $17 million," Dechow said of the valuation prior to the $16 million Series A round.

With the Series A round, Novo A/S Partner Soren Schifter, Integra Ventures Managing Director Joseph Piper, who will serve as chairman, and Masa Life Science Ventures Director A. Sinclair Dunlop will join the board. The current board also includes Dechow and Julia Brown, former executive vice president of Amylin Pharmaceuticals.

Bothell, Wash.-based MediQuest currently has 11 employees. Dechow said he anticipates hiring about 20 employees in the next 12 months.

Amnis Closes Oversubscribed $11.25M Series C Round
By Lorie Konish
3/28/2006

Amnis Corp., a developer of instrumentation for high speed imaging of flowing cells, said it has closed an oversubscribed $11.25 million Series C round. The target for the round was $6 million, according to a release. The Series C closed March 17, said Amnis Director of Marketing Guy Page.

New investors participating in the round included CVF LLC - the venture capital arm of Henry Crown and Co. - and MedVenture Associates. Previous investors Emerging Technology Partners, Hillman Ventures, OrbiMed Advisors and TVM Venture Management also participated, according to Page. The round also saw participation from angel investors and individuals, as well as Amnis employees, who contributed about $500,000. The Series C round was "management led," according to Amnis Chief Executive David Basiji.

Before the latest round, Amnis had received $13 million in funding. Amnis closed a Series B round in late 2001. Past Amnis investors also included Integra Ventures, Stratos Product Development, Sunshine Capital, and WRF Capital.
All previous investors are still shareholders in Amnis.

Amnis is the developer of a cell analysis system that generates high resolution microscopic images. The system, known as ImageStream, allows for the use of the images in ultra-high throughput, multiparametric cellular assays in basic research, drug discovery and development, as well as in clinical diagnostics. The system enables advanced applications in analyzing apoptosis, nuclear translocation of transcription factors, co-localization of cell surface and intracellular molecules and automated morphologic cell classification.

VentureWire reported in May 2004 that Amnis was raising a $12 million Series C round projected to close in July of that same year, according to then CEO Jack Ball. Fund raising for the Series C round, which began in mid-April 2004, had commitments from previous investors while Amnis sought a new lead for the round.

But the Series C round stalled when Amnis had an executive reorganization in March 2005. Jack Ball stepped down as chief executive and was replaced by David Basiji, one of Amnis' founders and former chief scientific officer. The chief scientific officer position was not filled again. Bill Ortyn stepped up to the newly- created position of chief operating officer from vice president of R & D. Basiji declined to comment on the executive reorganization.

Other than the management changes, "it's the same now as it was before," Page said. As a result of the Series C round, Richard Robb, a chief financial officer at Henry Crown and Co., and Annette Campbell-White, a senior managing member at MedVenture Associates, joined Amnis' board.

Amnis plans to use the Series C funding for the expansion of the basic image stream idea into new markets and for the development of the commercialization program through marketing and sales, according to Page. Amnis has been selling its product since December 2004, with current customers including research scientists in basic research at universities and pharmaceutical companies. Page said Amnis currently has about 15 to 20 customers, with increasing sales.

"We've already sold more instruments than we sold in all of 2005," Page said. Page said the company is optimistic about the outcome of the Series C funding round. "We expect the funding will take us through profitability," Page said. "What's encouraging about it is that it is a technology that has a very strong future and is applicable to many markets."

MedVenture Associates' Campbell-White declined to speculate on Amnis' future plans, but also expressed optimism for the Series C financing round. "Hopefully the company will be cash flow positive after this round," Campbell-White said. "We invested because we think that they've produced technology that will probably lead to the next generation of flow cytometry instrumentation technology."

Founded in 1999, Seattle-based Amnis currently has about 30 employees.