TODAY’S HEADLINES:

• Paris-based Stentys takes $18M for “bifurcated” stents (release)
• Cancer-test biotech Calderome changes name to VeraCyte (VentureWire)
• Predictive Biosciences names Peter Klemm as CEO (release)

Paris-based Stentys takes $18M for “bifurcated” stents – Stentys, a Paris-based medical device maker, raised $18 million in a second funding round. The company is developing “bifurcated” stents intended to prop open clogged arteries at blood-vessel junctions.

The startup said the funding will allow it to complete clinical trials of its stents and to win European regulatory approval for them. Stentys doesn’t seem to have given any indication whether or when it might seek approval in the U.S. or other markets as well.

Scottish Equity Partners and Sofinnova Partners provided the funding.

Cancer-test biotech Calderome changes name to VeraCyte – Calderome, a stealthy cancer-test startup in South San Francisco, has changed its name to VeraCyte (no Web site), VentureWire reports. The new name presumably reflects the company’s focus on cell-based cancer diagnostics, as we described last week.

The VentureWire story goes on to reprise VeraCyte’s $12 million fundraising, which we also covered last week. VeraCyte has two employees, and recently extended job offers to three other individuals, the news service reported.

TODAY’S HEADLINES

• Recodagen launches, takes aim at cancer (MS Word release)

Recodagen launches, takes aim at cancer – Recodagen, a newly launched Seattle biotech working on new cancer drugs, raised an undisclosed sum in a first funding round. Investors included Alexandria Real Estate Equities, Amgen Ventures, ARCH Venture Partners, OVP Venture Partners and WRF Capital.

Recodagen was incubated by Seattle’s Accelerator. The company’s technology originated at Washington State University,

TODAY’S HEADLINES

• Recodagen launches, takes aim at cancer (MS Word release)

Recodagen launches, takes aim at cancer – Recodagen, a newly launched Seattle biotech working on new cancer drugs, raised an undisclosed sum in a first funding round. Investors included Alexandria Real Estate Equities, Amgen Ventures, ARCH Venture Partners, OVP Venture Partners and WRF Capital.

Recodagen was incubated by Seattle’s Accelerator. The company’s technology originated at Washington State University,

TODAY’S HEADLINES:

• Affinergy gets $3M in grants for biological “linkers” (release)
• Specialty pharma EUSA snaps up public biotech Cytogen for $23M (release)
• LifeMasters takes in $15M for wellness, disease-management programs (release)
• Dubai Techno Park launched $300MVC fund for life sciences, other sectors (release)

Affinergy gets $3M in grants for biological “linkers” – Affinergy, a Duke University spinout in Research Triangle Park, N.C., received grants worth more than $3 milllion to support development of biological “linker” molecules with potential uses in coatings for medical devices and the development of new therapeutics. The grants were awarded by the federal National Institutes of Health through its small-business innovation research program.

The startup is developing biological molecules that can selectively bind various substances to particular surfaces. Such linkage molecules could, for instance, attach healing growth factors to surgical meshes or other implanted biomaterials or help target drugs at particular cell-surface proteins. The company hasn’t described its goals in much detail, although it said one of the grants is for work aimed at accelerating a patient’s natural healing process.

TODAY’S HEADLINES:

• BrainCells raises $30M for neuroregeneration drugs (release)
• EKR Therapeutics takes in $50M plus $95M in debt for pain, heart drugs (release)

BrainCells raises $30M for neuroregeneration drugs – San Diego’s BrainCells, a startup focused on drugs intended to stimulate the growth of new neurons, raised $30 million in a second funding round. Investors included MedImmune Ventures, Bay City Capital, Oxford Bioscience Partners, Technology Partners, Pappas Ventures and Neuro Ventures.

BrainCells set out several years ago to discover drugs that stimulate neuron growth, following pioneering discoveries at the Salk Institute that revealed mechanisms by which the brain itself regrows its primary cells under certain circumstances. The startup, which raised $17.7 million in a 2004 first round, has been screening experimental compounds against neural stem cells to identify ones that had the previously overlooked property of promoting the growth of new brain cells.

The company’s lead drug candidate, BCI-540, which it licensed from Mitsubishi Pharma, will soon be mid-stage, phase II trials as a potential treatment for depression and anxiety disorder. (Mitsubishi had previously tested as a possible Alzheimer’s therapy, so it’s already been taken by 700 patients and is considered safe.) A follow-up compound, also licensed from a Japanese company — Taisho Pharmaceutical — remains in animal testing at the moment.

Another one bites the dust.

The saga of Precision Therapeutics, a Pittsburgh biotech developing what struck me last August as a particularly crude type of cancer-chemotherapy diagnostic, continues apace. In a tersely worded press release, the special-purpose acquisition company Oracle Healthcare Acquisition said it has terminated its planned merger with Precision. The release blamed “currently prevailing market conditions” for the decision, which carries some fairly ominous consequences for both sides.

Oracle’s plight is fairly simple: The blank-check company will now dissolve itself and return the money it raised, minus expenses, to investors. For Precision, however, the outlook is much starker. The merger would not only have taken the company public, it would have left Precision with $120 million in cash, ample resources to bolster sales of its ChemoFx test and to develop new potential products.

Now, after getting jilted at the altar by Oracle and withdrawing its IPO, the startup is most likely almost out of cash. As of September 30, Precision had only $15.6 million in cash and cash equivalents and a working-capital deficit of $1.1 million against debts of $17 million — plus a burn rate of roughly $3 million a quarter. Those numbers don’t look good by any measure

The first real sign the merger was in trouble came just about two weeks ago, when Oracle and Precision effectively cut the overall size of the deal by 15 percent — never a good sign. Oracle’s decision to walk away remains murky to me given the complexity of the deal, and external market events might have somehow triggered provisions that made the acquisition untenable. But I can’t help wondering if the buyers may have simply concluded that Precision’s prospects weren’t at all what they once thought.

TODAY’S HEADLINES:

• Precision Thera merger with “blank check” Oracle Healthcare collapses (release)
• Sleep Solutions takes in $21M for sleep-apnea diagnostics (release)
• Trevena takes in $24M for drugs targeting G-proteins (release)
• “Specialty biotech” PanGenetics gets €23M for antibody drugs (release)
• Cancer-drug maker Unibioscreen pulls in €5M (release)
• Danish contract manufacturer CMC Biologics raises new funding (PDF release)
• Healthcare investor EDF Ventures postpones fourth fund (VentureWire)
• Global TB-drug alliance names former Sanofi-Aventis exec Jerome Premmeurer as CEO (release)
• Liquidia Tech names Neal Fowler as CEO (release)

(NOTE: Sorry for the minimal posting yesterday — I was at the Health 2.0 conference with extremely limited Internet connectivity. Normal posting resumes today.)

Precision Thera merger with “blank check” Oracle Healthcare collapses – This item is now a standalone post here.

Sleep Solutions takes in $21M for sleep-apnea diagnostics – Sleep Solutions, a Pasadena, Md., developer of diagnostic devices for sleep apnea, raised $20.5 million in a new funding round. Investors included TPG Biotechnology, MedVenture Associates, Emergent Ventures and Lava Ventures.

Sleep Solutions has developed a home-use diagnostic device for identifying sleep apnea, which are breathing difficulties during sleep. Diagnosing apnea has traditionally required patients to spend the night in a sleep laboratory. Left untreated, apnea can increase the risk of more serious problems, including stroke and heart attack.

Trevena takes in $24M for drugs targeting G-proteins – Trevena (no Web site), a Berwyn, Penn., biotech focused on a new area of drug discovery, raised $24 million in a first funding round. Investors included Alta Partners, Healthcare Ventures, New Enterprise Associates and Polaris Venture Partners.

Like many biotechs, Trevena plans to develop drugs that attack a particular biological mechanism rather than any particular disease. In this case, the company is targeting a class of proteins known as G-protein coupled receptors, or GPCR, which according to the company are affected by close to 40 percent of all drugs on the market today. The company didn’t describe its plans in any detail.

Healthcare investor EDF Ventures postpones fourth fund – EDF Ventures, an Ann Arbor, Mich., VC firm specializing in early-stage healthcare, has delayed a planned fourth fund, VentureWire reports. The postponement is related to the departure last year of managing director Beau Lasky, who left for Steamboat Ventures.

The firm intends to begin talking to potential investors again in several months. EDF didn’t say how much it hopes to raise in the new fund; its third fund closed in 2005 with $55 million in commitments.

TODAY’S HEADLINES:

• Molecular diagnostics user AssureRx raises $1M (Cincinnati Enquirer)
• Arresto Biosciences, cancer-drug developer, raises funds (VentureWire)

Molecular diagnostics user AssureRx raises $1M – AssureRx, a Mason, Ohio, startup working on new molecular diagnostics for personalized medicine, raised more than $1 million in new funding, the Cincinnati Enquirer reports. The Health Foundation of Greater Cincinnati, the Cincinnati Children’s Hospital Medical Center, Blue Chip Venture Co., CincyTech USA and several individual investors provided the funding.

AssureRx is developing a new test licensed from Children’s Hospital and the Mayo Clinic intended to help doctors determine the best doses of antidepressants and other drugs for individual patients. The Enquirer story didn’t go into much detail, but it sounds as though the company may be measuring variation in genes that influence how quickly the body breaks down, or metabolizes, drugs, such as cytochrome P450.

(NOTE: This item originally appeared in today’s daily briefing. It’s been expanded and rewritten here.)

DNA-based diagnostics face a fundamental, though hardly insuperable, obstacle: When you’re looking for a rare mutation or other identifying sequence of DNA “letters” (technically known as bases or nucleotides), there are rarely enough matching DNA molecules in your average blood or tissue sample for today’s technology to detect. So many such tests first require technicians to “amplify” DNA in the sample, usually by a process called polymerase chain reaction, or PCR, which essentially “clones” DNA molecules by the millions — an extremely useful process that is nevertheless time-consuming and which requires expensive, specialized equipment.

One company claiming to have built a better DNA mousetrap is Adnavance Technologies, a Vancouver, Canada, startup with an intriguing nanotech method for detecting small quantities of DNA. Adnavance just raised C$3.7 million ($3.7 million) in a second round of funding, with investors including the Working Opportunity Fund, JovInvestment Management and the Business Development Bank of Canada.

As you can tell from its older logo, reproduced to the left, Adnavance chose its name in part to emphasize its focus on DNA-based diagnostics. The company, founded in 2002, is developing tests based on a molecular trick that makes selected strands of DNA conduct electricity, making it possible to detect their presence using a microarray of tiny electrodes.

The basic idea is this: Using specific chemical conditions, Adnavance says it’s possible to force metallic ions between the double strands of DNA, where they displace the protons that usually hold the helical molecules together. The metallic ions then serve much the same purpose as the central wire in a coaxial cable by freely conducting electricity, given the DNA molecule as a whole an electrical property that can be measured directly.

Adnavance’s method starts by binding “capture” strands of DNA — that is, stretches that will bind to whatever mutated gene or viral sequence someone is looking for — to a gold electrode and “dehybridizing” them into their single-stranded forms. Once introduced to serum from a blood sample, say, those capture strands stick to matching DNA from the sample and resume their double-stranded shape. The system measures the conductivity of the bound DNA molecules, then introduces the metal ions to the solution, which in theory only integrate into capture probes that have bound perfectly to their targets — thus presumably eliminating mismatches. Measuring the difference in conductivity of the metallized strands yields a signal that the company says can detect as few as 500 matching DNA molecules. (By contrast, similar existing tests may require anywhere from 5,000 to 1 million target sequences to yield a detectable signal.)

The company’s first product candidate is a test for antibiotic-resistant staphylococcus, which it believes it can get onto the market by 2010. Adnavance believes its test will be simple enough for use in as many as 30,000 clinical laboratories that aren’t currently licensed to carry out existing DNA-based tests.

Oddly enough, Adnavance’s latest funding round is smaller than a C$3.9 million funding in 2005 — the company’s first — that’s described here. That’s a little unusual for a company at this stage, and raises the natural question of whether it’s been forced to take a “down round” with a lower valuation than it previously held. An Adnavance representative, however, says that in 2005, the company actually included two other lines of business — focused on hydrogen fuel cells and DNA vaccines — that were spun out prior to the current funding round. So by that logic, the share of funding devoted to the DNA-diagnostic work has risen.

Adnavance has also named a new CEO, V. Randy White, who previously served as chief executive at Nanogen and Xenomics.

TODAY’S HEADLINES:

• Adnavance pulls in C$3.7M for molecular diagnostics, names new CEO (release)
• Diagnostic maker Proprius sells to Cypress Bio for up to $75M (release)

Adnavance pulls in C$3.7M for molecular diagnostics, names new CEO – Adnavance Technologies, a biotech developing molecular diagnostics, raised C$3.7 million ($3.7 million) in a second round of funding. Investors included the Working Opportunity Fund, JovInvestment Management and the Business Development Bank.

Adnavance — judging from its logo, the name is intended to imply the biotech’s focus on DNA-related technology — was founded in 2002 and is developing diagnostics based on a molecular trick that allows the company to substitute metallic atoms into ordinary DNA under specific conditions. By using a microarray of tiny electrodes, Adnavance says it should be possible to detect particular DNA sequences without “amplifying” the molecules thousands or millions of times, a time-consuming step that requires expensive capital equipment. The company’s first product candidate is a test for antibiotic-resistant staphylococcus, which it believes it can get onto the market by 2010.

Oddly enough, Adnavance’s latest funding round is smaller than a $3.9 million funding in 2005 — presumably the company’s first — that’s described here. That’s a little unusual for a company at this stage, and raises the natural question of whether it’s been forced to take a “down round” with a lower valuation than it previously held. There’s no easy way to answer that question at the moment, as the company’s PR representative didn’t respond to a question on the subject.

Separately, Adnavance named Randy White, the former CEO of both Nanogen and Xenomics, as its new CEO.