Health Care Deal News: Spotlight on Venture Capital- August 2012

According to a report from PricewaterhouseCoopers and the National Venture Capital Association, in the first half of 2012 venture capital activity increased by 17% based on dollars invested and by 11% based on number of deals, compared with the first half of 2011. Another report by Bloomberg revealed that global venture capital investing in biotech companies dropped by 43% to $550 million in the second quarter from the first quarter of 2012.  It reported that there were just 59 deals worth an average of $9.3 million per deal, and it was the lowest level of activity for any quarter since 2007.

Yet, in July activity seemed to pick up significantly with several biotech and biopharmaceutical investments made.  In one of the larger investments, Cambridge, Massachusetts-based bluebird bio, a leader in the development of innovative gene therapies for severe genetic disorders, had an oversubscribed Series D round, raising $60 million. New investors included Deerfield Partners, RA Capital, Ramius Capital Group and two undisclosed blue chip public investment funds, plus Shire PLC, which joined as a “strategic investor.”  The proceeds will be used for some phase 2 and 3 clinical studies. The company is working on childhood genetic diseases as well as sickle cell disease. The Cowen Group served as the strategic advisor on the financing.

In another deal, San Diego, California-based CoDa Therapeutics raised an additional $20 million to complete its $40 million Series B financing round.  It received the funds from RusnanoMedInvest, and it is the first investment under a joint investment agreement between its parent, RUSNANO, and Domain Associates reached last March.  All current investors, including Domain, GBS Ventures and BioPacific Ventures participated in the round.  A portion of the proceeds will be used to expand late stage clinical trials of its lead product candidate, Nexagon, to treat diabetic foot ulcers.  The company plans to expand its clinical sites into Russia over the next several months.  In its first phase 2 trial nearly one-third of the patients were completely healed after four weeks following just three applications of Nexagon, compared with 6% in the control group.  This financing also involves a licensing of the intellectual property rights for Nexagon in Russia.

In a smaller financing, Stony Brook, New York-based Coferon, Inc. raised $12 million in a Series B round led by three new investors, including Hatteras Venture Partners, MedImmune Ventures (the corporate venture arm of AstraZeneca) and Ascent Biomedical Ventures...........Want to read more? Click here for a free trial to The Health Care M&A Information Source and download the current issue today