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

RUSNANO, a $10.0 billion Russian Federation fund that supports nanotechnology advances, made two investments of equal size in U.S. companies. The Russian fund is investing $47.25 million in Selecta Bioscience, a Massachusetts-based biopharma focused on developing a new class of targeted vaccines and immunotherapies. The investment comes in two parts. First is Selecta’s $22.0 million series D round with RUSNANO and additional new investors, which has the full support of Selecta’s existing investors. In the second part, Selecta has available additional funding of up to $25.25 million for strategic activities in Russia. Broadly speaking, the proceeds are to be used to expand the applications of the company’s Synthetic Vaccine Particle; more specifically, the funding allows Selecta to advance SEL-068, a vaccine candidate for smoking cessation and relapse prevention, more rapidly through clinical trials.

RUSNANO crafted a virtually identical deal with BIND Biosciences, another Massachusetts-based biopharma that is developing a new class of targeted therapeutics called accurins, which selectively congregate at the site of disease, enhancing drug efficacy and minimizing toxicity. Proceeds from the investment will support the further development of BIND’s cancer drug pipeline, focusing on BIND-014 which selectively concentrates in tumors. BIND’s $22.0 million series D round is with RUSNANO and additional new investors, and has the blessing of existing investors. BIND also has additional financing of up to $25.25 million for strategic activities in Russia.

It should be noted that besides RUSNANO, the two companies share certain other investors in common: Polaris Venture Partners, Flagship Ventures and NanoDimension. Other investors in Selecta include OrbiMed Advisors and Leukon Investments while additional investors in BIND include ARCH Venture Partners, DHK Investments and EndeavourVision.

Third Rock Ventures, LLC helped launch SAGE Therapeutics with a $35.0 million series A financing. SAGE will address CNS disorders with critical unmet needs through its proprietary Positive and Negative Allosteric Modulator (PANAM) chemistry platform. The goal is to enable the rapid development of a class of allosteric receptor modulators that can fine tune and balance neuronal activity which is disrupted by such disorders as schizophrenia, depression, pain and traumatic brain injury.

Foundation Medicine, a cancer diagnostics company based in Cambridge, Massachusetts, recently closed on an expanded $33.5 million series A financing. New investor Kleiner Caufield & Byers joined founding investor Third Rock Ventures. Proceeds are intended to support precommercialization efforts for Foundation’s comprehensive cancer diagnostic test...Want to read more? Click here for a free trial to The Health Care M&A Monthly and download the current issue today