Health Care Companies in Cardiovascular, Anti-Inflammatory and Other Markets Capturing Venture Capital (July 18, 2006)

In the past two weeks, the most eye-catching venture capital deals in health care may not have been the largest, including two announced by companies targeting the cardiovascular market. Investors including Shepherd Ventures pumped $2 million into Emergent Respiratory Products, the seller of a non-invasive ventilator, meaning without tubes, which is FDA-approved for the treatment of patients with congestive heart failure and for development in other areas. TheraVitae, a developer of adult stem cell therapies for treating heart disease, secured $3 million from undisclosed investors and also established its North American presence with an office in Canada, to complement its activities in Israel and Thailand.

Venture capitalists committed a total of $257 million to finance the growth of 12 health care companies during the two weeks ended July 14, 2006. The largest deal so far this month is the $52 million Series C expansion round announced by AmbRx www.ambrx.com, a biopharma that uses its own technology to optimize the performance of existing commercial protein drugs. Investors in AmbRx include Apposite, Glynn Ventures, the Employees’ Pension Plans of both Dow and Union Carbide, as well as Versant Ventures and Roche Ventures. The Blackstone Group announced the second-largest deal we have seen in the past two weeks, a $50 million investment in India-based Emcure Pharmaceuticals, an outsourcing and manufacturing partner to the pharmaceutical industry. Emcure is one of the first additions to the portfolio of Blackstone Capital Partners V, the firm’s most recent fund, which just closed with $15.6 billion in commitments.

Biopharmaceuticals and biotechnology captured the lion’s share of funding during the past two weeks, including two companies focused on anti-inflammatory compounds and one company formed by means of a merger. Synta Pharmaceuticals, a biopharma conducting trials for its anti-inflammatory and other product candidates targeting areas including cancer, announced a $40 million round, the third-largest we have seen in the past two weeks. Synta’s backers include new and existing investors, who were not identified. In the smallest of the top five deals announced so far this month, Alder Biopharmaceuticals raised $16 million to advance its clinical initiatives in the areas of anti-inflammatory and autoimmune diseases, from a syndicate led by H.I.G. Ventures and including other, previous investors.

Last but not least, the fourth-largest deal was announced by U.S. Renal Care, which will use the proceeds from its $36 million round to acquire a majority interest in nine existing dialysis centers serving more than 900 patients, plus two more that are expected to open later this year. Thoma Cressey Equity Partners led the investment and was joined by SV Life Sciences, Select Capital and Salix Ventures.
 

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