February 2006 issue
Boning Up on Orthopedics: Growing Market
Drives Investments in Medical Devices and Technology
The medical device market is heating up, with
financings, acquisitions and strategic investments, plus the largest venture
capital deal we have seen in the orthopedics space.
...
Most VC Deals In Three Years: Specialty
Interests, Strategic Moves And Foreign Concerns Fuel Activity
More venture capital deals were announced by health care companies in
January 2006 than in any other thirty-day period we have tracked in the past
three years. read more
...
Public Equity Market
Initial public offerings were scarce in the health care markets during
January, but some secondaries were priced and other offerings were filed.
...
Mergers and Acquisitions
The health care M&A market was focused on a bidding war all month, which
culminated with the winning bidder’s involvement in one of the
billion-dollar deals announced in January.
...
Private Equity Market
Health care companies saw a quiet month for private equity, but raised more
capital this January than they had in previous years.
...
Notes & Briefs
...
Key Contacts
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Companies Mentioned in this issue:
February 2006
3F Therapeutics p5
3i Group p7
A
A.G. Edwards p3
A4 Health Systems p5
Abbott Laboratories p5, p6
Abingworth Management Limited p11
ACADIA Pharmaceuticals p10
Accium BioSciences p8
Acorda Therapeut. p3
Adlyfe p8
Advantage Capital Partners p8
Aethlon Medical p3
Aethon p11
Aisling Capital p9
Akesis Pharmaceuticals p11
Aksys p10
Albany Molecular Res. p5
Alexandria Real Estate Equities p7
Allen & Co. p3
Allion Healthcare p3
Allscripts Healthcare p5
Alnylam p3
Altus Pharmaceut. p3
Amarin Corporation p11
Amazon Biotech p3
Amedisys p5
Amer. Oriental Bio. p3
American Health Medicare p9
American Retirement p3
AmerisourceBergen p5
Angiotech p5
Angiotech Pharmaceutical p12
Anspach Investments p7
Antibiotic Research Institute p1
Apax Partners p7
Applied Spine Technologies p2
Arboretum Ventures p8
Archus Orthopedics p2
Arena Pharmaceut. p3
Argonaut Private Equity p8
Ash Access Technologies p8
ATS Medical p5
Avid Radiopharmaceuticals p8
Avidex p8
Avigen p5
Axiom Venture Partners III p7
B
Banc of America p3
Bay Area Equity Fund p7
Bay City Capital p7
Bear, Stearns p8
Becton, Dickinson p5
Benecol p12
Biomira p10
Biosensors International Group p12
BioVentures Investors p8
Boston Scientific p6
Brookdale Senior Lvg. p5
Brookside Capital p7
Burrill & Company p7
C
Calvary Manor p5
Canaan Partners p8
CanBas Co. Ltd. p9
Canyon Creek Devel. p5
CAPE Health Plan p5
Capital Senior Living p5
Cardica p3
Cardinal Partners p7
Care Capital p11
Cellpep p5
Centene p5
Cetek Corporation p8
Chicago Investment p11
Chlorogen p8
CIBC p3
Citigroup p3
CNF Investments p8
CNS, Inc. p5
CoLucid Pharmaceuticals p8
ComGenex p5
Connetics p5
Connetics Corporation p6
CoolSystems p2
Cornell Capital Partners p11
Crdentia Corp. p11
Cypress Town Village p5
Cytokinetics p10
D
Dawson James Securities p11
DBV Technologies p8
De Novo Ventures p1, p8
deCODE genetics p5
DePuy Orthopedics p2
DePuy Spine p2
Desert Pain Medicine Gp. p5
Deutsche Bank p3
Diamyd Medical p8
Discus Dental p5
Domain Associates p11
DOR BioPharma p11
Dr. Tony Ryan p11
Draper Fisher Jurvetson ePlanet Ventures p2
Duff, Ackerman & Goodrich p7
DuPont Capital Management p8
DUSA Pharmaceutic. p5
E
Elder Health p11
eMedicine.com p5
EmergingMed.com p8
Endeavors Group p8
Endo Pharmaceutic. p3
EpiPharma p5
EraGen Biosciences p8
Essex Woodlands Health Ventures p7
eyeonics p8
F
FDA p12
Federated Kaufmann p10
First Analysis Corporation p8
First Genetic Trust p9
Forbes Medi-Tech p3
Formation Cap. p5
ForSight Labs p8
Forward Ventures p8
Fusion Capital Fund p10
G
Galileo Partners p8
GBS Ventures p8
GeneOhm Sciences p5
Genitope p3
Gentiva Health Svcs. p5
Global Life Sciences Ventures p7
Glycotex p3
Goldman p3
Griffin Securities p11
Guidant Corp. p6
H
H&Q Life Science p11
Hadasit Bio-Holdings p8
Haemostatix p8
Hand Innovations p2
HandyLab p9
Hawaii Biotech p8
HBM Partners p7, p9
Health Benefits Direct p10
HealthCare Ventures p11
Healthline p8
HealthSpring p3
Hillman Company p7
HLM Venture Partners p1
Horizon Health Corp. p5
HSBC p3
Human BioSystems p3
I
IDP Group p8
ING Corporate Finance p8
InnoSpine p5
INNOVA Hlth./Rehab. p5
InnovationsKapital p8
Inovio Biomedical p3
Integral Capital Partners p7
Intel Capital p7
Interpharma Asia Pacific p9
InterWest Partners p7
Investor Growth Capital p7
Iomai Corporation p3
Ipsat Therapies p8
J
Jefferies & Company p3
Johnson & Johnson p2
Johnson & Johnson Development Corporation p2
JPMorgan p3
K
Kids Behav. Health of UT p5
Kleiner Perkins Caufield and Byers p2
Kyphon p5
L
La Jolla Pharmaceu. p3
Large Scale Biology p3
Laurel Healthcare p5
Lazard Freres p11
LD Pensions p7
Lehman Brothers p3
LifeHouse Retirement p5
Lifeline Systems p5
Living Independently p8
Loeb Partners p11
Lonza Group p5
M
MAP Pharmaceuticals p7
March of Dimes p12
Matritech p11
McKesson Corporation p9
MCTec Holding p5
MediPlan p5
MedVenture Associates p2
Merit Medical Systems p5
Merrill Lynch p3
Metabolon p8
MethylGene p11
Molina Healthcare p5
Montagu Newhall Associates p11
Montigen Pharmaceutic. p5
Morgan Stanley p3
Morgenthaler Ventures p8
MorphoSys p5
MPM Capital p7
N
Nabi Biopharma-ceuticals p12
Nabriva p1, p7
National Health Part. p3
NeoPharm p3
Network 1 p11
New Enterprise Associates p7, p8, p11
NGN Capital p7
NIF SMBC Ventures p8
NightHawk Radiol. p3
NitroMed p10
NMCR p5
Nomura Phase4 Ventures p9
Novacea p7
Novartis Venture Fund p7, p9
Novo A/S p7
NuVasive p3
Nuvelo p3
O
Ocera Therapeutics p8
Ohio State University College of Medicine and Publ p12
Omrix Biopharmaceu. p3
Oragenics p3
Oxford Bioscience Partners p11
P
PAC-LINK Bio Venture Capital p8
Pacific Growth Equities p10
PainCare Holdings p5
Paul Royalty Fund p5
PediaMed p5
PediaMed Pharmaceuticals p6
Pequot Ventures p7
Perseus-Soros Biopharmaceutical Fund p7
Perseus-Soros BioPhar-maceutical Fund p9
Perseus-Soros Management p9
Pfizer p6
Pfizer’s Strategic Investments Group p8
Pharmion Corporation p11
Pharos Capital Group p8
Plasmasol p5
Plethora Solutions p5
Polaris Venture Partners p7
Posit Science p8
PreferredTime p8
Prime Healthcare Svcs. p5
Primus Venture Partners p7
Proacta p8
Procyon Biopharma p5
Project Prevention p12
Prolacta Bioscience p12
ProMetic Life Sciences p11
ProQuest Invesments p7
Protalex p11
Protein Sciences Corp. p8
Provectus Pharmaceutic. p11
Psychiatric Solutions p5
Q
Quester Capital p8
Questmark Partners p8
Quintiles, PharmaBio Development p9
Quintiles Transna-tional p9
R
RBC p3
REC/CareFirst Medical p5
Red Abbey Venture Partners p10
Replidyne p9
Rockport Venture Partners p7
Roda Group p2
Rodman & Renshaw p10
Royal Philips p5
S
Salix Ventures p11
SAM Private Equity p8
Sanderling Ventures p8
Sandoz p1
sanofi-aventis p6
Scandinavian Life Science Venture p7
SDS Capital p11
Sepracor p10
Sequel Venture Partners p7
Serotec Group p5
Sevin Rosen Funds p8
SG Cowen p3
SGX Pharmaceuticals p4
Sherman Oaks Hospital p5
Sirius Laboratories p5
Skyline Ventures p7
Small Bone Innovations p1
Socios Mayores en Salud p1
Sofinnova Ventures p7
Solexa p3, p10
Somanetics p3
Southpoint Capital p11
Spinal Kinetics p2
Spinal Modulation p2, p8
Spirus Medical p8
Sprout Group p7
Stereotaxis p3
Strategic Healthcare p5
Stryker p5
SuperGen p5
Supernus Pharmaceuticals p8
Surgis p5
SV Life Sciences p1
Symphogen p7
Symphony Medical p8
Syngenta p8
T
T.R. Winston p11
Takeda Research Investment p7
Targacept p3
Telemolecular Corp. p9
Temasek Holdings p9
Tercica p3
Texas Pacific Group Ventures p7
Tgap Venture Capital Fund p7
The Healthfield Group p5
Theravance p3
Theregen Company p8
ThermoGenesis p3
Thomas Weisel p10
TiGenix p8
Timm Medical p5
Tioga Pharmaceuticals p8
TK-Signal p8
TomoTherapy p8
Transax International p11
Triathlon Medical Ventures p8
Trilogy Health Services p11
Trilogy Health Svcs. p5
U
UBS Securities p3
UCB p5
UNeMed p9
United Surgical Ptnrs. p5
University of British Columbia p12
University of Michigan p9
University of Nebraska Medical Center p9
Urdur, Verdandi Skuld p5
V
Vaekstfonden p7
Valence Capital Management p8
Valera Pharmaceut. p3
Valera Pharmaceuticals p4
Vanda Pharmaceutical p3
VantagePoint Venture Partners p8
Vapotherm p8
Vectec p8
Venrock Associates p11
Verispan p9
Versant Ventures p7
Viscogliosi Brothers p2
Vital Sensors p8
W
Waldon Woods p5
WayPoint Biomedical p12
WebMD p5
Wellcome Trust p7
Wellington p5
Wellstone Regional Hosp. p5
Windsor Health Group p8
Wolverine Venture Fund p9
WR Hambrecht p3
WRF Capital p8
Wyeth p5
X
XDx Inc. p7
Xytis p8
Z
ZONARE Medical Systems p7
Zuellig Pharma p9 |
Boning Up on Orthopedics: Growing Market
Drives Investments in Medical Devices and Technology
Email this Editor
Activity in the orthopedics space continued during the month of
January, and it’s no wonder these types of companies are attractive to
investors. Richard Ferrari, a Managing Director at De Novo Ventures,
reminded us that the orthopedics space is one of the most robust markets
in health care. It is estimated that the global orthopedics market is
growing at a rate of up to 20% per year and is worth up to $18 billion.
De Novo is not the only firm investing on the premise that the market for
medical devices, including orthopedics, will continue to grow. During
2005, more venture capital was invested in orthopedic companies than in
the two preceding years combined. An aging population that lives longer
and an active younger population are two factors contributing to the
growth.
Small Bone Innovations, until the last day of
January, had announced the largest deal of the month, securing $42.2
million in venture financing, the largest deal we have seen in this
space. Since about this time last year, Small Bone has made several
acquisitions and licensing deals. The company was formed in May 2004 by
the principals of Viscogliosi Brothers, a merchant banking firm
focused exclusively on the musculoskeletal and orthopedic sectors of
health care.
De Novo Ventures participated in the financing of a
medical device company that is staying stealthy, for now. Spinal
Modulation raised $7 million in its Series A, co-led by De Novo and
Kleiner Perkins Caufield and Byers and including Draper Fisher
Jurvetson ePlanet Ventures. Not much information is being released
about the company right now, except that Spinal Modulation is focused on
the development of devices that target pain management, specifically in
the spinal region. De Novo has $350 million under management; its
portfolio includes Spinal Kinetics and Applied Spine
Technologies, among other medical device and biotechnology companies.
Also during January, in its Series C financing
Archus Orthopedics secured $35 million from investors including
Johnson & Johnson Development Corporation (JJDC) and DePuy Spine.
Archus is developing reconstructive implants to treat a variety of spine
disorders resulting from degenerative changes in the facet joint. DePuy
Spine, a leader in disc arthroplasty, provides a strategic fit and the
investment by JJDC establishes a framework for future collaboration
between Archus and DePuy Spine. DePuy, a Johnson & Johnson (NYSE:
JNJ) company, is staying competitive with other companies focused on small
bones. DePuy Orthopedics Inc. announced last month that it had
acquired Miami, Florida-based Hand Innovations LLC, a manufacturer
of fracture fixation products for the upper extremities including an
implant for the treatment of wrist fractures.
Another health care company targeting the orthopedics
market, but on the less invasive side, CoolSystems raised $8.6
million in Series G financing from investors co-led by MedVenture
Associates and Roda Group, including the Brian & Jennifer
Maxwell Trust and other, angel investors. CoolSystems provides sports
injury treatment systems that have additional applications in the health
care markets. We learned in a recent conversation with Tom Oliver, the
President & CEO, that the proceeds of this round will be used primarily
for expansion, including staffing. Over the past six years CoolSystems
has raised close to $22 million in venture capital.
The company’s products, Game Ready (for people) and
Game Ready Equine (for horses), are designed to accelerate recovery from
soft tissue injuries via patented, flexible wraps and a
microprocessor-regulated control unit. The wraps are unique in that they
incorporate active compression with cool therapy. Currently the cooling
and compression wraps are available for the ankle, knee, wrist, elbow,
hip, groin, shoulder, and back (also used for the chest and ribs).
Recently, CoolSystems launched a cooling vest for surgeons, to keep
doctors in the operating room comfortable during long procedures.
CoolSystems’ revenues are doubling year over year,
Mr. Oliver said, ranging from half a million in 2002 to more than $6
million in 2005. Game Ready systems are already in use in more than 1,000
physical therapy clinics across the United States, and by more than 70
professional sports teams and 150 universities. The company is now
focusing on expanding its post-operative business, allowing more people to
use Game Ready following orthopedic surgeries. Additionally, CoolSystems
is evaluating its technology for potential applications in the area of
neurological disorders. |
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