August
2006 issue
The e-Health Sector:
Older And Wiser? After Years In Flux, Resurgence Of E-Health Sector Seems
Imminent
In the past six years, e-Health companies have come and gone, investors have
lived and learned and this market is pulling its head out of the sand.
...
CNS Company In the Money
The largest venture capital deal announced during July was by a company that
already has a product on the market in Canada and other countries.
...
Public Equity Market
In July, just one initial public offering was priced by a health care
company, but it was a rather unusual one.
...
Mergers and Acquisitions
Of course the HCA buyout eclipsed the other deals in terms of size and media
coverage, but activity in the health care M&A market seems to be in a bit of
a seasonal slowdown otherwise.
...
Venture Capital Market
In spite of low numbers, which we attribute to annual vacations, the venture
capital market saw some interesting deals near the end of the month.
...
Private Equity Market
Private equity investors were not out in full force in the health care
markets during July, in spite of stories that there is too much capital in
the market.
...
Notes & Briefs
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News Read the past
headlines.
Companies Mentioned in this issue:
August 2006
20/10 Perfect Vision p8
5AM Ventures p7
A
A.G. Edwards p3
Aberdare Ventures p7
Acacia Venture Partners p4
Adams Respiratory p5
Addison Davis p3
Advanced Medical Optics p8
Advanced Technology Ventures p8
Advent Ventures p8
Advisory Committee on Immunization Practices p12
AEW p5
Affiliate Computer p5
Affinity Capital p8
Affymax p3
Alder Biopharmaceuticals p8
Alfacell Corporation p10
Allion Healthcare p5
Alloy Ventures p7
Ambrx p7
American Association of Physician Specialists p12
American Board of Disaster Medicine p12
American Cancer Society p12
Amgen p11
AMN Healthcare Services p4
Anulex Technologies p8
Apex Bioventures p3
Apposite p7
Aravis Ventures p7
Arch Venture Partners p8
Arena p3
Argonaut Private Equity p8
Armed Forces Radiobiology Research Institute p4
Asthmatx p3
Atlas Ventures p9
B
BA Venture Partners p9
BARRX Medical p7
Bay City Capital p7
BDC Capital p8
Bear, Stearns p3
Beckman Coulter p5
BioAsia Investments p9
Blue Shield of California p12
Brookdale Senior p3
C
Cadence p3
Cambridge Laboratories p1
Canada Microsurgical p5
Cardiovascular Systems p7
Cargill Ventures p8
Carlyle Group p8
CAS Medical p3
Catalyst p3
Centers for Disease Control and Prevention p12
Cerner Corporation p2
Charter Life Sciences p7
ChemBridge Corporation p4
Cherry Oaks p5
CHG Healthcare p3
China Healthcare p3
Chiron p11
CIDC Inc. p10
Citigroup p3
Cleveland BioLabs p3, p4
Cleveland Clinic Foundation p4
Clinical Data, Inc. p3
CMDF p8
CMEA Ventures p7
CNF Ventures p9
Collinsville Care Center p5
CompHealth p4
Concert Pharmaceuticals p8
Concuity p6
Confluent Surgical p5
Conor Medsystems p3
Cornell Capital Partners p10
Corus Pharma p5
Cross Country Staffing p5
CRT Capital p3
D
Dacogen p5
DARPA p4
Dava Pharmaceuticals p5
Dawson James p3
deCODE genetics p3
Delphi Ventures p7
Destination Healthcare Staffing p4
Deutsche Bank p3
DINMAR p5
Domain Associates p8
Dow Employees’ Pension Plan p7
E
Easton Capital p7
eHealth Solutions p6
Elusys Therapeutics p8
Emcure p7
Emergent Respiratory Products p8
Emergis p5
Emphasys Medical p8
EnteroMedics p7
Essex Woodlands p8
F
Facet Technologies p5
Ferris, Baker Watts p3
First Albany p3
Foundation Medical Staffing p4
Frazier Healthcare Ventures p4, p7
G
Genelabs p3
Genencor p11
Generex Biotech p3
Gentium p3
Gilead Sciences p5
Global Care Quest p6
Glynn Ventures p7
GNC Corporation p3
Goldman, Sachs p3
GV Instruments p5
H
H.I.G. Ventures p8
HBM Partners p7
HealthUnity p6
Hercules Technology Growth Capital p7
Home Diagnostics p3
Hurel Corporation p12
I
Idera p3
ImpactRx p6
InnerWireless p6
Innoven Partenaires p8
Integra LifeSciences p5
IntelliDOT Corporation p6
International Biotechnology Trust p7
InterWest Partners p7
J
Jaba Farmaceutica p5
Janney Montgomery Scott p10
Jefferies & Co. p3
JER Partners p5
Johnson & Johnson p5
Johnson & Johnson Pharmaceutical Research and Deve p12
K
Kareo p6
Kingsbridge Capital p10
Kosan Biosciences p10
L
LB I p11
LB I Group Inc. p10
Lehman Brothers p3, p10
LHC Group p3
Lux Biosciences p7
M
Macri Technologies/NTD p5
Marshall Edwards p10
Massachusetts Biologic Laboratories p11
Maverick Capital p7
Mayo Foundation for Medical and Education Researc p7
MB Venture Partners p8
Medical Education Technologies p12
Medical Staffing Network Holdings p4
MedImmune Ventures p8
Medsite p5
Medsphere Systems p6
Medtronic p8
Merck Capital Ventures p6
Merck Co. p12
Merrill Lynch p3
Metabolix p3
Metropolitan Research p5
Micrus p3
Montagu Newhall Associates p7
Morgan Stanley p3
MPM Capital p7
N
NASA p4
Nassau Capital p4
National Cancer Institute p4
National Healthcare Services p8
National Institutes of Health p4
National Vaccine Information Center p12
New Beacon Hospice p5
New Enterprise Associates p4
Novartis Pharmaceuticals p12
Novo A/S p7
Novo Nordisk p8
Novogen Limited p10
O
Ocera Therapeutics p8
Oculus p3
Onset Ventures p7
Optobionics Corporation p8
Oscient Pharma p5
Osiris Therapeutics p3
Osteobiologics p5
Owens & Minor p5
P
Pacific Asset Ventures p7
PainCare Holdings p3
Partners Healthcare p8
Pathwork Diagnostics p8
Patient Infosystems p3
PatientKeeper p6
Pequot Ventures p9
PerkinElmer p5
Petersen Health Care p5
Pfizer Strategic Investments Group p6
Piper Jaffray p3
Polaris Venture p8
Polaris Venture Partners p8
POSCO BioVentures p8, p9
Prestwick Pharmaceuticals p1
Primax Recoveries p5
Primedex Health p5
Pro-Pharmaceuticals p3
ProMed Management p10
Prospect Venture Partners p7, p8
Protalex p11
Protalex, Inc. p10
Protiva Biotherapeutics p8
Q
Quaker BioVentures p8
QuatRx p3
QuatRx Pharmaceuticals p4
R
Radianse p8
Radiologix p5
Recordati p5
Regency Healthcare p5
Respironics p9
RN Network p4
Roche Venture Fund p7
Roth Capital p3
Roth Capital Partners p4
S
Salix Ventures p7
Schering Corporation p12
Schering-Plough Research Institute p12
Select Capital Ventures p7
Sevin Rosen Funds p8
Shepherd Ventures p8, p9
Smith & Nephew plc p5
Sofinnova Ventures p8, p9
St. Jude Pharmacy p5
Stada p5
Statsure Diagnostic p3
Stifel Nicolaus p3
Sunrise Securities p3
Sunrise Senior Living p5
SupplyScape Corporation p6
Sutter Hill Ventures p7
SV Life Sciences p7
Synovics p3
Synta Pharmaceuticals p7
T
Tandem Health Care p5
Tarrant Dialysis Centers p7
Tavistock Life Sciences p7
Teva Pharmaceutical p8
The American Board of Physician Specialties p12
The Blackstone Group p4
TheraVitae p8
Thermo Electron p5
Thoma Cressey Equity Partners p7
Thomas Weisel Partners p10
Three Arch Partners p8
Tiara Medical Systems p5
TransPharma Medical p8
Transport Pharmaceuticals p8
Trellis Health Ventures p8
Trubion p3
TVM Capital p8
Tyco International p5
U
U.S. Renal Care p7
UBS p3
Union Carbide Employees’ Pension Plan p7
V
Versant Ventures p7
Viasys Healthcare p5
Viragen p3
VirtualScopics p3
Vivo Ventures p9
vSpring Capital p10
W
Warburg Pincus p9
Water Street Capital p5
Weatherby Locums p4
WebMD Corporation p5
Welsh, Carson, Anderson, Stowe p4
Working Opportunity Fund p8
X
Xencor p8
Z
Zen Investments p8 |
Pharma Focused On CNS Leads VC Deals - Company
Receives Approvable Letter From FDA, Secures Third Round
Email Editor
The largest health care
venture capital transaction of the month, a $60 million Series C financing
raised by Prestwick Pharmaceuticals, adds another drop in the
bucket to the multi-billion dollar market for central nervous system (CNS)
treatments. There are some business moves that have brought this
particular specialty pharma to the forefront among other privately held
companies in the same sector. Prestwick’s primary product candidate is
tetrabenazine, a drug that has been approved in ten countries outside the
United States, commercially available in parts of Europe for about 35
years and in Canada for about ten years. Tetrabenazine was licensed for
marketing in the U.S. and Canada by Cambridge Laboratories
(Ireland), Limited (Cambridge), which has worldwide rights to
the product. Cambridge already markets the product itself in the United
Kingdom and Ireland, and through marketing partners in European and other
markets.
Apparently it took one woman, Dr. Kathleen Clarence-Smith, a handful of
venture backers plus some time and talented colleagues, to get this drug
into the system in our country. In the United States, tetrabenazine is an
investigational drug known by the trade name XENAZINE. From a source
familiar with the disease, we learned that XENAZINE, a highly selective
and reversible dopamine depletory, in 2005 became the first product for
which an NDA was filed in the U.S. for treatment of chorea in association
with Huntington’s disease. Chorea, a debilitating feature of a number of
neurological diseases, is characterized by excessive, involuntary and
repetitive movements, which may involve the face, limbs, or the entire
body. In Huntington’s disease these symptoms are caused by the
overactivity of dopamine.
Founded in 2002, Prestwick has raised $112 million in three institutional
rounds, bringing in at least one new investor with each fundraising. Its
initial backers include BioAsia Investments, as well as
Sofinnova Ventures, BA Venture Partners and Atlas Ventures,
which have each participated in all three rounds. Pequot Ventures,
CNF Ventures and Vivo Ventures each participated in the
second and third rounds. The latest round is led by private equity firm
Warburg Pincus. Headquartered in Washington, D.C., Prestwick
Pharmaceuticals is a product-based, specialty pharma engaged in the
development and marketing of small molecule drugs for chronic diseases of
the central nervous system. Its portfolio now includes five product
candidates obtained under licenses from third parties that are being
studied for a range of CNS conditions with significant unmet needs,
including Huntington’s disease, Parkinson’s disease, restless legs
syndrome, schizophrenia, autism, Alzheimer’s disease, and sleep apnea. The
market for Huntington’s disease, unfortunately, is expected to increase in
size during the coming years. Huntington’s is a hereditary disease that
has no cure and usually does not become apparent until people are in their
thirties, so testing for the disease is often viewed as pointless. The
patient population size is fairly small at this time, around 30,000, but
is projected to grow as the population ages and increases in number.
Although it may seem strange that Prestwick’s lead drug could be on the
market for so many years in other countries but still be in the
pre-approval stages in the United States, the situation is probably not
uncommon. We were reminded by one person close to the Prestwick deal that
comparing the U.S. FDA’s drug approval process to the drug approval
process in some other countries can be like comparing tortoises to hares.
We also need to remember that the discovery and patenting of a drug
somewhere in the world is in no way synonymous with the approval and
marketing of a drug everywhere in the world. Prestwick is attempting to
build its business based on an assembly of drug candidates, including one
that is considered late-stage in U.S. terms, and also happens to be
approved for use in other countries for other indications. In Canada,
tetrabenazine is marketed under the trade name Nitoman for the treatment
of hyperkinetic movement disorders. Prestwick has two other compounds in
Phase II development and two in preclinical stages, for other CNS
conditions.
No one we talked with was willing put a timeline on approval in the U.S.,
but it was stressed that FDA approval of XENAZINE is Prestwick’s first
order of business. Since receiving an approvable letter in March from the
FDA, Prestwick must now wait for the next scheduled meeting of the FDA’s
Peripheral/CNS Advisory Committee, which will occur in November, at the
earliest, and result in a vote and suggestions submitted to the FDA. Final
approval or denial will be handed down by the FDA. Our guess is that if
all goes well, Prestwick could have the drug approved for
commercialization in the United States within the next two years or so.
However, no official speculations are being made regarding pricing or
expected sales for XENAZINE, unless or until it is approved in the United
States.
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