March
2007 issue
Backing Best Bets In Health Care - In Various
Sectors Venture Capitalists Are Investing In Products
There were a fair number of health care venture capital deals announced in
February by companies with products on the market, about to go to market or
in the later stages of development.
...
Public Equity Springs To Life - Seven Health Care IPOs In One Month,
Including Two Winners
The health care sectors produced seven initial public offerings during
February, including two with relatively impressive aftermarket performance.
...
Mergers and Acquisitions
Four deals were announced that are in excess of a billion dollars, plus we
look at Long-Term Care in 2006 and talk with a company that was formed
through the combination of three companies.
...
Private Equity
Some health care companies that announced private placements in February
also announced other deals during the month, including an acquisition and a
spin-off, and the largest deal announced was for close to a billion dollars.
...
Notes & Briefs
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News Read the past
headlines.
Companies Mentioned in this issue:
March 2007
3i Group p9
3M Company p6
3SBio p4
A
ABS Capital Partners p10
ABS Partners p11
Accentia Biopharmaceuticals p15
Access Pharmaceutic. p6
Accuitive Medical Partners p7
Accuray p1
Acolyte Biomedica p6
ActoGeniX p10
Adeza Biomedical p6
Adherex Technologies p4
Adiana p6
Advanced BioHealing p10
Advanced Cell Tech. p6
Advanced Tissue Therapies p10
Advanced Viral Res. p4
Advent Venture Partners p8, p10
Aequus BioPharma p15
AirSep Corporation p8
AlphaVax p10
Alta Investors p15
Alta Partners p9, p10
AMDL p4
American Caresource p4
American Financial Group p9
AmSurg Corporation p6
Aravis Ventures p9
Arboretum Ventures p7
ARCH Venture Partners p9
Arrow Therapeutics p6
Arrowhead Publishers p7
Asset Management Company p9
AstraZeneca p6
Astro Manufacturing & Design p10
Athenagen p6
Avalon Pharmaceutic. p4
Avalon Ventures p7
Avista Capital Prtnrs. p6
B
Banc of America p4
BB Biotech Ventures p3
BDC Technology Seed Investment Fund p10
Bear, Stearns p4
Bio-Imaging Technol. p6
BioBehavioral Diagnostics p10
Biodel p4
BioHeart p4
BioReliance Corporation p6
BiPar Sciences p9
BMO Capital p4
Brachysales p6
Bridge Pharmaceuticals p11
Bristol-Myers Squibb p6
Brookside Capital p9
BTF p10
C
C.E. Unterberg p4
Callisto Pharmaceut. p4
Camden Partners p10, p11
Canaan Partners p9, p10
Canaccord Capital p4, p15
Canadian Medical Discoveries Fund p9
Cara Therapeutics p10
Cayenne Medical p2
CCMP Capital Advisors p5
CCP Equity Partners p11
Cell Genesys p14
Cell Therapeutic p15
Cell Therapeutics p15
Cellix Limited p11
Center for Health and Gender Equity p16
Centers for Medicare & Medicaid p16
Cepheid p6
CeraPedics p10
Champions Biotech p6
Chartwell Seniors Hsg. p6
Chimerix p10
China Pharma p15
Chromos Molecular p15
CIBC p4
Citigroup p4
Clarus Ventures p9
Cleveland Clinic p3
CMGI p2
CoDa Therapeutics p10
Collaborative Seed and Growth Partners p10
CoMentis p6
CorNova p10
Cougar Biotechnology p4
Coventry Health Care p6
Cowen & Co. p4
Cowen and Company p15
Crestview Capital Partners p16
Crinos S.p.A. p14
Critical Biologics p10
Cyberkinetics p4
Cyclacel Pharmaceuticals p14
Cystic Fibrosis Foundation p16
Cystic Fibrosis Foundation Therapeutics p16
Cytori Therapeutics p14
Cytyc Corporation p6
D
D-Partners p10
Dako Denmark A/S p5
Delphi Ventures p9
DH Capital p9
Domain Associates p9, p10
DOR BioPharma p15
Dundee Securities p4, p15
E
Early Stage Partners p10
Emerging Growth Equities p15
EndoCeutics p4
Enterprise Ireland p10
Enzo Biochem p15
EQT Partners p5
F
Familymeds p6
Favrille p15
Federated Kauffman p15
Ferris Baker Watts p15
First Albany p4
First Check Diagnostic p6
Formosa Health-care Investments p3
G
Galderma, S.A. p6
GBS Partners p10
GBS Venture Partners p9
Gene Logic p11
Genelabs Technologies p4, p15
Genizon BioSciences p10
Gentium p14
Geron Corporation p15
GIMV p10
GlaxoSmithKline p6
Goldman Sachs (Asia) p4
Goldman Sachs’ GS Capital Partners p5
Goldman Sachs International p5
Government Accountability Office p16
Granite Global Ventures p11
Greenwich Biotech Ventures p1
Grosvenor Funds p9
GrowthWorks Atlantic Venture Fund p10
H
HBM BioVentures (Cayman) p9
Healthcare Realty Tr. p6
HealthCor Management p7
Helicos Biosciences p4
HemoCue p6
HPC Capital Management p15
HyperMed p1
Hythiam p4
I
IDM Pharma p15
Ikaria p6
Immatics Biotechnologies p9
Immtech Pharmaceutical p15
Imperial Innovations Group p10
INO Therapeutics p6
Inogen p7
Insulet p4
InterMune p7
InterWest Ventures p10
Intraop Medical p4
Introgen Therapeutics p16
Inverness Medical p6
Invus p10
J
Janney Montgomery p4
Japan Asia Investment Co. p10
Jefferies & Company p1
JMP Securities p3
Johns Hopkins University School of Medicine p15
JPMorgan p1, p4
K
KfW p9
Kingsbridge Capital Limited p14
Kosan Biosciences p4
L
L Capital Partners p9
Lazard Capital Markets p14, p15
Leerink Swann p4
Lentigen p2
Life Sciences Partners p10
Lincare p8
Lincoln Hills Health Center p6
Locus Pharmaceuticals p9
Lupin Limited p8
Lupin Pharmaceuticals p8
M
MAKO Surgical p2
Marubeni Corporation p3
Maternal Child Health p6
Matrix Hlthcare. Westwood p6
MB Ventures p7, p10
Medical Properties Tr. p4
Merit Medical Syst. p6
Merrill Lynch p4
Mindray Medical p4
Minrad International p4
Mitsubishi p10
Mitsubishi Chemical Holdings p5
Mitsubishi Pharma p6
Mitsubishi Pharma Corporation p5
Modern Medical Mod. p6
Molecular Insight p4
Morgan Stanley p4
Morningside Technology p10
Morningside Ventures p10
MPM Bioequities p15
Mylan Laboratories p4
N
NanoPass p10
National Community Pharmacists Association p16
National Technology Enterprises p9
NCB Ventures p10
NeoStem p4, p15
NeurogesX p4
New Enterprise Associates p10, p11
New Leaf Venture Partners p10
New River Pharmaceuticals p5, p14
New Zealand Venture Investment Fund p9
NexMed p4
NextWave Pharmaceuticals p8, p9
NIF SMBC Ventures p10
Nightingale Informatix p6
NIH p2
Nippon Shinyaku Co. p3
NovaBay Pharmaceut. p4
Novartis Bioventures p9, p10
Novartis Venture Fund p9
Novo Nordisk p5
Novo Ventures p7
Nura p12
Nuvasive p4
O
OccuLogix p15
Ofer Brothers Hi-Tech p10
OH Beteiligungen p9
Omeros Corporation p11
Oncolytics Biotech p4, p15
Oppenheimer & Company p14
Optimer Pharmaceuticals p1
OrbiMed Advisors p9, p10
Osprey Pharmaceutical Company p6
Osteotech p4
P
Pac-Link BioVenture p10
Pacific Growth p4
Pacific Growth Equities p4
Palatin Technologies p4
Palo Alto Investors p15
Pan American Hospital p6
Par Pharmaceutical Companies p3
Paradigm Spine p7
PatientsLikeMe p10
Pediatric Svs. of Amer. p6
Pfizer p10
Piper Jaffray p1
Point Therapeutics p15
Poly-Technos Venture Partners p9
Precision Optics p15
President (BVI) International Investment Holdings p3
Prism Venture Partners p9
Prism VentureWorks p10
Promesan, S.r.l. p6
ProQuest Investments p3
pSivida Limited p15
Purkinje p10
Q
Quantum Technology Partners p9
Quest Diagnostics p6
R
Radius Medical p4
Radius Ventures p9
RBC Capital p4
REGiMMUNE p10
ResCare p6
Resolution Health p16
Rodman & Renshaw p3, p15
Rosetta Genomics p4
S
S.R. One p9
Salix Pharmaceuticals p6
Sanderling Ventures p7
Sangtec Diagnostics AB p6
sanofi-aventis p6
Scottish Widows Invstmt. Partnership p10
Seaflower Ventures p9
Senior Housing Pptys. p4
SenoRx p4
SeQual Technologies p8
Serica Technologies p10
Sevin Rosen Funds p10
Shire Pharmaceuticals Group p5
Shire plc p14
Simbionix p10
Sistema de Salud Met. p6
Skyline Ventures p9
Sofinnova Ventures p8, p10
Somanta Pharmaceuticals p6
Southern Cross Capital p9
Southern Home Care Svs. p6
Specialty European Pharma p8
Split Rock Partners p7, p10
Stanford University p7
Stanley Medical Research Institute p9, p12
Sterne, Agee & Leach p15
Superior Vision Services p11
Synta p4
T
Tanabe Seiyaku Co. p5, p6
Targanta Therapeutics p9
Targeted Genetics Corporation p16
TechniScan Medical Systems p10
The Down Syndrome Research and Treatment Foundatio p16
Theralys, SA p6
ThinkEquity Partners p14
TomoTherapy p4
TongjiTang Chinese p4
Trellis Bioscience p10
Trevi Health Ventures p9
Triad Hospitals p5, p6
Trilogy Long-Term Care p6
Trius Therapeutics p10
Tudor Investment p2, p9
Tullis-Dickerson p10
U
UBS Investment Bank p1, p4
University of California, San Francisco p16
V
Valeant Pharmaceutic. p6
Vantage Oncology p11
VantageMed p6
VenGrowth Advanced Life Sciences Fund p9
Versant Partners p4
Versant Ventures p7, p11
Virtual Expert Clinics p10
Viscogliosi & Co. p7
Viscogliosi Brothers p7
Visiogen p10
Vivo Ventures p8
Vulcan Capital p9
W
Wachovia p4
Walgreen Co. p6
Wave Biotech p2
Wellington Partners p9
Wilkerson Health Care p6
World Heart Corp. p4
WRF Ventures p9
X
Xtent p4
Z
Zapaq p6
Ziegler Meditech Equity Group p2, p9
ZIOPHARM Oncology p14 |
Public Equity Springs To Life - Seven Health
Care IPOs In One Month, Including Two Winners
Email Editor
Seven health care IPOs
popped onto the market during February 2007, signaling perhaps a little
pre-Spring fever. By the end of the month, two of these IPOs had some
exciting aftermarket performance to report. At the close of trading on
February 28, Optimer Pharmaceuticals (NASDAQ: OPTR) was trading up
44% and Accuray (NASDAQ: ARAY) was trading up 42% from their IPO
prices. The other five that priced were all trading for less than 20%
below the IPO prices. Piper Jaffray (NYSE: PJC) and Jefferies &
Company (NYSE: JEF) were both involved in the two IPOs that performed
well.
In an offering led by
JPMorgan (NYSE: JPM) and UBS Investment Bank, and including
Piper Jaffray and Jefferies & Company, 16,000,000 shares of ARAY’s stock
were priced at $18.00 per share. Unlike the many recent IPOs that were
reduced in size or priced below range, Accuray increased both the number
of shares and the IPO price by about 20% from the original estimates.
Headquartered in Sunnyvale, California, Accuray is the developer and
marketer of the CyberKnife system, which was approved by the FDA in 2001
for the treatment of solid tumors anywhere in the body, as an alternative
to traditional surgery, and represents the next generation of radiosurgery
systems. According to the Cleveland Clinic, three technologies have
become established methods of treatment for brain tumors: the CyberKnife
system, the Gamma Knife and the Peacock intensity modulated radiotherapy
system. Unlike traditional radiosurgery systems that can only treat tumors
in the head and neck, the CyberKnife can be used on any part of the body,
and is the first and only commercially available intelligent robotic
radiosurgery system that combines image guidance and computer-controlled
robotics to track, detect and correct for tumor and patient movement in
real time.
It is
estimated that more than 20,000 patients around the world have been
treated with the CyberKnife system. The system is marketed through a
direct sales force in the United States and through a combination of
direct sales personnel and distributors in the rest of the world. For the
year ended June 30, 2006, Accuray reported total net revenue of $52.9
million with a net loss of $33.7 million. The company had 83 CyberKnife
systems installed at customer sites and 78 pending installation as of
September 30, 2006. Accuray has two major Asian backers, Japan-based
Marubeni Corporation (PK: MARUY) and Taiwan-based President (BVI)
International Investment Holdings, each with more than 5% of ARAY’s
outstanding voting shares.
After the
February IPO, Accuray announced clinical data showing that use of its
CyberKnife system in the treatment of spinal tumors has increased by 56%
between December 2005 and December 2006. Due to the proximity of tumors in
the spine to the spinal cord, other surgery methods and radiation have
proven unsatisfactory since unintended damage to the spinal cord can
occur, resulting in loss of movement, feeling or paralysis. Accuray’s
software tracking system uses the internal anatomy to directly track
tumors with radiosurgical precision without the need for any external
frames or implanted fiducials, and enables the delivery of high doses of
radiation with sub-millimeter accuracy while avoiding damage to healthy
tissue.
In what has
become a more frequent case of events, Optimer Pharmaceuticals priced its
initial public offering below range—but in OPTR’s case, the decision had a
less frequent outcome in that the stock traded up nicely. Although many
deals in health care, especially for companies involved with
biotechnology, have been difficult since savvy investors want to see
aftermarket performance, apparently Optimer has a compelling story, even
though it does not have either of its two lead products on the market yet.
Optimer’s lead product candidate, Difimicin, is currently in a Phase IIb/III
registration trial for the treatment of clostridium difficile associated
diarrhea, which is the most common form of hospital-acquired diarrhea. The
biopharmaceutical company is focused on discovering, developing and
commercializing innovative anti-infective products.
In mid-2004,
Optimer acquired the exclusive United States rights to develop and
commercialize Prulifloxacin, an antibiotic, from Nippon Shinyaku Co.,
Ltd. (PK: NPNKF). Now Prulifloxacin is in two Phase III trials for the
treatment of travelers’ diarrhea, a form of infectious diarrhea. The
company is also developing additional products using its proprietary drug
discovery platform. The most significant shareholders in Optimer include
Par Pharmaceutical Companies (NYSE: PRX), Formosa Health-care
Investments, ProQuest Investments, BB Biotech Ventures
and management. Prior to the IPO, Optimer had raised approximately $70
million in venture capital from those and other investors.
Piper Jaffray
and Jefferies & Company led Optimer’s IPO, with additional underwriting
from JMP Securities and Rodman & Renshaw. With a portion of
the proceeds from the offering, Optimer is buying back certain rights from
Par Pharmaceutical for the development and commercialization of Difimicin
in the United States and Israel, suggesting management has faith in the
product candidate. Although OPTR had entered into a collaboration
agreement with Par in 2005, as we were going to press, Par announced it
had indeed returned the rights to Optimer for $20 million. In addition,
Par will receive a milestone payment of $5 million when the first of three
agreed upon events occurs, as well as royalties on global sales.
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