December
2007 issue
Venture Capital Deals In 2008: Health Care
VCs See Steady Stream Of Funding
We get the inside view on the upcoming year from a few health care venture
capital investors, who seem to expect 2008 will be just about as active as
2007.
...
New Funding
For Drug Delivery--
Zosano Attracts More Capital For Development
Zosano is moving forward with its clinical and fund-raising activities under
its new name, with a technology that has been in development for some time.
...
Public Equity Market
In spite of some shuddering in the broader markets, IPOs and secondary
offerings of stock in health care companies continue to get priced.
...
M&A Market, 2008
Provident Healthcare Partners is one firm that anticipates a relatively
strong market for certain health care mergers and acquisitions in the coming
year.
...
Mergers & Acquisitions
Transactions for generic pharmaceutical companies are a highlight of this
month’s health care M&A activity, which included a few more deals than
usual.
...
Venture Capital, November
Health care companies continued to raise venture capital funding, with
medical devices and biopharmaceuticals garnering most of it during November.
...
Private Placements
November was a quiet month for private
placements in health care companies, compared with some recent months, but
had some interesting deals.
...
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News Read the past
headlines.
Companies Mentioned in this issue:
December 2007
A
Abbott Laboratories p9
Acrongenomics p7
Actelion p12
Addington Place p8
Adenosine Therapeutics p11
Advanced Technology Ventures p11
Aegerion Pharmaceuticals p4, p5
Agensys p7
AGF Private Equity p11
AIM Therapeutics p11
Akrihin p6
Albert Einstein College of Medicine of Yeshiva Uni p12
Alliance Imaging p8
Alloy Ventures p10, p11
Alta Partners p11
Altarum Institute p11
ALZA p1
Ambit Biosciences p9
Amedisys p9
American Academy of Home Care Physicians p16
American Board of Radiology p5
Amgen p2
Amicus Therapeutics p12
Ampersand Ventures p11
Amylin p11
Analogix p7
Anaptys Biosciences p9
Antisense Pharma p11
AorTx p7
Apposite Capital p9, p10
Apria Healthcare Group p9
Arena Pharmaceuticals p4
Artemis Pharmaceuticals p7
Arterial Remodeling p11
ARYx Therapeutics p4
Aspen Group p6
Astellas Pharma p7
ATEL Ventures p11
Aurora Funds p11
Austin Ventures p11
Avalon Ventures p11
Averion International p8
Avidia p12
Axcan Pharma p7
B
BBT Fund p10
Beulah Land p8
BIND Biosciences p11
BioForm Medical p4
Biogen Idec p7
Biomerix p11
Biopure p4
Biospace Med p11
Bristol-Myers Squibb p11
Broncus Technologies p5
C
C.E. Unterberg, Towbin p5
Cadence Pharmaceuticals p12
Canaan Partners p12
Capella Healthcare p8
Carbylan Biosurgery p11
Cardica p4
Cardinal Health p9
CardioVations p7
CaseNET p11
Cavidi p11
Celgene Corporation p7
Centice p11
Cerus Corporation p12
ChemoCentryx p4, p5
CIBC p4
CIBC World Markets p5
Cielo p11
CIGNA p8
Clarus Therapeutics p11
Clinicient p11
CM Capital Investments p11
Co-pharma p6
Coalition America p7
Cognizant Technology p7
Coley Pharmaceutical p7
Collins Stewart LLC p5
ConcepTx Medical p11
Corriente Master Fund p14
CoTherix p12
Craig-Hallum Capital Group p4
Credit Agricole Private Equity p11
Credit Suisse p4
Critical Therapeutics p13
Cutlass Capital p10
D
D.A. Davidson & Co. p5
De Novo Ventures p11
Delphi Ventures p9
Derma Sciences p7
Deutsche Bank p4
Dicerna Pharmaceuticals p11
DnBNor p11
Domain Associates p10, p12
Dynavax Technologies p4
E
Edwards Lifesciences p7
Emergent Medical Ventures p9
Emeritus p6
Ensign Group p5
EnteroMedics p4
Epicept p4
EPIX Pharmaceuticals p15
ePlanet Ventures p11
eResearchTechnology p8
Evalve p9
Excaliard p11
Excela Health p8
Exiqon A/S p7
Eyetel Imaging p5
F
f-star p11
Favrille p15
Fiserv p8
Flagship Ventures p11
FlexPoint Partners p9
Forest Laboratories p12
ForHealth Technologies p11
FORMAC Pharmaceuticals p11
Formula Naturelle p6
Forward Ventures p10, p11
Frazier Healthcare Ventures p11, p12
Frazier Healthcare VI p12
Fresenius Medical p7
G
Gedeon Richter p7
Genechem p10
Genefar BV p6
General Electric Pension Trust p14
Gentiva p9
Geodon Richter p6
Getinge AB p7
Gezina p11
GIMV p10
GlaxoSmithKline p5
Golden Pond Healthcare p4
Goldman, Sachs p5
GPT Group p8
Great Lakes Home Health p9
Great Point Partners p14
Great-West Healthcare p8
Greatbatch p7
Gyrus Group p7
H
H.I.G. Ventures p11
Hana Biosciences p4
Hansen Medical p7, p12
HBM BioVentures p11
HBM Partners p13
HemaQuest p11
HemoSense p7
Hesperion AG p8
Highway 12 Ventures p11
HLM Venture Partners p11
Home Solutions p9
Horizon Technology Finance p10
HouseMD Today p16
HSBC Private Equity p11
Hythiam p15
I
I-trax p8
Ilypsa p2
Integral Capital Partners p10
InterMune p7
Inverness Medical p5
J
Jefferies & Company p5
Johnson & Johnson p1
Johnson & Johnson Development Corporation p11
Jov-CMDF p10
JPMorgan p4
K
Kaiser Permanente p11
Krka p7
Kyphon p3
L
LabNow p11
Lazard p4
Lazard Capital Markets p5, p14
Lazard Freres & Co. p14
LBBW Venture Capital p11
LEAD Therapeutics p11
Leerink Swann p4
Lehman Brothers p5
Lilly & Co. p1
LogistiCare p8
M
Macrochem p4
Macroflux Corporation p1
MAP Pharmaceuticals p12
marketRx p7
Matignon Technologies p11
MedAssets p4
Medco Health Solutions p9
Medical Research Council p12
MedImmune Ventures p9, p10
Mediware p7
Memory Pharmaceuticals p16
Merck p12
Mercy Jeannette Hospital p8
Merrill Lynch p4
Merrill Lynch & Co. p5
Metastatix p12
Michigan Pre-Seed Capital Fund p11
MIG Funds p11
Molecular Vision Limited p7
Montreux Equity Partners p10
Morgan Stanley p4
MPM BioVentures IV Fund p2
MPM Capital p1
Mylan Pharmaceuticals p4, p5
N
N Spine p7
Nanosphere p4
NBGI Ventures p11
NeoStem p7
New England Health p8
New Enterprise Associates p9, p10, p13
NimbleGen p12
Nimblegen Systems p4, p5
NLV Partners p1
Nomura Phase4 Ventures p13
NovaCardia p12
Novalar Pharma p10
NovaQuest p9, p10
Novartis p15
Novo A/S p11
Numenor Ventures p10
NutraMax p7
O
Olympus Corporation p7
Omnicell p7
Oncotech p7
Optimer Pharmaceuticals p4
OrbiMed Advisors p9, p10, p12
Oxford BioScience Partners p11
P
Palmetto Vein Center p8
Papastavros Group p8
Pappas Ventures p11
ParadigmHealth p8
Park Regency p8
Perseus-Soros Biopharmaceutical Fund p10
Pfizer p7
Pharmion p7
Piedmont Pharmaceuticals p11
Piper Jaffray p4, p5
Polaris Venture Partners p11
Polpharma p6
Posit Science Corporation p16
Pouschine Cook p9
Precimed p7
ProFitness Health Solutions p8
ProHealth Care p8
ProQuest p13
Providence Service p8
Provident Healthcare Partners p6
Q
Queensland BioCapital Funds p11
QuestMark Partners p11
R
Radius Ventures p9, p10
RadNet p8
RadPharm p11
Raven biotechnologies p7
Reliant Pharmaceuticals p5
Relypsa p2
Renal Solutions p7
Rich Healthcare p8
Rioux Vision p7
Roche p4, p5, p12
Roche Venture Fund p11
Rodman & Renshaw p14
Rural Hospital Acquisition p8
S
S-Group Direct Investments p11
S.R. One p10
Salix Ventures p11
Sammons Enterprises p11
Sanofi-aventis p6
sanofi-aventis p7
SantoSolve p11
Sears Capital Management p12
SGAM p11
SGX Pharmaceuticals p15
Sigma Partners p11
Sirtris Pharmaceuticals p12
Skyline V p12
Skyline Ventures p11, p12
Sloning Biotechnology p11
Split Rock Partners p9
St. Francis Medical p3
Stanislaus Behavioral p8
Stem Cell Technologies p7
Stifel, Nicolaus & Company p5
Strides Arcolab p6
Strides Latina p6
Synthes GmbH p7
T
Taconic Farms p7
TAD Pharma p7
Takeda Pharmaceuticals North America p16
Targanta Therapeutics p12
Tenet Healthcare p8
The Buck Institute p16
The SeniorCare Investor p5
Thomas, McNerney & Partners p11
Thomas Weisel Partners p5
TPG Capital p7
Tranzyme Pharma p11
Tri-Isthmus Group p8
Trivitron p11
Trubion Pharmaceuticals p12
U
UBS Investment Bank p5
UnitedHealth Group p8
Uroplasty p4
V
Vapotherm p11
Varian, Inc. p7
Vaxart p11
VaxGen p7
Vericare p11
Versant III p3
Versant Ventures p1
Village Ventures p11
Virtual Radiologic Corporation p5
Vivacta p11
Vivo Ventures p11
W
Walgreen p9
William Blair & Company p5
WS Investment Company p10
X
Xanodyne p4, p5
Xenome p11
Xlibris p16
Z
Zosano p1
|
New Funding
For Drug Delivery--
Zosano Attracts More Capital For Development
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Email Editor
About this time last year,
Macroflux Corporation had announced its initial $75 million financing
after being spun off from Johnson & Johnson’s (NYSE: JNJ) ALZA. Now, the
company has attracted a new venture backer and changed its name to reflect
its ongoing mission, which also differentiates the Macroflux technology
from the company itself. Now Macroflux Corporation is known as Zosano,
which is derived from the combination of two words—“sano,” meaning to heal
or cure, and “zo,” short for zone—to refer to “the healing zone” that the
company is pursuing.
It seems that Zosano’s lead product candidate, a parathyroid hormone
transdermal microprojection delivery system, could have a bit of an edge
toward gaining regulatory approval over some other new product candidates,
because it is not an entirely new product. We talked with Cory Zwerling,
the CEO of Zosano since May 2007, who stated, “Our regulatory submission
strategy is a 505(b)(2) path, and may be a quicker approval than new
products, because the parent compound Forteo is already in use,” referring
to the parathyroid hormone product that Lilly & Co. (NYSE: LLY) already
has on the market. Zosano has now pulled in $90 million of venture capital
in its Series B financing, which was initially announced in October 2006
with $75 million committed. New investor ProQuest added $15 million to the
funding Zosano had already raised from Nomura Phase4 Ventures, New
Enterprise Associates and HBM Partners, for a round total of $90 million.
The Macroflux technology is considered a drug delivery system, not a
medical device, and Zosano’s initial product is in development for the
delivery of a parathyroid hormone (PTH) to help influence bone building in
severe osteoporosis patients. Zosano’s technology is expected to have the
potential for broad applications across various therapeutic areas where
the company is focused on making better pharmaceutical products with
innovative drug delivery systems. The transdermal Macroflux patch provides
a convenient alternative to daily injections, which is the current
delivery method for patients on this therapy.
“Our PTH system provides elderly women a more convenient therapy choice
than daily shots,” Mr. Zwerling explained. “Another advantage of our
system is room-temperature stability, which should eliminate the need for
patients to refrigerate our product.” he said. Macroflux has been
well-tolerated so far, we were told. The PTH phase II clinical trial
completed enrollment at the end of November, more than a month ahead of
plan, and the trial results should be available in the second half of
2008. This quick enrollment is a critical milestone for the company. “We
feel our rapid enrollment in the phase II trial may reflect physician and
patient acceptance of our system,” said Mr. Zwerling. “We hope this
acceptance will benefit our future commercial activities, in PTH and other
Zosano products.”
“Osteoporosis is a large, growing market, where we believe a more
convenient product like ours can effectively compete,” Mr. Zwerling
stated. “We are highly focused on advancing our PTH program, but Zosano is
also exploring other product opportunities with our differentiated product
technology.” By 2010, estimates indicate that the size of the osteoporosis
market could reach up to $10 billion. From what we understand, there
really aren’t a lot of competitive bone building osteoporosis products,
besides parathyroid hormone—like Lilly’s Forteo, which brought in nearly
$600 million in worldwide sales in 2006. At this point, Zosano hasn’t
really projected precisely what portion of the osteoporosis market it
expects to capture, or what sort of revenues it is likely to earn.
Beyond PTH, Zosano is developing a propriety product portfolio and
exploring partnership opportunities with other companies’ products. The
Macroflux delivery system has demonstrated some measure of clinical
success in pairings with five different drugs and over 300 patients. The
company is building off of this experience, in applying other therapies to
this delivery technology. Partnering opportunities would have to involve a
technology or drug that can pair well with the Macroflux technology and
can be administered with a patch of the same size as what is being used in
the current trial. Candidates include more potent peptides, as well as
small molecules and vaccines. Delivery of larger drugs is possible, but
would require additional equipment that is not currently prioritized in
Zosano’s business plan.
Zosano has been open to collaborative product agreements ever since the
name change, and is open to exploring such opportunities with both big
pharma and biotech, as well as smaller companies, including venture-backed
entities. Currently, Zosano is in the early stages of discussions with a
variety of other pharmaceutical and biotechnology companies, but the
parties involved are not being disclosed at this time. “We have a great
technology platform, built on differentiable advantages of patient
convenience and room-temperature stability that will be valued by the
marketplace,” said Mr. Zwerling. “This will enable Zosano to develop
better pharmaceutical products, with our innovative delivery system, for
the years ahead.”
Mr. Zwerling has been working in the pharmaceutical business for about 20
years, mostly in big pharma, with Bristol-Myers Squibb, but gained
experience with the smaller company models by working with smaller
business units at BMY, including its medical imaging and overseas
pharmaceutical businesses. He is also currently serving as a director on
the board of Critical Therapeutics (NASDAQ: CRTX).
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