January 2008 issue
Recent Discovery Spawns Venture Funding--
RNA Interference Offers Basis For Therapeutic Development
One fairly recent biological discovery drew more attention from scientists
and investors in 2007.
...
Annual Venture Capital Results Shine--
Quarterly Results Slightly Lackluster, But Add To Strong Finish
In the health care venture capital market, 2007 was the fifth year in a row
that total funding and deals increased.
...
Mergers & Acquisitions
The health care M&A market continued to produce deals at a rapid pace during
2007, but did not break the record.
...
Venture Capital Funds
Two venture capital firms closed funds recently, including one that finished
raising its debut fund.
...
Venture Capital Transactions
December 2007 was slower than some months,
but still helped bring the year to a strong close.
...
Disintegrating Devices
Among the companies drawing in venture dollars recently are some developers
of bioabsorbable technologies.
...
Private Placement Market
Annual results of private placement activity support the idea that the
market for these deals is expanding.
...
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headlines.
Companies Mentioned in this issue:
January 2008
A
Abingworth Management p3
Adams Respiratory Therapeutics p6
AEA Investors p16
Alma Lasers p4
Alta Partners p1, p9
Ambion p3
Amvex Corporation p16
Anesiva p9
Alnylam p2
Applied Biosystems Group p3
ARCH Venture Partners p9
Ardea Biosciences p15
Arterial Remodeling Technologies p12
Ascendis Pharma p16
Ascension Health p9
Ascension Health Ventures p9
Asuragen p3
B
Bankinvest p2
BG Medicine p4
Bioabsorbable Therapeutics p12
Blue Cross and Blue Shield Association p4
Broadpoint p9
Brookside Capital p12
C
Camulos Capital p12
CardioMEMS p16
Carnegie Institution of Washington p3
Cequent Pharmaceuticals p3
Cerberus Capital Management p12
Chemokine p4
CIBC World Markets p4
Citigroup Global Markets p4
City of Hope p3
Clarus Ventures p16
Consorta p16
Cord Blood America p15
Cougar Biotechnology p13
Cowen and Company p13
Credit Suisse Securities p4
Cyclacel Pharmaceuticals p13
D
DaVita p16
deCODE Genetics p9
Deutsche Bank Securities p4
Devax p4
Dicerna Pharmaceuticals p3
Domain Associates p1
DW Healthcare Partners p11
E
Eisai Co. p6
Elixir Pharmaceuticals p4, p9
Essex Chemis AG p12
EUSA Pharma p12
Exalenz Bioscience p15
F
Ferrer Freeman & Company p11
Finistere Ventures p12
Fortis Securities p9
Frazier Healthcare Investors p3
G
Gilde Healthcare Partners p2, p16
GlaxoSmithKline p6
Goldman, Sachs p4
Growth Capital Partners p3
Guggenheim Partners p16
H
Health Watch p6
hysicians Dialysis, Inc. p11
I
Illumina, Inc. p9
Integra Ventures p12
IntraBiotics Pharmaceuticals p15
Isis Pharmaceuticals p2
ITX International Equity p12
Ivivi Technologies p4
J
Jaguar Acquisition Corp. p6
Johnson & Johnson Development Corporation p3
K
Kingsbridge Capital p13
L
Lazard Freres p13
Leerink Swann p13
Lehman Brothers p6
Lifeline Systems p6
LSP p3
M
Matignon Technologies p12
McLaren Healthcare Corporation p11
MedAssets p4
Medsciences Capital p3
Merck & Co. p2
Merrill Lynch & Co. p9
Merrion Pharmaceuticals p4
MGI Pharma p6
Midtown Partners p15
Migdal Insurance Company p15
Morgan Stanley p4, p12
MorphoSys AG p6
MVC Capital p16
N
National Venture Capital Association p9
Nephros p4
NeurogesX p9
New Smith Financial Products LLP p12
NewSmith Asset Management p12
Novare Surgical Systems p16
Novartis p6
Novartis Ventures p3
Novo A/S p2
O
Ohio Medical p16
OncoMed Pharmaceuticals p6
Oracle p4
Oxford BioMedica p3
Oxford BioScience p3
P
Pacific Growth Equities p9
Pelikan Technologies p16
Pequot Capital Management p12
Perry Baromedical p16
Pfizer p3
Piper Jaffray & Co. p4
Popular Securities p4
Precision Therapeutics p4
Prizma p15
Prometheus Laboratories p4
Prosensa Holding p3
PTV Sciences p3
R
Raytel Cardiac Services p6
Reckitt Benckiser p6
Regulus Therapeutics p2
Reliant Renal Care p3
Reliant Renal Care, Inc. p11
Respironics p6
REVA Medical p12
Ribopharma p2
Rodman & Renshaw p13
Royal Philips Electronics p6
S
Santander Securities Corporation p4
Santaris Pharma p2
Sante Ventures p9
Schering Plough p12
Senior Housing Properties Trust p9
Simplex Diabetic Supply p3
Sirna Therapeutics p2
Skyline Ventures p3
Sofinnova p1
Sudbrook Associates LLP p12
T
Tacere Therapeutics p3
Telegraph Hill Partners p3
Tepha p12
Total Renal Care Holdings p16
Triple-S Management p4
Twickenham p6
U
UBS Investment Bank p4
University of Chicago p9
University of Massachusetts Medical School p3
V
Versant Ventures p3
Vertical Group p12
VISICU p8
W
Wachovia Capital Markets p4
William Blair & Co. p4
Wound Care Advantage p16
Z
Zosano Pharma p3
Zweite TechnoStart Venture Funds p16
|
Recent Discovery Spawns Venture Funding--
RNA Interference Offers Basis For Therapeutic
Development
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Email Editor
One fairly recent discovery
that has received a lot of attention from the scientific and investment
communities is the concept of RNA interference, or RNAi. RNAi refers to a
specific, naturally occurring cellular pathway—a catalytic process—that
involves a mechanism for gene silencing. RNAi is a naturally occurring
biological process that occurs in plants, animals and humans, helping
regulate gene expression and participating in defense against viral
infections. Scientists see an opportunity to develop technology that
harnesses and utilizes this natural mechanism to provide therapeutic
benefits through a new class of products. RNA interference is intriguing
not only because of its potential applications, but because of the
relative novelty of its discovery and the speed at which the discovery has
become meaningful to the life sciences community.
In deals with disclosed
prices, from 2003 to 2007 venture capitalists invested $425 million in
companies that are focused on RNA biology, most of them developing
platforms or product candidates based on RNA interference. Much of the
activity is recent—in fact, 47% of the total funding since 2003 was raised
during 2007. Ten of the 24 deals announced during those four years were
announced during 2007. It helps that the Nobel Prize in Physiology or
Medicine for 2006 was conferred upon Drs. Andrew Fire and Craig Mello for
the discovery of RNAi. Specifically, they received the prize "for their
discovery of RNA interference - gene silencing by double-stranded RNA."
In 1998, Drs. Fire and Mello
published their discovery of the RNAi mechanism, which can degrade
messenger RNA (mRNA) from a specific gene. mRNA transmits crucial genetic
information from DNA that directs the creation of proteins in the
transcription process that is vital to life. For example, enzymes digest
our food, protein receptors receive signals in the brain and antibodies
defend us against bacteria. RNAi is activated when RNA molecules occur as
double-stranded pairs in the cell, causing mRNA molecules that carry a
genetic code identical to that of the double-stranded RNA to degrade. The
disappearance of these mRNA molecules is what causes the corresponding
gene to be silenced, with no protein of the encoded type created.
Alnylam
(NASDAQ: ALNY), a leading company in the RNAi development space, has
posted on its Web site that, "The discovery of RNAi has been heralded as a
major scientific breakthrough... and represents one of the most promising
and rapidly advancing frontiers in biology and drug discovery today." The
quote from Alnylam probably reflects the opinion of many health care
industry professionals. Alnylam was founded in 2002, but at this point,
the company is not at all alone in thinking that RNAi development is an
area that is expected to have broad potential.
Alnylam raised a $24.6
million venture round in July 2003, in conjunction with the completion of
a merger with a Germany-based company, Ribopharma, another RNAi
specialist. In 2004, Alnylam went public at $6.00 per share in a $30
million IPO; as we were going to press this month, its stock was trading
for more than $31 per share. Other publicly traded companies working with
RNA interference technology include Merck & Co., Inc. (NYSE: MRK),
which entered the space in October 2006 with its acquisition of Sirna
Therapeutics for $1.1 billion.
Among other recent venture
capital deals in the RNAi development space, one involves Alnylam as an
investor. In September, the formation and initial funding of Regulus
Therapeutics was anounced. Regulus, a joint venture between Alnylam
and Isis Pharmaceuticals (NASDAQ: ISIS) is focused on the
discovery, development and commercialization of microRNA therapeutics that
may regulate networks of genes in disease processes.
Applications for the exploitation of
RNA interference are currently being evaluated in areas including
neurodegenerative disorders, viral infections and oncology. In December
2007, two companies working with RNA technology secured funding, including
Santaris Pharma, which raised $30 million from Gilde Healthcare
Partners, Bankinvest, Novo A/S and other investors.
Santaris is focused on the development of rationally designed, synthetic
oligonucleotides, or RNA agonists, that specifically intercept RNA
molecules to prevent their expression as disease-causing proteins. The
company is concentrating its efforts on the development of products to
treat malignant diseases and metabolic disorders.
Also in December, Asuragen, a
molecular diagnostics company and molecular biology service provider with
a microRNA patent estate, raised $18.5 million in venture capital from
PTV Sciences, Telegraph Hill Partners and Growth Capital
Partners. Asuragen is focused on molecular oncology and the early
detection of cancer and is using the funding to support its ongoing
product development efforts. The company believes it is uniquely
positioned to take advantage of the recent discoveries of the role that
microRNA and mRNA play in disease. Austin, Texas-based Asuragen was
founded as a spin-off from Ambion, simultaneous with the sale of
Ambion’s research products division to Applied Biosystems Group
(NYSE: ABI).
Dicerna Pharmaceuticals,
which is discovering and developing drugs with technology centered on a
key enzyme involved in processing double-stranded RNA into small
interfering RNA (siRNA), announced a round in November 2007. Oxford
BioScience and Skyline Ventures led the $13 million Series A
financing. Dicerna, based in the Boston area, has licensed intellectual
property from the City of Hope cancer research and treatment
center.
Highlighting two other deals
announced in 2007, Cequent Pharmaceuticals, which currently has its
lead program in preclinical development for the prevention of colon
cancer, is focused on developing RNAi-based treatments for human disease.
Cequent closed a $9 million round led by Novartis Option Fund in
June. Last January, Prosensa Holding, based in The Netherlands,
announced an $18 million initial round that included investors LSP,
Abingworth Management and Medsciences Capital. Prosensa is
using the proceeds for the development of its two lead RNA interference
therapeutic programs, in the field of Duchenne Muscular Dystrophy.
Companies working on RNAi-based
therapeutics, and their investors, seem to have high hopes for the
unlocked potential in this space, and big pharma is eager to do some
unlocking. As we were going to press, two deals of interest were
announced. As part of a licensing agreement, Oxford BioMedica (LSE:
OXB), a leading gene therapy company based in the United Kingdom, got the
rights to key RNAi technology from the Carnegie Institution of
Washington and the University of Massachusetts Medical School.
Separately, Tacere Therapeutics entered into a collaboration deal
with Pfizer (NYSE: PFE) to develop and commercialize an RNAi drug
for Hepatitis C virus. Pfizer is funding the studies necessary to submit
an investigational new drug application and may also make eventual
milestone payments to Tacere totaling up to $145 million. |
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