Following a week of little activity, venture financing for life science companies got hot. Even General Electric is getting into venture investing, announcing a $250 million venture fund midweek that will invest in small companies developing “disruptive technologies” in the healthcare arena (see story). GE is spending $6 billion to revamp its GE Healthcare division, one of its fastest growing divisions until recently. However uncertainty surrounding healthcare reform and a lower demand for medical devices and imaging services have cut into profits. GE hopes its venture efforts will result in greater exposure to a wider array of innovative technologies, any one of which could be a winner, while maintaining a flexibility it would not have if it buys companies outright.

 

Several companies closed large financing rounds. Lux Biosciences, a privately held New Jersey biotech focused on the development and commercialization of therapies for serious ophthalmic diseases, closed a $50 million Series B venture financing by current investors HBM Bioventures, Novo A/S, Prospect Venture Partners and SV Life Sciences, as well as SVLS' publicly traded fund, International Biotechnology Trust. Lux is anticipating U.S. Food and Drug Adminstration approval for its lead product Luveniq, oral voclosporin, a next generation calcineurin inhibitor, in 2010. The funds will support the completion of the New Drug Application in the United States and the Marketing Authorization Application in Europe, based on positive pivotal data in non-infectious uveitis. Lux Biosciences received Fast Track Designation for Luveniq in August 2007 and will request priority review from the U.S. Food and Drug Administration. If granted, the company could potentially gain U.S. approval for Luveniq in 2010. The proceeds from the financing will also help the company prepare for commercial launch of the product for non-infectious uveitis. Lux Biosciences also has several earlier stage projects based on its mixed nanomicellar ocular formulation technology, and its proprietary product-enabling bio-erodible polymer technologies that facilitate targeted and sustained delivery of molecules to the eye.

 

Privately held GlycoMimetics, which is developing a new class of glycobiology-based therapies for a broad range of indications, raised $38 million in its latest round of venture financing. New investor in the Maryland-based company include Genzyme Ventures, which joined returning investors New Enterprise Associates, The Novartis Venture Fund, Anthem Capital and Alliance Technology Ventures in the round.

 

The new investment will be used to fund a phase 2 trial of GlycoMimetics’ lead drug candidate GMI-1070 in vaso-occlusive crisis, the main clinical feature of sickle cell disease. The company also intends to use proceeds to fund a phase 2 study of GMI-1070 in a second clinical indication. GMI-1070, is a rationally-designed glycomimetic inhibitor of E-, P- and L-selectins, and inhibits a key early step in the inflammatory process leading to leukocyte adhesion and recruitment to inflamed tissue.

 

Massachusetts drug development startup Flexion Therapeutics raised $33 million in Series A funding led by Versant Ventures with participation by founding investors 5AM Ventures and Sofinnova Ventures. The funds will be used to advance a number of promising drug candidates through clinically meaningful proof of concept and beyond.

 

By providing expertise and risk-sharing, Flexion effectively expands the development capabilities of its partners. Flexion was established in 2007 by Mike Clayman and Neil Bodick, the founders of Chorus, Eli Lilly’s in-house proof-of-concept drug unit, which they say demonstrated a level of productivity far greater than the industry standard. The Flexion team has evolved the Chorus model and expects to be able to take preclinical compounds into their initial clinical trials in half the time and slash the costs to one fifth what it normally takes by using novel types of licensing deals with pharmaceutical and biotech partners and maintaining a small team with low overhead. Flexion soon expects to announce deals with three major pharmaceutical companies.

 

Biotech pioneer Lee Hood’s new company, Integrated Diagnostics, was officially launched on October 14 with more than $30 million in venture capital from InterWest Partners, U.K.-based Wellcome Trust, and Germany-based dievini Hopp Biotech holding, part of a collaboration with the government of Luxembourg and the Institute for Systems Biology. The Seattle-based company will focus on developing personalized and preventive diagnostics based on breakthroughs using genomic and proteomic technologies to identify organ-specific proteins. The idea is to develop diagnostics to detect the earliest stages of disease when they are the most treatable.

 

“Just as the DNA sequencer allowed us to decode the human genome, the technology behind Integrated Diagnostics will allow us unprecedented insight into preventing and treating diseases like cancer, diabetes, and Alzheimer’s by analyzing the proteins that appear in their earliest stages,” says Hood, current president of The Institute for Systems Biology and inventor of the DNA sequencer. “By taking a systems approach to monitoring an individual’s health we will be able to provide physicians and patients an early warning system for preventing and treating diseases.”

 

Integrated Diagnostics will have access to Hood’s research at Institute for Systems Biology investigating protein blood markers that can report on the physiological state of the body's 50 major organs. It is the first commercial enterprise to emerge from a $200 million public-private partnership announced in 2008 between Luxembourg and three American research institutions including the Institute for Systems Biology.

 

Other founders of Integrated Diagnostics are Jim Heath, professor of chemistry at Caltech; David Galas, professor at Institute for Systems Biology and CSO of the Battelle Memorial Institute; and Paul Kearney, scientific director of special projects at Institute for Systems Biology.

 

Complete data on September financings and deal activity, including relevant clinical developments, and political and regulatory events impacting the life science industry is available in the Burrill Report, a monthly, subscription-based publication. To download a free issue, click here.