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April 30, 2011

Southeast BIO Venture Wire

Filed under: SEBIO News — admin @ 8:42 pm

ATLANTA, GA - The first quarter of 2011 was relatively strong for venture capital investment in the life sciences sector. According to the new MoneyTreeTM Report from PricewaterhouseCoopers LLP, dollars invested rose 16 percent to $1.4 billion, although deal volume fell by 9 percent. Overall, the life sciences sector tracked the larger venture capital market, in which much of the funding was directed to later stage deals with average deal size continuing to increase.

Mirroring national trends, the Southeast saw several large follow-on rounds this quarter. The largest of these was a $45 million F round for Chimerix, a Durham-based drug discovery company. Other notable regional deals included Aerie Pharmaceuticals ($30M), Viamet Pharma ($25M), ELENZA, Inc. ($24M) and OrthoSensor, Inc. ($21M) - all B rounds.

The overall exit market, both for M&A and IPOs, continues to improve over the lows of the economic crisis, although momentum has slowed over Q4 2010. According to data from Thomson Reuters and the National Venture Capital Association (NVCA), 109 venture-backed M&A deals were reported for the first quarter, for an aggregate deal value of $5.9 billion, of which 23 were in the life sciences sector for a total of $2.1 billion. In the IPO market, there were 14 deals valued at $1.4 billion, of which 6 were in the life sciences sector for a total of $374 million. Just past the Q1 window was the Tranzyme IPO, in which the Durham-based drug discovery company raised $48 million on April 4th.

While the IPO market is returning, M&A remains the focus of many venture-backed companies. Yet, it is clearly a buyer’s market. A recent study from Silicon Valley Bank shows that on average, there are eight device and 10 biotech “big exits” per year (defined as an upfront payment $50 million or more in cash for device companies and about $100 million or more in cash for biotech companies). What does it take to land a big deal? “The successful company will have the ability to generate multiple products and collaborations,” observes Art Pappas, Managing Partner of Durham-based Pappas Ventures. But deal dynamics may be changing, he notes. Although Pappas thinks structured transactions will continue to be the norm, he observes there seems to be more receptivity to “earlier payouts around defined and practical milestones.” Pappas Ventures was an investor in CA-based Plexxikon, which recently sold to Daiichi Sankyo in a very big exit that included an $805 million up-front and the possibility of an additional $130 million in near-term milestones. With numbers like that, there will continue to be an appetite for life sciences investing.

Becky Kaufman
King & Spalding

Regional Venture NewsDurham-Based Chimerix Closes $45M Round for Antivirals
DURHAM, NC – Chimerix, a company developing orally available broad spectrum antiviral therapeutics, has closed a $45 million sixth round of financing. New Leaf Venture Partners, Pappas Ventures and Morningside Group, as well as existing investors Canaan Partners, Sanderling Ventures, Alta Partners, Asset Management Company and Frazier Healthcare Ventures all participated in the funding. (more…)

Aerie Pharmaceuticals Closes $30M Round for Glaucoma Treatment
RESEARCH TRIANGLE PARK, NC – Aerie Pharmaceuticals, Inc., a biotechnology company focused on the discovery and development of medical innovations in ophthalmology, has closed a $30 million Series B financing. Clarus Ventures and Sofinnova Ventures co-led the round, with participation from Osage University Partners, and existing investors Alta Partners and TPG Biotech. (more…)

Viamet Pharma Closes $25M Equity Round for Drug Improvement Technology
MORRISVILLE, NC - Viamet Pharmaceuticals Inc. has raised $25 million in equity financing, according to a regulatory filing. The company focuses on enzymes that contain a metal, typically zinc or iron. About ten percent of current drugs target these “metalloenzymes.” Viamet’s technology makes those drugs more effective and safer, the company has said. (more…)

ELENZA Nabs $24M Financing for Auto-Focusing Lens Tech
ROANOKE, VA - ELENZA Inc., a company developing the world’s first Electro-active AutoFocal Intraocular Lens, has raised a $24 million Series B round of financing from its original investors, The Carlyle Group, Washington, DC, and Delphi Ventures, Menlo Park, CA, as well as new investors, the Itochu Corp., Tokyo, Japan and a strategic corporate investor from the ophthalmic industry. (more…)

OrthoSensor Raises $21M in Series B Round of Financing
ATLANTA, GA - Led by Ziegler Meditech Equity Partners, Florida-based OrthoSensor raised $21 million in a Series B round of financing. The device marker’s OrthoSensor Surgical products are disposable, sensor-enabled devices that give feedback to surgeons while they’re placing orthopedic implants. (more…)

IPO News

Tranzyme Shares Begin Trading on NASDAQ
DURHAM, NC – Tranzyme Inc. (NASDAQ: TZYM) officially became the newest Triangle-based public company Monday, when shares of the Durham-based biopharma began trading on the NASDAQ. Tranzyme’s stock price was up 6 cents, or 1.5 percent, to $4.06 in early trading. The company hit the market at an initial public offering price of $4 per share. (more…)

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