San Diego biotech companies are continuing to take advantage of Wall Street’s goodwill toward the life sciences sector, but venture capital funding in the area dropped to a four-year low. Here’s our roundup of news over the past week.
—After setting the price range of its planned IPO earlier this month, San Diego’s Conatus Pharmaceuticals is among 12 IPOs expected this week, according to Renaissance Capital. Conatus, which is developing new treatments for chronic liver disease, plans to raise $55 million by offering 5 million shares at a price between $10 and $12 a share. Conatus would have a market value of $160 million at the midpoint of its price range. Venture firms (and the size of their stake) in Conatus include Aberdare Ventures (23 percent); Advent Venture Capital (21 percent); Gilde Healthcare (14 percent); MPM Capital (11 percent); AgeChem Venture Fund (8 percent); and Roche Finance (7 percent).
—In his BioBeat column, Luke observed that the resurgence of biotech IPOs is unlikely to last longer than a few months. So far this year, Renaissance Capital has counted 27 healthcare IPOs, including San Diego’s Conatus Pharmaceuticals, Madison, WI-based Cellular Dynamics, and Onconova Therapeutics of Newtown, PA. When I asked Biocom CEO Joe Panetta recently about the wave of biotech IPOs, he wrote in an e-mail, “There is an IPO window open right now because the mood in the market toward the life science sector has dramatically shifted from one of apprehension to one of opportunity… We have some decisions on Obamacare from the Supreme Court, on patents and FDA out of Congress (at least we did on Obamacare a month ago before the latest out of the Administration on postponing coverage) People are putting their money to work again.”
—Venture funding for life sciences companies in the San Diego region accounted for nearly 90 percent of the $147.8 million that was invested in 18 local companies during the second quarter, according to the MoneyTree Report. The largest venture deal went to San Diego’s aTyr Pharma, which took in $38.8 million during the quarter. VC activity was low compared to the prior quarter, when VCs invested $203.2 million in 27 deals. It also was off from the second quarter of 2012, when VCs invested $333.7 million in 31 companies. In fact, it was the lowest level of VC activity, in terms of both deals and dollars, since the first quarter of 2009.
—San Diego’s Illumina said it acquired Advanced Liquid Logic of Morrisville, NC, in a deal that could eventually be as much as $96 million in a combination of upfront and milestone payments. Illumina CEO Jay Flatley said Advanced Liquid Logic, which has proprietary microfluidics technology that uses voltage to manipulate droplets through a sealed “Lab-on-a-chip” is an example of the kind of smaller M&A deal that Illumina would be doing in coming years.
—Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) reported more encouraging results from a mid-stage trial of its antisense drug candidate ISIS-APOCIII Rx. In a study of 26 patients at very high-risk for cardiovascular disease and pancreatitis, Isis said its drug resulted in a 70 percent reduction in a dangerous protein, apolipoprotein C-III, and as much as a 64 percent reduction in triglycerides. The drug is meant for patients with extremely high levels of both compounds, which are closely associated with heart disease. Isis released the first batch of results for the drug about a month ago.
—San Diego-based MediciNova (NASDAQ: MNOV) said the NIH has awarded a grant that will enable the company to continue with a mid-stage trial of MN-166 (Ibudilast) in patients with progressive multiple sclerosis. MediciNova said the study will be led by Robert Fox, a staff neurologist at the Cleveland Clinic’s Mellen Center for Multiple Sclerosis, and is part of a collaboration that includes the National MS Society and MediciNova.