12:00 AM
 | 
May 22, 2006
 |  BioCentury  |  Finance

Ebb & Flow

By all accounts, last week was a banner week on the venture side. A total of $175.4 million was raised by private biotechs, which far exceeded the industry’s average of about $100 million per week since the start of 2005. The heavy lifting was done by three companies - Nanosphere ($57 million raised), MacroGenics ($45 million) and Intercept ($41 million). What’s notable is that the lead investors on the Nanosphere and Intercept deals are not members of the typical VC crowd.

Intercept’s round was led by Italy’s Genextra, and included Balyasny Asset Management and JAFCO Life Science, the U.S. venture arm of Japan’s JAFCO Co.

Genextra is a holding company that invests in early stage biotech and nanotech companies. Intercept is no stranger to Italy, as its technology based on the farnesoid X receptor (FXR) originated at an Italian university.

Intercept’s lead compound is INT-747, an oral agonist of FXR to treat liver damage caused by fibrosis and obstructed bile flow. A Phase Ib trial is expected to start next month.

"Given the origins of the company’s IP, it made sense to partner with Genextra," said Intercept President and CEO Mark Pruzanski. "Also, given our focus on chronic liver disease, our story was very interesting to JAFCO," as such diseases are increasingly prevalent in Japan.

Pruzanski said the company had competing term sheets from U.S. investors, but noted that "there was a method to the madness of selecting this syndicate. Genextra has a very strong focus in metabolic and degenerative diseases. They’re essentially a scientific campus, and in that light, we consider them a strategic partner - we’ll be able to leverage their research capabilities."

Meanwhile, JAFCO will help introduce Intercept to Japanese pharma companies.

Another sweetener offered by the Genextra-led syndicate was the willingness to buy common stock, rather than preferred shares.

Genextra CFO Paolo Fundaro told Ebb & Flow the company didn’t mind taking common stock because "Intercept is not a short-term investment to be quickly monetized. We view them as a long-term investment. It therefore wasn’t necessary to have preferred stock."

Molecular diagnostics company Nanogenpulled in its $57 million in a series D round led by Bain Capital. Other investors included Allen & Co. and Lurie Investments. Bain Capital was formed in 1984 and has about $27 billion under management. The Nanogen money came from Bain Capital Ventures, which manages $600 million.

Nanogen CEO William Moffitt said he likes Bain’s "high ratio of investment professionals to capital under management. That equates to time and attention."

This year, Nanogen plans to launch its Verigene System for direct genomic testing without the need for PCR. The company is also developing its Biobarcode technology for measuring protein biomarkers and nucleic acids.

Private rounds

Viron also had a healthy sized financing last week - a US$20 million in a series A round, which is the second largest A round for a Canadian biotech going back to at least 1993. But the financing may warrant an asterisk, as the financing was a recap round for the inflammation company.

Viron was...

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