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Life Sciences Roundup

Region sees 16 start-up financings under $1m

Xconomy.Com / May 3, 2010

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March was a big month for little deals — at least when it comes to investing in New England’s start-ups. New England companies inked 16 deals under $1 million, by far the biggest list this year, according to data provided by private company intelligence platform CB Insights. (There were 10 such under-the-radar deals on the January list, and nine on February’s.)

Not only did the number of such transactions increase, so did the proportion of them that were based in equity.

March’s list had a dozen equity-based transactions and four debt-related financings. In February, there were five equity-based transactions, three debt-based fundings, and one sale of securities to be acquired through the exercise of options and warrants.

In addition to the few medical device and health IT companies, March’s under-the-radar list included companies in online learning, marketing automation and customization, solar energy, energy auditing, water treatment, and mobile travel guides.

For the first time this year, Massachusetts companies did not take the majority of New England’s smaller transactions. Connecticut took the top spot with seven deals, and Massachusetts followed with six. Two start-ups grabbed under-the-radar funding in New Hampshire, and Vermont inked a sole deal.

The biggest deal still went to a Massachusetts life sciences company, with $900,000 in equity-based funding to Anterion Therapeutics. The Salem company is making bioerodible implants — small drug-delivery devices that don’t have to be surgically removed from the body after use.

The second-biggest was a $842,981 debt-based transaction that went to Newton-based inStream Media, which provides targeted, point-of-purchase advertising on sales receipts at major retailers. -- ERIN KUTZ

* * *

Vertex Pharmaceuticals was a pretty audacious place, even by biotech standards, when it was founded 20 years ago. A chemist from Merck, Joshua Boger, quit that job and assembled a small band of chemists who aimed to beat the big pharma companies at their own game of making small-molecule drugs.

That grand ambition has not been fulfilled, but Vertex has come a long way.

Boger handed over the reins last year to a chief executive whose mission is to transform Vertex into a big profitable anchor for biotech in Boston. It has more than 1,100 employees in Massachusetts and 1,400 worldwide, a stock market capitalization of almost $8 billion, and a hepatitis C drug in the final phase of clinical trials that could become the elusive billion-dollar molecule.

“Vertex attracted people who liked fresh ideas and high-profile situations and that weren’t afraid of risk,’’ said Roger Tung, an early chemist at Vertex who is now CEO of Lexington-based Concert Pharmaceuticals.

Vertex is starting to show signs of age and experience. One is a growing network of alumni, like Tung, who gained valuable experience they took with them. I sought to track down many of them; the list includes 33 names at last count. (If you see any information below that’s out of date or incorrect, let me know: ltimmerman@xconomy.com.) The list includes:

■ Rich Aldrich, cofounder RA Capital Management and chairman of Concert Pharmaceuticals

■ Tom Auchincloss, independent investment management professional

■ Lee Brettman, chief medical officer, Alnara Pharmaceuticals

■ Iain Buchanan, CEO, Novexel

■ Pravin Chaturvedi, chief scientific officer, Napo Pharmaceuticals

■ N. Anthony (Tony) Coles, president and CEO, Onyx Pharmaceuticals

■ Bart Henderson, president and founder, Rhythm Pharmaceuticals

■ Freda Lewis-Hall, chief medical officer, Pfizer

■ Robert Mashal, CEO, NKT Therapeutics

■ Jeff Saunders, the head of chemistry at Agios Pharmaceuticals

■ Jeff Williams, president and CEO, Addicere Pharmaceuticals -- LUKE TIMMERMAN

* * *

Athenahealth, the Watertown maker of electronic health records software systems, has hired IBM’s Managed Process Business Services unit for IT and administrative support. The deal will allow the company to focus on improving the administrative and reimbursement aspects of its products, it said.

* * *

Alkermes revealed its royalty rate for exenatide once-weekly (Bydureon), a diabetes drug from Eli Lilly and Amylin Pharmaceuticals that uses Alkermes’s chemistry technology. The Waltham company will take in 8 percent of sales of the first 40 million units of the treatment sold per year, which could bring in about $160 million if Bydureon is priced comparably to an existing twice-daily version of exenatide. Alkermes would also take a 5.5 percent royalty rate on sales beyond those first 40 million units.

This report was compiled by the editors of Xconomy, an online news website focused on the business of technology and innovation. For more New England coverage, visit www.Xconomy.com/boston.