A Diagnostics & Imaging Week

XDx (South San Francisco), a molecular diagnostics company, reported completing a $26.5 million financing, with a post-money valuation of more than $115 million.

Duff, Ackerman & Goodrich led the investment, with participation from Intel Capital, as well as all previous VC investors Kleiner Perkins Caufield & Byers; Texas Pacific Group Ventures; the Sprout Group; Burrill & Company; Integral Capital Partners; and Bay Area Equity Fund, managed by JP Morgan.

John Cadeddu of Duff, Ackerman & Goodrich, said that XDx has established "a leadership role in molecular diagnostics and personalized medicine, with a unique technology that will significantly improve patient care and outcomes."

XDx garnered a Series D financing round of $20 million in late 2004.

The recent round of financing follows numerous milestones for its first product to market, AlloMap molecular expression testing, a proprietary method for non-invasively monitoring the immune system by measuring gene expression in a patient's blood. From a simple blood draw, the test enables physicians to determine a heart transplant patient's risk of rejection.

The company in April of last year launched the test at the International Society for Heart and Lung Transplantation's (Addison, Texas) annual meeting in Philadelphia. And it reported the AlloMap test being used at 11 U.S. transplant centers at year-end '05, with "several" other centers lined up for its adoption early this year.

XDx received Clinical Laboratory Improvement Amendments certification in November 2004, and launched AlloMap testing in January 2005. AlloMap testing was clinically validated at eight of the leading transplant centers, accounting for about 22% of the annual U.S. heart transplant population, in the four-year Cardiac Allograft Rejection Gene Expression Observational Study (CARGO) study. CARGO data results appear in the January 2006 issue of the American Journal of Transplantation.

Pierre Cassigneul, CEO of XDx, will outline the company's progress this week at the JP Morgan 24th Annual Healthcare Conference in San Francisco.

EraGen Biosciences (Madison, Wisconsin), a biotech company focused on automating molecular diagnostics, reported completion of $12 million in Series A financing, bringing the total capital raised to date to about $21 million.

The round was led by First Analysis Corp. and Prolog Ventures. New investors also include Stonehenge Capital and a syndicate of Midwest investors. The existing investor, Novartis Venture Fund, also participated.

Dr. Tracy Marshbanks, vice president, First Analysis, and Greg Johnson, managing director, Prolog Ventures, have joined EraGen's board of directors.

In other financing activity:

• Spirus Medical (Stoughton, Massachusetts), specializing in the use of helix technology for ease of access in the gastrointestinal (GI) tract, has received $5.9 million in a first-round Series A preferred stock financing from STD Med (also Stoughton).

Spirus Medical's first product, the disposable EndoEase system, simplifies the insertion and advancement of colonoscopies into and through the colon by utilizing the company's patented "rotate-to-advance" technology. Spirus received FDA 510(k) clearance of the product in September.

STD said that the round was raised through its network of investors, Point Judith Capital, BioVentures Investors and Village Ventures. Boston Equity Advisors served as placement agent.

Spirus is the third medical device company formed and incubated by STD Med. STD's first two spin-offs were AngioLink, a femoral closure technology company recently acquired by Medtronic (Minneapolis), and ArthroSurface (Franklin, Massachusetts), an orthopedic company, with a technology for resurfacing cartilage damage to articulating joints, that last year received a $10.5 million round of financings.

STD reported that it recently moved into a 70,000-square-foot medical device manufacturing facility in Stoughton, Massachusetts.

"It is our intent to leverage our skills as a medical device manufacturer, to allow us to bring new technology to market every 14 [to] 16 months," said Andrea Patisteas, vice president of sales and marketing for STD Med.

STD is certified to ISO 9000 and ISO 13485 standards.

• Xillix Technologies (Richmond, British Columbia) reported receiving new financing of $5.5 million from Hercules Technology Growth Capital (Palo Alto, California), a debt-and-equity capital provider to technology and life science companies. Xillix, a developer of fluorescence endoscopy for the early detection of cancer, said the funds will be used for general corporate purposes.

Parag Shah, managing director of Hercules, said that Xillix is known for its leadership in the development of its Xillix LIFE imaging technology and its latest FDA-approved technology, Onco-LIFE, which allows doctors the ability to detect cancer at a significantly earlier stage then currently possible. "Doctors can now help to extend the lives of their patients using these unique technologies," he said.

• Advanced BioPhotonics (Bohemia, New York) said it has filed a registration statement with the Securities and Exchange Commission (SEC) that serves to complete the second milestone of its previously reported financing. The company received $1 million in proceeds, payable upon completion of the milestone, and another $2 million will be paid at the time the registration statement becomes effective.

Denis O'Connor, CEO of Advanced BioPhotonics, said: "The proceeds will be used to continue the clinical validation necessary to fuel market adoption and revenue opportunities for our BioScanIR product, which we hope will occur in the near future."

Advanced BioPhotonics develops functional medical imaging applications using advanced infrared technology for the measurement of changes of photonic activity within tissue. Advanced BioPhotonics provides imaging technology for clinicians and researchers for disease detection and disease management and drug discovery applications.

• Biophan Technologies (Rochester, New York) said it has amended an agreement with financing partner SBI Brightline XI for the sale of up to 10 million shares of its stock, to be sold in tranches of 1 million shares each at a price of $3 a share, assuming the full $30 million were utilized. The amendment clarifies Biophan's right to determine the dates of sale of share tranches to SBI, and it requires SBI to purchase up to 10 million shares of Biophan common stock on the dates Biophan elects, for $30 million.

Biophan develops technologies designed to make biomedical devices safe and image compatible with the magnetic resonance imaging environment.