A Medical Device Daily Staff Report

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 next Tuesday at the JP Morgan 24th Annual Healthcare Conference in San Francisco.

Aisling Capital (New York) reported raising $550 million in equity for its life sciences fund, Aisling Capital II.

Aisling Capital, spun-out of Perseus-Soros Management, in a statement said it will invest primarily in life science companies developing biopharmaceutical products based on advanced life science technologies. It said its 10-person team will continue to participate in the management of the Perseus-Soros BioPharmaceutical Fund and will have a total of $1 billion in committed capital under management.

The members of the Aisling team are Dennis Purcell, Steve Elms, Andrew Schiff, MD, Magdalene Cook, MD, Jan Hoerrner, Adele Kittredge Murray, Andrew Nicholson, Diana Robinson, Anthony Sun, MD, and Brett Zbar, MD.

In other financing activity:

• eyeonics (Aliso Viejo, California), manufacturer of the Crystalens, the only FDA approved accommodating intraocular lens, reported closing on a $16.9 million round of Series E financing, led by Versant Ventures, a new investor. Eyeonics said all of its previous investors – Brentwood Associates, Pequot Private Equity, ABS Ventures and Entrepreneurs Fund, also participated.

J. Andy Corley, CEO and chairman of eyeonics, said the funding will be used "to support the expansion of our distribution capabilities for the Crystalens. Investment in our distribution should allow us to increase our field presence to approximately 100 employees during 2006."

eyeonics attained FDA approval for the Crystalens in November 2003, and the company said that, since then, ophthalmic surgeons have implanted more than 35,000 of the devices. By using the eye's muscle to move the lens backwards and forwards naturally, Crystalens allows patients to focus through a continuous range of vision, without the glare and halos of multi-image lenses.

Charles Warden, managing director at Versant, said that Crystalens accommodating technology "is the best product for this market."

• Avid Radiopharmaceuticals (Philadelphia) reported raising $8.9 million through a first institutional round.

Avid, founded in 2002 via seed money from BioAdvance, the Biotechnology Greenhouse of Southeastern Pennsylvania, develops radiolabeled compounds which bind to amyloid plaque, thus designed to diagnose Alzheimer's in real-time and allow researchers to evaluate the many drug candidates targeting amyloid plaque build-up faster and more effectively. These agents, exclusively licensed to the company by inventors Hank Kung, PhD, and colleagues at the University of Pennsylvania (Philadelphia), can be used with a variety of non-invasive imaging technologies such as PET and SPECT scanning. The company said its first product is expected to enter clinical trials in 2006.

The financing was led by Pfizer's Strategic Investments Group and included Lilly Ventures, the venture capital arm of Eli Lilly and Company, RK Ventures, LLC and BioAdvance. Daniel Skovronsky, MD, PhD, president and CEO, said the financing will support preclinical and clinical studies of its compounds.

• Fresenius Medical Care (Bad Homburg, Germany) reported that its preference share conversion offer will start today. All preference shareholders, including holders of preference shares represented by American Depositary Shares, will have the opportunity to convert their preference shares into ordinary shares on a 1:1 basis accompanied by payment of a conversion premium of EUR 9.75 per preference share to the company in a period of four weeks ending Feb. 3, subject to extension. The share conversion and transformation of the legal form of the company into a KGaA are expected to be completed in February.

The conversion offer is being conducted through two offers – a German offer and a U.S. offer, open to all preference shareholders resident in the U.S. and all ADS holders.

Fresenius is the world's largest, integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1.3 million people. Through its worldwide network of about 1,670 clinics, Fresenius provides dialysis treatment to around 130,400 patients. Fresenius also bills itself as leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products.