In the third quarter of 2008, the first tremors of the financial crisis had been felt, and the number of venture deals in the U.S. fell to its lowest total since early 2005. According to Dow Jones’s VentureWire, which tracks venture investment, information technology companies fared particularly badly, with their lowest deal total in more than 10 years.
But for the quarter, total dollars invested stayed fairly steady, off only about 1 percent from each of the first two quarters. So some companies were still getting big paydays. Of the 10 companies with the biggest third-quarter deals, the plurality–four–were in the health-care sector. One of those companies, Pacific Biosciences, builds genome-sequencing machines and figures prominently in Emily Singer’s “Interpreting the Genome.” The other three are testing promising new therapies for some of the most common medical conditions.
Head of the Class
Biggest deals, third quarter of 2008
Between 25 and 33 percent of hypertension patients can’t control their condition with medication. But the body has its own mechanisms for bringing blood pressure down, which are triggered by nerve cells in the carotid artery that respond to pressure. CVRx has found a way to treat severe, drug-resistant hypertension by stimulating those nerves electrically. A device the size of an iPod Nano is implanted in the patient’s chest, with electrical leads snaking up to the carotid artery. The device is now in phase III clinical trials in the U.S. and Europe.
Product: Arterial stimulation to control hypertension
CEO: Nadim Yared
Location: Minneapolis, MN
Funders: New Enterprise Associates, Johnson and Johnson Development Corporation, others
Funding: $209 million
Cells clean up unneeded proteins by shipping them to a structure called the proteasome, which chops them up. If the proteasome can’t do its job, the cell eventually dies. By targeting a specific component of the structure, Proteolix has developed a proteasome inhibitor that is particularly deadly to cancer cells. In the right doses, it kills cancer with little damage to healthy tissue. A variation on the molecule targets the proteasomes in immune cells (which differ from those in normal cells), disrupting biochemical pathways that cause autoimmune disorders.
Product: Drugs that target the proteasome
CEO: Susan Molineaux
Location: South San Francisco, CA
Funders: Nomura Phase4 Ventures, Advanced Technology Ventures, Delphi Ventures, others
Funding: $143 million
Portola’s drugs treat blood clots, which form when collagen-containing plaques on artery walls rupture. Collagen is one of the supportive tissues in blood vessels, so the body reads its sudden appearance as indication of a wound, which it sends blood-clotting agents to repair. Portola designed an imaging system that lets researchers observe blood clots forming in collagen-lined capillary tubes. The simulations led to a drug candidate that’s in clinical trials as a competitor to Plavix, the world’s second-best-selling drug.
Product: Drugs for treating blood clots
CEO: Charles Homcy
Location: South San Francisco, CA
Funders: Advanced Technology Ventures, Prospect Venture Partners, Sutter Hill Ventures, MPM Capital, others
Funding: $218 million
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