Life sciences briefing: Wednesday, Oct. 24, 2007

Featured companies: Angstrom Medica, Asuragen, Aryx Therapeutics, HistoRx, MiMedx, Pioneer Surgical, Transfusion & Transplantation Technologies, Tolerx, Vivo Ventures

UPDATED: Expanded Aryx and XDx items.
UPDATE REDUX: Expanded Tolerx item, moved XDx to a separate post.

Aryx sets IPO range, seeks $92M for redesigned drugs — Fremont, Calif.-based Aryx Pharmaceuticals, a specialty pharma focused on producing safer versions of existing drugs, set its IPO range and now seeks to raise as much as $92 million. That’s a bit more than the $85.3 million the company originally estimated when it first filed.

Aryx reengineers existing drugs, many with safety problems, in order to revive them or to sidestep complications. It now plans to offer up to 5.75 million shares at a price of $14 to $16 per share. Our previous coverage of the company and its strategy is here.

Map Pharmaceuticals, another specialty pharma that went public earlier this month, has seen its shares rise 22 percent since its offering, so the prospects may be good for Aryx as well. The seemingly bottomless investor appetite for specialty pharma — mostly companies that buy or re-engineer existing drugs instead of discovering new ones — stands in sharp contrast to the experience over in biotech.

The most recent biotech IPO, that of Targanta Therapeutics, fared badly, with shares now down 16 percent. Next up is Bioheart, which we’ve covered here and here, and whose star-crossed IPO is still scheduled for this week.

Tolerx gets $70M, plus a possible $680M, from GSK for diabetes drug — Cambridge, Mass.-based Tolerx, a venture-backed biotech focused on diseases of the immune system, struck a major alliance with GlaxoSmithKline to develop and commercialize an antibody drug that might be effective against diabetes. The companies’ joint release is here.

Tolerx will receive an upfront payment of $70 million, which will be a mix of equity and advance R&D funding. The company may also get an additional $155 million in future development costs, up to $350 million in milestone payments and up to $175 million in sales milestones. Tolerx will also be able to co-market the drug, called otelixizumab, for treating type 1 diabetes in the U.S., and will earn double-digit royalties on worldwide sales of the drug.

Those are some mighty impressive numbers for a drug that hasn’t yet begun late-stage trials more than two years after Tolerx first reported positive mid-stage data. Otelixizumab is an antibody that sticks to a surface protein on immune cells called T cells, presumably in a way that then tamps down misfiring immune responses. In that earlier test, 80 patients newly diagnosed with type 1 diabetes — in which T cells attack insulin-producing beta cells in the pancreas — received two to four-hour infusions of either otelixizumab or placebo for six days. Those who received the drug required less insulin and appeared to retain more of their beta cells over the next 18 months.

If those results hold up, otelixizumab would be one of the first treatments to slow the course of type 1 diabetes. That study, however, was relatively small, and some critics have warned that anomalies in the data might have skewed the results.

OTHER HEADLINES OF NOTE:

• HistoRx raises $6M to for new diagnostics (release)
• MiMedx, orthopedic implant maker, draws in $3.8M (VentureWire, sub req’d)
• Transfusion & Transplantation Technologies raising $5M for blood analysis (VW)
• Spinal-device maker Pioneer Surgical acquires Angstrom Medica (release)
• Biology services provider Asuragen inks cancer pact with Merck (release)
• Vivo Ventures adds James Huang as executive in residence (release)