InterWest Partners

InterWest Partners

Dollars: $64.69 million
Deals: 15
Based: Menlo Park, CA
Founded: 1979

For InterWest Partners, 2012 was a year of relative caution. While the firm continued to nurture innovative portfolio companies in biotechnology, healthcare IT, medical devices and personalized medicine, it participated in a large number of moderate follow-on rounds and a few new ones.

Some standouts: Early in the year, portfolio company Integrated Diagnostics raised a $10 million tranche to complete a $30 million Series A round first disclosed in 2009. Biotech visionary Lee Hood launched the company, which is focused on novel protein-catalyzed capture agents, molecules that are being developed as both diagnostic and therapeutic agents. Satori Pharmaceuticals is another portfolio success in terms of financing, having banked $15 million in debt financing from InterWest and others to keep fueling preclinical work on its beta amyloid 42 peptide pill to treat Alzheimer's.

On the side of early-stage rollouts, InterWest and other investors, along with Astellas Pharma, committed $14 million to launch Teslar Pharma, which will develop a drug from Astellas' pipeline to treat ulcerative colitis. 

Invuity is an InterWest medical device portfolio company that did particularly well in 2012. The company drew in a $25 million Series D round from InterWest, Kleiner Perkins, Valence Advantage Life Sciences Fund II and others. Its goal: to accelerate development, marketing and manufacturing of surgical tools enhanced with optical imaging technology to enable surgeons to see inside a small incision more clearly without having to open it wider. 

Another success story--Amgen ($AMGN) snatched up InterWest portfolio company KAI Pharmaceuticals in April 2012 for $315 million, giving investors a solid exit and KAI a new backer for its experimental treatment of secondary hyperparathyroidism in patients with chronic kidney disease.

For InterWest, 2013 has offered some kernels of optimism for biotechnology and also continued, stay-the-course safe investing at the medical device level.

For optimism we have Tesaro, a cancer drug specialist whose backers included InterWest, Kleiner Perkins Caufield & Byers and New Enterprise Associates. The company raised $81 million in 2012 in what was a rare IPO success story at that point. Earlier this year it raised another $91.2 million from a public offering. Investors got their return, and Tesaro is going gangbusters, in the midst of three Phase III trials for lead drug rolapitant. The company just got started in 2010 and has built rapid growth by securing clinical stage assets along the way.

On the side of stay-the-course, safe investing in the medical device world, InterWest in 2013 contributed to portfolio company Gynesonics' recent $21 million Series D financing, led by HBM Partners and others. It's a safe investment because Gynesonics already has a CE mark in the European Union for its VizAblate System, a transcervical, minimally invasive, ultrasound-guided ablation device designed to eliminate symptomatic uterine fibroids. The new funding will help propel ongoing U.S. clinical trials and fuel work on the product's commercial rollout. Invuity and Gynesonics' investments represent a larger trend in medical devices VC investing that continues. Firms at a much later stage with a viable product closer to commercialization are much more likely to get funding than something on the early side, though some see those restrictions opening up in 2013.

Mixed market conditions aside, InterWest's website recounts its accomplishments thus far--$2.8 billion raised so far, more than 70 IPOs and participation in 60 "upside" acquisitions.

For more:
Lee Hood startup grabs $10M to advance class of protein-capture agents
Satori snags $15M to fuel a trial on Alzheimer's drug
Astellas, biotech VCs to pump $14M into virtual drug developer
Invuity draws $25M Series D for illuminated surgical tools
Tesaro raises $81M in a rare IPO success story
Gynesonics draws in $21M Series D to advanced uterine fibroid ablation device

-- Mark Hollmer (email | Twitter)

InterWest Partners

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