Good day. Venture capitalists are funneling $100 million into biotechnology company's ShouTi Inc.'s effort to turn injected medicines into oral pills.

Biotech companies have made strides developing antibodies and other biological drugs that are taken by injection or infusion. But these medications aren't widely available in much of the world, partly because of the difficulty of keeping them cold while transporting them through hot climates, said ShouTi Chief Executive Raymond Stevens. Biological drugs, or biologics, are made of proteins that degrade easily when heated.

South San Francisco-based ShouTi aims to develop pills that work as well or better than current biologics. Its approach involves studying how biologics interact with molecular targets in the body. The goal is to identify smaller molecules that interact in the same way. These smaller molecules can then be developed into pills that are easily stored, according to Dr. Stevens.

ShouTi's small-molecule drugs may also have other advantages, such as improved ability to penetrate tissues in the body, he said.

ShouTi, founded in 2017, has an early-stage pipeline that includes potential medicines for chronic cardiovascular and pulmonary diseases. These conditions were prevalent before the pandemic, but Covid-19's impact on the lungs and heart will increase the need for treatments in these areas, Dr. Stevens said.

And now on to the news...

Top News

Regulatory hodgepodge. Telemedicine startups expanding nationwide are navigating increasingly complex regulatory terrain as states take varying stances on how they govern this type of healthcare.

Telemedicine companies have scaled up rapidly during the pandemic to meet growing demand. Venture capitalists fueled much of the growth, investing $13 billion in U.S. telemedicine startups this year, as of Oct. 18, compared with $7.7 billion in all of last year, according to PitchBook Data Inc.

Startups have benefited from relaxed restrictions on telemedicine enacted because of Covid-19. Now some states are reverting back to their old rules, while others are continuing their pandemic policies, creating a regulatory hodgepodge for startups to negotiate.

Medicare coverage for telemedicine, minimal before the pandemic, has expanded greatly because of the public-health emergency. Unless Congress acts, that broader coverage will diminish once the public-health emergency ends. A bipartisan bill in the Senate, and companion legislation in the House, would expand Medicare coverage of telemedicine.

$13 Billion

The amount of venture capital invested in U.S. telemedicine startups through Oct. 18 this year, according to PitchBook.

European Life Sciences Investor Sofinnova Raises $548 Million

European venture-capital firm Sofinnova Partners has raised EUR472 million, equivalent to $548 million, to invest in life sciences startups, the latest in a series of healthcare funds the firm has closed recently. Sofinnova raised this latest fund, to invest in early-stage biotechnology and medical-device companies. In July, Sofinnova said it had raised a EUR63 million pool to launch medical-technology startups, and in March, it disclosed a EUR445 million crossover fund targeting later-stage companies. A decade ago, capital for European startups was harder to come by, but Sofinnova has found that funding for its startups is now more readily available. European biotech startups secured $3.66 billion in venture capital in the first half of this year, approaching the $4.6 billion raised in all of 2020, according to Silicon Valley Bank.

WSJ Tech Live

Sarah Guo, a partner at Greylock Partners, spoke Wednesday at The Wall Street Journal's Tech Live conference.

Greylock's Sarah Guo Sounds Alarm on Heightened Cybersecurity Risks

23andMe Cites Broader Tech Privacy Concerns for Kit Sales Dip [Video]

Republican SEC Commissioner Criticizes Agency's Approach to Crypto

Industry News

People

Pulmonary disease treatment developer Avalyn Pharma Inc. appointed Marc Schneebaum as chief financial officer. He was most recently senior vice president and CFO of Madrigal Pharmaceuticals Inc. Seattle-based Avalyn Pharma is backed by Norwest Venture Partners, Pivotal BioVenture Partners, F-Prime Capital, Novo Holdings, RiverVest Venture Partners and TPG.

Encodia Inc., a proteomics research technology provider, hired Nigel Beard to the post of chief technology officer. He was most recently CTO and senior vice president of operations at Mission Bio. In January, San Diego-based Encodia said it raised a $75 million Series C round from Northpond Ventures, Deerfield Management, GV, Arch Venture Partners and others.

Neurelis Inc. appointed Brittany Bradrick as chief financial officer, replacing George Stuart. Ms. Bradrick was previously chief operating officer and chief financial officer at ViaCyte. San Diego-based Neurelis in March said it completed a $114 million Series D round from Cormorant Asset Management, Decheng Capital, LYZZ Capital and HBM Healthcare Investments.

NeuExcell Therapeutics Inc., a gene therapy company focusing on neurodegenerative diseases, named Lori Gavrin to the new position of chief business and strategy officer. She was most recently vice president of corporate development at Tmunity Therapeutics. State College, Pa.-based NeuExcell recently raised more than $10 million in pre-Series A funding from investors including Co-Win Ventures.

Exits

Everly Health, the parent company of digital health company and at-home lab testing brand Everlywell, acquired fertility products and pregnancy essentials provider Natalist. Terms weren't disclosed. Austin, Texas-based Everly Health, which earlier this year was valued at $2.9 billion, has raised over $325 million to date from investors including Goodwater Capital, Highland Capital Partners, Next Coast Ventures, Greenspring Associates, Lux Capital and Morningside Ventures. Natalist was backed by Collaborative Fund, Cowboy Ventures, Fuel Capital, Rock Health and xFund.

HealthEdge Software Inc., a provider of automation and connectivity technology to the health insurance industry, plans to acquire digital health-management startup Wellframe Inc. for an undisclosed sum. Last year, funds managed by Blackstone became the majority owner of Burlington, Mass.-based HealthEdge Software. Wellframe, of Boston, is backed by investors including Blue Venture Fund, Threshold Ventures and F-Prime Capital.

Castle Biosciences Inc. agreed to acquire Cernostics Inc., developer of a test that predicts the risk of esophageal cancer in patients with Barrett's esophagus, for an undisclosed amount. Pittsburgh-based Cernostics is backed by Illumina Ventures.

New Money

Bardavon Health Innovations, an Overland Park, Kan.-based workers' compensation and musculoskeletal health company, secured a $90 million investment. Matrix Capital Management led the round, with additional participation from WestCap.

D&D Pharmatech Inc., which is developing treatments for neurodegenerative, fibrotic and metabolic diseases, closed a $51 million Series C round. Praxis Capital Partners led the investment, which included additional support from DS Asset Management, Kudos Ventures and Korea Investment & Securities. The company has offices in Korea and Gaithersburg, Md.

Cerecin Inc., a Singapore-based neurotherapeutics startup, landed $40 million in Series II and IIA funding from investors including Nestlé, Partners Investment, Arche Investment, SK Securities and Hana Financial Investment.

SPR Therapeutics Inc., a Cleveland-based medical device company focused on providing pain relief without opioids or surgery, raised $37 million in an oversubscribed Series D round of growth equity. Revelation Partners led the financing, with additional investment from River Cities Capital and Mutual Capital Partners.

Scout Bio Inc., a Philadelphia-based developer of therapies for chronic pet health conditions, closed $33 million in Series B2 funding. New investors including OrbiMed were joined by existing backers Digitalis Ventures, Frazier Healthcare Partners, RiverVest Venture Partners, Greenspring Associates, Adage Capital Management and Correlation Ventures in the round.

Radionetics Oncology, a Menlo Park, Calif.-based developer of nonpeptide radiopharmaceuticals for the treatment of a broad range of oncology indications, launched with $30 million in funding from 5AM Ventures and Frazier Healthcare Partners.

Insurights, an employee health benefits platform based in New York and Israel, was seeded with a $22 million investment. Group 11 led the funding, which included participation from Cresson Management, Good Company and Insurtech Israel.

Biomilq Inc., which is developing a novel infant feeding option derived from human mammary cells, fetched $21 million in Series A funding led by Novo Holdings.

RedShift BioAnalytics Inc., a Burlington, Mass.-based startup whose technology helps facilitate decision making in biopharmaceutical development, completed a $20 million Series E round. Illumina Ventures led the investment, which included contributions from Technology Venture Partners and Waters Corp.

SouSmile, a Brazilian startup offering aesthetic dental treatments, nabbed $18 million in Series B funding. Lead investor Kaszek was joined by Global Founders Capital, Chromo Invest and others in the round.

Contraline Inc., a Charlottesville, Va.-based male contraception provider, closed a $10.7 million Series A round led by MBX Capital.

Lydia AI, a health AI insurtech startup with offices in Toronto and Taiwan, raised an $8 million Series A+ round led by Information Venture Partners.

Open, a Los Angeles-based mindfulness studio offering experiences that combine breathwork, meditation, yoga, Pilates and more, collected $9 million in Series A funding led by Founders Fund and A.Capital Ventures.

More Health News

Biogen's new Alzheimer's drug meets slow rollout

White House says Covid-19 vaccine for children 5-11 will be at schools, pediatric offices once authorized

New York City to require Covid-19 vaccinations for all public employees

ESPN reporter Allison Williams quits over vaccine mandate, fertility concerns. Many share her fears.

Around the Web

Gates Foundation will provide $120 million to ensure generic production of Merck's Covid-19 pill. (STAT News)

Scientists search for the cause of mysterious Covid-related inflammation in children. (Kaiser Health News)

AstraZeneca slams the brakes on MCL-1 blood cancer drug. (Fierce Biotech)

Waiting on a U.S. mandate, some nursing homes are slow to vaccinate staff. (New York Times)

(END) Dow Jones Newswires

October 21, 2021 09:36 ET (13:36 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.