Healthcare Venture Funding Goes to Medsphere, Aubrey, and Animal Cell Therapies—A Brief Roundup

If new venture rounds are any indication, the life sciences sector is showing renewed signs of life, with several startups raising capital in the San Diego region, according to recent filings with the U.S. Securities and Exchange Commission.

Industry watchers are expecting healthcare IT, in particular, to heat up as the federal government’s carrot-and-stick approach to adopting electronic medical records takes effect. The carrot is represented by some $19 billion the government has allotted for health technology under the American Recovery and Reinvestment Act. The stick is that hospitals must show by 2011 that they have implemented electronic medical records technology to become eligible for such economic stimulus funding. As a result, venture funding announced by Carlsbad, CA-based Medsphere Systems could be at the leading edge of a broader trend. Here’s our roundup:

—Medsphere Systems says it has raised $12 million in a secondary round of venture funding. Medsphere CEO Mike Doyle tells me the proceeds, equivalent to a Series C round for the company, will be used to support Medsphere’s growth as hospitals move to adopt its OpenVista electronic health record technology.

Medsphere was founded in 2002 to commercialize OpenVista, an improved enterprise software version of the VistA electronic health record technology developed by the U.S. Department of Veterans Affairs more than 20 years ago for use by its hospitals. Doyle says Medsphere’s OpenVista has been installed in 215 locations in 35 states. Including the current round, Doyle says the Carlsbad startup has raised a total of $43 million in venture capital. A new investor, Western Technology Investment, joined existing investors Azure Capital Partners, Epic Ventures, and Thomas Weisel Venture Partners in the round.

—Aubrey, based in Carlsbad, CA, has raised nearly $3.9 million in a secondary venture round that’s intended to raise $6 million, according to a regulatory filing with the federal Securities and Exchange Commission. The biomedical startup specializes in advanced biosynthetic dressings for treating wounds and burns. E. Aubrey Woodroof, a wound care specialist, founded Aubrey in 2007 to commercialize a dressing he had developed that has microscopic web-like interconnections and continuous pores throughout the dressing. Investors were not identified, and a spokesperson for the company could not immediately provide additional details.

—Animal Cell Therapies, a San Diego biotech founded in 2008, has raised $1.1 million of a planned $1.3 million venture round, according to a recent filing submitted to the Securities and Exchange Commission. While the filing was made in recent weeks, the document indicates the first investment was made in January. CEO Kathryn J. Petrucci, did not return a phone call seeking additional information yesterday afternoon.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.