Good day. Boston-based healthcare investor LRVHealth has raised $200 million for its fifth venture fund as it doubles down on its strategy of raising capital from health insurers and other strategic limited partners.

The fund is about twice the size of its 2018 predecessor. As with the previous fund, limited partners in the new vehicle are strategic investors such as healthcare providers and insurers, the firm said.

These investors provide insight into the needs of players across the medical system and on how startups can fill them, said Managing Partner Keith Figlioli.  

When the Covid-19 pandemic hit, LRVHealth consulted strategic investors about their interest in telehealth and virtual care, he said. That knowledge helped the firm identify an opportunity in Current Health, a startup with a technology platform for remote care management.

LRVHealth joined a Series B round that Current raised in April 2021, and Best Buy acquired the startup later that year.

Toward the end of its last fund, LRVHealth developed a “care anywhere” strategy of targeting startups that enable medical care to be delivered in various settings, in an effort to make healthcare more personalized and focused on prevention.

That approach anchors LRVHealth’s new fund. Initial portfolio companies in the new fund include KeyCare, a startup that helps hospitals and health systems offer virtual-care options.

And now on to the news...

Eye drug. Venture investors have provided $100 million in fresh funding to Ray Therapeutics, a biotech company seeking to restore vision in people with the rare blinding disease retinitis pigmentosa.

• Ray Therapeutics is one of several startups harnessing advances in gene therapy to attack retinitis pigmentosa. Other companies are aiming to stem the disorder before it results in blindness, including SparingVision and Eudora, a startup launched by biotech company Replay Holdings.
   
• Retinitis pigmentosa arises from gene mutations that cause the breakdown of cells in the retina, the light-sensing tissue in the back of the eye. Symptoms usually start in childhood and most patients eventually lose most of their vision.
   
• Ray Therapeutics aims to restore sight in patients who no longer have photoreceptors that convert light into electrical signals that are relayed to the brain. The company’s treatment won’t recreate perfect vision, but might restore enough sight in completely blind patients to let them find their way around the house and recognize faces.

Envision Healthcare has filed for chapter 11, beginning one of the largest healthcare-related bankruptcy cases ever and likely wiping out the $3.5 billion stake that private-equity firm KKR acquired in the physician-staffing company in 2018, The Wall Street Journal reports. KKR’s loss on Envision would be among the steepest write-downs the private-equity firm has swallowed in recent years and highlights some of the continuing instability in the healthcare industry. 

Overdose deaths in the U.S. edged higher in 2022, a federal estimate showed, marking only the second time drugs killed more than 100,000 people in a year, WSJ reports. The Centers for Disease Control and Prevention on Wednesday released a provisional count of overdose deaths last year that indicated the toll of the fentanyl crisis leveling off after two years of surges during the Covid-19 pandemic. The CDC counted 109,680 overdose deaths in 2022 compared with 109,179 deaths from a similar 2021 projection. 

People

Sofinnova Investments, a healthcare investor, said it has named Dr. Jakob Dupont as an executive partner. Dupont was previously global head of research and development and executive vice president at biotech company Atara Biotherapeutics. Earlier, he was chief medical officer at biotech company Gossamer Bio.

Ochre Bio, a startup targeting chronic liver disease medicine development, said it appointed Eliot Forster as chairperson of the board. Forster previously was chief executive at biotech companies F-Star Therapeutics and Immunocore.

Deals

KSQ Therapeutics, a clinical-stage biotechnology company developing cancer therapies, said it has expanded its collaboration with Takeda to research and validate novel tumor-intrinsic targets. Under the agreement, Takeda will provide KSQ with an upfront payment and an investment in the double-digit millions of dollars, KSQ said. KSQ is also eligible to receive up to $510 million in future payments if all milestones are achieved during the term of the agreement, plus royalties on potential net sales of any commercial product resulting from the collaboration. 

Exits

Reveleer, a healthcare-technology company using natural language processing and artificial intelligence to enable data-driven healthcare for health plans and risk-bearing providers, said it acquired MDPortals, a prospective risk-adjustment platform. Reveleer said the acquisition augments its retrospective and prospective risk-adjustment solution by allowing payers and risk-bearing providers to close care gaps at the point of care while accurately and efficiently reflecting the true risk adjustment factor score for members.

Nido Biosciences, a clinical-stage company developing precision medicines for debilitating neurological diseases, said it has raised a combined $109 million in seed, Series A and B financings. Nido Bio said it is using advancements in the understanding of human genetics and disease to develop small-molecule medicines for neurological diseases.  

Boundless Bio, a clinical stage precision-oncology company developing therapeutics directed against extrachromosomal DNA  for patients with oncogene amplified cancers, said it closed a $100 million Series C financing.

Venture firm Flagship Pioneering said it has launched Metaphore Biotechnologies, a company harnessing biomimicry and machine learning to unlock the therapeutic potential of functional molecular mimics. Flagship said it has made an initial commitment of $50 million to advance Metaphore's  platform and build its pipeline for patients with autoimmune, metabolic, or oncology indications.

Ensoma, a genomic-medicines company developing one-time, in vivo treatments that precisely engineer any cell of the hematopoietic system, today announced the closing of an extension of its Series B financing by $50 million, bringing the total size of the funding round to $135 million.

Hippocratic AI, a startup with a safety-focused large language model designed specifically for healthcare, said it raised a $50 million seed round co-led by General Catalyst and Andreessen Horowitz.

Cadence Neuroscience said it has secured $26 million in Series B financing. Cadence said it is a clinical-stage company developing a neuromodulation therapy for children and adults with focal drug-resistant epilepsy based on research by a Mayo Clinic neurology and neurosurgery team, led by Dr. Gregory Worrell.

Upkara, a biomedical-technology company, said it has secured $9 million in Series A funding. Upkara said its technology enables ambient-temperature storage and transportation of therapeutic and research tools. The company said it is collaborating with reagent companies to incorporate its technology into manufacturing processes.

• Young Americans are dying at alarming rates
   
• Abortion-pill battle returns to the courtroom
   
• FTC’s Amgen activism will spare smaller biotechs
   
• People are getting ‘prejuvenation’ Botox shots
   
• Biotech stock surges after experimental rare disease drug gets key vote
   
• The health tests you need at age 30, 40 and 50

• Racial inequality in receipt of medications for opioid use disorder (New England Journal of Medicine)
   
• Drug shortages near an all-time high (New York Times)
   
• Biotech and pharma execs wrestle with the ‘nightmare’ of developing digital biomarkers (STAT)
   
• Gene-therapy consortium targets eight rare diseases for clinical trials (BioPharma Dive)

This newsletter was compiled by Brian Gormley. 

WSJ Pro Venture Capital is a premium service of The Wall Street Journal. We cover venture capital and the global startup ecosystem. Share your tips, comments and questions: vcnews@wsj.com

The Team: Matthew Strozier, Yuliya Chernova, Brian Gormley, Angus Loten and Marc Vartabedian.

Follow us on Twitter: @wsjvc