Exit watch, March 26, 2007

Morphotek sells for $325M

Morphotek Inc., a venture-backed developer of therapeutic antibodies for treating cancer, arthritis and infectious diseases, announced last week that it is being acquired by Japanese pharmaceutical company Eisai for $325 million.

Chris Christoffersen, a Morphotek board member and partner at Morgenthaler Venture Partners, which invested in the company’s Series C and D rounds, characterized the deal as “an exit in which both the collection of investors and the company have done quite well.”

Exton, Pa.-based Morphotek—which currently has two cancer drugs in early stage clinical trials, one for ovarian cancer and the other for pancreatic cancer—raised $88 million in in VC funding since its 1999 inception, including a $40 million Series D round late last year at a post-money valuation of about $85 million. Backers of Morphotek include Morgenthaler, Burrill & Co., CB Health Ventures, China Development Industrial Bank, Flagship Ventures, Forward Ventures, Hunt BioVentures, MDS Health Ventures, Rock Maple Ventures and S.R. One Ltd.

The purchase is the latest in a series of exits by venture-backed startups developing antibody–based therapies. Others include Domantis, which is being acquired by Glaxo; Abgenix, which was sold to Amgen in late 2005; and Trubion Pharmaceuticals, which went public in October.

Integra buys larger rival Eschelon

Integra Telecom Inc.

, a Portland, Ore.–based CLEC, has agreed to acquire Eschelon Telecom Inc. (Nasdaq: ESCH), a Minneapolis–based provider of integrated communications services to SMEs in the western United States. The offer is worth $30 per share, for a total value of about $566 million. In addition, Integra will pay off about $144 million of Eschelon’s debt. Deutsche Bank Securities will help finance the deal via a senior credit facility. Eschelon shareholders include Bain Capital and Wind Point Partners. Integra shareholders include Nautic Partners, BA Capital Investors, Boston Ventures and GE Equity.

Broadband companies merge

InnerWireless Inc.

of Richardson, Texas, and PanGo Networks Inc. of Framingham, Mass., have merged to create a single provider of broadband coverage and real-time location systems. No financial terms were disclosed. InnerWireless has raised about $62 million in VC funding since 1998 from such firms as Sevin Rosen Funds, Centennial Ventures, HO2 Partners, Johnson Controls Inc., Massey Burch Capital, Rho Ventures, StarTech Early Ventures and Technology Associates Management. PanGo has raised nearly $15 million since 2003 from such firms as IDG Ventures Boston, Columbia Capital and Investcorp. —PE Week staff