MethylGene Inc. (TSX:MYG) announced today it has completed its previously announced private placement of 7,356,044 units at a subscription price per unit of $3.10, each unit consisting of one common share and thirty one-hundredths (0.30) of a common share purchase warrant, exercisable for a period of three years from the date of issuance at an exercise price of $3.90 for the initial year, $4.10 for the second year, and $4.25 for the third year, for gross proceeds to MethylGene of approximately US $19.9 million (Cdn $22.8 million). The transaction was led by ProQuest Investments III, LP. Other new investors participating in the offering are Domain Public Equity Partners LP, CIBC Capital Partners, and Pappas Ventures. An aggregate of 7,356,044 common shares and 2,206,809 common share purchase warrants were issued in the transaction.

Bayhill Therapeutics Inc. has begun dosing patients with BHT-3009, the company’s experimental drug candidate, in a Phase II company sponsored trial for multiple sclerosis. The Phase II study is a multi-center, double-blind, placebo-controlled evaluation with an MRI endpoint. In a related development, current investors indicated strong support for Bayhill’s antigen-specific tolerance platform by raising an additional $15.8 million in private equity. The company has now closed its Series B round totaling $51.2 million.

Bayhill Therapeutics Inc. today announced the completion of a Series B private venture financing of $35.4 million led by De Novo Ventures and Lilly Ventures and joined by Series A shareholders, CMEA Ventures, Latterell Venture Partners, Morgenthaler Ventures, U.S. Venture Partners, and the Vertical Group. Participants in this new round of financing include A.M. Pappas Life Science Ventures; Boston Life Science Venture Corp (Taiwan); Grand Cathay Venture Capital Company, LTD (Taiwan); Montreux Equity Partners; PAC-LINK Bio Management Corp (Taiwan); Prudence Venture Investment Corp (Taiwan); and Quintiles’ PharmaBio Development.

A. M. Pappas & Associates, a life science venture capital firm, announced today the appointment of Dr. Charles Hsu as a venture partner with the firm. AMP&A also announced that Dr. Geoffrey R. Barker has joined the firm as an Executive-in-Residence. Dr. Hsu, based in San Francisco, will focus on identifying and evaluating new life science investment opportunities in California and elsewhere on the West Coast. Dr. Barker will provide clinical development support to the firm’s portfolio companies and will assist in assessing potential portfolio companies’ clinical and regulatory programs. Dr. Barker began working with AMP&A in mid-2004 and is based in the firm’s Research Triangle Park office.

Companies struggle to diversify after disappointing software sales sink the sector.