The San Diego MIT Enterprise Forum wine social, held annually, is one of the premier networking event for San Diego’s technology and biotechnology community. With more than 700 founders and executives of growth companies, business development personnel, investors, and service providers, this industry networking social creates an opportunity for technology sector leaders and entrepreneurs across all segments to connect in an inspiring setting. More information is online here.

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Funding for clean technology startups has increased substantially in recent years, with 323 U.S. companies raising a total of $4.3 billion in 2011, according to the recently released MoneyTree Report. In the San Diego area, the same report shows that four cleantech startups raised $78 million last year, including $15 million that went to SG Biofuels in the fourth quarter.

But sometimes it’s not enough to be green. Many cleantech startups face a basic challenge in competing against existing products that might not be as environmentally friendly, but are nevertheless well-established—even commoditized—in their respective markets.

In San Diego, sustainable design architect (and Xconomist) Robert Noble has led the development of clean manufacturing methods and technologies for manufacturing a green replacement for medium density fiberboard (MDF) structural panels—a standard material used in building construction and other industries. Noble says the proprietary process makes panels from any kind of fibrous, cellulosic material, such as recycled paper, cardboard, wood chips, corn stalks, and even cow manure. The big difference is that the replacement product, which Noble calls 3-D Engineered Molded Fiber (3DEMF), requires no petroleum-based glues or addititves, or vapor-emitting chemicals.

Ecor samples

Now Noble Environmental Technologies, a company he founded in 2005, is overseeing installation of a 3DEMF factory, showroom, and design lab in downtown San Diego to manufacture the company’s Ecor brand panels. “The tide has turned for sustainable materials,” says Jim Torti, the company’s chief operating officer.

After personally funding the company through 2009, Noble says he now has about 15 individual and institutional investors, and he’s in the process of raising another $4 million to help equip the 10,000-square foot factory and to provide some cash flow. Noble adds that he has no plans to seek venture capital. He says the time required to build large-scale manufacturing and their primary market—the building industry—”doesn’t easily fit the venture capital model for a quick exit,” which is an issue for many cleantech businesses.

Torti and Noble say they wanted to establish the company’s first production plant in an urban, mixed-use setting—an apartment building is across the street—to demonstrate … Next Page »

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OncoSec Medical CEO Punit Dhillon tells me the startup he helped establish in San Diego last March is beginning mid-stage safety and efficacy trials of its proprietary technology for enhancing drug delivery in treatments of several types of skin cancer.

The technology, which OncoSec acquired from Blue Bell, PA-based Inovio Pharmaceuticals (AMEX: INO) almost a year ago, transmits intense electrical pulses into skin tumors through six electrode needles that are pushed into the skin. The electricity causes the tumor cells to become permeable with each jolt, and makes it easier for anti-cancer drugs injected into the region to pass through the tumor cells’ tough outer membrane. Known as electroporation, the process increases the concentration of an anti-cancer drug within the tumor.

“What we’re doing is a much more elegant and targeted approach,” says Dhillon, who estimates the technique increases the uptake of anti-cancer drugs by 4,000 to 10,000 times. As a result, doctors can reduce the dosage of anti-cancer drugs used with electroporation technology.

Dhillon, who previously served as Inovio’s vice president of finance and operations, says Inovio has been an electroporation pioneer. The Pennsylvania company decided last year, however, to sell technology that was unrelated to its strategic focus on developing DNA vaccines for cervical dysplasia, leukemia, and hepatitis C virus therapies.

The deal to acquire Inovio’s assets didn’t happen by chance. Inovio chairman and former CEO Avtar Dhillon is Punit Dhillon’s uncle, and their family and friends raised the initial $1.1 million that funded OncoSec after the company sprang to life through a reverse merger with a dormant public company. The San Diego startup raised another $3 million last June from two New York health funds, Hudson Bay Capital and Heights Capital. That should be enough cash for OncoSec to complete three mid-stage trials the company plans to begin before the end of March.

The three studies will use OncoSec’s electroporation technology to deliver the company’s lead drug candidate, called Interleukin-12 (IL-12) cytokine, to three groups of patients with different lethal skin cancers—metastatic melanoma, Merkel cell carcinoma, and cutaneous T-cell lymphoma. The experimental drug is intended to both trigger and boost a strong immune response to each type of cancer. The combined treatment, known as electroimmunotherapy, represents a potential new anti-cancer treatment with broad applicability, although Punit Dhillon says the company must pursue separate regulatory approvals to treat each type of cancer (as a combination drug-and-device product) on an application-by-application basis.

OncoSec says its technology also can be used in the same way in electrochemotherapy, which uses an established anti-cancer drug like bleomycin while a tumor is being electroporated. The use of electroporation in chemotherapy has been studied more throroughly, and Punit Dhillon says he wants to advance OncoSec’s approach through a partnership with a bigger pharmaceutical company.

“2011 was a great year for us,” he says, “and we’ve got some exciting milestones to look forward to in 2012.” Once the latest studies have been completed, OncoSec’s Dhillon says he looks forward to licensing opportunities and other commercial prospects, and he adds, “We also still have the chemotherapy program in the wings.”

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Applied Proteomics hasn’t exactly been operating in stealth mode since it was founded five years ago. Co-founders David Agus, a cancer specialist at USC, and Danny Hillis, the MIT-trained computer scientist, gave TedMed talks about the startup’s technology, which provides a 40-gigabyte snapshot of all the proteins circulating in a drop of blood. By pure coincidence, I watched John Stewart’s Feb. 2 interview with Agus last night on “The Daily Show.”

“Danny and David had the foresight to build the tool before trying to use the tool,” says John Blume, a molecular biologist who joined API in 2008 as chief scientific officer. “Although the company wasn’t in stealth mode, the first several years were spent in taking the time to make it right, and then to use it and avoid some of the stumbling blocks.”

Now Applied Proteomics is raising the curtain on several steps that mark its progress beyond a seed-stage startup that was incubating at Applied Minds, an industrial think tank that Hillis founded in Glendale, CA, with a colleague from Disney Imagineering. After moving the headquarters to San Diego late last year, Applied Proteomics is today naming a new CEO—Peter Klemm, a veteran in molecular diagnostics and the former CEO of Lexington, MA-based Predictive Biosciences.

Danny Hillis

The company known as API says it also secured $22.5 million last June in Series B funding from Domain Associates (San Diego partner Jim Blair joined the board), Seattle’s Vulcan Capital, and returning angel investors. Klemm tells me the company raised $4 million from angel investors (who prefer to go unnamed) in what amounted to API’s Series A round in 2007.

David Agus

API’s goal, Klemm says, is nothing less than to “elevate molecular diagnostics to another level beyond the genome” by measuring the proteins made by genes—a long-sought technology that is expected to help doctors improve medical care for individual patients. Because proteins carry out most cellular functions, the company says a snapshot of all the proteins circulating in the body at a given moment represents “the most powerful source of information” in terms of understanding a patient’s health status.

Quantifying all the proteins in the body, Klemm says, can help doctors optimize the course of treatment for individual patients by making it easier to identify the specific drugs that would have the greatest effect on blocking specific proteins or signaling pathways, which can vary dramatically from person to person.

In a statement from the company, Hillis says, “For the first time, we can look at all the proteins in the body with remarkable specificity and sensitivity and use proteomic technology to create … Next Page »

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We’re starting to see fresh signs of life among the Internet software startups in San Diego. Check out this news.

—During a visit last week, TechStars CEO David Cohen talked with the leaders of San Diego’s grassroots Web startup community about the factors that help to create and sustain entrepreneurial communities. One crucial issue confronting San Diego is a crying need for savvy and experienced Internet entrepreneurs who are willing to “pay it forward” by mentoring a new generation of startups.

—A dozen seed-stage companies moved into the new EvoNexus incubator in downtown San Diego. EvoNexus, which was founded by the CommNexus non-profit industry group, will continue to operate its original incubator in University City, where eight startups are taking root. In both locations, EvoNexus provides office space, utilities, and other services free of charge and with no strings attached.

—Sigma Partners led a $10 million round in venture funding for San Diego-based MOGL, a Web startup that has developed a comprehensive customer loyalty program for restaurants and bars, to fuel its expansion into San Francisco and New York. San Diego’s Avalon Ventures and Austin, TX-based Austin Ventures joined in the round.

—San Diego’s MicroPower Technologies named two new board members after raising $6.5 million in Series C funding in a deal that was led by Motorola Solutions Venture Capital and joined by an undisclosed private fund. MicroPower Technologies, which uses wireless networking technologies to create low-cost surveillance capabilities, named PacketVideo CEO Jim Brailean and former DivX CEO Kevin Hell to its board. Hell, who is now chairman of San Diego’s EvoNexus incubator, will join as MicroPower chairman.

—San Diego’s StockTwits said it has established a partnership with Toronto’s Q4 Web Systems, which provides … Next Page »

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—San Diego’s Amylin Pharmaceuticals says Bydureon, its new once-a-week drug for treating Type 2 diabetes can hit the market as early as next month, after the FDA cleared Bydureon. The FDA rejected the Amylin’s drug twice before. An estimated 26 million people in the United States, or roughly 8 percent of the population, have type 2 diabetes.

—San Diego’s life sciences sector has expanded since 2009, with employment increasing by more than 5,550 jobs, or 15 percent, over the past two years, according to a new economic report from Biocom, the local industry group. The comprehensive study counted more than 1,700 life sciences companies with a total of 41,937 employees throughout San Diego County in 2011, and says those numbers are expected to grow over the next two years.

—The FDA gave its approval to Cambridge, MA-based Vertex Pharmaceuticals (NASDAQ: VRTX), which has substantial operations in San Diego, for a new drug called Ivacaftor (Kalydeco), developed to treat a rare form of cystic fibrosis. The twice-a-day pill targets about 4 percent of the 30,000 patients in the U.S. with cystic fibrosis.

—Johnson & Johnson’s reorganized R&D operation in San Diego, now known as Janssen Healthcare Innovation, is trying an experiment in innovation by creating an incentive prize challenge. Janssen is offering a total of $250,000 for technology that helps improve care for patients who have just been discharged from a hospital.

—The folks who produce the quarterly MoneyTree report on venture capital funding just released a deeper dive into the details of life sciences investments. The survey shows that VC funding for life sciences increased 21 percent nationwide in 2011, with a total of $7.5 billion going into 785 deals. San Diego ranked third among metropolitan regions in terms of capital invested in the fourth quarter. The top five are Bay Area ($498 million), Boston ($384 million), San Diego Metro ($193 million), NY Metro ($98 million), and Orange County ($97 million

—Optimer Pharmaceuticals (NASDAQ: OPTR) CEO Pedro Lichtinger outlined his plans for expanding the market for the company’s first product, the antibiotic fidaxomicin (Dificid), as a preventative therapy for hospital patients at risk for a nasty intestinal infection called C. difficile. San Diego-based Optimer is planning a clinical trial to prove the drug can help prevent severe diarrhea in patients undergoing bone-marrow transplants.

—A tweet from Bob More of Frazier Healthcare Ventures prompted Luke to delve into the importance of character among life sciences leaders in his BioBeat column. “Politics pretty similar to backing CEO’s,” More said. “Newt may be smart and a good debate guy. But Newt=Smug. Never back smug,”

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When it comes to tech startups—especially in Internet software and app development—San Diego has been adrift in the horse latitudes. That’s the term Spanish mariners had for the waters where the trade winds died out for days and even weeks at a time. Becalmed sailors desperate to gain some headway would heave their horses overboard to reach the New World.

It hasn’t reached that point yet in San Diego, but you would never know that software was once a thriving entrepreneurial community here. Even now, the software sector accounts for more than a third of San Diego’s private technology companies. But as I’ve written previously, it feels as if the local software companies speak different languages. In contrast to the flourishing tech hubs in Seattle, Boston, and New York—not to mention Silicon Valley—San Diego’s software scene is sleepy and indifferent.

Still, there are signs of a freshening breeze.

David Cohen last week at UC San Diego

Scores of new seed-stage startups have begun to emerge throughout the region, including a dozen that just moved into the new EvoNexus incubator in downtown San Diego. These emerging companies are led by young entrepreneurs who view San Diego’s innovation establishment as old-school and irrelevant. They are turning out instead for informal “hackathons” and “meetups.” They tell me they’re yearning for real mentoring by real tech entrepreneurs, and for access to real tech investors who are really investing.

Last week, more than 200 people turned out to hear David Cohen talk at U.C. San Diego about TechStars, the early stage fund and accelerator program for Internet startups that he co-founded with three partners in Boulder, CO, six years ago. Cohen is the CEO, and by any measure, the startup program has been wildly successful.

TechStars enrolled its first 10 Internet startups in 2007, providing as much as $18,000 in seed funding and an intense, three-month mentorship program for each company in exchange for a 6 percent stake. Since then, TechStars has expanded to … Next Page »

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Employment in San Diego’s life sciences sector grew by 15 percent over the past two years, as biopharmas, medical device companies, and other employers added roughly 5,550 jobs here—raising employment in the sector to 41,937 in 2011, according to a report released today by Biocom. The report says overall employment in San Diego increased by 1.1 percent over the same period, gaining about 20,600 jobs to reach 1.83 million in 2011.

The 40-page economic study says San Diego’s life sciences cluster also is expected to outpace the nation in terms of job growth and economic impact over the next two years, as another 2,770 jobs are added by 2013. A broader snapshot that includes life sciences companies in neighboring Orange, Riverside, and Imperial Counties projects the region will add more than 6,000 workers over the next two years.

Despite a significant decline in venture capital funding, the report says the four-county region of Southern California will continue to retain its high standing and competitive advantage in the life sciences. By 2013, there will be 70 percent more jobs in the life sciences in these four counties than the national average.

While venture capital funding is a key indicator of entrepreneurial activity and business formation, the report says the sharp decline in Southern California VC investments, from $1.1 billion in 2007 to $553 million in 2010, reflects the severe economic downturn and other industry trends underway nationwide.

San Diego’s strength was especially apparent in federal funding for biomedical research. Of the top 10 research institutions receiving National Institutes of Health grants in 2011, nine are in San Diego. The $835 million in grants awarded last year to San Diego scientists accounted for more than 85 percent of the grants allocated in the four-county region.

The report says the four-county life sciences cluster comprises more than 3,500 companies and employs over 97,000 people. On average, salaries range between $54,141 and $116,462, well above the national and regional averages. Including direct, indirect, and induced employment, the report says this region supports a total of 248,800 jobs that pay over $17.7 billion in wages and generate $57 billion in economic activity.

San Diego County alone accounts for 1,700 companies that employ 41,937 people. Including direct, indirect, and induced job, San Diego’s industry supports more than 106,000 jobs that pay $7.5 billion in wages and generate roughly $22 billion in overall economic activity. A .pdf file of the full report can be downloaded here.

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After previewing its expansion plans last summer, San Diego’s EvoNexus, the free startup incubator established by the non-profit technology group CommNexus, has opened a newly renovated downtown office space. A dozen early stage companies began moving into the incubator Monday.

CommNexus founded EvoNexus in 2009, when San Diego’s innovation economy was reeling from the Great Recession. The incubator has taken in 14 companies so far, including six that have moved out of the EvoNexus incubator in University City. Office space, utilities, and other services are provided to startups free of charge, and companies leave with no obligations to EvoNexus or CommNexus.

“As far as we know, we’re the only pro bono incubator in the country,” EvoNexus chairman Kevin Hell says in a statement issued late yesterday. “The goal is to grow sustainable tech companies and expand the industry here in San Diego.”

When the EvoNexus incubator first opened in Sorrento Valley, organizers said they wanted to host startups developing advanced communications technologies, including wireless life sciences and smart grid networking.

Since then, CommNexus moved EvoNexus to University City and broadened its criteria. The industry group established the new downtown EvoNexus to host startups that are focused primarily on developing Internet software, Web services, gaming, social networking, and cloud computing technologies. The privately held Irvine Co. made the 15,000-square foot space available to EvoNexus at no cost. The incubator takes up an entire floor of the building at 101 W. Broadway, known locally as the AT&T building.

Hell says he sees parallels in the downtown San Diego locale with San Francisco’s SoMa, the downtown neighborhood South of Market Street that has become a magnet for social media startups and mobile app developers. The nightlife, housing, and amenities available in San Diego’s city center should appeal to young entrepreneurs, Hell says.

CommNexus plans to continue to operate its incubator in University City. The 12 companies in the new downtown space are:

Antengo: Real-time mobile classifieds.

BigSho: Social webcam game show.

Chatmeter: Online reputation management.

Fashioning Change: Shopping experience for eco-friendly apparel.

Saambaa: Social media app for finding things to do.

SwoopThat: Online textbook shopping by course.

TapChow: Cloud-based restaurant experience manger.

Taphunter: Mobile app for locating places that serve craft beer.

UgliApps: Mobile apps focused on food.

Voluware: Saas healthcare information software.

Xpenser: Web-based tracking of business expenses, time, and mileage.

Zambig: Web-based service that provides online outlet for radio ads.

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San Diego’s StockTwits is developing a bit of a Canadian accent, eh, through a partnership being announced today with Toronto-based Q4 Web Systems, which provides online investor relations services for publicly traded companies throughout North America.

StockTwits is an online social media network that enables traders and shareholders to share their market insights, ideas, charts, and news in real time via Twitter. The startup structures financial and investor-related information from its Twitter feed by stock, user, reputation, and other criteria. StockTwits also enables users to save the stocks they follow to their own portfolios and to limit the comments tweeted about each stock to trusted sources.

As I reported last summer, the four-year-old startup has determined that its chief source of revenue also lies with the investor relations and public relations units of publicly traded companies.

By introducing a ticker tag symbol for publicly traded stocks, $(ticker), StockTwits makes it possible for public companies to sign up for a higher level of StockTwits’ Web service and to “claim” their stock tickers. Once claimed, a company’s IR and PR teams can use the ticker tag to distribute corporate information over the Web in real time.

By partnering with Q4, StockTwits plans to integrate its services with the subscription-based services that Q4 provides its corporate customers. Q4 says its website services include more than 30 IR “best practices” modules that help companies properly provide information and other services to investors and shareholders.

“We’re working with them to make it easier for people to use both of our products,” says Francis Costello, StockTwits’ chief operating officer. He tells me StockTwits has more … Next Page »

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San Diego’s MOGL, a Web-based customer loyalty and rewards program for restaurants and bars, says it has raised $10 million in venture funding to fuel its expansion into San Francisco, New York, and other markets.

The Menlo Park, CA, office of Sigma Partners led the Series B round, which was joined by San Diego’s Avalon Ventures and Austin, TX-based Austin Ventures. That brings total funding for MOGL to $12.4 million, according to a statement from the company. Entrepreneurs Jon Carder, Jarrod Cuzens, and Jeff Federman started MOGL in 2010.

The Internet startup offers its customers multiple incentives for returning to member restaurants and bars, using a mixture of technology, games, and psychology. The incentives include a 10 percent cash back each time a customer returns to eat at participating restaurants. A contest  offers monthly cash prizes to the top three most-frequent customers at each locale. Customers also can automatically donate a meal to someone in need every time they spend $20.

MOGL Homepage Screenshot

MOGL says it provides customer analytics and return-on-investment data for participating bars and eateries. In a statement from the company, Sigma partner Peter Solvik says, “The MOGL team has generated an explosive response from both consumers and restaurant partners, while effectively positioning itself as the most innovative loyalty platform of its kind.”

Since it was launched last April, MOGL has signed up nearly 350 Southern California-based eateries and bars, donated more than 27,000 meals to Feeding America, and has rewarded its members with more than $350,000 in cash back to date.

The company also offers a location-based mobile app for iPhone and Android, so MOGL members can easily locate participating restaurants while on the go. The mobile apps also help customers track their cash rewards and jackpot opportunities, as well as the number of meals donated in their name.

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—Peter Clarke of EE Times reported that San Diego’s Qualcomm (NASDAQ: QCOM) has acquired Andover, MA-based Pixtronix, a startup founded in 2005 to develop Microelectromechanical systems (MEMS) display technology. Qualcomm, which confirmed the deal with EE Times but provided no details or press release about the deal, reportedly spent between $175 million and $200 million for Pixtronix. The Massachusetts company founded by Nesbitt Hagood raised more than $53 million in venture funding, athough the Pixtronix technology has not yet been introduced to the market. Qualcomm has spent years working to refine its own MEMS-based display technology—known as Mirasol.

—More than 200 entrepreneurs turned out to hear TechStars founder and CEO David Cohen talk about the startup accelerator program he helped to launch in Boulder, CO, in 2007. Cohen told the rapt audience during a San Diego Tech Founders meetup that the Internet software community in Boulder “is just totally on fire” compared to five years ago. This was the night after Cohen met with local tech leaders to discuss the steps that helped boost the entrepreneurial ecosystem in the Colorado college town. Xconomy San Diego arranged the dinner discussion, and I plan to have more about our conversation later this week.

—Meteorologist Stephen Bennett and investor John Plavan founded San Diego’s EarthRisk Technologies in mid-2010 with the idea of creating predictive analytics technology that could extend the range of weather long-term forecasts from two weeks to 30 or 40 days. They are now providing their Web-based technology to commodities and energy-trading firms on a subscription-basis. Bennett told me the core business at EarthRisk Technologies is focusing on extreme weather events—heat waves, frigid cold snaps, and storms because extreme events are the ones with the highest impact.

—Mark Heesen of the National Venture Capital Association gave a good-news, bad-news presentation to the San Diego Venture Group last week. Among the interesting bright spots: Corporate venture capital is growing and San Diego-based Qualcomm now ranks as the nation’s second-largest corporate venture outfit. The bad news? U.S. VC firms invested $28 billion in startups last year, but only … Next Page »

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It’s that outlook time of year, and Mark Heesen, president of the National Venture Capital Association (NVCA), was in San Diego earlier this week, talking about the 2012 outlook for venture capital. Today he’ll make a similar presentation to the New Jersey Technology Council. Next week,  John Taylor, the NVCA’s director of research is set to talk in Florida about the 2012 outlook.

Heesen began his presentation in San Diego by saying, “Be prepared for a roller coaster ride here, because that’s where we’ve been for the past year—and that’s where we’re going.”

In a conversation with Xconomy yesterday, Heesen talked about some of the broader trends he’s charting throughout the United States. Here are some of the takeaways from our talk, and from Heesen’s presentation in San Diego:

—The VC industry continues to contract. Venture capital investments in U.S. startups peaked in 2000, when VCs sank $99 billion into emerging companies of all kinds. There were 1,022 venture capital firms at that time, and they were collectively managing $220 billion worth of invested capital. In 2010, VCs invested more than $20 billion into startups of all kinds. The number of VCs had plunged by almost 55 percent—to 462 VC firms with $177 million under management.

—VCs are raising more capital from their limited partners, but it isn’t enough to sustain current investment levels. In 2011, U.S. venture firms raised a total of $18 billion. That was up significantly from the $14 billion that VCs raised in 2010—but it falls $10 billion short of covering the $28 billion that VC firms invested in 2011. As a result, Heesen says he expects venture investments in U.S. technology and life sciences companies to decline in 2012.

—A handful of VC firms accounted for … Next Page »

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Janssen Healthcare Innovation, part of Johnson & Johnson’s reconstituted R&D operation in San Diego, is announcing an incentive prize challenge with awards totaling $250,000 for technology solutions that improve care for patients who’ve just been discharged from a hospital.

Janssen says it’s working with the National Transitions of Care Coalition to establish criteria and to recruit experts in transition care to serve as judges. The coalition was established in Little Rock, AR, almost six years ago to address a variety of care issues that often arise after discharge. The lack of coordination often means the primary care physician is unaware a patient was hospitalized (or released), newly prescribed medications don’t get reconciled, and patient complaints go unheeded, which can result in a range of adverse events and increased health care costs.

Hospital readmissions under Medicare cost $15 billion a year, and $12 billion of these readmissions are considered preventable, according to a Janssen spokeswoman. The challenge was announced at the Health Care Innovations Summit in Washington, D.C.

In a statement today, Diego Miralles of Janssen Healthcare Innovation says, “We hope that the Janssen Connected Care Challenge will inspire the best and the brightest entrepreneurs to develop effective, scalable solutions that can be deployed and truly make a meaningful impact in patients’ lives.”

Johnson & Johnson, based in New Brunswick, NJ, has consolidated a variety of its business units over the past year under the umbrella of Janssen Healthcare. Janssen says its incentive prize competition is intended to prompt “a crowdsourcing-inspired effort to rally entrepreneurs’ best ideas.” The goal is to create technology for coordinating patient care within and between different healthcare practices.

More information about The Janssen Connected Care Challenge is available on the Janssen Healthcare Innovation website. Janssen plans to award $50,000 to each of three finalists, as well as the chance to consult with healthcare experts to refine their solution. A winner will be selected in May, awarded $100,000, and get help to advance their concept toward commercialization.

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The unsolicited $5.7 billion offer that Roche made for Illumina will no doubt dominate San Diego’s biotech news for weeks to come. We have it and more.

—Switzerland’s Roche offered $5.7 billion, or $44.50 a share, for San Diego-based Illumina (NASDAQ: ILMN in a hostile bid disclosed yesterday. Roche’s bid to stake a claim in genetic diagnostics by acquiring the market-leading maker of DNA sequencing instruments would be the Swiss pharma giant’s biggest deal since its $46.8 billion buyout of Genentech almost two years ago. Roche is the world’s biggest maker of cancer drugs, which suggests its quest for Illumina represents a significant move to base cancer treatments on each patient’s genome.

—Venture capital investors sank $4.73 billion into 446 biotechs nationwide in 2011, according to the MoneyTree report from the National Venture Capital Association, PwC, and Thomson Reuters. But as Luke pointed out in his BioBeat column, there is an alarming drop in support for early stage life sciences startups. Only 153 biotech and medical device startups got their first round of financing in 2011, the lowest amount of seed investment activity in 15 years.

—At an Xconomy dinner discussion, former Amira Pharmaceuticals CEO Bob Baltera said insufficient access to capital is the biggest driver for decision-makers on both sides of biotech-pharma partnerships. So what are some other key factors? We asked some of San Diego’s life sciences leaders to explore the question in an “on the record” dinner discussion late last year.

—San Diego’s Sequenom (NASDAQ: SQNM) completed its secondary public offering, raising roughly $62 million in gross proceeds (before underwriting costs) in the sale of 14.95 million shares, including additional allotments granted to underwriters. Sequenom said it plans to use the net proceeds for … Next Page »

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If you were in the business of supplying heating oil in the Northeast, do you think it would be useful to know if a big winter snowstorm is likely to arrive with sub-zero temperatures in Massachusetts next month? How would fire chiefs in the brushy backcountry of Southern California react if they knew the odds of intense Santa Ana winds would increase dramatically in four weeks?

For all of meteorology’s satellite imaging and computer modeling, John “JP” Plavan and Stephen Bennett say it’s just about impossible to use current weather forecasting models to make more than general predictions about the weather more than two weeks in advance. That might be enough time for fuel oil suppliers to get a few extra shipments into local dealers, they say, but it’s not sufficient to make decisions at the highest levels of a big corporation or government agency.

But what if a weather forecasting model could “estimate” the likelihood of extreme weather events 30 or 40 days in advance? Would it be helpful, for example, to know if the odds a major winter storm would hit a particular region had increased from 33 percent to, say, 66 percent?

This, in a nutshell, is the promise of the innovation under construction at EarthRisk Technologies, a San Diego company that Plavan and Bennett founded less than two years ago. “If you’re Home Depot, you certainly want to have snow shovels in stock if you’re anticipating a big snowstorm,” says Bennett, a career meteorologist who helped create the company’s predictive analytics technology with scientists at U.C. San Diego’s Scripps Institution of Oceanography. Likewise, if you’re the Federal Emergency Management Agency, you’d certainly want to get a 30-day advance warning of the next Hurricane Katrina.

“We fancy ourselves as a software company, not as a weather company,” says Plavan, an investor serving as the company’s founding chairman and CEO. “We provide information that helps our clients make decisions of value.”

Bennett, who is EarthRisk’s chief science and products officer, says the highest value for the company and its customers lies in determining the likelihood of extreme weather—heat waves, cold snaps, and the kinds of storms that trigger destructive events like tornadoes, hurricanes, and flooding. “Extreme events are the ones that have the highest impact,” Bennett says. “The places where the opportunities are to be seized, and the risks managed, are at the extremes.”

JP Plavan

Plavan compares the startup’s predictive analytics to counting cards in Blackjack, a technique used by some gamblers to optimize their bets and to guide how they play each hand. “The odds change, depending on the cards already played,” Plavan says. Instead of six decks of cards in the dealer’s shoe, however, EarthRisk calculates the odds for extreme weather events based on correlations between existing weather patterns and historical patterns in a database that encompasses more than 60 years of detailed global weather data.

“The research question that Scripps Oceanography helped us answer is whether there are certain things that the atmosphere does that loads the dice, so to speak, in the way things play out,” Bennett says. “The data patterns have become so complex that it’s too much for a meteorologist—for one brain—to digest.”

Their focus on the statistical risks of extreme weather events also represents a fundamentally different approach from the long-range forecasts now issued by the U.S. Climate Prediction Center, which relies on … Next Page »

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—Venture capitalists invested $269 million in 23 deals in the San Diego area during the last three months of 2011, according to the MoneyTree Report from the National Venture Capital Association, PwC, and Thomson Reuters. That was almost a 20 percent gain in dollars, but a 28 percent slide in deal count from MoneyTree data for the fourth quarter of 2010. For the full year of 2011, the MoneyTree VC survey said $829 million was invested in 104 deals in San Diego, a 5 percent decline in dollars and a 17 percent slide in deals from the $871.7 million sunk into 126 San Diego deals in 2010.

—What should students study now to be prepared for the workplace 10 years from now? We asked that question of 22 Xconomists, including San Diego Xconomists Ramesh Rao, Duane Roth, Drew Senyei, Larry Bock, and Robert Noble. We’ve compiled all 22 answers in an Xconomy special report on education, which you can find here.

—San Diego Gas & Electric hosted a grand opening of its new Energy Innovation Center, which is designed to serve as an energy innovation showcase and education facility, and to meet the U.S. Green Building Council’s requirements for a platinum LEED (Leadership in Energy & Environmental Design) certificate. The center includes a full commercial “food service demonstration kitchen” where San Diego chefs can test their recipes on energy efficient appliances and restaurant owners can learn about the advantages of new and more energy efficient equipment. Utility officials said Commercial kitchens are particularly energy intensive.

—San Diego-based Tealium raised $1.1 million in Series A financing from private investors, and plans to use the funding to expand development of the tag management technology the company created to help enterprise customers manage their online marketing. Tealium said the investors include Limelight Networks CEO Jeff Lunsford, former Visual Sciences CEO Jim MacIntyre, Collective CEO Joe Apprendi, EyeWonder CEO John Vincent, and eValue Group CEO Thomas Falk.

—After previewing their plans last year, the X Prize Foundation and San Diego-based Qualcomm Foundation officially unveiled the Qualcomm “Tricorder” X Prize, a competition offering $10 million to the team that can develop new wireless diagnostics technology. The winning entry must be able to accurately diagnose a set of 15 diseases across 30 consumers in three days, capturing real time, critical health metrics such as blood pressure, respiratory rate, and temperature, and providing information in a consumer-friendly way.

—Qualcomm’s leadership has been talking for several years about the anticipated competition between its ARM-based semiconductors and the CPUs developed for desktop computing in the expanding market for smart devices. Now some of those skirmishes are beginning. Illinois-based Motorola Mobility (NYSE: MMI)  said recently it would use Intel’s (NASDAQ: INTC) latest low-power x86 Atom processor in a number of future Motorola products, marking Intel’s opening move into the smartphone market. A Motorola spokeswoman told me by email, “We will continue to use multiple chip set vendors.” Qualcomm (NASDAQ: QCOM) already has hundreds of mobile devices using its Snapdragon processor, and has been working with manufacturers on hundreds more.

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As early stage biotech startups advance their drug candidates into pre-clinical development, many must decide at some point whether to start working with a big pharmaceutical or biotech partner to continue to pursue their program through clinical trials.

It’s no small decision, and a topic of increasing industry interest, especially since initial public offerings (IPOs) by life sciences companies have fared poorly in recent years, curtailing their ability to raise cash and develop new drugs on their own. Of the 12 biotechs that went public in 2011, for example, 10 raised substantially less cash than they wanted to, according to the BIO industry group.

The IPO class of 2010 also was schooled in terms of post-IPO performance, with shares in just four of the 12 biotechs trading higher at the end of 2011 than when the companies began trading. Small wonder, then, if Wall Street traders are asking, “Why buy biotech shares at the IPO when we can get them cheaper later?”

So joining forces with larger drug companies offers a wise alternative strategy, which was evident in a new conference that Biocom organized last year to focus on the nitty-gritty of biotech-pharma partnerships. (The Second Annual Global Life Science Partnering Conference convenes in San Diego on Feb. 1, with an agenda that includes VIP speakers from GlaxoSmithKline, Merck, Vertex, Novartis, Pfizer, Roche, and Bristol-Myers Squibb.)

Under the circumstances, you’d think these times would be ideal for partnership deals. After all, big pharmas are prospecting for new drug candidates outside their own R&D programs, and late-stage venture financing remains tenuous for today’s startups. But to borrow a pop psychology concept, pharmas and biotechs are from different planets. Startups are almost invariably motivated by a need for capital to advance their drug development program. Hooking up with a particular pharma may or may not align with their true strategic desires. Big pharmas, on the other hand, are looking to fill their pipeline with new products, but they have trust issues. The pharmas ask themselves, “Does that biotech want a true drug development partner, or just some tawdry substitute for venture financing?”

Of course, this isn’t something that happens on Match.com. The process of choosing the right partner and negotiating a … Next Page »

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Money pumped into San Diego’s regional economy by venture capital firms hit an eight-year low in 2011, with a total of $829 million invested in 104 startups throughout the year, according to the MoneyTree VC survey being released today. The 2011 deal count was the lowest seen in San Diego since 1997.

The 2011 numbers represent a 5 percent decline in dollars and a 17 percent decline in deals in comparison with the previous year, when VCs put a total of $871.7 million in 126 startups, according to the MoneyTree Report from PricewaterhouseCoopers, the National Venture Capital Association (NVCA) and Thomson Reuters.

The decline in San Diego’s venture activity ran counter to the nationwide trend in 2011, in which $28.5 billion was invested in 3,673 deals—and ranks as the third-highest total in the past decade. The U.S. numbers represent a 22 percent increase over the $23.6 billion in 2010 VC funding and a 4 percent rise over the previous year’s deal count, according to the MoneyTree analysis.

The overall U.S. trend depicted in the MoneyTree Report generally agrees with the rise in venture activity nationwide that CB Insights charted last week in its 2011 findings. CB Insights, the New York financial analysis firm, said the $30.6 billion VCs invested in 3,051 deals throughout 2011 was a 10-year high in terms of both dollars and deals. (The two sets of numbers don’t line up exactly because the firms use different methods to collect their venture data, and count dollars and deals in different ways.)

In the fourth quarter of 2011, the MoneyTree Report shows that venture capitalists invested $269 million in 23 deals in the San Diego area, with life sciences startups in diagnostics, drugs, and devices accounting for roughly two-thirds of the transactions. It represented a … Next Page »

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Here’s our weekly roundup of San Diego’s life sciences news.

—Jeff Shuren, director of the FDA’s Center for Devices and Radiological Health (CDRH), briefed reporters in San Diego on his efforts to make the regulatory review of new medical devices more predictable, transparent, and efficient. Shuren is undertaking reforms at a time when eight out of 10 biomedical CEOs say they “agree or strongly agree” that the FDA regulatory approval process has slowed the growth of their organizations.

—More than 500 people turned out Monday evening for the open house that Johnson & Johnson’s (NYSE: JNJ) new Janssen Labs startup center. The first four startups to be inducted are Diomics (diagnostics, integrated DNA analysis); Neurolixis (drugs for schizophrenia, Parkinson’s and other CNS disorders); Tem Systems (comprehensive blood test for anti-coagulants); and Yolia Health (optometry device company).

—San Diego-based Auspex Pharmaceuticals, which is developing deuterium-based drugs, has raised $3 million of a $6 million round of debt and convertible promissory notes, according to a regulatory filing. Previous investors include CMEA Ventures, Costa Verde Capital, and Thomas McNerney & Partners. Auspex uses deuterium to replace metabolically sensitive hydrogen atoms in compounds to create new versions of existing drugs.

—BrainCells, a San Diego developer of neurological drugs, raised $2 million toward an $8 million round of debt, rights and securities, according to a regulatory filing. BrainCells previously raised $77 million from Alexandria Real Estate Equities, Bay City Capital, MedImmune Ventures, Mitsubishi UFJ Capital, Mizuho Capital, NeuroVentures, New Enterprise Associates, Oxford Bioscience Partners, Pappas Ventures and Technology Partners, according to VentureWire. The company says it is developing novel therapies for treating central nervous system (CNS) diseases, based on the principal of blocking select metabotropic glutamate receptors (mGluR).

—To have the skills needed in 2022, San Diego Xconomists Robert Noble and Larry Bock recommend that students should “learn how to learn.” Drew Senyei says students should study anything they are passionate about; Duane Roth would like to see a new major that encompasses engineering, biology, chemistry, physics, law, business, humanities and communications; and Ramesh Rao would emphasize studying new techniques for sensing data, as well as data analysis. They all offered their views for an Xconomy special report on education, and what students should be studying today to be prepared for 10 years from now. Their comments are available online here.

—In a talk with Sanofi CEO Chris Viehbacher, Luke explained the company’s strategy since it acquired Cambridge, MA-based Genzyme, and cut back on its internal research and development.

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