Neurocrine Biosciences, which looked like it was stuck perpetual retrenchment-mode, just pulled off its second big deal in two days. Yesterday, the San Diego biotech agreed to grant German drug maker Boehringer Ingelheim worldwide rights to experimental diabetes drugs. Neurocrine will get an upfront payment of $10 million and milestone payments of up to $225 million in return.

The deal was preceded Wednesday by an even larger pact with Abbott Laboratories. The US drug giant is paying Neurocrine up to $575 million for global rights to Neurocrine’s experimental drug for endometriosis.

Neurocrine (NASDAQ: NBIX) also stands to receive royalty payments from its partners if the drugs reach the marketplace.

Is this the beginning of a long-awaited turnaround at Neurocrine? Investors seem optimistic. The company’s shares are up 18.5 percent since Tuesday’s close. Jason Napodano, an analyst with Zach’s Investment Research, said in a note Wednesday that the Abbott deal was a “game changer” for Neurocrine.

Of course, it’s important to remember that Neurocrine has more or less been in this position before. Back in 2002, pharmaceutical giant Pfizer agreed to pay up to $400 million—including an upfront payment of $100 million—for rights to Neurocrine’s experimental sleeping pill indiplon. That made Neurocrine one of San Diego’s hottest companies—until four years later when Pfizer walked away from the deal after the FDA declined to approve the drug. Neurocrine’s shares once traded between $40 and $50, climbing above $70 before the FDA acted. Thursday’s close of $5.57 is a long parachute jump from the stock’s previous heights.

Neurocrine is no longer working on indiplon, and the company … Next Page »

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A spate of financings dominated the headlines in the past week. We’ve got it summarized for you here.

—Brain Cells’ experimental antidepressant was no better than placebo in a mid-stage clinical trial, but the results hinted the drug might help people with a combination of depression and anxiety. Thecompany hasn’t decided what to do next, although it might pursue development of the drug for people with both depression and anxiety or post-traumatic stress.

—Cognionics, a startup formed by graduate students in engineering, science and business at UC San Diego, the Salk Institute, and The Scripps Research Institute, won the top prize of $25,000 in funding and $15,000 in legal services at the UCSD Entrepreneur Challenge. The company aims to develop a wireless sensor that can be used for remote monitoring of cardiac data and other health information.

—Otonomy, a company working on drugs for disorders of the ear, converted $10.5 million in bridge loans from Avalon Ventures into equity. The startup is working on drugs for Meniere’s disease, which causes dizziness and leads to hearing loss, and otitis media, an inflammation of the middle ear.

—Illumina was among five companies to receive letters from the FDA notifying them that the agency believes that genome-sequencing tests offered directly to consumers are medical devices requiring FDA approval. Illumina (NASDAQ: ILMN) got a letter because it knowingly provides two of the companies that sell genetic tests—23andMe and deCode Genetics—with gene-chip technology that has not been approved for clinical use. Besides Illumina, 23andMe and deCode, Navigenics and Knome received the FDA letters, which do not order the companies to stop selling the tests, but suggest it may not be legal to market certain genetic testing services. 23andMe and Navigenics are based in the San Francisco Bay area and Knome is based in Cambridge, MA.

—Bruce identified a trio of life sciences companies that raised fresh financing. Cylene Pharmaceuticals, a developer of cancer drugs, raised $6.1 million; Access Scientific, a medical device company, nabbed $2.6 million; and Ridge Diagnostics raised $577,000.

—Trius Therapeutics and the FDA agreed on a special protocol assessment establishing the design of a pivotal clinical trial for Trius’ lead drug candidate, torezolid phosphate. The company postponed IPO plans in March after new FDA guidelines delayed the pivotal antibiotic study.

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Abbott Laboratories will pay Neurocrine Biosciences (NASDAQ:NBIX) of San Diego up to $575 million for exclusive worldwide rights to develop and commercialize Neurocrine’s experimental oral drug for endometriosis, a painful condition in which uterine tissue grows outside the womb. Neurocrine will receive $75 million upfront, up to $500 million in milestone payments, and royalty payments on product sales. Neurocrine has completed mid-stage trials of the drug, called elagolix. The companies expect to begin late-stage trials this year.

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The pace of life sciences news slowed in the past week, but we know from experience the lull is temporary. You can catch up on the headlines here.

—A raft of studies from provided additional evidence that a urine test from Gen-Probe (NASDAQ: GPRO) might help eliminate the need for additional biopsies in men with positive PSA tests. The results of clinical tests of PCA3 prostate cancer test were presented at the annual meeting of the American Urological Association.

—Syndax Pharmaceuticals, a biotechnology company co-founded by scientists from the Salk Institute for Biological Studies, said a small clinical study suggested its experimental drug entinostat might be effective in combination with hormone therapies against breast cancer. The Waltham, MA-based company plans a mid-stage trial.

—Alan Raffensperger was named CEO of BeneChill, which is working on a device to reduce the risk of brain damage after cardiac arrest. Raffensperger formerly headed Amgen’s nephrology franchise.

—Arena Pharmaceuticals (NASDAQ: ARNA) raised $35.5 million through an equity financing from Deerfield Management. An FDA advisory panel will consider Arena’s obesity drug lorcaserin on Sept. 16.

—It turns out the undisclosed investment in San Diego’s Synthetic Genomics by Life Technologies (NASDAQ: LIFE) of Carlsbad, CA, was $10 million. That was based on a regulatory filing made after Life made its announcement.

—San Diego-based Illumina (NASDAQ: ILMN) has lowered the cost of sequencing a person’s entire genome from $48,00 to $19,500. The genetic diagnostics company also is offering a discounted price of $9,500 to sequence the genomes of individuals with serious medical conditions—which could potentially enable doctors to tailor their treatment.

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[Updated 6/11/10 12:05 am. See below.] The cost of getting your genome sequenced continues to drop. San Diego’s Illumina (NASDAQ: ILMN) has lowered the cost of its individual sequencing service to $19,500 from $48,000.

The company is offering a discounted price of $9,500 for people with serious medical conditions who could potentially benefit from having their genomes decoded. Last year, doctors at Yale University reported using whole-genome sequencing to diagnose the mutation responsible for an infant’s persistent diarrhea. The information allowed doctors to tailor their treatment.

Illumina also is offering a discounted price of $14,500 to groups of five or more from the same physician.

[Updates here and below with comments by Illumina CEO Jay Flatley.] “It’s very clear as the price comes down that we’ve been able to open broad new markets,” says Illumina CEO Jay Flatley.

Illumina’s announcement last week came on the heels of Pathway Genomics’ aborted plans to market its genetic test kits in Walgreen drug stores. The retail chain reversed plans to carry the kits after the FDA questioned the company’s decision to market the test without the agency’s approval. Pathway, which is based in San Diego, has maintained it is in compliance with “currently applicable” regulations. Now a Congressional committee is looking into genetic tests marketed on the Internet by Pathway and competitors 23andMe and Navigenics.

The service Pathway intended to offer was … Next Page »

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Gen-Probe (NASDAQ: GPRO) appears to be on the right track with its experimental prostate cancer test, judging from a raft of recent clinical studies in men being screened for prostate cancer.

The research, presented at the annual meeting of the American Urological Association in San Francisco last week, provided additional evidence that Gen-Probe’s PCA3 urine test might help eliminate the need for additional biopsies in men with positive PSA tests.

The PSA, or prostate specific antigen test, is the primary screening test for prostate cancer. Because the test has a high false-positive rate, men must undergo biopsies, a painful procedure in which prostate tissue is taken for analysis, to confirm the presence of cancer.

Men with positive PSA test results and negative biopsies have a dilemma. “The PSA said they have cancer but their doctors can’t find it,” said Gen-Probe spokesman Michael Watts. If these patients continue to test positive on a follow up PSA, they face a second biopsy, he said.

Gen-Probe’s PCA3 test has a relatively low false-positive rate, so it could be used to assess the need for a second biopsy. A high score might indicate a biopsy was needed, whereas a low score might indicate a low risk of aggressive cancer, making a second biopsy unnecessary.

In one key study presented at the meeting, the PCA3 was used to analyze urine samples from 1,946 men. Results showed … Next Page »

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Pathway Genomics’ plan to take genetic testing to the people continues to go badly awry.

A House panel disclosed yesterday that it is investigating personal genetic tests sold over the Internet by San Diego-based Pathway and two other companies. Rep. Henry Waxman, D-Calif., sent the companies letters seeking information about the accuracy of the tests and how they are conducted. The House panel also wants to know what the firms do with the genetic material they collect from consumers. The Wall Street Journal has the story here.

Pathway Genomics test kit

The move came after Pathway announced plans last week to sell its genetic tests in drug stores operated by Walgreen. Subsequent to the announcement, the FDA released a May 10 letter that questioned Pathway’s decision to market the test without agency approval. It told Pathway that it should explain why it believes the test does not need prior approval before it could be sold.

Walgreen and CVS, which had also planned to offer the tests, decided against doing so until the regulatory issues were addressed.

Besides Pathway, the House Energy and Commerce Committee wants information from Navigenics and 23and Me. The three companies sell tests that analyze saliva to determine genetic ancestry or genetic links to certain health conditions.

The House panel said its investigation was motivated by Pathway’s attempt to market the kits in retail stores “despite concern from the scientific community regarding the accuracy of test results.” The letter to Pathway CEO Jim Plante is here.

In a commentary in the Philadelphia Inquirer on Sunday, … Next Page »

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The sector was firing on all burners in the past week with fresh developments in devices, drug development, wireless health, and weight loss (just ask Larry Smarr). You can catch all the latest here.

—Sequenom (NASDAQ: SQNM), which scrubbed the launch of its diagnostics test for Down syndrome a year ago over “mishandled data,” is resuming development on a new testing schedule. The company also raised $51.6 million for R&D, commercial product development and general corporate purposes.

—Cytori Therapeutics reported (NASDAQ: CYTX) announced encouraging results from two small, placebo-controlled studies of its fat-derived regenerative cell therapy in cardiac patients. The double-blind studies, which were conducted in Europe, should pave the way for a larger test in 150-250 heart attack patients, the company said.

—Pathway Genomics fired the next salvo in the personal genome-testing wars with its announcement that it will begin selling genetic tests this week at 80 percent of Walgreens stores nationwide. Consumers can choose the $249 test that looks for a total of 46 genetic and health conditions, or a $179 test  that will look for either 23 genetic conditions or 23 health conditions.

—Sotera Wireless CEO Tom Watlington told me the company is preparing to test the ViSi, a wireless device that continuously monitors blood pressure, respiration, temperature, blood oxygen levels and heart rate, at five Southern California hospitals. If ViSi works, Sotera could begin marketing the device to hospitals during the first quarter of 2011, he said.

—Two San Diego companies were recognized for their innovations at the Wireless Life Sciences Investor Meeting in La Jolla, which was attended by 200 people, nearly double last year’s number. CortiCare, of San Diego, which provides remote and continuous electroencephalography monitoring of patients admitted to a hospital intensive care unit for signs of micro-seizures, was a finalist in the Best Clinical Applications category. Great Connections, which just moved to San Diego from Sweden, has technology that transmits ultrasound and X-ray medical images to any mobile device.

—Luke chatted with Internet pioneer Larry Smarr about his personal … Next Page »

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Sequenom can cross off another item on its long to-do list. The San Diego-based developer of diagnostic tests is announcing today that it has raised $51.6 million in a private placement, an important step toward regaining the confidence of investors. The much-needed funds will go toward R&D, product commercialization and general corporate purposes, Sequenom (NASDAQ: SQMN) says.

The announcement comes less than a week after Sequenom disclosed that it was resuming development of its prenatal test for Down syndrome. In April, 2009 Sequenom abruptly delayed launch of the test because of what it described as “employee mishandling of R&D test data and results.” The ensuing mess brought inquiries from the Justice Department, the Securities and Exchange Commission, and cost several executives, including then-CEO Harry Stylli, their jobs. Last week, Sequenom agreed to pay $14 million to settle a shareholder suit over the matter.

Purchasers of the 12.4 million shares sold in the private placement paid $4.15 a share, a 23 percent discount from Sequenom’s closing price of $5.37 on Tuesday, a sign that investors are somewhat skeptical of the company’s prospects, Hapoalim Securities analyst Raghuram Selvaraju told Reuters. The company’s accumulated deficit stood at $614.2 million at the end of March, up three percent from the end of last year. Sequenom’s shares were trading lower today.

Sequenom hasn’t said how much money it will need to restart its Down syndrome diagnostic development program. As Bruce reported last week, Sequenom had available cash and securities of $29.2 million on March 31 (it was also owed $8.6 million on unpaid bills). The company used net cash of $13.4 million in its first quarter to support operations. So if that spending trend continues, today’s cash infusion should last more or less a year.

Sequenom says a laboratory test for Down syndrome could launch in 2011. So Sequenom has a ways to go before it can cross everything off its list.

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As representatives of the emerging mobile health industry convene for their annual summit today in La Jolla, it seemed both timely and appropriate to revisit San Diego-based Sotera Wireless. The company, which was founded six years ago as Triage Wireless, jumped onto our radar screen in April after the medical device company successfully raised nearly $11 million from Qualcomm, Intel, West Family Holdings, and other investors. Last week, I caught up with CEO Tom Watlington to learn more about the company and came away convinced that Sotera, which is within a year of launching its first mobile device, would continue to remain in our sights.

Sotera’s wireless device, dubbed ViSi (for vital signs) and aimed at the hospital market, continuously monitors blood pressure, respiration, temperature, blood oxygen levels and heart rate. The device, a wristband slightly larger than a sports watch, collects vital signs information through two sensors—one on the chest, and one on the thumb—and transmits the data to a hospital workstation. If vital signs deteriorate, an alert goes out.

Tom Watlington

Watlington tells me that hospitals, often faced with more critically ill patients than their ICUs can handle, want a device that will allow them to continuously monitor the vital signs of very sick patients on general hospital floors. Currently, nurses check these patients’ blood pressure and other vital signs at intervals throughout the day. But Watlington maintains these snapshots can miss the earliest signs that a patient is starting to go downhill.

ViSi doesn’t predict a patient will have a heart attack or some other bad outcome, but functions as an early warning system that a problem may be developing. “Our goal is to develop technology that is very, very sensitive to the earliest signs of deterioration in a patient and alert the doctor or the nurse that something may be emerging so they can intervene,” he said.

Last year, Sotera tested a prototype device for measuring blood pressure at three San Diego hospitals. The 50-patient clinical study pitted the prototype against … Next Page »

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San Diego-based Cytori Therapeutics (NASDAQ: CYTX) is announcing encouraging results this morning from two small, placebo-controlled studies of its fat-derived regenerative cell therapy in cardiac patients. The double-blind studies, which were conducted in Europe, should pave the way for a larger test in heart attack patients, the company says.

The first study involved 27 chronic heart disease patients; 18 got cell therapy and 9 received a placebo. After six months, the treatment group showed  improvements on key measures of oxygen consumption and aerobic capacity. By contrast, the placebo group’s performance on those key measures declined. The differences between groups are statisically significant, the company says.

Specifically, the treated group showed an average 3.6 percent improvement in maximum oxygen consumption compared to an average 18.4 percent decline in the placebo group. Aerobic capacity in the treated group as measued by metabolic equivalents (METS) rose .2 points compared to a drop of .8 points in the placebo group.

The second study involved 14 heart attack patients; roughly two-thirds received cell therapy within 24 hours after arriving at the emergency room, the remaining patients were in a placebo group. Although the study was too small to demonstrate statistical validity, the treatment group showed a stronger improvement trend.

No serious side effects related to treatment were seen in trials, Cytori CEO Marc Hedrick tells me.

It’s important to note that each study excluded … Next Page »

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We saw a spate of deal-making in the past week. Those developments and more are summarized for you here.

—Avalon Ventures, one of the few San Diego venture capital firms that continues to invest in early-stage life sciences companies, embarked on fund-raising for its ninth venture fund with the intention of raising $150 million from its investment partners. The fund will split its investments between life sciences and Web and wireless companies.

—Erin identified four San Diego life sciences companies that raised less than $1 million in March. Leading her under-the-radar deals list is Tracon Pharmaceuticals, which is developing treatments for cancer and age-related macular degeneration.

—Sequenom (NASDAQ: SQMN) said a federal judge in San Diego approved its $14 million class-action settlement with shareholders who sued the company after it retreated from plans to introduce a diagnostic test for Down syndrome due to “employee mishandling” of R&D test data and results

—Cadence Pharmaceuticals (NASDAQ: CADX) re-submitted its new drug application for an IV form of acetaminophen (Ofirmev) to the FDA. In February, the agency told Cadence it could not approve the drug because it found deficiencies during its inspection of third-party manufacturer, Baxter International.

—Schrödinger, a New York and Portland, OR-based maker of chemical-simulation software for drug development and research, received a $10 million equity investment from Bill Gates through Cascade Investment. The company has an office in San Diego.

—Althea Technologies, a contract development and manufacturing company focused on biologics, acquired the assets and IP portfolio of Waltham, MA-based Altus Pharmaceuticals for an undisclosed price. Althea said applications of Altus’ technology range from therapeutics to protein purification and catalysis.

—Luke profiled Proteostasis Therapeutics, a Cambridge, MA-based biotech working on drugs for Alzheimer’s disease and Parkinson’s disease. Jeffery Kelly of the Scripps Research Institute in San Diego is one of the scientific founders of the company.

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San Diego’s Cibus Global is uniting with Canada’s flax growers to develop a crop strain resistant to glyphosate, the active ingredient in the widely used weed killer Roundup. Flax, also known as linseed, is a major crop grown for both its seeds and fibers, with various parts of the plant used to make linen and other fabrics, dyes and inks, medicines, and other products.

The Flax Council of Canada is investing about $5.5 million in the partnership, including the proceeds of a $4 million grant it received from the Canadian government. Revenues from the new strain of seed would be split between the Flax Council and Cibus, according to Barry Hall, president of the growers’ group.

The deal moves little Cibus closer to competition with Monsanto, the agri-industry giant which markets both Roundup and lines of crops that are genetically engineered to resist the herbicide. Weed killers containing glyphosate are available as generics.

Monsanto’s Roundup-resistant strains account for much of the corn, cotton, and soybeans grown in the U.S. But genetically modified crops have received only limited acceptance (and sometimes harsh criticism) in Europe, which imports 70 percent of Canada’s flax crop. Much of the flax is used to produce linseed oil, which is used in paints, linoleum flooring, and inks.

Cibus believes its technology for producing new crop strains is less … Next Page »

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Progress on the drug development front dominated the headlines in the past week, although one company, Phenomix, also had some bad news. Get those details and more here.

—Phenomix announced that diabetic patients who took its experimental drug dutogliptin in a clinical trial saw statistically significant drops in their blood sugar. But the company is looking for a new strategic partner to help develop dutogliptin after New York-based Forest Laboratories said it had terminated its alliance with the San Diego biotech.

—My end-of-flu-season wrap up showed some San Diego companies received a temporary revenue boost from sales of products related to swine flu, and at least one company garnered enough funding to continue work on a H1N1 vaccine.

—Luke profiled Amplyx, a startup that is working on redesigning existing drugs to make them more effective or tolerable. The company’s first project is to develop improved protease inhibitors for H.I.V.

—Anadys Pharmaceuticals (NASDAQ: ANDS) reported promising interim clinical trial data for its experimental hepatitis C drug ANA598. The results were announced at the European Association for the Study of the Liver meeting in Vienna, Austria.

—Luke chatted with Nobel laureate Roger Tsien of UC San Diego about his startup company, Avelas Biosciences, which is working on fluorescent molecular tags that surgeons may use to distinguish tumors from healthy tissue.

—Ligand Pharmaceuticals (NASDAQ: LGND) earned a $6.5 million milestone payment from Switzerland-based Roche for advancing its experimental hepatitis C drug RG7348 into clinical trials. Ligand obtained the drug through its acquisition of Metabasis Therapeutics; Metabasis shareholders will receive $2.7 million from the milestone payment.

—The Sanford-Burnham Medical Research Institute promoted Kristina Vuori to president from her previous position as executive vice president of scientific affairs. John Reed will continue as CEO of the institute.

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As swine flu raced through colleges and communities last summer and fall, at least five San Diego companies with flu-related products or research programs saw their share prices surge. Investors were betting that swine flu, the predominant circulating flu virus in the U.S., presented a real opportunity for these companies.

Now comes the reckoning. The influenza season, which normally runs from October through May, is winding down. An update issued April 9 by the national Centers for Disease Control and Prevention said influenza cases were declining or stable throughout the country, and the percentage of all doctors’ visits by patients with flu-like symptoms had fallen to 1.1 percent—well below the seasonal norm—from a high of 7.8 percent last October.

Last September, I looked at San Diego companies with stakes in swine flu. The time has come to see how they have actually performed since the World Health Organization declared a global H1N1 swine flu pandemic in June.

—I’ll begin with Quidel (NASDAQ: QDEL). The diagnostic-test maker received special government clearance last summer to market its QuickVue rapid flu test for swine flu. The company told investors last summer it expected a revenue bump from sales of the tests.

And how. Quidel reported a 38 percent increase in 2009 net sales of infectious disease-related products. Total revenue jumped 28 percent for the year, driven by global sales of influenza products. Quidel’s shares are up about 12 percent since last June.

However, Quidel has already warned investors not to expect a repeat of its 2009 financial performance. “We do not plan for or expect the influenza pandemic of 2009 to recur in 2010. Accordingly, we expect a significant decrease in our influenza test sales, related earnings, and cash flows during 2010,” Quidel said in its annual filing with the SEC.

—Life Technologies (NASDAQ: LIFE) produces equipment that runs a diagnostic test, developed and distributed by the CDC, that can determine if patients are infected with the specific strain of the influenza A virus that causes swine flu.

The test has become the de facto standard in H1N1 detection, which makes Life’s equipment a must-have for public health labs. Life experienced an equipment-buying frenzy last spring, followed by an increase in sales of reagents to run the swine flu tests. The products contributed … Next Page »

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We heard in the past week from key experts who shared their views on the funding climate and the potential of emerging computational technologies. Our recap follows.

—Histogen said its Hair Stimulating Complex produced “statistically significant” new hair growth after one year among the 24 balding patients who participated in a clinical trial conducted in Honduras.

—Avalon Ventures, one of the few San Diego venture capital firms still investing in early-stage life sciences companies, is talking about raising a ninth fund, Luke reported. He chatted with principals Jay Lichter and Kevin Kinsella about the investing climate.

—San Diego is well-positioned to play a significant role in advancing computational biology, said Paul A. Rejto, director of computational biology in oncology research at Pfizer. He discussed the technology and its potential impact on drug development in a Q&A.

—San Diego has all the ingredients to become the number one biomedical informatics center in the country, said UC San Diego’s Lucila Ohno-Machado, director of biomedical informatics at the medical school. She discussed the technology with me in a Q&A.

—Amplyx Pharmaceuticals, a San Diego-based drug developer, has raised an initial round of $1.5 million in financing. The investors included Golden Seeds, Life Science Angels, and Tech Coast Angels.

—AltheaDx, a San Diego-based developer of molecular diagnostics, closed its $6 million Series A round of funding. The funds will support development of diagnostics that predict whether a drug is safe for certain people.

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San Diego’s role in computer analytics dates back to at least 1969, with the founding of Science Applications Inc., now SAIC, which used computer models to predict the effects of nuclear blasts for the Government. Today, a life sciences industry that didn’t exist in San Diego 40 years ago is embracing increasingly powerful computational tools to make sense of the massive amounts of data resulting from genetic discoveries and advances in molecular profiling.

Among the leaders in this emerging field is Paul A. Rejto, director of computational biology in oncology research at Pfizer in San Diego. A physical and theoretical chemist, Rejto started in 1994 at Agouron Pharmaceuticals, a San Diego biotech that became part of Pfizer in 2000. We caught up with Rejto by e-mail last week to find out more about the technology, its role in pharmaceutical research, and its importance to San Diego.

Xconomy: What is computational biology?

Paul Rejto: As with many interdisciplinary fields, there is no single well-established definition. Computational biology broadly refers to the application of computational and informatics approaches to address questions in biology. A number of other terms describe activities at this interface, with slightly different flavors. Bioinformatics is typically more focused on algorithms for sequence manipulation and analysis, and biomedical informatics is more focused on the acquisition and analysis of patient data and outcome.

X: What are some applications of computational biology?

PR: As you might imagine there are many applications. Here in the Pfizer Oncology Research Unit, we are applying computational approaches to support two major objectives: 1) identification and credentialing (or validation) of oncology targets, and 2) linking targets to patients using predictive markers of response. Our chief scientific officer, Neil Gibson, refers to these efforts as the bookends of the research portfolio – in other words, we support the selection of projects that are initiated within research and help to ensure a successful path for those projects moving forward out of research into the clinic.

To credential new targets, we use genomics and transcriptomics to assess targets and pathways in well-defined populations with unmet medical need, and look for evidence of functional activation. To accomplish this, we work closely with our commercial colleagues to ensure … Next Page »

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One notion that emerged at Xconomy’s event in San Diego last week was that biomedical informatics might have a promising role to play in the region’s economic future. There is no consensus on this as yet, as Luke discovered when he talked with Illumina CEO Jay Flatley.

Among the true believers is UC San Diego’s Lucila Ohno-Machado. No surprises there—since last year, she has been director of biomedical informatics at the medical school. Before arriving in San Diego, she was director of the Harvard-MIT-Tufts-Boston University biomedical informatics training program.

We caught up with her this week via e-mail to find out more about the technology, what it means for the U.S. health care system, and the role she sees for San Diego’s innovation community.

Xconomy: What is biomedical informatics?

Lucila Ohno-Machado: Biomedical informatics is a scientific discipline focused on the development of new algorithms and/or new approaches to organize, visualize, and interpret health-related data in order to promote health and alleviate the burden of disease. The discipline is placed at the intersection of health sciences, biology, computer science, and statistics.

San Diego is in a unique position due to the accumulation of human talent, high-tech companies, and a collective interest in improving healthcare for all. It has all the ingredients to become the number one biomedical informatics center in the country.

X: How is it different from computational biology, which we’ve also been hearing a lot about?

LOM: Computational biology usually relates to the development and application of algorithms and computational strategies to analyze biological data at the molecular level. In biomedical informatics, we develop new algorithms and systems that relate to the full spectrum of data: from molecular to individual to population levels. We often refer to bio-, clinical- or public health-informatics for algorithmic developments and strategies targeting … Next Page »

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The integration of information technology and life sciences is well underway in San Diego, judging from the past week’s headlines. We’ve summarized it all here.

—Illumina (NASDAQ: ILMN) CEO Jay Flatley chatted with Luke about the outlook for the gene-sequencing business, among other things. Flatley has an interesting take on the business potential of bioinformatics and offers his prediction on when we’ll see the $1,000 genome.

—Medsphere Systems Chief Operating Officer Rick Jung told me the Carlsbad, CA-based provider of electronic medical records software expects to triple its bookings this year, thanks to the impetus the field is getting from federal stimulus funds. The company’s subscription software is based on technology developed by the Veterans Health Administration.

—Xconomy had a great event with four longtime life sciences innovators—John Mendlein, chairman of Fate Therapeutics; Paul Schimmel, Scripps Research Institute scientist and serial entrepreneur; Fred “Rusty” Gage, Salk Institute for Biological Studies researcher; and Dan Bradbury, CEO of Amylin Pharmaceuticals (NADSAQ: AMLN)—sharing their thoughts on where San Diego has been and where it’s going. Could bioinformatics be the next big opportunity? Luke summarized their comments.

—CareFusion (NYSE: CFN), a San Diego-based medical device company, said that it would acquire Medegen, a maker of disposable systems for delivering medication intravenously, for $225 million in cash.

—Ryan profiled DR Systems unit eMix, a company that provides Web-based delivery of radiological images. The company is entering a field that is rapidly heating up.

— Michael L. Eagle, a former manufacturing vice president at Eli Lilly, joined the board of Cadence Pharmaceuticals (NASDAQ: CADX). The FDA recently told Cadence it could not approve its intravenous acetaminophen because of manufacturing problems. The drug is being produced by a third-party manufacturer, Baxter International.

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Experts agree that electronic medical records can lower costs and improve care. Yet just 10 percent of U.S. hospitals keep any computerized records, according to a survey in the New England Journal of Medicine last year. The biggest reason is cost: depending on the size of the hospital, the price of a digitized record system can run from $20 million to $100 million.

Carlsbad, CA-based Medsphere Systems is marketing what it bills as a cost-effective solution. The company has taken the electronic medical record system developed by the Veterans Health Administration and adapted it for commercial use.

Developed over two decades with more than $8 billion from taxpayers, the source code for the VA system is in the public domain. This means software developers and startups like Medsphere are free to use and modify the code known as the Veterans Health Information Systems and Technology Architecture, or VISTA. (The acronym is sometimes confused with Microsft’s unrelated Vista operating system.)

Rick Jung

Medsphere Chief Operating Office Rick Jung says the private, venture-backed company offers its version of the software, called OpenVista, on a subscription basis, which minimizes the upfront costs for hospitals and healthcare facilities. The system manages clinical and health information, laboratory tests, pharmacy, radiology, and nutrition and food service applications. In exchange, Medsphere provides OpenVista subscribers regular software updates, maintenance, and technical support. Customers also get tools that connect OpenVista to legacy systems that handle specific functions, like billing.

OpenVista also is available without a paid subscription for users to install and operate on their own enterprise networks, without support from … Next Page »

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