Ironwood Pharmaceuticals is gearing up for the possibility of an IPO. The Cambridge, MA-based developer of a new treatment for bowel disorders like for irritable bowel syndrome and chronic constipation said it may raise as much as $172.5 million from investors through the deal, according to a prospectus filed late today.

The proposed offering would be underwritten by JP Morgan Securities, Morgan Stanley, Credit Suisse, Bank of America/Merrill Lynch, and Wedbush PacGrow Life Sciences. The prospectus doesn’t list how many shares it hopes to sell, or what the price range will be. Its proposed ticker is (NASDAQ: IRWD).

The proposed IPO filing doesn’t come as a surprise—we raised this question to the company last month when it added Genentech’s former chief financial officer, David Ebersman, to its board of directors. Ironwood has certainly put itself in a position to go public. Earlier this month, it passed the first two of four pivotal clinical trials, demonstrating that its drug is an effective new treatment for chronic constipation. The company has racked up a deficit of $290 million since its founding in 1998, yet it had $98.9 million left in the bank at the end of September according to today’s filing, so it’s not in urgent need of cash. Its lead drug candidate, linaclotide, treats chronic constipation that affects an estimated 26 million Americans, there are few available therapies for it, and the Ironwood drug has a way of working that’s unlike anything on the market. The U.S. healthcare system spends an estimated $25 billion on treating irritable bowel syndrome.

“We believe that linaclotide could present patients and healthcare practitioners with a unique therapy for a major medical need not yet met by existing therapies,” the company wrote in its prospectus.

Ironwood has no products currently on the market, but it has secured partnerships with three organizations to help commercialize linaclotide around the world. They are Forest Laboratories in the U.S., Laboratorios Almirall in Europe, and Astellas Pharma in certain Asian countries. The company has 167 employees.

Who stands to make the most money if Ironwood can complete an IPO? Ridgeback Capital Investments has the biggest stake in the company at 13.4 percent prior to the offering, followed by Venrock Associates with 11.3 percent, Polaris Venture Partners at 8.1 percent, and Morgan Stanley with 6.9 percent. Ironwood’s founding CEO, 46-year-old Peter Hecht, has a 5.5 percent stake, while Fidelity Biosciences has a 4.8 percent holding.

Ironwood still has a way to go before it can start generating cash flow from its first product. Results are expected from the additional two clinical trials of linaclotide in the second half of 2010, and the company will need time after that to submit its application to U.S. and European regulators and wait for them to complete their reviews.

If Ironwood can pull off this IPO, plenty of other biotech companies will to it as a bellwether to rekindle investors’ appetites for speculative biotech companies developing new products. Last month, Seattle-based Omeros (NASDAQ: OMER) completed the first IPO of a traditional U.S. biotech in the development stage since February 2008. While the company raised $62 million, it was a flop for investors. Omeros stock is down 25 percent from its IPO price of $10.

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Seattle-based Blue Marble Energy, the developer of renewable energy and specialty chemicals from biomass, said it has received a $2 million state grant through a partnership with the Odessa Public Development Authority. The company plans to use the grant, from the Washington Community Economic Revitalization Board, to build a refinery in Lincoln County that will turn organic biomass from around Eastern Washington into as much as 858 metric tons of biochemicals and 700 metric tons of green ammonia per year, says CEO Kelly Ogilvie, in an e-mail. The facility is expected to create 30 to 50 full-time jobs in its first year, he says.

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[Update: 1:55 pm Eastern, 11/20/09] After a bitter standoff earlier this year with billionaire investor Carl Icahn over alleged mismanagement, Cambridge, MA-based Biogen Idec now faces another sharp attack from a major shareholder.

New York-based HealthCor Management, a hedge fund that invests in health and biotech companies, said today in a regulatory filing that Biogen (NASDAQ: BIIB) overpays CEO James Mullen, that his performance has been poor, and that the company has a record of “excessive and fruitless” spending on R&D and little regard for its shareholders. HealthCor portfolio managers Joseph Healey and Arthur Cohen, in a letter dated November 18, urged the board to “revisit” Mullen’s compensation, cut research spending, and start buying back shares to boost the stock price. HealthCor said it holds 3.65 million shares, or about a 1.3 percent stake in Biogen, and it has held a position for more than a year.

HealthCor is urging the board to turn things around by buying back $500 million to $1 billion worth of stock annually. That would reduce the supply of available shares, and increase the value of those that remain on the market.

“We fear that continued acquiescence to the status quo will be viewed as an indictment of the Board’s lack of focus on shareholder value creation,” HealthCor wrote in a letter to the board, which was disclosed to the Securities and Exchange Commission.

[Update with company response, 1:55 pm Eastern, 11/20/09.] Biogen Idec “actively engages with our shareholders and we appreciate their input,” says company spokeswoman Jennifer Neiman. That said, she also noted that Biogen has already done share repurchases worth $5 billion since 2004, and last month its board authorized an additional $1 billion of share repurchases.

HealthCor said in its letter that it has been arguing for changes at Biogen for more than a year. The fund noted that the company’s stock has seen no real growth for six years, and is currently trading near levels seen before the company filed for FDA approval of natalizumab (Tysabri) in 2004. (The stock was selling for $44.26 per share on February 17, 2004, and was at $46.05 at the time HealthCor wrote its most recent letter on November 18, 2009.)

While “investors have been left holding the bag,” in HealthCor’s words, the firm …Next Page »

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Seattle-based Dendreon (NASDAQ: DNDN), the developer of what it hopes will be the first FDA-approved treatment to actively stimulate the immune system against cancer, said today the U.S. regulatory agency has received its amended application and set a deadline of May 1, 2010 to complete its review. The company is seeking clearance to start selling sipuleucel-T (Provenge) for men with prostate cancer that’s no longer controlled by standard chemical castration therapies. The application includes data from a 512-patient study which showed the drug could extend lives by a median of four months when compared with a placebo.

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Seattle-based Omeros expects to apply for FDA clearance to start selling its first product by the second half of next year, and it also hoping to strike at least one partnership over the next couple of years with a bigger drugmaker, CEO Greg Demopulos said today in his first quarterly update running a public company.

Omeros (NASDAQ: OMER) is “on track” to finish enrollment next year of more than 1,000 patients in clinical trials of its lead anti-inflammatory drug candidate that’s supposed to help patients recover faster from arthroscopic knee surgery, Demopulos said on a conference call with analysts. Results from those pivotal studies should be available by the middle of 2010, and if the results are good, the company will ship off an application to the FDA to start marketing the product before the end of 2010, he said.

The clinical trial update was an important point for Omeros to make in the first week it has been legally allowed to make public statements since the 15-year-old company completed its initial public offering on October 7. Omeros raised about $62 million through the transaction, but its shares lost more than a third of their value in the first two weeks, earning it the dubious distinction of having the worst performing IPO of the year. Omeros has rebounded a bit since then, although its shares are still down 23 percent. Now the company is setting up expectations of events in the year ahead—like an FDA filing or a big corporate alliance—which could entice more investors to lift its stock out of the doldrums.

If the clinical trials go well, “we’ll have the first commercially available drug delivered directly to the surgical site to improve recovery” of knee surgery patients, Demopulos said.

The treatment, called OMS103HP, combines a couple of generic anti-inflammatory drugs into an injection designed to reduce post-operative swelling and speed up recovery time, Demopulos said. The clinical trials aren’t designed to see if the Omeros drug can wean patients off opioid-based pain relievers that circulate throughout the bloodstream, but it’s possible that could be one of the benefits, Demopulos said in response to a question from analyst Mark Monane of Needham & Company. Omeros is also looking at health economic analyses that might help justify the drug’s expense by showing how it speeds up recovery time, reducing rehab costs, and allows people to get back to work sooner than they otherwise would, Demopulos said.

While investors are certainly interested in the knee surgery drug candidate, Omeros has made plain that it isn’t putting all its eggs in that basket.

One key piece of the strategy is based on scientific work that it hopes will enable the company to hit a whole new class of targets on cells that have long been considered “undruggable.” This is the group …Next Page »

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Waltham, MA-based ImmunoGen (NASDAQ: IMGN) said today that Amgen has purchased a second license to develop a treatment that uses ImmunoGen’s technology for linking targeted antibodies to cell-killing agents that make them more potent. ImmunoGen will get $1 million upfront and could receive $34 million worth of milestone payments over time if Amgen is successful in developing a drug against an undisclosed target on cancer cells. Amgen bought its first such license to the ImmunoGen technology in September.

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San Diego-based Ligand Pharmaceuticals (NASDAQ: LGND) said today it has received $2 million in milestone payments as part of research collaboration with Merck that is due to expire next month. The partnership started with Organon, which was later acquired by Schering-Plough, which was then acquired by Merck.

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Few doctors knew much about a rare brain infection called PML back in 2005, when two patients on a hot new multiple sclerosis drug from Biogen Idec and Elan died from the side effect. The infection, at the time, was generally considered a death sentence. But now with three years of data from more than 60,000 patients worldwide who have taken natalizumab (Tysabri) under strict monitoring by physicians, a new picture is emerging that shows PML is still very much a serious threat, but that it isn’t nearly as deadly as first feared.

While each and every confirmed case of PML, known formally as progressive multifocal leukoencephalopathy, scares investors in Cambridge, MA-based Biogen (NASDAQ: BIIB) and Ireland-based Elan (NYSE: ELN), I sought to assemble a big picture view of exactly how deadly PML really is when I interviewed Al Sandrock last week. He’s the senior vice president of neurology R&D at Biogen, and an assistant clinical professor of neurology at Harvard Medical School.

Before diving too far into the numbers about the risk of Tysabri, a little background is required. This drug, an antibody treatment designed to block certain white blood cells that cause MS when they attack nerves, has a history of also making patients vulnerable to infection. Biogen and Elan yanked it off the market in February 2005 after two cases of the brain disease were confirmed among patients taking the drug; a month later, a third case was confirmed. But legions of patients still demanded the drug, considered to be the most effective medicine on the market at reducing the disabling nerve damage from multiple sclerosis flare-ups. The FDA allowed the drug to return to the market in July 2006 after determining its benefits outweighed the risks, but it also forced doctors into a strict monitoring program to keep an eye out for the early signs of PML.

This matters not just for doctors and patients, but for Biogen’s and Elan’s financial futures. The drug, Biogen’s fastest-growing product, generated $560 million in sales in the first nine months of this year. (The importance of this drug is one reason why investors get so ticked at Biogen when it isn’t exactly forthcoming about every newly diagnosed case, but that’s a bone to pick another day.)

When the drug came back on the market, its FDA-approved prescribing information contained a prominent warning that about 1 out of every 1,000 patients on the drug were likely to get PML. But that was really just a forecast, and the actual risk-benefit balance for this drug is really a moving target that shifts over time when a new case is confirmed. So I sought to build a simple chart when I spoke to Sandrock that provides a snapshot of PML cases in February 2005, when the drug was pulled off the market because of the PML risk, versus those confirmed as of yesterday. Here’s what I gathered:

The February 2005 figures came from clinical trial data and formed the foundation for the FDA-required warning of the 1-in-1,000 chance of getting PML. The more recent figures include all the experience of patients who have gotten the drug since it was returned to the market in July 2006. The thing that jumped out at me was the fact that only five of the 27 confirmed patients with PML have died—meaning that the current survival rate stands at over 80 percent.

That curious fact has been buried under a rash of scary headlines …Next Page »

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Three years have gone by since the region’s top biotech company was taken over by Eli Lilly, so it seemed like a good time to find out where all that talent migrated around the Northwest.

—Icos was once the great hope for Seattle biotech, but now three years have passed since the Bothell, WA-based company agreed to be sold to Eli Lilly for $2.3 billion. I wanted to find out where most of that scientific and business talent went in the wake of the mass layoffs that ensued, so I found a few Icosahedrons (as I’m told some of them like to be called) to help me put together a fascinating list of 270 alumni who have moved on to new opportunities.

—Seattle-based Trubion Pharmaceuticals (NASDAQ: TRBN) said this week that its co-founder and CEO, Peter Thompson, has resigned. He’ll be replaced on a temporary basis by Arch Venture Partners’ Steve Gillis while the company searches for a permanent replacement. I also recapped some of Trubion’s latest tribulations, to give a sense of what Thompson is leaving to his successor.

—Kirkland, WA-based OVP Venture Partners wanted a bigger piece of the original action in San Diego-based Fate Therapeutics, and now it grabbed some of that by leading a $30 million Series B venture round in the stem cell company. Carl Weissman, an OVP managing director and the CEO of Accelerator, will take a seat on Fate’s board as part of the deal.

—Seattle-based Oncothyreon (NASDAQ: ONTY) said it has decided to advance one of its experimental cancer drugs, PX-866, into mid-stage clinical trials next year. This is another sign of the company’s improving financial health, and its shift from cancer vaccines to cancer drugs, which I described in an in-depth feature earlier this year.

—Seattle-based NanoString Technologies earned a golden word of mouth endorsement this week from the Broad Institute of MIT and Harvard, which agreed to buy a couple of NanoString’s gene-expression tools to use them for a three-year research collaboration. Broad director Eric Lander, one of the big names in biology, said NanoString has “exciting” technology.

—People who work in Seattle’s global health cluster love to tell anecdotes about how certain projects can make a difference in people’s lives, but there hasn’t been as much effort to really catalog all the projects going on here and where they extend around the world. That was the goal of the Washington Global Health Alliance, a nonprofit led by Lisa Cohen, who wrote about it in this guest editorial. You can read more about the alliance in a profile I did of Cohen and her fledgling association in January.

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Another day, another piece of bad news from Genzyme. The Cambridge, MA-based biotech giant (NASDAQ: GENZ) said today it is scrapping development of a next-generation drug for kidney disease after it was unable to beat its existing treatment on the market.

Genzyme’s experimental drug, called an advanced phosphate binder, didn’t appear any better at getting rid of excess phosphorus from the blood of kidney dialysis patients than Genzyme’s sevelamer carbonate (Renvela) in a clinical trial of 349 patients, the company said in a statement. Genzyme had been hoping that the new drug would be more potent.

Those following the Genzyme story know about what’s become a brutal year. Some of the big setbacks were the viral contamination at its Allston, MA factory in June that created shortages of its top-selling products, the failure to win FDA approval of large-scale manufacturing for a Pompe drug, and the rejection of a leukemia drug for elderly patients.

But this kidney drug failure is another serious body blow. The company generates $850 million a year in sales from its two phosphate binder treatments. Patents that protect that franchise from competition from cheaper generics will expire in September 2014, according to Christopher Raymond, an analyst with market research firm Robert W. Baird. The next-generation kidney drug was supposed to help the company extend the patent life of its kidney drug market, Raymond said.

The failure is “a very significant negative in our view,” Raymond said in a note to clients today. He added that he had been starting to warm up to the company, as it has been inching closer to resolving the Allston manufacturing problems, but he called today’s halting of the kidney program a “game-changer.” Raymond has a $54 price target for the stock.

Shares of Genzyme dropped 1.3 percent to $49.65 at 9:39 am Eastern time today after the news was announced. The stock has dropped 25 percent this year.

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NanoString Technologies, the maker of a machine that lets scientists digitally analyze how genes are turned on or off in a tissue sample, just won a glowing endorsement from one of the biggest names in biology—Eric Lander of the Broad Institute of MIT and Harvard.

The Seattle-based company has nailed down a three-year research collaboration with the Cambridge, MA-based Broad Institute to look at how networks of hundreds of genes work in concert to form immune defenses against foreign invaders. Financial terms aren’t being disclosed, but NanoString has sold the Broad a couple discounted nCounter machines that normally retail at $235,000 apiece, and will provide proprietary reagent chemicals to operate them, according to acting CEO Wayne Burns. In return, NanoString gets certain intellectual property rights from the collaboration, advice on how to improve its tool, and some golden word of mouth.

NanoString, a private company founded in 2004 with technology from the Institute for Systems Biology in Seattle, has been building stronger ties to the Broad over the past year as people there have started using one of the first commercially available machines, Burns says. The mounting enthusiasm at the institute was instrumental in helping NanoString nail down a $30 million venture capital round in June. The round was led by Clarus Ventures, which has an office just a couple blocks from the Broad. Word has spread to the point that 15 researchers at the Broad are now involved in 20 separate collaborations to see whether the NanoString technology can yield biological insights that couldn’t realistically be attained with competing instruments, Burns says.

“NanoString offers the ability to look at hundreds of genetic markers across many samples at relatively low cost and with high sensitivity. They have developed exciting technology with potential applications to a wide range of scientific problems,” said Lander, the director of the Broad Institute, in a NanoString statement. “We look forward to working together to explore new ways of using of this technology.”

That kind of endorsement is sure to carry weight in the biomedical research community, and can’t hurt a fledging company trying to increase sales. “If you’re in the industry you know exactly who Eric Lander is, the reputation he has, as well as that of the Broad. We have the best of the best endorsing our technology,” Burns says.

For those who are new to the NanoString story, the idea is to allow researchers to look at a large number of genes, with digital precision, to see the extent to which they are turned on or off in a given sample. It’s the sort of technology that’s supposed to help researchers do …Next Page »

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[Update: 12:30 pm Pacific, 11/20/09] Icos was once the great hope for Seattle biotech. Founded in 1990 with an investment from Bill Gates, it went on over the next 15 years to create a $1 billion molecule for treating erectile dysfunction, and employed about 700 people nationwide at its peak. For a while, it looked like it would carry the torch as the only big, independent, profitable biotech company with growth potential and staying power in the Seattle area.

That hope was dashed about three years ago, when Icos agreed to be acquired by its partner, Eli Lilly, ultimately for about $2.3 billion. Many readers will remember the controversy over this deal, which I covered with intensity through the fall of 2006 for The Seattle Times. Employees who had worked together for years and built a great camaraderie were deeply upset with CEO Paul Clark, who enriched himself with a $23 million golden parachute through the transaction while kicking most of them to the unemployment line. Shareholders objected to what they saw as a sweetheart deal for management, and ultimately forced Lilly to raise its bid before they handed over their shares.

Even Icos’s founding CEO and legendary leader, George Rathmann, who was not in good health at the time, objected to what had become of the company he created. It had essentially squandered an entire pipeline of drug candidates in the wake of its hit with tadalafil (Cialis), leaving no real opportunity for an encore, and no real strategic alternatives other than getting bought by Lilly.

About 550 people were employed locally at Icos at the time the Lilly acquisition closed in January 2007, and about 350 high-paying local jobs were cut. All that was left was a contract biotech drug manufacturing facility, which Lilly didn’t want, and sold to CMC, a Danish company that continues to operate at the old Icos facility in Bothell today.

But now that three years have gone by, what happened to all that intellectual capital that came to create exciting new biotech drugs for Icos? This is an important question for the future of Seattle biotech, given how companies that look to start or expand to new locations always consider the caliber of the local workforce as one of the main criteria.

From what I’ve been able to gather by talking to some very helpful former Icosians, I’ve discovered that quite a few of these bright people have stayed in the Seattle region. Some left for new opportunities elsewhere, usually after they couldn’t find suitable work in Seattle. Quite a few more than I expected have gone on to co-found or play critical technical roles in some intriguing startups—including Calistoga Pharmaceuticals, CoCrystal Discovery, Mirina, Theraclone Sciences, and Xori.

What follows here is a list of more than 270 names I’ve been able to gather from people who had made contributions to the science, medical, or business aspects of Icos. Special thanks go out to the following Icos alumni who were hugely helpful in allowing me to piece this list together: David Crowe of Mirina; Pat Gray of Accelerator; Ed Kesicki, Allen Casey, and Stephanie Florio of the Infectious Disease Research Institute; and Albert Yu of Calistoga Pharmaceuticals.

Of course, this list isn’t comprehensive. I’ve done my best to verify everybody’s connection to Icos through their LinkedIn profiles or from other sites—but I haven’t been able to confirm every name referred to me. Some people haven’t kept their profiles up to date on LinkedIn or on other sources. So if you can think of former Icos alumni who I’ve overlooked, or if you see any mistakes, please send us an e-mail at editors@xconomy.com, or to me personally at ltimmerman@xconomy.com. Or feel free to post a comment at the bottom of the story. I figure this is a starting point for what could be a valuable networking resource.

—Lee Adams, research scientist, Institute for Systems Biology

—Janet Adolphson, senior research scientist, AMRI

—Laura Afflerbaugh, research associate, Genentech

—Brian Albarran, senior scientist, Trubion Pharmaceuticals

—Lynn Allen, founder, Allen Clinical Research

—Dan Allison, senior director of therapeutic design, VLST

—Juli Ashburn, senior field force automation administrator, ZymoGenetics

—Eric Austin, senior toxicology consultant, Veritox

—Connie Ave-Teel, manager, lab support, CMC Icos

—Tim Axtelle, vice president of product development, Allozyne

—Susan Aznoff, owner, Petlane Pals

—Lauret Ballsun, owner, LBC Pharmaceutical Professionals

—Cari Barthe, recruiting project manager, NWRPros

—Ted Baughman, senior scientist, chemistry, Saltigo

—Chan Beals, senior director, Merck

—Kelly Bickley, quality control associate scientist, CMC Icos

—Julie Birashk, process development associate, CMC Icos

—Bodil Bjorner, development associate, CMC Icos

—Kyla Bjornson, senior research associate, Gilead Sciences

—Kim Black-Washington, director of marketing and strategic development, Xcelience

—Leonard Blum, senior vice president and chief commercial officer, Theravance …Next Page »

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The big new cholesterol-lowering drug from Genzyme and Isis Pharmaceuticals, which both companies are counting on as a future profit driver, passed its first major clinical trial, but investors didn’t like what they saw when full details were released this morning at a major medical meeting.

Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) fell 16 percent to $11.17 at 1:30 pm Eastern time after details from the trial of the drug, mipomersen, were released at the American Heart Association’s scientific sessions in Orlando, FL. Cambridge, MA-based Genzyme (NASDAQ: GENZ), which isn’t nearly as dependent on the drug, saw its shares climb 2.6 percent.

Expectations have been running high for this drug for years, with many seeing it as the next big thing for cholesterol after the invention of multi-billion dollar statin drugs such as Pfizer’s atorvastatin (Lipitor). Isis’ very bullish CEO Stanley Crooke told me last month that the drug represents an historic advance. The drug is thought to have promise because it is the first of its class that’s made of specially engineered strands of RNA drugs to block a problematic protein in the body, which often can’t be hit by conventional small-molecule drugs. In this case, mipomersen is engineered to block the production of a protein called apoB that carries the so-called “bad” LDL cholesterol in the bloodstream. The drug is originally being tested among patients with a one-in-a-million genetic condition that causes them to die young from their extremely high cholesterol, although Genzyme and Isis envision this drug becoming more widely used among wider populations of people with extremely high cholesterol that can’t be controlled by existing meds.

“Mipomersen may well be a valuable addition to the therapeutic armamentarium,” said Frederick Raal, the primary investigator of the pivotal study of mipomersen, during a webcast from today’s scientific meeting. Raal is the director of the Carbohydrate and Lipid Metabolism Research Unit at the University of the Witwatersrand in South Africa.

So what was in the data that made Isis investors, at least, skittish? First off, it should be noted that the headline results were released back in May, when Isis and Genzyme said that mipomersen reached its goal of lowering “bad” LDL cholesterol by 25 percent, compared with a 3 percent reduction on placebo, in a study of 51 patients with homozygous familial hypercholesterolemia. This meant that patients had a 100 milligram per deciliter drop in their LDL scores, which significantly lowers their risk of dangerous cardiovascular events like heart disease and stroke, Raal said. Isis and Genzyme added further detail on the effect at today’s meeting, essentially showing that secondary goals, such as lowering total cholesterol and triglycerides, also were achieved among patients on the drug.

But the treatment, which was given in a once-weekly 200 milligram injection, had some side effects worth noting. Four of the 34 patients $12 percent) who were treated with mipomersen had …Next Page »

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[Updated: 5:55 pm Pacific, 11/16/09] Trubion Pharmaceuticals, the Seattle-based company developing new drugs for autoimmune diseases and cancer, said today that its founding CEO, Peter Thompson, has resigned and director Steve Gillis of Arch Venture Partners will step in to fill the void as executive chairman.

Trubion (NASDAQ: TRBN) said today that Thompson is leaving his positions as chairman, CEO and president of the company to “pursue other interests,” and Gillis, a member of the board, has stepped up to serve as acting president and executive chairman of the company while it plans to start a formal search for a new CEO. The company has also shuffled a few other management slots, with Michelle Burris being promoted from chief financial officer to chief operating officer, and John Bencich, the company’s senior director of finance, receiving a promotion to take Burris’s place as CFO.

The company has struggled the past two years, since it underwhelmed investors with results from a 276-patient clinical trial of its lead drug candidate, TRU-015 for rheumatoid arthritis. Back in February, the company cut one-fourth of its workforce in an effort to hold onto its remaining cash. But the company has gotten a little bit of mojo back in recent months. It announced encouraging results from a second drug candidate, TRU-016, for leukemia in June, and parlayed that into a partnership with Redwood City, CA-based Facet Biotech (NASDAQ: FACT) that generated $20 million in upfront cash, and could be worth as much as $176 million over time. The company still has a partnership intact with Pfizer to develop the rheumatoid arthritis drug, which it inherited through its acquisition of Wyeth.

Today’s statement from Trubion didn’t say why Thompson is leaving, or what he plans to do in the future, other than that he’ll be available as a consultant to the company. He was listed as 49 years old when the company issued its latest proxy statement in April. Thompson didn’t respond immediately to a request for comment, but noted in a statement that, the company has two partnerships, and three drugs in clinical trials. “With these foundational strengths, a talented leadership team, and an upcoming year replete with significant milestones from its clinical programs, Trubion is well-positioned to realize its potential,” Thompson said in the statement. “I have great confidence in the continued ability of the Trubion team to execute its strategy.”

While Trubion conducts its search for a new CEO, Burris said the company will continue to work on executing goals within its partnerships with Pfizer and Facet Biotech.

“Peter set the company up very well,” Burris says. “We’re well positioned, and we’ll continue to execute on our programs.”

Trubion went public three years ago on enthusiasm for TRU-015, a product designed by Trubion scientists to have the same targeting capability of Roche and Biogen Idec’s rituximab (Rituxan) against inflammatory cells with a marker called CD20. But because the Trubion drug is a smaller molecule than Rituxan, it should be better at penetrating deep into tissues like bone marrow and lymph nodes, where it can stop overactive immune system B-cells from causing damage. Ed Clark of the University of Washington, an immunologist and scientific adviser to the company, once called these “leaner and meaner” drugs.

Thompson, along with Jeff Ledbetter and Ken Mohler, co-founded Trubion in November 2002, when it was originally called Genecraft. Arch Venture Partners, Frazier Healthcare Ventures, Oxford Bioscience Partners, ATP Capital, and Bill Gates’ Cascade Investment all participated in a $13.6 million financing at that time. Mohler said the founders had “a shared vision of the next great immunology company in Seattle” like Immunex once was.

But Trubion has struggled to gain momentum with investors as a public company. It went public at $13 a share, and closed today at $4.13.

[Update: 5:55 pm Pacific time, 11/16/09.] Trubion disclosed Thompson’s severance package later today in a regulatory filing. He will receive one year of base pay, about $416,000, on the payroll date in January, and a lump-sum payment of about $28,000 for unused vacation time. He agreed to provide one year of consulting services, for no more than 20 hours a week, and will get paid $25,000 per month for the consulting, the company said. Thompson’s unvested stock options will immediately vest, giving him the right to buy 59,820 shares of Trubion stock, according to the document.

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Fate Therapeutics, the San Diego-based company on a quest to develop techniques that make stem cell research practical for the pharmaceutical industry, has raised $30 million in a Series B round of venture financing.

Kirkland, WA-based OVP Venture Partners led the deal, which included the three venture firms that co-founded the company two years ago—Arch Venture Partners, Polaris Venture Partners, and Venrock Associates. This time, Fate also drew investment from three strategic corporate investors, two of whom are being named—Astellas Venture Management, and Genzyme Ventures. The company has now raised a total of about $50 million since inception, according to Scott Wolchko, Fate’s chief financial officer.

The round is the latest step forward for Fate, which was founded by a band of high-profile scientists from Harvard University, the University of Washington, Stanford University, and The Scripps Research Institute. Fate generated some scientific buzz last month when one of its co-founders, Sheng Ding of Scripps, found a way to use three conventional small-molecule compounds to coax adult human cells into an embryonic-like state. That’s important not only because it circumvents the ethical controversy around destroying embryos for research, but it also paves the way for “industrialized” stem cells. The Ding lab’s method is twice as fast and 200 times more efficient than previous techniques of creating induced pluripotent stem cells—with potential to turn into any type of cell. The Fate method also sidesteps the use of viruses and genetic modification of cells that has been one of the main disadvantages of the prior methods—and a big reason why pharma has steered clear.

Fate’s hope is to keep building enough momentum for its stem cell production technology that it will become a useful tool for creating models of disease in the lab, and for toxicology testing to see which drug candidates have the best odds of success. Further in the future, it hopes to create regenerative medicines to replace damaged tissues in the body.

While that capability is getting built up, and Fate is seeking pharmaceutical partners to help pay the bills, the company is also pushing ahead with its own proprietary drug candidate in clinical trials. The drug, FT-1050—a conventional small-molecule chemical compound that isn’t nearly as risky as an injectable cell therapy—is designed to help improve the effectiveness of adult stem cell transplants for blood cancers like leukemias and lymphomas.

“This is a company that has performed exactly as planned,” says Carl Weissman, managing director with OVP, who is taking a board seat in connection with the financing. “This management team is rounding out into a very sharp and effective group. It made sense for us to double down.”

OVP invested a small amount in Fate’s Series A round, and by betting bigger this time …Next Page »

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San Diego-based Cadence Pharmaceuticals (NASDAQ: CADX) said today that the FDA has pushed back its deadline for reviewing the company’s intravenous pain reliever by three months. The FDA’s new deadline for completing its review of IV acetaminophen is now Feb. 12. The company said it remains confident it will win FDA approval, although shares fell 5 percent today on the news.

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[Update: 6:22 pm Eastern, 11/13/09] Just when you thought it couldn’t get worse for Genzyme, it did. The FDA reported today that it has found tiny bits of garbage—steel, rubber, and fiber—in vials of five of the major drugs produced by the Cambridge, MA-based biotech company.

Genzyme (NASDAQ: GENZ) shares fell $3.89, or about 7 percent, to $49.28 at the close of trading today after the FDA made its disclosure on its website.

The agency said it found the new contamination in five of Genzyme’s top-selling products—imiglucerase (marketed as Cerezyme), agalsidase beta (Fabrazyme), alglucosidase alfa (Myozyme), laronidase (Aldurazyme), and thyrotropin alfa (Thyrogen), according to a report from the Associated Press. The FDA estimates the contamination only affects about 1 percent of Genzyme’s products, and the agency says that no serious side effects have been reported related to the latest contamination, according to the AP.

This is the latest major setback for Genzyme’s manufacturing operation, which was hit by a viral contamination in June that forced it to shut down production at its Allston Landing plant over the summer. That earlier contamination caused Genzyme to slash its sales estimates for the year, and created a new opportunity for competitors like Shire and Protalix Biotherapeutics.

Christopher Raymond, an analyst with private equity firm Robert W. Baird who covers Genzyme, said in a note to clients today that the latest contamination shouldn’t affect the company’s ability to start shipping new batches of imiglucerase and agalsidase beta to patients, but noted that “continued issues at Allston, and the fact that FDA inspection of Allston remains ongoing is not encouraging.” Fellow Baird analyst Tom Russo noted that “underscores the upside potential” of Shire to gain new market for its products.

[Updated comment from Genzyme, 6:22 pm Eastern, 11/13/09]

Genzyme issued a statement later Friday about the situation. The company says a global review of its safety database “has not identified any safety concerns to suggest that patients treated with Genzyme products have been exposed to foreign particles. However, a theoretical safety risk remains should a particle enter the bloodstream.”

The company added that doctors are being reminded to visually inspect vials for foreign particles before patients are injected. It says the rate of foreign particles in vials has not increased over time, although the company “remains committed to reducing the frequency of foreign particles in all of our products.”

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Qliance Medical Management, the Seattle-based company that operates primary care clinics that don’t accept insurance payments, has been selected for a one-year pilot program to offer services to members of Washington state’s largest employee union. The agreement is with the South Health & Wellness Trust, which provides health benefits to 50,000 union members and their families in Washington state, including those represented by the United Food & Commercial Workers. Members of the trust who join the Qliance plan will pay $3 a week—$156 a year—to get unlimited access to Qliance primary care services, and will also get full wrap-around insurance coverage for specialists or emergency services that Qliance does not provide.

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Cequent Pharmaceuticals, the Cambridge, MA-based developer of RNA interference drug technology, said today it has filed an application with the FDA to begin the first clinical trial of an orally-delivered RNAi treatment. Cequent is seeking to test its drug, CEQ508, at a variety of doses in 18 patients with polyps that lead to colon cancer (familial adenomatous polyposis). Cequent hopes to get the trial underway before the end of March, at the Fred Hutchinson Cancer Research Center in Seattle.

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Seattle-based Oncothyreon (NASDAQ: ONTY) said it has decided to advance an experimental cancer drug into mid-stage clinical trials in the first half of 2010. The company plans to run two or more trials of PX-866, an oral pill made to block the PI3 Kinase pathway implicated in cancer cell growth. This shift in priorities, from cancer vaccines to cancer drugs which I profiled back in March, was applauded by analyst Simos Simeonidis at Rodman & Renshaw. “The company has not only been transformed into a well-run and very lean operation, but has literally been brought back from the brink of disaster,” Simeonidis wrote in a note to clients.

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