San Diego Life Sciences Roundup: Evoke Pharma, Isis, Otonomy, & More
There was a spate of significant developments following the Labor Day holiday, as San Diego’s life sciences companies continued to take advantage of favorable market conditions. Here’s my rundown from a pretty newsy week.
—Otonomy, the San Diego startup founded by Avalon Ventures partner Jay Lichter to advance new treatments for Meniere’s disease and other ear disorders, raised $45.9 million in a Series C round of financing. Otonomy CEO David Weber said the capital is needed to advance two drug candidates, OTO-104 and OTO-201, to late-stage trials, advance a third drug program to clinical trials and for general corporate purposes. Otonomy said OrbiMed Advisors led the investment, which was joined by two new investors, Aperture Venture Partners and Osage University Partners, as well as existing investors Avalon Ventures, Domain Associates, Novo Ventures, RiverVest Venture Partners and TPG Biotech.
—Let the corporate integrating begin. ITC Nexus, a Warburg Pincus portfolio company based in Piscataway, NJ, said it has acquired San Diego’s Accumetrics. No financial terms were disclosed in the deal, which combines ITC’s hemostasis management and point-of-care testing business with Accumetrics’ diagnostic device for assessing how well a patient is responding to antiplatelet therapies. Accumetrics had raised over $74 million in VC funding from Arnerich Massena & Associates, BBT Fund, Essex Woodlands Health Ventures, Kaiser Permanente Ventures, PTV Sciences, and RiverVest Partners. The combined company will assume a new name, Accriva Diagnostics, which will be based in San Diego.
—San Diego-based Evoke Pharma, which is developing a nasal spray for treating diabetic gastroparesis, set the price range for 2.1 million shares being offered in its IPO at between $12 and $14 per share, according to a recent regulatory filing. The company now plans to raise at least $33.8 million in the offering. At the mid-range price of $13 a share, the IPO would give Evoke Pharma an initial market valuation of roughly $75 million. The company plans to trade on the Nasdaq under ticker symbol EVOK. Shareholders include Domain Associates (30.9 percent), Latterell Venture Partners (30.9 percent), CEO David Gonyer (13.8 percent), and co-founder Cam Garner (10.2 percent).
—San Diego’s Fate Therapeutics, a stem cell biotech company, priced the 4.6 million shares being offered through its IPO between $14 and $16 per share, according to a recent regulatory filing. The company intends to raise $73.6 million, and would have an initial market cap of approximately $189.5 million, were it to price in the middle of its range. It will trade on the Nasdaq under ticker symbol FATE. Fate has raised over $42 million in venture funding from Arch Venture Partners (16.8 percent ownership pre-IPO), Polaris Partners (16.8 percent), Venrock (16.8 percent), and OVP Venture Partners (15.4 percent).
—Qualcomm (NASDAQ: QCOM), the San Diego wireless technologies giant, said its Qualcomm Life subsidiary unveiled its 2net Mobile technology platform at the Uplinq 2013 developers conference in downtown San Diego. Qualcomm said its 2net Mobile wireless technology enables healthcare providers to collect and aggregate clinical data from multiple medical device sensors so it can be distributed across a variety of mobile phones and tablets, Qualcomm said the system has been designed to meet privacy and security requirements set by the government.
—San Diego-based Accelrys (NASDAQ: [[ticker:ACCL) said it acquired the environmental health and safety specialist ChemSW, which provides on-premises and cloud-based technology to help customers manage their chemical inventory and environmental health and safety compliance programs. Accelrys agreed to pay ChemSW shareholders a total of $15.3 million in cash, and certain executives could receive as much as $2 million more if they meet certain operating milestones on schedule. The deal was preceded by a series of acquisitions for Accelrys, including the 2012 buyouts of Velquest and Aegis, and the 2013 acquisition of Vialis nine months ago. Accelrys specializes in software that helps organizations better manage their scientific R&D and innovation.
—Shares of Isis Pharmaceuticals (NASDAQ: ISIS) have been strengthening since the Carlsbad, CA-based RNA interference drug developer reported interim data from an ongoing midstage trial of its experimental heart drug. The company said its experimental drug ISIS-APOCIIIRx reduced significantly triglycerides in more than 75 percent of the patients tested. The drug is being tested in patients with very high to severely high triglycerides.
—Elcelyx Therapeutics, the San Diego diabetes specialist, said it has spun out a separate company called NaZura BioHealth, and provided NaZura with a $5 million credit line to advance development of Lovidia, an over-the-counter dietary supplement meant for weight management. Elcelyx CEO Alain Baron also will serve as CEO of NaZura, and the two companies will share the same board of directors. NaZura intends to commercialize Lovidia by early 2014.
—In a separate announcement, Elcelyx said its long-acting formulation of the generic diabetes drug metformin is meeting its main goal of significantly reducing fasting blood plasma glucose among patients during the first four weeks of treatment of a mid-stage trial. Final results are expected in late October. Elcelyx said its delayed-release formulation drug candidate, dubbed NewMet, reduces nausea and vomiting that some Type 2 diabetic patients experience while on metformin.
—San Diego’s Allylix, an industrial biotechnology company, said it was named one of 15 companies to win a Defense Energy Technology Challenge by developing a renewable, high-quality, and cost-effective high density fuel comparable to JP-10, the Pentagon’s existing petroleum-based fuel standard. Allylix has developed technology to genetically engineer yeast to produce a wide range of terpene-based products. A spokeswoman for Allylix said its sustainably produced terpenes can be used directly as high density fuels or as additives to other hydrocarbons to improve the performance characteristics of a given fuel. The third annual Defense Energy Technology Challenge was managed by the Clean Technology and Sustainable Industries Organization in partnership with the U.S. Army, Navy and Air Force.
—San Diego-based Halozyme Therapeutics (NASDAQ: HALO) said the European Commission has given Roche, one of its key pharmaceutical partners, marketing authorization for the use of a subcutaneous formulation of trastuzumab (Herceptin) as a time-saving treatment for HER2-positive breast cancer. The formulation uses Halozyme’s recombinant human hyaluronidase (rHuPH20) and can be administered as an injection in two to five minutes, rather than intravenously through a process that takes 30 to 90 minutes.
—Crinetics Pharmaceuticals co-founder Steve Betz told me the San Diego startup has been awarded a $2.2 million Small Business Innovative Research grant from the National Institutes of Health to develop new drug candidates for the treatment of pituitary tumors. Such tumors produce excess growth hormone, leading to symptoms that can include gigantism, excess soft tissue growth, arthritis, hypertension, diabetes, heart failure, kidney failure, and vision loss, a condition called acromegaly. Crinetics is focused on oral somatostatin drugs with a “bias” towards activating the intracellular signaling pathways that inhibit hormone secretion. In a note, Betz said, the grant will put Crinetics on “pretty solid financial footing” through the end of 2015. “We’re going to be moving labs in a couple of weeks and adding a couple more scientists to the team, as well,” he said.
—Richmond, CA-based Sangamo BioSciences (NASDAQ: SGMO) said it has acquired San Diego-based Ceregene, a San Diego biotech focused on developing adeno-associated virus (AAV) gene therapies. Sangamo agreed to issue 100,000 shares of its stock (valued at just over $1 million) to Ceregene shareholders as well as subsequent milestone payments.