The week started amid anticipation of a new round of public debuts, with six of the 11 companies queued up coming from the life sciences, according to Renaissance Capital. Then on Tuesday, the Federal Reserve singled out two sectors as overvalued: social media and biotechnology. The biotech indices dropped nearly 4 percent the next two days and have continued to fall Thursday. Will IPOs be affected? As of this writing, three of the six life science firms on the slate have gone public. We lead this week’s roundup with the one IPO on our side of the country, CareDx, plus more of the latest news on fundraising, deal making, and drug testing from the West Coast.
—CareDx ((NASDAQ: CDNA), a Brisbane, CA maker of heart diagnostics, took its shares public Wednesday, selling 4 million at $10 apiece to raise $40 million before fees. That’s about 20 to 25 percent lower than it hoped for. Formerly known as XDx, the firm’s main product is a monitor that tests the blood samples of heart transplant patients to warn doctors of post-transplant rejection. Its top pre-IPO shareholders were Kleiner, Perkins, Caufield & Byers, TPG, Sprout Capital, Intel, and Burrill & Co. Pre-IPO shareholders agreed to buy up to 345,000 shares in the offering. Underwriters can sell an additional 600,000 shares in the next 30 days.
—Our San Diego editor Bruce V. Bigelow interviewed Rich Heyman, the scientist-CEO who sold two San Diego-based cancer companies in the span of a year. We examined his strategy to optimize the value of second-generation drugs that treat hormone-driven cancers. Last summer, Johnson & Johnson ((NYSE: JNJ) bought Heyman’s Aragon Pharmaceuticals for $1 billion. Almost exactly a year later, Roche’s Genentech bought Aragon’s successor company, Seragon Pharmaceuticals, for up to $1.7 billion. Here’s how Heyman did it.
—Genentech and Exelixis (NASDAQ: EXEL), both of South San Francisco, CA, said Sunday that Exelixis’s experimental cancer drug cobimetinib, when combined with the approved drug vemurafinib (Zelboraf), increased the life span of patients with a specific type of advanced melanoma compared to vemurafinib alone. The Phase 3 study gathered 495 patients with melanoma that carries the the BRAF V600 mutation. Genentech said it plans to submit the data to the Food and Drug Administration for approval. Exelixis originally sold development rights for cobimetinib to Genentech in 2006.
—Genentech didn’t fare as well with Phase 2 clinical results of crenezumab, a treatment for Alzheimer’s disease that was originally developed by Swiss firm AC Immune. Genentech and its parent, Roche, were in charge of a trial to treat mild-to-moderate Alzheimer’s. The results were disappointing, but still held “a glimmer of hope,” according to Matthew Herper of Forbes.
—San Diego-based Edico Genome raised $10 million in Series A financing to commercialize the specialized processor technology it has been developing to slash the time and cost of genome mapping. It raised the round from Qualcomm Ventures, Axon Ventures, and Greg Lucier, the former chair and CEO of Life Technologies. Edico says its technology reduces the computational time required for analyzing a whole human genome from 24 hours to 18 minutes.
—San Diego-based Otonomy, which has raised $144 million from investors since the biotech was founded in 2008, plans to raise as much as $86 million in an IPO, according to a regulatory filing. Avalon Ventures partner Jay Lichter started the company to develop new therapies for ear diseases and disorders. Its lead candidate is a long-lasting antibiotic gel intended to treat various types of middle ear infections among children who undergo tympanostomy tube placement surgery.
—Freedom Meditech has raised almost $1.2 million from investors in a round that aims to raise $6 million for the San Diego diagnostic equipment maker, according to a regulatory filing. The FDA cleared the technology last year. It is intended for use by optometrists and ophthalmologists to screen their patients for diabetes during routine eye exams.
—Enzyme maker Codexis (NASDAQ: CDXS) of Redwood City, CA, said Monday it inked a deal with GlaxoSmithKline (NYSE: GSK) that gives the drug maker license to use Codexis’s protein engineering technology, the first time a health care entity has licensed the platform, dubbed CodeEvolver. The deal pays Codexis $6 million upfront and $19 million more in milestones over two years. Codexis shares rose more than 80 percent upon the news, to a high of $2.65, before settling back down.
—Ultragenyx Pharmaceutical (NASDAQ: RARE) of Novato, CA, a developer of treatments for rare diseases, closed Monday a follow-on stock offering that grossed about $60 million for the company. The firm sold 1.6 million shares at $40 apiece, and other stockholders sold approximately 706,000 shares, the sale of which did not benefit the company.
Bruce V. Bigelow contributed to this roundup.
Photo of the San Diego County Fair courtesy of Friend of Xconomy Julie Wright.