What a week to round up. Against a backdrop of regulatory approvals, strategic deals, and R&D initiatives, a fresh salvo of life sciences IPOs signaled a resurgence in public offerings already running ahead of last year’s pace. We also saw moves to resolve weeks of drama at The Scripps Research Institute in San Diego and at the headquarters of California’s stem cell agency in San Francisco. So, without further ado…
—In a statement Monday, chairman Richard Gephardt of The Scripps Research Institute’s board of trustees said Michael Marletta plans to leave the institute, following an internal faculty revolt over the new president’s proposed deal with USC to bridge a $21 million funding shortfall. Marletta’s tenure as president began in early 2012. In a very short statement, the former St. Louis congressman said the board is working on a transition plan with Marletta.
—In our other denouement of the week, the man who succeeded Alan Trounson as president of the San Francisco-based California Institute for Regenerative Medicine pledged to act with personal ethics and integrity. A week after officially leaving his office at the state’s stem cell agency, Trounson joined the board of Newark, CA-based StemCells, a startup that received CIRM funding. The new CIRM president, Randy Mills, said he will refuse gifts or travel payments from any company, institution, or individual who gets CIRM funding. Mills also declared that he will not accept a job with any CIRM-funded company for at least a year following his departure.
—American life sciences companies raised $3.9 billion in 55 initial public offerings during the first half of 2014, accounting for more than 81 percent of the $4.7 billion raised globally in 68 IPOs, according to a tally from Burrill Media. In a statement, CEO G. Steven Burrill said, “The first half of 2014 saw the most life sciences offerings completed in any six month period ever.”
—Meanwhile, life sciences companies continued to go public, but it hasn’t been as easy as it was just a few months ago. In its first day of trading yesterday, San Diego-based Pfenex (NYSE: PFNX) fell to $5.30 a share. The company’s lead candidate is a biosimilar form of ranibizumab (Lucentis), a drug sold by Genentech and Novartis for the wet form of age-related macular degeneration. Pfenex raised $50 million in its IPO by offering 8.3 million shares at $6 a share. Pfenex initially planned to raise $65 million by offering 5 million shares priced somewhere between $12 and $14 a share. At $6, Pfenex has a market valuation of $118 million, or 43 percent below its initially proposed market cap of $207 million.
—Seattle-based immunotherapy company Immune Design (NASDAQ: IMDZ), meanwhile, did make it through the IPO queue this week—albeit not with as big a splash as it had hoped. Immune Design priced 5 million shares at $12 apiece, the low end of its $12 to $14 range, raising a total of $60 million. Further, insiders bought about $20 million of the stock in the IPO, according to research firm Renaissance Capital. Column Group (26.1 percent stake before the IPO), ProQuest Investments IV (24.1 percent), Alta Partners (20.9 percent) and Versant Ventures (20.9 percent) own most of the company’s shares.
—Another San Diego biotech, La Jolla Pharmaceutical (NASDAQ: LJPC), raised over $50 million in gross proceeds after pricing an underwritten offering of 4.8 million shares at $10.50 a share. After deducting the underwriting costs, the company said it plans to use the proceeds for general corporate purposes, including funding its ongoing and future clinical trials, and for general and administrative expenses.
—Brisbane, CA-based Atara Biotherapeutics looks like it’ll have to wait a little longer before it makes its debut on the Nasdaq. A report from Thomson Reuters indicated that Atara has postponed its IPO because clinical data came in that it has to disclose publicly to investors before pricing the offering. Atara was formed a few years ago around some drug programs licensed from Amgen for muscle-wasting disorders and cancer. The company aims to raise about $80 million in its IPO.
—Perhaps encouraged by the strong IPO activity, venture capital firms invested a record $1.8 billion in 122 biotech startups nationwide during the three months that ended June 30, according to the MoneyTree Report from PricewaterhouseCoopers, the National Venture Capital Association, and Thomson Reuters. The previous high for venture dollars invested in biotech was set during the first quarter of 2006, when VCs put $1.58 billion into 117 startups nationwide.VCs invested another $649 million in 73 medical devices and equipment companies during the same quarter.
— Foster City, CA-based Gilead Sciences (NASDAQ: GILD) has made a series of business development moves over the past few years to try to get into the cancer field—among them, a $600 million deal to buy Seattle’s Calistoga Pharmaceuticals. This week, it finally got the chance to make its entrance, as the FDA approved idelalisib (Zydelig)—the crown jewel of the Calistoga buyout—as a treatment for three different types of blood cancer. Idelalisib is entering an increasingly crowded field, and expectations for the drug have been tempered a bit by a black box warning telling doctors to watch out for liver toxicities and other potentially severe side effects. But given many believe it’ll eclipse $1 billion in annual sales one day, the Calistoga deal looks like a solid investment by Gilead nonetheless.
—In other Seattle biotech news, Summit, NJ-based Celgene (NASDAQ: CELG) revealed in an earnings announcement that it’s decided to form what it’s calling an Immuno-Oncology Center of Excellence. The center, which will be based in Seattle, is part of Celgene’s plan to expand its presence in the hot field of immuno-oncology, or methods of harnessing the immune system to fight cancer. Robert Hershberg, the founder and CEO of Seattle’s VentiRx Pharmaceuticals, has joined Celgene to lead the company’s immuno-oncology project and new center. It’s unclear what this means for VentiRx at this point—Celgene nabbed an option to acquire VentiRx in 2012.
—Cypher Genomics, a three-year-old San Diego startup with 10 employees, said it has joined forces with Illumina (NASDAQ: ILMN), the San Diego-based provider of gene-sequencing equipment, in a deal that will promote Cypher Genomic’s technology and services for discovering genetic markers. The deal helps to validate the analytic technologies Cyper Genomic has developed to identify individual genes in an ocean of DNA material.
—Another biotech venture firm reloaded this week, as Menlo Park, CA-based Sofinnova Ventures closed a new $500 million fund, Sofinova Venture Partners IX LP, blowing past its initial $425 million target. Sofinnova’s ninth fund will primarily invest in biopharmaceutical companies with late-stage programs—with an eye towards orphan disease drugs and specialty pharmaceutical products. Sofinnova said it’ll make certain “select” investments in earlier-stage biotechs. Sofinnova was a backer of Labrys Biologics (bought by Teva Pharmaceutical) and SARcode (acquired by Shire), and companies like ZS Pharma (NASDAQ: ZSPH) and Aerie Pharmaceuticals (NASDAQ: AERI), which have both gone public over the past year.
—The FDA bestowed a “breakthrough” designation for Berkeley, CA-based Aduro BioTech’s combination regimen of pancreatic cancer vaccines, GVAX and CRS-207, according to a statement from the company. Arduro says the designation will speed up the agency’s regulatory review of the therapies. Aduro recently completed a mid-stage trial testing the vaccine combination, and is planning to finish off a second, 240-patient mid-stage study next year.
—San Diego-based Arena Pharmaceuticals (NASDAQ: ARNA) said its German subsidiary has signed an exclusive sales and marketing agreement with Abic, the Israeli subsidiary of Teva Pharmaceuticals, for lorcaserin (Belviq). The deal gives Abic rights to market and distribute lorcaserin in Israel for weight loss or weight management in obese or overweight patients.
—San Diego-based Celladon (NASDAQ: CLDN) gained another gene therapy program for its development pipeline after obtaining an exclusive global license for gene therapy applications of the Stem Cell Factor gene (mSCF) in patients with blocked coronary arteries. Celladon, which is also advancing a gene therapy for heart failure, said it obtained the license from one of its investors, San Diego’s Enterprise Partners Venture Capital.
—Xconomy Deputy Biotech Editor Ben Fidler contributed to this roundup.