Seattle Genetics’ Financing Tale, Johnny Stine Sticks it to VCs, Puget Sound’s Biotech Universe, & More Seattle-Area Life Sciences News

2/12/09Follow @xconomy

Not a lot of breaking news surfaced this week in Seattle biotech, but we still found some interesting feature stories that challenge all sorts of conventional wisdom.

—Seattle Genetics CEO Clay Siegall told Xconomy the inside story of how his company’s $55.8 million financing came together. The moral of the story: Don’t do a bunch of tricky financial gimmicks, and do come up with great data for a new cancer drug. Easier said than done, of course.

Johnny Stine shared the improbable tale of how he has started a “garage biotech,” to discover and develop new antibody drugs, without the backing of any venture capitalists. Stine, by himself, says he has secured three partnerships that could pay him as much as $200 million, plus royalties, if he can create drugs that reach the market.

—Stewart Lyman, a research collaboration consultant and former scientist at Seattle-based Immunex, wrote an interesting guest editorial for the Xconomy Forum about how to revitalize the local biotech scene. He suggests recruiting more Big Pharma company branches to provide more stable jobs, and urges one of the local tycoons to put money into a nonprofit drug development company.

—ZymoGenetics showed how it is getting its financial house in order to recover from the slow sales of its first approved drug. The Seattle-based biotech company (NASDAQ: ZGEN) narrowed down its fourth quarter net loss to $9.2 million, said it had about $90 million in cash left at the end of the year, and expects to pull in $200 million this year from a new hepatitis C partnership with Bristol-Myers Squibb.

—The Washington Technology Industry Association showed off a cool poster last month that depicted the local “universe” of tech companies and their origins, and I was told a few biotechies felt left out. Sanjaya Joshi, president of Kirkland, WA-based Userspace, passed along a research report he last updated in 2007, which traces many company origins to the University of Washington, Fred Hutchinson Cancer Research Center, and Seattle-based Immunex.

—I did an extensive two-part interview with the University of Washington’s technology transfer leader, Linden Rhoads. In the first part, she explained how her office is shaking the bushes on campus along with researchers to dig up the best ideas with commercial potential, and match them up with venture capitalists who can take them forward. In the second part, she talked about making the leap from startups to working in a huge institution like the UW.

—Venrock Associates’ Bryan Roberts, a prominent life sciences investor, says he predicts a shakeout is coming this year in the venture capital business, just like with portfolio companies. His firm is now taking more care in putting together syndicates that it thinks will still be able to put money into startups four or five years from now, when the companies need more capital.

—David Auth, the longtime electrical engineering and bioengineering professor at the University of Washington and the founder of Redmond, WA-based Heart Technology, was one of two UW professors (along with engineering dean Matthew O’Donnell) elected to the National Academy of Engineering. One of Auth’s latest projects is serving on the board of Kirkland, WA-based Pathway Medical Technologies, a company that aims to improve upon techniques his earlier company developed to clear out clogged arteries.

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