Five More Life Sciences Companies To Watch: Invest Northwest Notebook, Part 2

3/20/09Follow @xconomy

There were lots of intriguing ideas circulating at this year’s Invest Northwest conference in Seattle; so many, in fact, that I couldn’t jam them all into one story. Yesterday, I offered an update on the progress of five intriguing Seattle-area companies in the business of making new drugs, vaccines, or medical devices—Alder Biopharmaceuticals, Immune Design, Allozyne, Calypso Medical Technologies, and Liposonix.

Today, we have updates on five more local players to watch, who stack up well with competitors that I cover in the bigger biotech hubs of Boston and San Diego:

—Seattle-based ZymoGenetics (NASDAQ: ZGEN) made national news in the biotech industry back in January, when it signed a partnership potentially worth $1.1 billion to co-develop pegylated interferon lambda with Bristol-Myers Squibb. The big idea is that this drug could have the anti-viral killing punch of standard interferons, without the flu-like side effects that plague those drugs, which are one of the backbone therapies for hepatitis C.

What few people have picked up on is this new engineered interferon may have uses in diseases other than hepatitis C. These could include hepatitis B and multiple sclerosis, although timing for advancing those programs will be up to Bristol, says spokeswoman Susan Specht. The deal with Bristol actually includes $287 million worth of potential milestones (as part of the $1.1 billion total) that could flow to Zymo if researchers make progress with these other diseases.

—Seattle Genetics (NASDAQ: SGEN) has generated its share of attention in the last few months, after it reported impressive data at the American Society of Hematology in December from a trial of its SGN-35 drug against Hodgkin’s disease and related lymphomas. The next important piece of evidence will be from a trial that examines weekly dosing of this drug, which will be presented at the American Society of Clinical Oncology meeting in late May and early June, said chief financial officer Todd Simpson. The drug has shown its strong effect when it has been given every three weeks.

—Seattle-based VLST is counting its blessings after having signed a partnership with Danish drugmaker Novo Nordisk in December to help fill up that company’s pipeline of drug candidates. But VLST didn’t give away everything to its new sugar daddy. Its lead internal drug candidate, VLST-007, is supposed to hit a target on cells called CD47, which is implicated in autoimmune diseases, said chief financial officer Julie Eastland. She didn’t say when this drug might be ready to go to the clinic, although CEO Martin Simonetti told me last week he’s waiting for a partner to help pay the freight for that.

During Eastland’s talk, I sat in the audience next to Carl Weissman, the CEO of Accelerator and the original backer of VLST. He whispered that his father Irv Weissman’s lab at Stanford University has found CD47 is also a target on cancer stem cells. “It’s a really important target,” he says.

—Seattle-based Targeted Growth received a bit of PR boost in January, when Japan Airlines ran the first test flight, on a Boeing 747-300, using camelina-based fuel from a Targeted Growth joint venture. It would certainly be a bigger story if Japan Airlines (or any other airline) does more than a test flight. But in the cash-hungry business of making biofuels, plenty of companies have run into cash crises, so I was listening for signs of financial health.

Not to worry. Targeted Growth still has 18 to 24 months’ worth of cash left, said Margaret McCormick, general manager of the company’s bio-based materials group (and a partner with Seattle-based Integra Ventures). Camelina comes first as a feedstock for biofuel now, but the company’s scientists are also in the hunt with many other competitors to engineer the highest possible yields out of algae for biofuel production. Targeted Growth doesn’t plan to build up the massive capital equipment for refineries, but hopes to build value with its molecular biology expertise, and let other people do the engineering work, McCormick says.”We hope to make headlines here in the Seattle area,” McCormick said.

—Bothell, WA-based MediQuest Therapeutics got some bad news last October when its topical gel for Raynaud’s disease, a condition that causes numbness in the fingers and toes in response to cold temperatures, was turned down by the FDA. It took until Feb. 6 for the company to get a meeting with the FDA to clarify what it has to do next to get its drug on track for approval again. Now that it has a better idea of what’s required, it’s preparing to do another study of patients in cold rooms, CEO Fred Dechow said.

MediQuest also made one interesting hire in the last few months. Guy Seaton is its new chief business officer. Seaton was formerly the chief financial officer for a couple of local success stories—Seattle-based Corus Pharma and Bothell, WA-based Sonosite.

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