Biomedical research funded by Uncle Sam is hot, but publicly traded biotech companies that seek to develop those discoveries in the Northwest are cold. Here’s a recap of the week’s ups and downs in the local life sciences scene:
—President Obama is proposing a whopping $10 billion addition to the National Institutes of Health’s budget as part of his economic stimulus plan, and this has researchers in the Northwest scrambling to turn in their applications. The University of Washington, already the nation’s largest public research center with $1 billion a year in sponsored research, may capture as much as another $300 million in federal stimulus grants, says Linden Rhoads, vice provost of UW TechTransfer. Still, she says that’s no excuse for state lawmakers to start whacking away at the university’s state support.
—Yet even with basic biomedical research on the rise, many public biotech companies are struggling. Based on my review of the quarterly financial filings of the 12 public companies in the Northwest, six were looking pretty vulnerable with less than $20 million in available cash as they headed into 2009.
—Healionics, the Redmond, WA-based company that spun out of the University of Washington bioengineering lab of Buddy Ratner, took its first step this week toward becoming a commercial business. It shipped its first product, a biomaterial coating for shunts that are made to relieve pressure behind the eyes of dogs with glaucoma. If it works by helping allow fluid to pass more easily through the shunt, it could set an important precedent for using the biomaterial in human beings with glaucoma—a more lucrative potential market.
—Halosource, the Bothell, WA-based maker of technology to purify drinking water, won certification from the U.S. Environmental Protection Agency for its technique. This is no big deal in the U.S., where we take clean drinking water for granted, but it’s an important validation to partners Halosource is working with in India, China, Brazil and other parts of the world that are looking at its cheap, gravity-fed system for ridding water of viruses and bacteria. This technology is now providing clean water for 2 million people in India, double the number who were using it nine months ago.
—MDRNA (NASDAQ: MRNA), the Bothell, WA-based developer of RNA interference drug technology, received a bit of a lifeline this week when it received $7.25 million from Novartis in exchange for a non-exclusive worldwide license to its technology. But easy come, easy go. The company has to use $870,000 to write a severance check to its former CEO, Steven Quay.
—Nanostring Technologies CEO Perry Fell has resigned his post, and is being replaced on an acting basis by chief financial officer Wayne Burns. The Seattle company introduced its first product, for providing digital readouts on large-scale genomic experiments, last July. Fell will stay on as non-executive chairman of the board and will “help to find a suitable replacement,” as CEO, he told me in an e-mail.
—Biotech pioneer Leroy Hood and his team at the Institute for Systems Biology produced an interesting publication this week that identifies a series of genes that became altered in mice shortly after they were infected with “Mad Cow” disease. Their findings could lead to improved diagnostic tools for early detection. Gilbert Omenn, a prominent biologist at the University of Michigan, called this paper a “landmark” and it may have implications for how to spot genes that go awry early on when people are infected with tuberculosis, HIV, or other pathogens.
—Invest Northwest, the region’s largest annual life sciences investing conference, produced so much news about the local biotech scene, I couldn’t cover it all in one day. So in case you missed it, I provided updates on five companies to watch last Thursday, and then followed up with five more the next day. They represent a wide variety of approaches to make new drugs, devices, and vaccines.
—Gilead Sciences, the world’s largest maker of HIV drugs, paid $360 million three years ago for Corus Pharma, thinking it had developed a winning drug to help it diversify—an inhalable antibiotic for cystic fibrosis called aztreonam. Now it turns out that Gilead will have to wait a while to bring aztreonam to market. The drug has been delayed by the FDA, and last week it also failed to win a recommendation from a scientific committee that advises European regulators.