All this talk about quarterly earnings and venture stats reminded me: I never posted my favorite stories from Xconomy Boston’s third quarter.

Yes, I know it’s almost the end of October, and the third quarter ended a month ago. I must have been traumatized by the collapse of the Red Sox or something (is baseball still going on?). Go ahead, run me out of town like Theo and Tito.

This time, I’m not consulting with my colleagues. I’m a rebel, a maverick. I work alone. Without further ado, here are my favorite stories from July through September:

Top 10 Tech Stories:

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Stem cells hold the promise of ushering in a new era of regenerative medicine, as scientists and engineers have made significant progress in directing these powerful cells towards use in drug screening models and replacements for failing tissues. More recently, scientists have developed even more efficient and alternative methods for reprogramming cells into their desired state.

But as panelists at the recent Washington Biotechnology & Biomedical Association (WBBA) symposium on the “Today and Tomorrow” of stem cells in regenerative medicine emphasized, the stem cell promise is an exciting but risky wager that seems extreme even by biotech standards. It is easy, even for those familiar with the field, to understate the incredible challenges imperiling the transition of stem cell therapies to the clinic. Yet against all odds, two companies have pursued clinical trials and many more are fast at their heels. What gives? And what distinguishes this challenge from the commercialization of more traditional biotech approaches?

First, take the FDA. According to Joseph Gold, the senior director of neurobiology and cell therapies research at Menlo Park, CA-based Geron Corp. (NASDAQ: GERN) and a panelist at the WBBA event, the U.S. regulatory body was not really “conversant” in embryonic stem cell-derived therapies before Geron submitted its 20,000-page proposal for beginning clinical trials among patients with spinal cord injuries. This application to start trials was the largest of its kind ever presented. To date, there has only been one other company to seek FDA clearance to study an embryonic stem cell therapy in humans: Advanced Cell Technology (OTCBB: ACTC). Clearly playing a world role in the oversight of a constantly evolving landscape in biomedical technology, the FDA must understand and demonstrate competence in effectively regulating stem cell treatments for present and future companies to have a prayer of getting them to market. But Joe Gold argues that Geron’s and ACT’s application processes have improved, and in fact given birth to, the FDA’s ability to regulate stem cells as a new type of therapy.

Then comes funding, scaleup and manufacturing: requirements for any biotech but which may in the context of stem cell therapies point to a unique reliance on startups in pushing the field forward. Although preclinical stem cell research is well funded by the National Institutes of Health, federal dollars don’t support the costs of current good manufacturing practice (cGMP) manufacturing and clinical trials. And on the other end of the spectrum, Big Pharma appears hesitant to move forward with internal cell therapy programs because, like venture capitalists, they remain underwhelmingly convinced of the commercialization potential of such an infant scientific development. Pfizer, Bayer, Merck, and others have expressed interest and developed programs for partnering with cell therapy collaborators in academia and early-stage industry, but are not about to go it alone. This parallels the unfavorability of innovation within large pharmaceutical companies increasingly even in the space they know best-pharmaceuticals-where in the modern framework it’s preferable to acquire the next Viagra from what will likely be a small company. The small company environment can catalyze the initial phases of cell therapy translation better than anywhere else, partly because the level of infrastructure is right for tackling the nontrivial scale-up and manufacturing of cGMP cells, a proof-of concept endeavor that is impossible in the university discovery setting, but which, once demonstrated, can be augmented with acquisition by Big Pharma. The current state of affairs suggests, then, that the rate-limiting step for pushing stem cell treatments into mainstream use will be capital investment at the startup phase.

So why, in the midst of an extended recession and with hurdles raised higher on all fronts than those for new pharmaceuticals, is the field (albeit slowly) advancing? Even with a clear translational path, investors in some cases remain reluctant while conditions are favorable enough in others to get the ball rolling. What is happening? One possibility is that we are looking at the cusp of translation, which has happened time and again in biotech and which often gives rise to a similar teeter-tottering of a new wave of medical therapies over the edge into the clinic. John Mendlein, the executive chairman of Fate Therapeutics and also a panelist at the WBBA event, posited an apt reminiscence of the challenges facing the implementation of monoclonal antibodies as pharmaceuticals 20 years ago. Roadblocks stifling the technology, manufacturing, funding, and regulation scared every facet of the industry at the outset. The promise of the field prevailed, and what was a process became a profit. That’s what biotech is all about, and maybe this time is no different.

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New England drug developers made headlines this week by kicking off drug trials, relocating offices, and merging.

—Xconomy national biotech editor Luke Timmerman profiled Cambridge, MA-based Ensemble Therapeutics, which is working to synthesize a class of mid-sized molecules known as macrocycles that are supposed to combine the best properties of both small-molecule and large-molecule drugs.

—Inotek Pharmaceuticals, a Lexington, MA-based firm developing treatments for diseases of the eye, added another $9.3 million to its latest funding round, bringing it up to $23.6 million.

—I caught up with the founders of Beverly, MA-based health IT firm Eliza weeks after they took in their first-ever external financing, from Parthenon Capital partners. Eliza plans to explore additional ways its speech recognition software can capture information on patient lifestyles and push them to make healthier decisions.

—Xconomy New York editor Arlene Weintraub spoke with Robert Lanza, chief scientific officer of Marlborough, MA-based Advanced Cell Technology, just days after the developer of human embryonic stem cell treatments had started its first human trials. ACT has FDA clearance to test its cells in two separate trials of blinding eye disease, Stargardt’s macular dystrophy and dry age-related macular degeneration.

—The Boston Globe reported that Biogen Idec will be moving its 530-employee headquarters from Weston, MA, to Cambridge’s Kendall Square. Biogen (NASDAQ: BIIB) CEO George Scangos told Luke earlier this summer that he was looking to combine the biotech’s commercial and R&D operations in Cambridge.

—Lexington-based Amag Pharmaceuticals (NASDAQ: AMAG) announced its plans to merge with Allos Therapeutics (NASDAQ: ALTH) in a $686 million all-stock deal. Both companies, each of which have one product on the market, saw their stocks drop the day it the deal was announced.

–-Coronado Biosciences of New York has some big plans in the offing, Arlene wrote. It plans to test one of its therapies—made of the eggs from a parasite found in pigs—in patients suffering from Crohn’s disease, will also relocate to Boston in August, and is aiming to go public.

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On July 14, Advanced Cell Technology (ACT)—a long-struggling developer of therapies derived from human embryonic stem cells—started its first human trials, by treating two patients suffering from blinding eye diseases. The company’s chief scientific officer, Robert Lanza, was still on a high when reached by phone in his Marlborough, MA, office a few days later. “It’s vindication,” he says. “In the early days, we were called murderers. We almost went under a few times. This was not easy.”

That may be an understatement. Ever since human embryonic stem cells were first isolated 13 years ago, ACT (OTCBB: ACTC) has been laboring to capitalize on the cells’ talent for transforming themselves into any tissue in the body. Over the years, Lanza and his colleagues have been blamed for everything from overconfidence to unethical science—the latter coming from conservative politicians who wanted to ban such research because the cells are derived from unborn embryos. But ACT charged ahead, raising money from hedge funds and other risk-hungry investors, and concentrating on using embryonic stem cells to regenerate retinal pigment epithelial (RPE) cells, which form a tissue that protects the eye’s photoreceptors.

ACT was cleared by the FDA to test its RPE cells in two separate trials: one in patients suffering from Stargardt’s macular dystrophy and the other in those with dry age-related macular degeneration (AMD). Stargardt’s affects young people, and AMD strikes the elderly, but they are both marked by the degeneration of the RPE cell layer. And both are leading causes of blindness. ACT was the second company cleared by the FDA to test an embryonic stem cell-derived therapy, the first being Geron (NASDAQ: GERN), the Menlo Park, CA-based company that’s testing its cells in patients with spinal cord injuries.

ACT’s first two patients were treated at the David Geffen School of Medicine at UCLA, and are now being watched for six weeks to ensure the cells don’t cause any dangerous side effects. Lanza explains that each trial will include 12 patients, and the doses will escalate over time. If no adverse events are observed in the first set of patients—who will receive the smallest dose of 50,000 RPE cells—the next set of patients will receive 100,000 cells. Then they’ll be observed, and so on, until the highest dose of 200,000 cells is reached.

Lanza says he was both intimidated and impressed by the FDA’s thorough review of ACT’s trial regimen. “They know as much as I do about embryonic stem cells,” he says. “They put us through … Next Page »

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Advanced Cell Technology is banking on an experimental cellular therapy for a rare eye disease to show the world that controversial embryonic stem cells have a place in treating diseases. Amid serious financial constraints at the Worcester, MA-based biotech firm (OTCBBACTC), a plan is in place to pioneer the use of cellular therapies made with human embryonic stem cells as treatments for people.

The biotech last month asked the FDA for permission to conduct a Phase I/II clinical trial of its stem cell therapy for Stargardt’s Macular Dystrophy, a genetic disease that is a leading cause of blindness in children. Bill Caldwell, the company’s chairman and CEO, told me this week that the experimental Stargardt’s treatment is the firm’s top priority and its best chance to prove that embryonic stem cells can make effective treatments for diseases.

The company and the field of human embryonic stem cells both need a big win. Advanced Cell Technology (ACT) has operated for 15 years without a commercial success, and the firm has been forced to nearly halve its operations since last year to stay afloat. Research on human embryonic stem cells has been mired in controversy and political attacks over fears about destroying human embryos to harvest stem cells—even though ACT and other firms have found ways to produce stem cells without harming embryos. And companies like ACT have been slow to move embryonic stem cell therapies into human clinical trials, despite the promise of such cells to provide the building blocks for regenerating tissues to repair organs damaged by serious conditions like heart disease, macular degeneration, and spinal cord injuries.

“This industry is in need of successes,” said Caldwell. “The technology of embryonic stem cells is very powerful and it needs validation.”

ACT has the burden of trying to become one of the first companies to test human embryonic stem cells as a therapy in humans, meaning the FDA, which must okay the clinical trials, has lots of questions about their potential health effects. Caldwell said that his firm has been in discussions with the FDA about the its proposed clinical trial with Stargardt’s patients, and the he hopes to have addressed all the agency’s concerns in time to begin the pioneering study in the third quarter of 2010.

The FDA has only authorized one company to test the use of embryonic stem cell therapies in humans: Menlo Park, CA-based biotech Geron, which was forced delay the its first human study for treating victims of spinal chord injuries in August due to the FDA’s concens about data it received on the treatment after it granted permission to conduct the trial. Geron (NASDAQ:GERN) said in October that it’s conducting animal tests to show the FDA that … Next Page »

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Lots of deals to report this week from New England tech and life sciences companies.

—Gloucester Pharmaceuticals of Cambridge, MA, agreed to an acquisition by Summit, NJ-based Celgene (NASDAQ: CELG). Gloucester will get $340 million in cash, plus $300 million in future milestone payments out of the deal, which is expected to close by the end of March.

—Advanced Cell Technology raised $2.77 million in financing from debt and options, an SEC filing. The Worcester, MA-based company hopes to be the first to bring embryonic stem cell technology into clinical trials.

—Waltham, MA- and Menlo Park, CA-based 5AM Ventures raised a $200 million new fund, which it plans to invest in drugs, diagnostics, materials, medical devices, and reagents.

—Mobile software startup Movik of Littleton, MA, raised $8.5 million in new equity-based financing, according to regulatory documents filed last Friday. Existing investors Highland Capital Partners and North Bridge Venture Partners participated in the round. Movik CEO Ramji Raghavan is a former general manager at Telsima, founder and former chief technology officer at Coriolis Networks, and a veteran of Digital Equipment and Cabletron.

—Waltham-based ModusLink Global Solutions (NASDAQ: MLNK), a supply chain management and e-business outsourcing provider, shelled out $30 million in cash for Boulder, CO-based e-retailer Tech For Less.

—Maine-based Hydro-Photon, developer of handheld water purification devices, raised just shy of $2 million in equity, according to regulatory filings.

—Cambridge-based drug developer Epizyme added $8 million to its Series B venture financing from New Enterprise Associates, bringing the total for the round to $40 million.

—Cambridge-based Parasol Therapeutics, an MIT spinoff developing treatments and diagnostics for influenza and other viruses, raised $3.2 million in debt and equity financing, according to … Next Page »

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Worcester, MA-based Advanced Cell Technology, the developer of human embryonic stem cell technology, has raised $2.77 million in financing from debt and options, according to a regulatory filing. Half of the financing arrived in mid-November, and the other half is due within 90 days of the original closing, according to the regulatory filing. Last month, the company filed an application with the FDA to start a clinical trial of a stem cell therapy for an eye disease called Stargardt’s Macular Dystrophy.

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Advanced Cell Technology (OTB:ACTC), a developer of stem cell treatments, says it has not renewed its lease on a facility in Alameda, CA, and has vacated labs in Boston as part of a plan to cut annual operating expenses by $5 million to $6 million. The company maintains operations in Worcester, MA, and in Los Angeles.

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Advanced Cell Technology, a California-based developer of cellular treatments with R&D labs in Worcester, MA, has licensed technology from Embryome Sciences related to the reprogramming of human cells such as skin cells into embryonic-like cells that can differentiate into a variety of cell types, Embryome reports. The technology from Alameda, CA-based Embryome is intended to enable cells with stem cell-like qualities to be generated without the controversial use of human embryos and egg cells.

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Website Seeks Credibility From Readers

A new website is using a twist on popularity rankings by asking readers to score it on credibility. NewsCred, which just launched its beta version, lets users score its news stories by how credible they are, an attempt to add a new level of involvement to news sites, Reuters reports. The site is mostly in English, but plans to expand its Spanish and French content.

Google to Host Bloggers at Political Conventions

When hordes of bloggers join the swarms of delegates descending on Denver next week for the Democratic National Convention, and on Minneapolis for the Republican version the week after that, Google will be there with open arms, Internet access, and snacks. Google, which wasn’t a significant presence at the conventions four years ago, will set up a two-story, 8,000 square foot headquarters for bloggers in Denver, with something similar planned for the Republicans, the Wall Street Journal reports. Along with Internet-equipped workspaces, couches for napping, and free smoothies, the company will offer a closing-night party.

Democratic Platform Addresses Internet

The Democratic party platform, to be discussed and voted on at next week’s convention, takes special notice of the role of the Internet in modern life. The platform calls for a national broadband strategy. Wired says this is very different from the Bush administration’s stance, which has left issues of broadband access in the hands of the private sector.

Stem Cells Produce Blood in Lab

Blood drives may one day be a thing of the past, thanks to work at Advanced Cell Technology of Santa Monica, CA, the University of Illinois, and the Mayo Clinic. As the Los Angeles Times reports, researchers there say they’ve used embryonic stem cells to make blood. The team says they’re still several steps away from making blood suitable for transfusions.

Is Data Fusion a Boon or a Bust?

Data fusion, the process of linking several databases together to create a single, wide-ranging profile of a person for such purposes as preventing credit card theft or chasing down deadbeat dads, promises efficient use of personal data but seems like a nightmare to privacy advocates. But as it turns out, Scientific American reports, these databases may contain too many errors and meaningless coincidences to actually be useful.

Stolen Data For Sale Online

The Security Fix blog at the Washington Post continues its look at the tools of the trade for cyber criminals. Today, it talks about websites where thieves can purchase stolen credit-card data. The average price for such information is $1.20 per card number, along with names, addresses, and phone numbers.

LEDs May Light Up New York Streets

Long-lasting, energy-efficient LEDs have already become ubiquitous in traffic lights around the country. Now they may be poised to take over streetlights as well. According to the New York Times, New York City will conduct tests of new streets lights, complete with new pole designs, based on LEDs. If the tests are successful, the city could eventually replace all 300,000 of its streetlights with LED versions.

Bloomberg Proposes Wind Plan for New York

Windmills could top New York City skyscrapers and bridges, or supply power from the waters off Manhattan, if Mayor Michael Bloomberg has his way. Speaking at the National Energy Summit in Las Vegas, Bloomberg cited studies predicting that wind energy could provide 10 percent of the city’s electricity needs within 10 years, says CNET News. Most of the installations would likely be small turbines on tops of buildings. Well, after all, old New York was once New Amsterdam.

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I don’t know the folks at Advanced Cell Technology, a company famous for making sensational claims about cloning the embryos of humans and animals alike, and it sounds like I may never get the chance. Today’s Boston Globe has a story about how ACT, which has been long on promise and low on cash for much of its history, appears to be finally running out of steam.

The story hinges on a filing with the Securities and Exchange Commission earlier this week that says ACT, whose labs are in Worcester, MA, had $17 million in liabilities and $1 million in cash, and that unless it raises money fast or makes huge cost cuts, it may not be able to keep the doors open past July 31. The stock closed yesterday at 2.5 cents.

The Globe‘s Todd Wallack writes that all the publicity that ACT garnered over the last decade “likely backfired.” News reports likened former CEO Michael West to the famed circus promoter P.T. Barnum, he recounts. A former executive adds that pharmaceutical firms and life sciences VCs were scared away by ACT’s controversial cloning techniques and stem cell research.

West surely got more than the usual publicity for a small biotech company. He was profiled in several publications and, as Wallack points out, co-wrote an eight-page spread on the “First Human Clone” in Scientific American. In 2003, he wrote a book, The Immortal Cell: One Scientist’s Quest to Solve the Mystery of Human Aging. West, though, told the Globe he doesn’t think he overstated any of the company’s work.

“I have indeed heard that criticism of me, but think it’s flat wrong,” he told the newspaper.

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Advanced Cell Technology, a Los Angeles, CA-based stem cell company with research operations in Worcester, MA, announced on Thursday that it’s been able to derive five stem cell lines from human embryos without destroying the embryos. The company’s approach (OTC BB: ACTC) was published in the new edition of the journal Cell Stem Cells, published by Cell Press. Scientists in Japan and at the Harvard Stem Cell Institute recently used a different technique—starting with adult cells rather than embryonic ones—to produce similar cell lines.

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