[Updated 8/15/11 8:00 am. See below.] In mid-July, Cambridge, MA-based Cerulean Pharma began a new clinical trial of its cancer drug CRLX101, which is a “nanoparticle”—a powerful chemical wrapped in a tiny package that can burrow its way into cancer cells and kill them. Cerulean is one of a handful of companies laboring to apply nanotechnology to drug delivery. The trial, which will involve 150 patients with non-small cell lung cancer, should shed some light on the potential of nano-drugs in the cancer setting when top line results are released next year.

But CEO Oliver Fetzer isn’t waiting for proof that Cerulean’s approach works. He’s so optimistic that he has already set his sights on a big new opportunity for the company’s tiny drug platform: RNA interference (RNAi). About a decade ago, the pharmaceutical industry started pouring research dollars into RNAi—a new method for shutting off disease-causing genes and proteins. But there was a problem. “If you just inject RNA into the patient, enzymes degrade it very quickly,” Fetzer told Xconomy in a recent sit-down interview. So last year, Cerulean started testing its nanoparticles to see if they might offer a better way to deliver RNAi therapeutics.

Cerulean isn’t the only company to spot an opportunity for nanoparticles in RNAi. On July 25, Cambridge-based Alnylam Pharmaceuticals (NASDAQ: ALNY)—one of the pioneers in RNAi—announced that it and its collaborators at the Massachusetts Institute of Technology discovered novel nanoparticles that might facilitate the delivery of RNAi drugs directly into cells. Alnylam is developing RNAi approaches for several diseases, including cancer.

The difficulty of translating the promise of RNAi into drugs has been a major downer for the field. Last November, Swiss drug giant Roche unexpectedly pulled the plug on its RNAi program, which included ending a research alliance with Alnylam that once had the potential to earn the Cambridge company … Next Page »

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When Cambridge, MA-based Alnylam (NASDAQ: ALNY) made its debut last year at the annual American Society of Clinical Oncology (ASCO) conference, it only had a pittance of safety data on its drug, which is designed to treat advanced solid tumors that have spread to the liver. At this year’s conference, which starts June 3 in Chicago, Alnylam CEO John Maraganore hopes the company will make more of a splash, especially since one of the patients in the trial being presented has been on its cancer drug for more than a year.

Maraganore can’t reveal much about that patient until the ASCO presentation on June 4, but it’s clear he’s excited she’s done well on the experimental drug, called ALN-VSP02. “This patient failed all other therapies,” he says. “As long as she’s responding, she’ll continue to receive our drug.”

ASCO could end up being a much-needed bright spot in what has been a tough year for Alnylam. The company has three drugs in clinical trials based on the technology RNA interference (RNAi), a once-hot technique that involves silencing key genes involved in a range of diseases. But last September, Novartis ended a partnership with Alnylam. Two months later, Roche pulled out of RNAi all together, which also involved axing a program with Alnylam.

Then in mid-March, seemingly out of the blue, Alnylam partner Tekmira (NASDAQ: TKMR)—which which provides a key nanoparticle technology used in ALN-VSP and other RNAi drugs—sued Alnylam for trade-secret violations. All told, Alnylam’s stock has lost 34 percent of its value during this string of events, falling from nearly $15 last September to a recent $9.68 at yesterday’s close.

But Maraganore hasn’t lost faith in Alnylam—or in RNAi as a potential game-changer. “I’ve seen this play out before,” says Maraganore, who met with Xconomy New York when he was in town on May 25 for the ThinkEquity Healthcare Conference. He points out that the pharmaceutical industry once abandoned monoclonal antibodies. Then the biotech industry picked up the ball and monoclonals became the fastest-growing category in all of pharma. “The driver for RNAi is going to be clinical data,” Maraganore says. “When it happens, you’ll see pharma come back.”

Maraganore says that the Phase 1 data being released at ASCO will be the first of three key datasets Alnylam plans to release this year. In the third quarter, the company will present data from its trials of ALN-TTR, which treats a rare hereditary disease called TTR-mediated amyloidosis. And in the fourth quarter, it will release clinical data from … Next Page »

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We are getting more and more excited about XSITE 2011—the Xconomy Summit on Innovation, Technology, and Entrepreneurship, our annual full-day innovation conference set to take place on June 16 at Babson College.

We began announcing keynoters and other featured speakers several weeks ago, and the list has been building—to more than 40 speakers. They run from legendary serial entrepreneur and super angel Desh Deshpande to Gilt Groupe co-founder Alexandra Wilkis Wilson to Edward Jung, former software architect of Microsoft and co-founder of Intellectual Ventures—to participants in featured sessions such as our annual Startup Xpo, where 12 young startups vie for audience votes.

Now, although we have a few small holes to fill in, we are releasing the full agenda, so you can see how the day will play out, and begin to consider what breakouts you will attend, and maybe where you will come out on our highly interactive session, Do You Really Need an Incubator?, where a quintet of entrepreneurs will debate this key question under the humorous and insightful moderation of Lead Dog Ventures’ John Landry.

The theme of this year’s XSITE is The Entrepreneurship Era, paying tribute to the newfound attention entrepreneurship is getting from the White House to college campuses. Who better to kick this off than serial entrepreneur and super angel Desh Deshpande, who has not only been a prime driver of innovation here in New England, but in his native India as well. Desh recently sent in the title of his talk: Entrepreneurship Driven by Technological and Social Innovation.

You can peruse the lineup yourself. We have one additional keynoter we hope to announce soon, and we will also be revealing the identities of the 12 Xpo companies next week. But here is the rest of the agenda, including the breakouts.

Get your tickets now—and take advantage of our saver registration rate.

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As we hurtle towards XSITE 2011, our full-day conference on June 16 at Babson College, a few thoughts come to mind. The theme this year is “the entrepreneurship era”—the idea that there is increased attention to startups and company-building as a key to revitalizing the U.S. economy. But now that entrepreneurship is at the top of the nation’s domestic agenda, a lot more people need to understand the real challenges of starting, building, and investing in companies—and they want to know the practical things they can do to carry out their vision.

Towards that end, we are in the process of adding a number of new speakers—entrepreneurs, investors, executives—to the program. They bring important (and entertaining) lessons from their entrepreneurship and company-building experience.

Here are just a few of the latest speakers we’ve confirmed:

—Katie Rae, managing director of TechStars Boston. Katie is helping to lead our startup “Xpo,” in which 12 early-stage entrepreneurs working in tech, life sciences, and cleantech will give short pitches to the audience, which will get to vote on its favorites.

—David Cancel, founder and CEO of Performable. David will speak on a technology panel focusing on “founder’s stories”—the trials and tribulations of starting, building, and (sometimes) selling IT businesses. In addition to Performable, he helped found Compete.com, Lookery, and Ghostery.

—Stephen Kaufer, founder and CEO of TripAdvisor. Stephen will be on a panel about “managing growth”—which he knows something about, given TripAdvisor’s rocketship ride over the past decade. And now it gets really interesting, with the company’s plans to spin out of Expedia as an independent public company.

—Paul Sellew, CEO of Harvest Power. Paul will join a discussion of the most game-changing companies in the cleantech sector that are going commercial. Harvest is opening a big West Coast waste-to-energy facility, and it just scored more than $50 million from Al Gore’s firm, Generation Investment Management.

—Sean Creeley, co-founder of Embed.ly. Sean has the distinction of going through both the Y Combinator and MassChallenge incubator programs. He’ll talk about his experiences in getting mentorship, and getting his Internet startup off the ground.

—Ben Gardner, founder and president of Linkwell Health. Ben will speak on a health-tech panel focused on new approaches to healthcare and wellness. Linkwell has a very interesting model that you’ll be hearing more about soon.

These speakers join an already stellar lineup of luminaries, including Desh Deshpande of Sycamore Networks and A123Systems fame; Edward Jung from Intellectual Ventures (former chief architect of Microsoft); Nobel Laureate Phil Sharp from MIT, Biogen, and Alnylam; Alexandra Wilkis Wilson from Gilt Groupe; Joe Chung from Art Technology Group and Redstar Ventures; and Pattie Maes from the MIT Media Lab.

You can register for XSITE 2011 here. We’re looking forward to seeing you on June 16.

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For the past two years, Xconomy has pulled out all the stops to throw a full-day conference in June called XSITE—the Xconomy Summit on Innovation, Technology, and Entrepreneurship. In that short amount of time, this cross-disciplinary event, spanning the Internet and other areas of IT, life sciences, energy, healthtech, and more, has become one of the hallmark high-tech events in New England—bringing together hundreds of entrepreneurs, investors, technologists, executives, and other leading members of the innovation community.

This year, I am pleased to announce, we are back again with XSITE 2011, which will take place on June 16 at Babson College in partnership with Babson and Olin College. The theme of this year’s event is The Entrepreneurship Era, acknowledging the crucial role that entrepreneurs are playing in revitalizing our economy and reshaping our world—and how, at the same time, the rules of entrepreneurship itself are changing.

There is, of course, a groundswell of attention now being devoted to entrepreneurship—not just in the scores of new incubators sprouting up around the nation, but also in the board rooms of large corporations, in the halls of city and state governments, and in the White House itself. And today’s 20-somethings represent “a whole new generation embracing entrepreneurship,” said Accel Partners’ Theresia Gouw Ranzetta, speaking at Xconomy’s recent VC65 event at MIT—perhaps the first generation of people who “want to be entrepreneurial from the start.”

To help understand why entrepreneurship is so exciting and so important at this moment in our economic and technological development, we have reached beyond New England to put together an absolutely stellar lineup that includes great speakers and innovators from around Xconomy’s network—San Francisco, New York, Seattle, Boston, and San Diego. Below is a quick look at some of those who will take part, you can see more and register here.

—Desh Desphande, the legendary entrepreneur, innovator, and super angel who founded Sycamore Networks and is now chairman of A123Systems, just one of a dozen or so boards he sits on.

—Nobel Prize-winning biologist Phil Sharp, a founder of Biogen, Alnylam, and other biotech companies. Sharp will be teaming up with Stephen Friend, co-founder and president of Sage Bionetworks
in Seattle and former Senior Vice President at Merck, to debate whether life sciences should go open source.

—Gilt Groupe co-founder (and Harvard Business School alum) Alexandra Wilkis Wilson. If you haven’t noticed it, discounted luxury fashion site Gilt, based in New York, is one of the hottest e-retail stories in the country.

—Edward Jung, former chief architect of Microsoft (Bill Gates took his job when Jung left MS), and co-founder of Intellectual Ventures, one of the biggest, and most controversial, patent investors in America.

—Nicholas Christakis, Professor of Medical Sociology, Harvard Medical School, and author of the best-selling Connected, which charts the importance of social networks in health, wealth, happiness, and more.

—Joe Chung, co-founder, Art Technology Group and Redstar Ventures, a new venture incubator in town.

—Todd Dagres, co-founder and General Partner, Spark Capital

—Jamie Goldstein, a general partner at North Bridge Venture Partners and president of the New England Venture Capital Association

—Pattie Maes, Founder and Director, Fluid Interfaces Group, MIT Media Lab

And that’s just a few of the great speakers we have lined up. We will also be holding the annual XSITE Xpo, featuring a series of rapid-fire presentations by 12 startups in healthtech, energy, and infotech—with the audience voting on its favorites.

This year, we are adding to the fun with the Incubator Throwdown, where alums of various incubators—think Y Combinator, TechStars, MassChallenge, and more—will be defending their institutions’ models and poking fun at rivals (anyone willing to join us and be a loud, sassy, but respectful participant—in exchange for a free ticket—let us know at editors@xconomy.com). And, as always, there will be lots of networking.

We will be introducing more speakers and sharing more about the day over the next few weeks. But we hope you agree—XSITE 2011 will be the place to be on June 16. Get your tickets now!

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A week after settling litigation related to the patents on gene-silencing treatments, Alnylam Pharmaceuticals and others have found themselves in another legal battle over the Tuschl patents related to RNA-interference treatments. This time the University of Utah has named Cambridge, MA-based Alnylam (NASDAQ:ALNY), Max Planck, the Whitehead Institute for Biomedical Research, MIT, and the University of Massachusetts in a civil complaint filed in federal court in Massachusetts on Tuesday, Alnylam said in a regulatory filing.

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New England’s biotech attorneys must be working overtime, if the week’s headlines are any indication.

—Cambridge, MA-based Alnylam (NASDAQ:ALNY) announced it had settled a long-standing legal dispute over the so-called Tuschl I and Tuschl II patent families. The suit, which involved key players in the field of RNA-interference including Alnylam, Max Planck Society, the University of Massachusetts, and the Whitehead Institute for Biomedical Research, began in June of 2009 and was slated to go to trial this month.

—No sooner did Alnylam wrap up that litigation than it was hit with a huge lawsuit from its Vancouver, BC-based partner Tekmira Pharmaceuticals, which is accusing Alnylam of misappropriation of trade secrets, unfair competition, and more—and is seeking damages of more than $1 billion. The suit centers on technology for delivering RNAi therapeutics—a notorious challenge in the field. For its part, Alnylam called Tekmira’s complaint “without merit or foundation,” and said it intends to defend itself fully.

—Elsewhere in Cambridge, Genzyme (NASDAQ:GENZ) faced a lawsuit as well. It and Mt. Sinai Medical School are being sued by six patients with Fabry disease over the handling of a rationing system for agalsidase beta (Fabrazyme), Genzyme’s treatment for Fabry. Supplies of the drug were short following a temporary closure in 2009 of the company’s Allston, MA, plant.

—In non-legal news, Cambridge based Tolerx and its partner GlaxoSmithKline (NYSE:GSK) reported that otelixizumab, their experimental drug for Type 1 diabetes, failed to meet its main clinical goal in a late-stage study called Defend-1. While the companies are … Next Page »

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Epizyme, a high-flying startup focused on the hot field of epigenetics, has recruited a new CEO and a new chief dealmaker. Robert Gould started work this week as chief executive of the Cambridge, MA-based biotech, having resigned from a big job at the Broad Institute of MIT and Harvard.

Gould has served on the board of directors at Epizyme since its founding two years ago, as it has grown from one to 20 employees and closed a $40 million Series B financing. (The firm has now raised a total of $54 million from New Enterprise Associates, MPM Capital, Kleiner Perkins Caufield & Byers, Bay City Capital, Astellas Venture Partners, and Amgen Ventures.) He’s replacing founding CEO Kazumi Shiosaki, a managing director at MPM, as part of a transition plan in which she will remain a board member of the company.

Besides Gould, Epizyme has also brought on Jason Rhodes, a former VP of business development at Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ:ALNY), to lead deal-making activities as the startup’s chief business officer. Rhodes certainly got exposed to a lot of deals during his stint from 2007 to this year at Alnylam, the RNA interference company; Alnylam has active partnerships with Roche, Novartis, Takeda Pharmaceuticals and other big drug companies.

Both executives spoke of the huge opportunity for Epizyme in the field of epigenetics, which involves turning on and off certain genes without altering the underlying code of DNA. Based on the company’s epigenetics research, Epizyme is in the early stages of pursuing small molecule drugs that block enzymes believed to be involved in cancer, called histone methyltransferases. The startup says its research could also lead to the discovery of drugs for diseases outside of the cancer field, where it will focus its initial efforts. It’s got a local rival in Cambridge’s Constellation Pharmaceuticals, which is also doing epigenetics research to find cancer therapies.

Gould, 55, left the Broad Institute after spending three years in charge of a group that looked for potential medical applications for scientific discoveries made at the renowned genomic research center in Cambridge. He was previously a vice president at Whitehouse Station, NJ-based Merck (NYSE: MRK), where he worked on ushering 20 drugs into clinical trials. In his new post, Gould hopes to eventually begin testing Epizyme’s drugs in cancer patients, but he declined to provide a timetable for when trials will begin or the specific types of cancer the company plans to treat.

Robert Gould, CEO of Epizyme.

When asked why he took the job, Gould said he is “anticipating the exciting possibilities in treating cancer and in epigenetics.” He added, “[It] seemed to me to be a great opportunity to continue building a company.”

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It was a mixed week of business and science, with a couple of stories on health IT companies to round things out.

—Luke reported on Thursday that Cambridge, MA-based Alnylam (NASDAQ: ALNY) is pushing forward with its Vancouver, BC-based partner Tekmira to create RNA interference drugs to treat cancer. The partnership is focusing on ways of using lipids to protect RNAi drug molecules until they get where they need to be in the body. A drug using this technology to treat liver cancer is currently in clinical trials.

—”Epigenetics”—using proteins and other molecules to turn genes off—may be another way to treat cancer, according to Cambridge, MA-based Constellation Pharmaceuticals, which collected $17.2 million in Series A financing last week . It was the last installment in a $32 million round that the company it raised last year. Epigenetics is also being used to treat infections and neurological disorders, but for now Constellation is focused on cancer, Ryan reported.

—On the business front, Ryan also wrote last week about a Wall Street Journal report that Cambridge, MA-based Momenta Pharmaceuticals (NASDAQ: MNTA) is facing an ethics complaint from rival Amphastar Pharmaceuticals, of Rancho Cucamonga, CA. Amphastar is alleging that Momenta has had special, unethical access to an FDA evaluator whose approval both firms need in order to manufacture their blood thinner drugs, which are similar.

—In the health IT world, Wade wrote about a Cambridge, MA-based startup, Vitality, whose GlowCaps product is designed to remind people when to take their pills. The system, which can only be bought through Amazon, fits on a standard pill bottle and plays an alarm sound when it’s time to take a pill, then senses whether or not the bottle was opened. If the bottle goes unopened for two hours, the cap sends a message through a wireless internet connection to Vitality, which initiates an automated phone call to the home. Data on how well patients keep to their regimens can be turned into a report for the patient, caregiver, or family member.

—Ryan profiled another Cambridge-based health IT company, Navinet, which runs what is possibly the nation’s largest real-time healthcare communications network. The company provide doctors with instant access to a patient’s insurance information, benefits eligibility and other information over the Internet. The company is also looking to streamline other services for doctors, such as payment collection. The private company was originally funded by venture capitalists but has been profitable for seven years, CEO Bradley Waugh told Ryan.

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We just got another great prize to give out to one lucky attendee of our upcoming XSITE 2009 event: a Garmin Nuvi 310 GPS unit, courtesy of the generous souls at the MIT Sloan CIO Symposium. Only the next 10 folks to buy tickets for XSITE—the Xconomy Summit on Innovation, Technology, and Entrepreneurship—will be eligible to win the system, which includes a car mount kit, car charger, carrying case, USB cable, and map software for North America. So if you head to the registration site quick enough, that means you’ll have a one in 10 chance to recoup almost the whole value of your XSITE ticket, which is already a great value.

Indeed, XSITE—which will be held at Boston University on June 24—will be chock full of leading innovators, executives, and investors. We’ll have keynotes by Dean Kamen and Juan Enriquez and panels and presentations from the likes of Yet-Ming Chiang of MIT and A123Systems, Boston-Power’s Christina Lampe-Onnerud, Reed Sturtevant of Microsoft Startup Labs, Dartmouth’s Tillman Gerngross, Alnylam CEO John Maraganore, Sirtris CEO (and GlaxoSmithKline SVP) Christoph Westphal, and EMC CTO Jeff Nick.

Then there’s the unveiling of two stealth companies, one of which, Taris Biomedical, we are giving an early sneak peak of today. And the day will be capped off by the XSITE Xpo, which will feature rapid-fire presentations from a dozen of New England’s most potentially transformative companies in cleantech, life sciences, and information technology.

You can check out the whole agenda here, and you can register here. Register quickly to secure your chance to win the GPS system (as always, Xconomy employees, underwriters, and investors are not eligible to win). Then you will have no problem navigating to XSITE 2009. We hope to see you there.

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There are three weeks and one day to go before XSITE—the Xconomy Summit on Innovation, Technology, and Entrepreneurship, which we are holding at Boston University on June 24—and we are pumped. We are finalizing the agenda, and have added a host of fantastic new speakers, including inventor extraordinaire Dean Kamen. We’re also putting the finishing touches on some great panels that uncover some of the incredible strengths (many of them underappreciated) of New England’s innovation community.

We are pleased to be part of Innovation Month in New England, and hope XSITE 2009 will serve as a great anchor for the month by devoting a full day to innovation and bringing together key players from across the innovation spectrum. Speakers at XSITE will include leading executives from EMC, IBM, Microsoft, Alnylam, and Sirtris/GlaxoSmithKline, as well as top entrepreneurs such as Yet-Ming Chiang of MIT and A123Systems; Tillman Gerngross of Dartmouth, GlycoFi, and Adimab; Mick Mountz of Kiva Systems; and Christina Lampe-Onnerud of Boston Power (who just announced ambitions to build a 600-employee battery plant in Massachusetts). And we’re very excited about keynote speakers Juan Enriquez of Excel Medical Ventures, and, of course, Dean Kamen.

And for those of you who want to drill down into one of New England’s most vibrant innovation sectors, XSITE’s afternoon breakout sessions will offer you three to choose from. Our chief correspondent, Wade Roush, will host a session on Boston’s little-known—yet highly influential—assembly of digital entertainment and media firms: The Digital Entertainment Cluster: Boston’s Best-Kept Secret. It’s a topic near and dear to Wade’s heart, and sure to spark some lively discussion. Atlas Venture’s Jeff Fagnan, meanwhile, will provide a tour of what we’re calling The Health 2.0 Hub, the local people, institutions, and companies that are using innovations from IT to transform healthcare, from bench side to bedside and beyond. And energy innovators, executives, and investors will come together in a third session—Getting Energy Innovations to Market—to talk about what it takes to translate and scale new ideas in solar, wind, batteries, grid management, and energy efficiency into market realities.

The up-to-date agenda is here—sign up soon because early bird registration ends tomorrow. Also, when you sign up, please take our quick survey about the economy—we want your views on when it will improve, and which sectors will lead us out of recession. We will be revealing your predictions at XSITE.

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Biotech stalwarts in two of Xconomy’s home regions, Isis Pharmaceuticals (NASDAQ: ISIS) of Carlsbad, CA, and Alnylam Pharmaceuticals (NASDAQ: ALNY) of Cambridge, MA, said today that they’ve agreed to share techniques devised by Isis for using single-stranded RNA interference (ssRNAi) to silence genes in the body that cause disease.

Under the agreement, Alnylam will owe up to $31 million to Isis in the form of upfront payments, milestone-based payments, and royalties on any drugs that may be developed using the technology. That’s relative pocket change for Alnylam, which has a comfortable $500 million in the bank.

Isis concentrates on developing drugs that make use of “antisense” molecules that lock onto messenger RNA and destroy it before it can be translated into proteins. Alnylam, meanwhile, is a leader in research on therapeutic applications of RNA interference (RNAi), in which small pieces of RNA interrupt other parts of the protein manufacturing process. The two companies have a long relationship—in 2007, for example, they pooled their intellectual property in an area called microRNAs to form Carlsbad, CA-based Regulus Therapeutics.

Most RNAi research to date has focused on using double-stranded molecules to turn off specific genes, and Alnylam has amassed a strong patent portfolio in this area. But some researchers believe that single-stranded RNAi molecules may be easier to administer as drugs than double-stranded molecules. Isis discovered ways to design chemically modified, single-stranded, RNA-like molecules as part of its antisense research—but Alnylam, with its expertise in RNAi therapeutics, is in a better position to develop and test RNAi drugs based on the insights.

In today’s announcement of the deal, Stanley Crooke, chairman and CEO of Isis, called Alnylam “the perfect partner” to help broaden applications of ssRNAi technology. “We are confident that working together in RNAi gives ssRNAi technology the best chance for success,” Crooke said.

John Maraganore, CEO of Alnylam, said in the announcement that his company would continue to focus primarily on double-stranded RNAs, but that the collaboration with Isis on single-stranded RNA-based drugs will “strengthen [Alnylam's] overall efforts.”

“We’ve recognized since Alnylam’s beginning that Isis is the leader in all aspects of antisense technology,” Maraganore said. “We’ve had a mutually beneficial collaboration based on their innovation and patents in the field of double-stranded RNAi drugs, and we’ve been impressed with their continued expansion of this innovation to single-strand RNAi approaches.”

The agreement would seem to be a sweet deal for Isis. All of the funding for the joint ssRNAi research—up to $3 million per year, according to the companies—will come out of Alnylam’s pocket. Alnylam will also pay Isis $11 million upon the signing of the deal and an additional $10 million within 18 months—or even sooner, if Alnylam can demonstrate that the molecules interrupt the production of proteins in rodents.

Another $5 million payment will be triggered if Alnylam can achieve efficacy in primates, along with a final $5 million if an ssRNAi drug makes it to human clinical trials. And if Alnylam licenses drugs based on the technology to other companies, Isis will get 50 percent of the license payments.

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There were some interesting M&A developments this past week involving or potentially affecting Massachusetts life sciences firms. Those, and the rest of the week’s news, below.

—Regulus Therapeutics, a joint venture of Cambridge, MA-based Alnylam (NASDAQ: ALNY) and Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISISI), unveiled plans to raise “a very respectable amount” of capital from private investors and reorganize as an independent corporation. The company was formed about a year and a half ago to develop drugs based on microRNA, tiny RNA fragments that affect the behavior of gene networks and which could be useful in treating diabetes, heart failure, and other complex diseases.

—Antiviral drug developer Panacos Pharmaceuticals (NASDAQ:PANC) of Watertown, MA, sold its HIV drug candidate, bevirimat, to Salt Lake City, UT-based Myriad Pharmaceuticals for $7 million.

—Boston’s Enlight Biosciences added healthcare giant Johnson & Johnson (NYSE:JNJ) to the roster of partners who back its efforts to advancing new technologies for use in the discovery and development of drugs. J&J agreed to invest up to $13 million in Enlight’s programs.

—Cambridge, MA-based Stromedix won patent protection for its technology for blocking fibrosis, an underlying process in different types of organ failure. The startup acquired the anti-fibrosis technology from Cambridge, MA-based Biogen Idec (NASDAQ: BIIB).

—Omni Life Science of Raynham, MA, joined with Enztec of Christchurch, New Zealand, to form a new company, called Orthopaedic Synergy, of which Omni and Enztec will both be wholly owed subsidiaries. The new firm also raised $4.8 million of a Series A financing from Pioneer Capital Partners of Auckland, New Zealand, and its limited partners, and plans to bring the round up to $6 million with an additional contribution from Birnie Capital Partners, also of Auckland, in March.

—New Haven, CT-based antibiotic developer Rib-X Pharmaceuticals raised $25 million in a debt financing from Warburg Pincus, ABS Ventures, Axiom Ventures, EuclidSR Partners, MedImmune Ventures, Oxford Bioscience Partners, SR One, and Vox Equity Partners. Ryan talked with Rib-X CEO Susan Froshauer about the prospects for … Next Page »

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Cambridge, MA-based Alnylam Pharmaceuticals and Lexington, MA-based Cubist Pharmaceuticals announced a major deal today in which Cubist will pay Alnylam $20 million immediately, and up to $82.5 million in milestone-based payments down the road, in return for the right to market RNAi-based drugs that Alnylam is developing to treat the deadly respiratory syncytial virus, or RSV.

As we reported back in February 2008, Alnylam (NASDAQ: ALNY) obtained encouraging results from a Phase II clinical study of its drug ALN-RSV01, which uses a tactic called RNA interference (RNAi) to shut down a gene that’s hijacked in infected lung cells to let RSV replicate. When the drug was administered intranasally to otherwise healthy patients, researchers detected a 40 percent reduction in RSV infection rates. The company is now studying the drug’s efficacy in adult lung-transplant patients.

Alnylam has already inked a similar deal with Kyowa Hakko Kirin Co. of Japan to market ALN-RSV01 in Asia, assuming that it proceeds to the level of regulatory approval. The deal announced today gives Cubist (NASDAQ: CBST) the right to distribute Alnylam’s RSV drugs everywhere else, with Cubist and Alnylam splitting the development costs and profits 50/50 in North America and arranging a milestone- and royalty-based license for the rest of the world.

Cubist specializes in the development of drugs for infectious diseases, especially drugs delivered in hospital settings. Its lead product is daptomycin (Cubicin), an injectable drug used to treat skin infections caused by bacteria such as Staphylococcus aureus, including the methicillin-resistant strain known as MRSA.

Alnylam CEO John Maraganore said in a statement that Cubist is “a like-minded organization” that can bring “additional critical mass” to the development of ALN-RSV01 and/or second-generation RNAi therapies for RSV. Maraganore also said that the Cubist payments will give Alnylam “additional financial flexibility” to invest in RNAi-based therapies for conditions other than RSV.

“This is a good day for Alnylam,” said Simos Simeonidis, a senior biotechnology analyst at research firm Rodman & Renshaw, in a press statement on the deal today. “They get solid market rate and a specialist partner for a compound they had guided they will partner. In addition, they show they are continuing to attract interest from pharma and biotechs and are able to execute deals with favorable terms.”

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There was quite a bit of news this week relating to RNA-interference drugs, and to FDA approval (or non-approval, as the case may be) of drugs under development by local biotechs. Without further ado:

—It was sports week for Ryan. First, he interviewed biotech hedge fund founder Rich Aldrich, part of the group that owns the Boston Celtics, who said why he’s excited about Alnylam, Alnara, and the future of his fund. Then he talked with David Lucchino, CEO of Cambridge, MA-based Semprus Biosciences and nephew of Red Sox CEO Larry Lucchino, about Semprus’s $8 million Series A round and its plans to develop longer-lasting polymer-based surface materials for plastic and metal medical implants.

—Yet another new pharmaceutical company focusing on RNA-interference, Norwood, MA-based AiRNA, emerged from stealth mode, with a focus on so-called asymmetrical interfering RNA molecules 15 base pairs in length, which are shorter (and may therefore have fewer side effects) than the RNAi molecules being developed by Alnylam and others. Alnylam, meanwhile, announced it has filed an application with the FDA to start the first clinical trials of its systemic RNAi anti-cancer drug, ALN-VSP.

—In Waltham, MA, Entra Pharmaceuticals collected the first $4.2 million of what could end up being a $12.5 million Series A venture round, with Flybridge Capital Partners and North Bridge Venture Partners participating.

—BioTrove of Woburn, MA, changed its mind about going public in the current market, canceling the planned $75 million IPO for which it first filed eight months ago.

—Weeks after news that the FDA had declined to approve its lead drug candidate, an antibiotic intended to treat the MRSA infection, Cambridge, MA-based Targanta Therapeutics laid off 86 employees, about three-quarters of its staff.

—In a private offering of its stock, genetic analysis tools maker Helicos Biosciences … Next Page »

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Overall, the news from Boston-area life sciences firms this past was not as much of a bummer as the first part of the headline might imply, but this first one isn’t great either…

—Cambridge, MA-based Idera Pharmaceuticals (NASDAQ:IDRA) reported that its experimental drug, IMO-2055, failed to have the desired effect on tumor size in a Phase 2 clinical trial among patients with a recurrent form of kidney cancer. Further studies will show whether the drug is effective in combination with other therapies.

—Ironwood Pharmaceuticals, a Cambridge, MA-based biotech whose irritable bowel syndrome treatment linaclotide is poised for Phase 3 clinical trials, raised $50 million from Morgan Stanley Investment Management, which led the deal, and many of its previous investors.

—Susan Froshauer, CEO of New Haven, CT-based Rib-X Pharmaceuticals, told Ryan about her seven-year-old firm’s platform for developing new antibiotics and about her plans to forge partnerships with pharma. Rib-X is testing its lead drug candidate, radezolid, head to head with Pfizer’s blockbuster linezolid.

—Shares of Cambridge, MA-based CombinatoRx (NASDAQ: CRXX) plummeted after the company reported that its lead drug candidate failed to reduce pain for patients with osteoarthritis of the knees in a mid-stage clinical trial.

—Luke visited with healthcare venture behemoth MPM Capital in Boston and learned about some of its most interesting recent investments, as well as its strategy for keeping its portfolio balanced between early stage innovation and firms with late-stage product candidates that promise short-term payoffs.

—Clarus Ventures of Cambridge, MA, led a $60 million Series D financing for Pittsboro, NC-based Biolex Therapeutics, which has a hepatitis C treatment in Phase 2 clinical trials. OrbiMed Advisors, Intersouth Partners, Quaker BioVentures, Johnson & Johnson Development Corporation, Investor Growth Capital, Polaris Ventures, Mitsui & Company, The Dow Chemical Company, JP Morgan Securities, the North Carolina Economic Development Fund, and others joined the deal.

—Billionaire philanthropist Hansjörg Wyss gave Harvard University $125 million–reportedly the largest gift in its history–to build a new institute for “biologically inspired engineering.”

—Cambridge, MA-based RNAi-based drug developer Alnylam (NASDAQ: ALNY) earned a $20 million milestone payment as part of an arrangement forged in May with Japan-based Takeda Pharmaceutical.

—The U.S. Supreme Court declined to hear an appeal from Boston Scientific (NYSE: BSX) of the $703 million verdict against the Natick, MA-based device maker in a patent-infringement case brought by Johnson & Johnson.

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Alnylam Pharmaceuticals has been getting by for years without a full-time chief scientific officer, but no more. The Cambridge, MA-based developer of drugs based on RNA interference (RNAi) technology said today it has hired Jack Schmidt, a former vice president at French drugmaker Sanofi-Aventis and a member of the global discovery leadership team there, to fill the role.

Schmidt, 58, will take over the role of chief scientist from Alnylam CEO John Maraganore, who has been pulling this double-duty for years. Schmidt received his postdoctoral training in immunology at the National Institutes of Health, before joining Merck Research Laboratories and then moving to Aventis. While at Aventis, he built up lots of experience with drugs at their earliest stages of development, helping introduce 15 new drugs into animal testing. Some of that was with conventional small-molecule pharmaceuticals, and some with protein-based drugs. Now he’s itching to help load up Alnylam’s pipeline with a third class of drug, RNA-based therapeutics that block the activity of problematic genes.

“This was an opportunity to get in on the ground floor on a major event in therapeutics,” Schmidt says.

Schmidt has been following the scientific literature on RNAi, or gene silencing, techniques for the past couple years, he says. He tried, but wasn’t able to get his bosses at Sanofi-Aventis to make a big push in the field as have other major pharma companies, like Merck and Roche. “Perhaps out of frustration, I continued to pursue this,” he says.

That led him to Alnylam (NASDAQ: ALNY). His job will be to help Alnylam move drug candidates ahead into clinical trials. He wouldn’t say how many candidates he expects to advance, although he predicted that an RNAi product will reach the market in five to seven years. Right now, Alnylam has just one such candidate in clinical trials, for respiratory syncytial virus. Delivery of the RNAi drugs has been a real bugaboo, but Schmidt says he has confidence in Alnylam’s strategy of forming partnerships around a variety of delivery techniques to hedge its bets.

“I wouldn’t take the job if I didn’t think this could be solved,” Schmidt says.

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Alnylam Pharmaceuticals may have to be careful what it wishes for. The Cambridge, MA-based biotech company (NASDAQ: ALNY) supported Gov. Deval Patrick’s 10-year, $1 billion initiative to boost the life sciences industry in the state, and now that it’s become law, the company says the initiative might give one of its competitors an unfair advantage.

Alnylam’s beef is essentially that the state’s new initiative could give the upper hand to Worcester, MA-based RXi Pharmaceuticals (NASDAQ: RXII), a rival in developing drugs through RNA interference technology, says Alnylam CEO John Maraganore. The new law is expected to pump significant amounts of state money into top state research institutions, like the University of Massachusetts Medical School, particularly the lab of 2006 Nobel Prize winner Craig Mello. That lab, which has done pioneering work in RNA interference, has a “blanket” agreement to provide licenses to RXi for technology emerging from its research, Maraganore says, citing RXi’s regulatory filings.

What it all means is that state money could end up strengthening a single company, which would block other companies from getting a shot at licensing the discoveries and creating jobs, Maraganore says. The issue was first aired, in a somewhat cryptic op-ed piece in the Boston Herald by Maraganore and Amir Nashat, a general partner with Polaris Venture Partners. They point out that California lawmakers nipped this problem in the bud in their $3 billion stem cell research initiative, making it clear that any intellectual property generated with state funds should be eligible for licensing to all comers, and can’t be steered to a single company, even if it has a pre-existing agreement with a state-supported lab.

“We were huge supporters of the life sciences initiative, it’s a bold and timely initiative,” Maraganore says. “It’s interested in fostering innovation, and new jobs, so IP takes on a lot of importance. Having the IP available to existing companies and to new companies on a level playing field is quite important. We think it’s important as a matter of public policy.” Otherwise, he added, “It may not foster as many new companies and new jobs.”

This issue of what to do with the intellectual property stemming from discoveries with state money falls squarely on Susan Windham-Bannister, the newly hired CEO of the Massachusetts Life Sciences Center. State lawmakers left this matter vague in the legislation, and are leaving those decisions up to the agency that will carry it out, Maraganore says. It doesn’t appear that anybody stuck a special provision or earmark into the law to specifically benefit a buddy with RXi or any other company, he says.

Alnylam has raised the IP rights issue with Windham-Bannister, and the company has had what it considers “excellent conversations with her,” Maraganore says. “She’s outstanding, she’ll certainly take this issue on. We’re very confident the Life Sciences Center will address this in a high-quality way.”

Windham-Bannister’s office is clearly thinking hard about how to get through this thicket. “A high priority issue for the Center is one that relates to the issue of exclusive licensing agreements for intellectual property developed using state funds between state-funded colleges and universities and private companies and institutions,” said Melissa Walsh, the center’s chief operating officer, in an e-mailed statement. “There is language in the life sciences law that requires the Center and its Board of Directors to review and make recommendations on this topic. We are committed to exploring the issue in a comprehensive and objective manner before rendering our recommendations to the Legislature.”

RXi Pharmaceuticals CEO Tod Woolf was unavailable for comment, according to a spokesman.

It’s likely that Alnylam’s complaint is just the first of many, says David Resnick, a partner with Nixon Peabody (and Xconomist) who specializes in intellectual property law. There are a lot of companies with sponsored research agreements at state institutions, and those deals often give them right of first refusal on technologies emerging from the research, Resnick says. “It’s probably good that Alnylam brought this up,” Resnick says. “It’s bound to come up in a number of offices.”

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A lot has been written about how Alnylam Pharmaceuticals, and plenty of other companies, see a gold mine in turning off problem genes through drugs based on the biological phenomenon called RNA interference, or RNAi. It turns out that Alnylam (NASDAQ: ALNY), the highflying Cambridge, MA-based biotech company built around RNAi, sees another big opportunity in doing the exact opposite—turning on certain genes that can help combat disease.

The new field is called RNA activation, or RNAa for short. Just like it did when it corralled intellectual property for its bread-and-butter RNAi business, Alnylam took the strategy of looking at the state-of-the-art and grabbing technology licenses that would give it a dominant position in the emerging field, says CEO John Maraganore. Last month, Alnylam said it obtained what it considers the field’s seminal IP from the Salk Institute, the University of Texas Southwestern Medical Center in Dallas, and the University of California, San Francisco.

The fundamental idea here is that sometimes people lack enough of a good protein to stay healthy. For example, researchers would like to know what would happen to people with cancer if a drug could stimulate production of the P53 protein, a well-known tumor suppressor, or P21, a protein that acts as a “stop signal” for cell division. Or, what would happen if researchers could develop a drug to activate a gene that’s otherwise faulty for patients with a single gene defect, like the one that causes cystic fibrosis, a fatal lung disease among children and young adults?

“This is the exact opposite of what we do with RNAi,” says Maraganore. “All diseases are from an overexpression or an underexpression of proteins. When you have an underexpression of certain proteins, that’s where RNAa can be applied.”

The opportunity for RNAa isn’t as broad as with the company’s original gene-silencing technology, because more diseases are caused when the body has too much of a certain physiological activity going on, Maraganore says. RNAa work is still in earliest scientific stages, yet the strategy has impressed Wall Street. … Next Page »

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Alnylam Pharmaceuticals is building one big cash horde for a company with no moneymaking products. The Cambridge, MA-based biotech company said today that it expects to sign two or more “major new alliances” in the next six to 18 months, and it is now telling Wall Street it will have $500 million in cash in the bank at the end of the year instead of its earlier prediction of $390 million.

Alnylam, a leading developer of drugs using RNA interference technology to turn off diseased genes, has already achieved its 2008 business goals through cutting deals with Takeda Pharmaceutical, and Kyowa Hakko, as well as one with GlaxoSmithKline through its Regulus Therapeutics joint venture, the company said today in a statement. Any more partnerships with pharma companies eager to fill up their drying pipelines will be gravy.

Alnylam (NASDAQ: ALNY) has already had a big year, with shares climbing 24 percent before today’s news. That could change, especially since it has a long ways to go before it can prove its drug candidates work well enough in people to justify commercialization. Even though pharmaceutical companies often wait until the later stages of development to invest in other biotech products, they’ve been eager to get involved early with Alnylam and its RNAi drugs.

“The hunger for our innovation is greater than ever before,” said John Maraganore, the company’s CEO, on a conference call with analysts after the release.

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