Seattle-based Immune Design has quietly pulled in another $11 million in venture capital. That new cash represents the second installment of a Series B financing that the company announced last July, when it was said to be worth as much as $32 million total.

Immune Design, the developer of new vaccine technology, disclosed the new financing in a regulatory filing that has been updated to say the Series B round could be worth as much as $34 million over time. Last July, the company pulled in $12 million, and now it has boosted the total financing up to $23.4 million in this round, according to the filing. The company didn’t issue a press release on the financing, but CEO Carlos Paya confirmed that the financing comes as a second tranche of the Series B financing. To date, Immune Design has pulled in $41.4 million between its first two rounds of venture capital.

The company has been one of the best financed biotech startups in Seattle, since it was founded in June 2008. Immune Design was founded by Nobel laureate David Baltimore of Caltech, Steve Reed of the Infectious Disease Research Institute, and Larry Corey, now the president of the Fred Hutchinson Cancer Research Center. It has raised its dough from a big name group of investors, including Versant Ventures, The Column Group, Alta Partners, and ProQuest Investments.

Immune Design CEO Carlos Paya

The vision of the company is based on developing two key technologies for vaccines. First, it’s aiming to create new synthetic compounds, called adjuvants, that boost the effectiveness of vaccines. Second, it is developing delivery technology that’s designed to trigger a specific immune defense against a certain invaders (like flu) instead of a more generalized immune reaction like the ones made by vaccines of today.

Paya, who joined Immune Design in April after a stint at Elan in South San Francisco, didn’t say what milestone the company hit to trigger the second tranche of financing. Immune Design’s biggest deal to date was a partnership struck last year with AstraZeneca’s MedImmune unit, in which the bigger company is getting access to an Immune Design adjuvant to enhance experimental vaccines for respiratory syncytial virus (RSV), Epstein-Barr virus, and cytomegalovirus (CMV) infections.

The late Ralph Steinman, the Rockefeller University biologist who won the Nobel Prize this week for his discovery of dendritic cells that alert other immune system cells to infections, was a member of the Immune Design scientific advisory board.

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[Updated with Merck comment 1:25 pm ET, 9/16] Just about all the major pharmaceutical companies have their own venture capital funds to invest in biotech startups, and now one of the real biggies, Whitehouse Station, NJ-based Merck, has joined the club.

Merck (NYSE: MRK) has established the new Merck Research Venture Fund (MRVF) with $250 million to invest around the world, according to a report today by In Vivo, an industry publication. The new venture operation is led by Merck senior vice president David Nicholson. The company also has set up a separate Global Health Innovation Fund with another $250 million.

[Updated Merck comment.] “Presently, MRVF is making strategic LP investments in a small number of geographically diverse life-science venture firms. While we expect to make direct investments in biotech companies in the future, we are not yet doing so,” says Merck spokesman Ian McConnell.

Big Pharma companies, as everyone who follows the industry knows, are struggling like crazy to come up with innovative new products to replace aging blockbusters that are losing patent protection from generic competitors. That need has helped create an opening in recent years for Big Pharma VC firms to invest in biotech startups, particularly as traditional biotech VC firms have been stuck by the lack of an IPO market to provide a reward for their efforts. Pfizer, GlaxoSmithKline, Novartis, Eli Lilly, Roche, J&J, and AstraZeneca have all found themselves in position to fill some of the void in early-stage biotech investing the past few years.

According to In Vivo, the Merck Research Venture Fund will enable Merck to invest in early-stage startups, offer its scientists up as advisors to the smaller companies, and provide Merck’s dealmakers with an inside track in negotiations when it’s time for the small company to strike a co-development partnership.

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An advisory panel to the FDA voted nine to six against the agency approving dapagliflozin, a diabetes treatment developed by New York-based Bristol-Myers Squibb (NYSE: BMY) and AstraZeneca (NYSE: AZN), according to a press release. Dapagliflozin is among a new class of drugs designed to inhibit SGLT2, a protein that promotes the reabsorption of glucose by the body. The FDA doesn’t have to follow the recommendations of its advisory panels, but it usually does. The panel’s rejection led Goldman Sachs analyst Jami Rubin to declare in a report “SGLT2 class likely dead.”

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Get most biotech executives talking about the FDA, and they usually tiptoe around with diplomatic sound bites, or maybe they’ll grumble about what they consider unreasonable burdens and arbitrary decisions by the U.S. drug regulatory agency.

The guys at Menlo Park, CA-based Optivia Biotechnology have a completely different take.

“The tougher the FDA gets, the better our business gets,” says Peter Milner, Optivia’s co-founder and executive vice president of corporate development.

Optivia, a company started four years ago with only about $500,000 in seed capital to date, has grown from one man’s idea in a garage into a profitable company with about 30 employees and a roster of 50 customers from Big Pharma, biotech, and academic research labs. Optivia has grown up based on a proprietary lab test that looks at transporter proteins that shuttle drugs, nutrients, and other substances in and out of cells. The field of research was pretty obscure when CEO Yong Huang got the company started in his garage (literally), but it has encountered some good fortune over the past year as the FDA has become increasingly vigilant in asking drugmakers to study the effect their compounds have on certain transporter proteins.

The FDA is particularly interested in how these transporters can be involved in drug-drug interactions, which can lead to dangerous side effects that sometimes only appear after a treatment has been taken by thousands or millions of people, on the market. Biologists say there are about 300 to 400 of these transporters that act as cellular gatekeepers. The FDA is trying to learn more about them, to avoid new cases like the debacle with Bayer’s cholesterol-lowering drug cerivastatin (Baycol). That drug was withdrawn from the market after reports of a fatal muscle disorder were discovered in patients who got the drug along with another compound known as gemfibrozil—through what was determined to be a bad transporter reaction.

Yong Huang

Drug regulators have long required companies to run tests that shown how their drugs get metabolized, or washed out of the body, usually through certain enzyme pathways in the liver. Doctors and pharmacists use that information to make sure they don’t prescribe too many different drugs that get metabolized through the same pathway, which could create a traffic jam of sorts, causing too much of the drug to remain in the bloodstream or tissues for too long. Transporter proteins also play an important role in drug metabolism, but the FDA has only recently begun to step up its requests for lab studies about them. That’s because transporters are complex protein structures that have been harder to study than enzymes, Huang says.

The FDA has singled out transporter biology as one area of research that could help improve the drug development process, as Janet Woodcock, a senior FDA official, described in this review article in Nature a year ago. Optivia isn’t the only company running tests of … Next Page »

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South Plainfield, NJ-based PTC Therapeutics entered into an exclusive licensing agreement with AstraZeneca (NYSE: AZN) for PTC’s technology, called GEMS (gene expression modulation by small molecules), according to a press release. The GEMS technology is designed to identify compounds that target particular regions of messenger RNA molecules. The collaboration is geared towards discovering new remedies for cancer and other diseases. The agreement includes an undisclosed up-front payment, plus future payments that will hinge on research, development, regulatory and commercial milestones.

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New York-based Bristol-Myers Squibb (NYSE: BMY) and development partner AstraZeneca (NYSE: AZN) released data from several studies at the 71st American Diabetes Association Scientific Sessions in San Diego. In a Phase 3 extension study, the investigational compound dapagliflozin plus metformin produced sustained gylcemic control and weight reduction in patients with Type 2 diabetes. In a longer-term, Phase 3 study, the same combination sustained reductions of blood-sugar levels from 52 weeks to 104 weeks, when compared to a commonly used sulphonylurea treatment. The companies also released data from two 24-week studies showing that that dapagliflozin plus metformin XR significantly reduced blood sugar levels compared to dapagliflozin or metformin XR alone plus placebo. Dapagliflozin is currently under review at the FDA, which is expected to hand down a decision by October 28.

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U.K.-based drug giant AstraZeneca (NYSE: AZN) is planning to lay off 135 employees at its facility in Westborough, MA, starting at the end of May and continuing through the end of 2011. The news was reported today by the Boston Business Journal, which cites a notice to state labor officials. The Westborough plant, which makes supply and packaging for allergy and asthma drugs, among other products, went through a previous round of layoffs in 2009, according to the report. Before that, AstraZeneca employed some 1,000 workers in the state between the Westborough plant and an R&D center in Waltham, MA. The new layoffs are part of a broader corporate restructuring (including 3,500 job cuts worldwide) that was announced in early 2010.

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Biology has long been based on a model in which scientists think up a dynamite experiment, gather data, keep it all close to the vest, and publish the (hoped-for) blockbuster results in a top peer-reviewed journal. Like many biologists, MIT’s Phil Sharp made his name following this time-honored method for discovering and disseminating knowledge.

Now along comes Stephen Friend, the former senior vice president of cancer research at Merck, saying the model is woefully out of date. The only way biology can really advance, and help us develop better drugs, is to break with tradition. Biologists have to embrace an open-source, collaborative movement, Friend says, in which academics and industrial scientists share vast troves of data in real-time on DNA, RNA, proteins, and clinical observations of disease. Done right, he says, and it will help scientists weed out the duds early in drug development, and help predict which individual patients will respond to certain treatments.

Friend has secured a number of high-profile backers for this fledgling idea at Seattle-based Sage Bionetworks. The cast of supporters includes Merck, Pfizer, AstraZeneca, and the National Cancer Institute, to name a few. But despite the strong support, there are still plenty of skeptics who wonder how this is all really supposed to work. That’s why I’m really excited to bring together these two leaders in biology, Sharp and Friend, for a lively debate on the pros and cons of moving the field in this direction. I will moderate a keynote chat between these two luminaries at Xconomy’s biggest event of the year, XSITE, coming up on June 16 at Babson College in Wellesley, MA.

These two guys know each other well, as Friend has maintained a position on the leadership council of the David H. Koch Institute for Integrative Cancer Research at MIT, where Sharp is on the faculty. Yet when I look at the founding members who have agreed to pour experimental data out into Sage’s open commons, I see top scientific names from Columbia University, Stanford University, and UC San Diego, but not MIT. I look forward to probing these guys for engaging conversation about why the open source movement in biology hasn’t caught fire like it has in software, and what needs to occur if this is ever going to catch on in a big way.

As always, a big part of my role will be to help people in the audience pose their own questions to the great speakers. I’m looking forward to hearing your questions, and their answers. See you there June 16 at XSITE.

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Seattle-based Resolve Therapeutics raised its first $2 million to execute on a plan that challenges about 30 years of conventional wisdom of how you make money in biotech. And it took some creative thinking from a couple of New York-based venture firms to pull it together.

The plan, crafted by Resolve CEO Jim Posada, is set up so that the startup can generate returns without ever going public, or getting acquired by a bigger biotech or pharma company. It’s an unusual pitch, since those are the two classic ways biotechs can generate returns. But after hearing Posada’s pitch, a couple of New York firms—New Science Ventures, and Easton Capital—agreed to join the $2 million Series A round, to support early development of Resolve’s new drug candidate for lupus, a chronic inflammatory disease.

“We don’t think there’s a large probability of going public or being acquired,” Posada says. “Our exit will be a licensing transaction. The probability of that happening is quite high.”

In connection with the financing, Somu Subramaniam, the founder and managing partner of New Science Ventures, was added to Resolve’s board, while John Friedman, managing partner of Easton Capital, will be a board observer. Peter Kiener, the CEO of Gaithersburg, MD-based Zyngenia and a former global head of biologics R&D at AstraZeneca’s MedImmune unit, has signed on as chairman of Resolve.

Resolve was first profiled in these pages back in November. Here’s the gist: Posada, a former dealmaker for Eli Lilly (NYSE: LLY) and Lebanon, NH-based GlycoFi, decided to try to advance the development of a new biologic drug for lupus based on research from University of Washington researchers Jeff Ledbetter and Keith Elkon.

Like a lot of companies, Resolve is following the lean and mean “virtual” company model that has become popular in recent years as investors have sought some kind of relief from the long development cycles and huge capital investments that are the bane of biotech. Knowing that a traditional business model wouldn’t fly, Resolve decided to try to raise a total of about $10 million to $15 million to push a single drug candidate through the first part of mid-stage clinical trials over a three year period, and then generate returns through a partnership with a Big Pharma company that seeks to finish the rest of the long, expensive, and risky slog of drug development. Resolve’s investors would make instant returns on any up-front payment from a partner—typically in the $30 million to $50 million ballpark—and could receive upside returns, if the partner hits milestones further along in development, that often exceed $400-$500 million.

Jim Posada

This requires some different structures and lawyering than most biotech investors are used to, Posada says. Instead of being incorporated as a “C” corporation, like most biotech companies that seek to get returns by striking IPOs or getting acquired, Resolve was set up as a limited liability corporation (LLC), which enables the investors to realize their returns directly upon a license transaction being struck, Posada says.

Resolve isn’t the only company thinking about how to generate returns for investors through some other way than the IPO or M&A lottery. San Francisco-based … Next Page »

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Vivaldi Biosciences is a rare and highly sought after property in New York City: a promising biotech startup. Why rare? Because office space is so expensive, and wet-lab space so hard to find, that most biotech companies that originate in NYC end up fleeing for some other city that has more to offer them. But Vivaldi’s far-flung startup team—which includes folks from NYC, Boston, and San Francisco—went to great lengths to keep the four-year-old company in the Big Apple.

Now Vivaldi is making strides towards reaching its first big milestone. Next quarter, the company hopes to get an application into the FDA to begin human trials of a novel flu vaccine—a product that Vivaldi executives believe could be the first truly effective vaccine in elderly people, who are most likely to suffer deadly complications from the virus. “Current vaccines leave 30 percent [of elderly people] unprotected,” says Elliott Kieff, a professor of medicine at Harvard who co-founded Vivaldi and now serves as chairman of its scientific advisory board. “What’s wonderful about this concept is it’s an entirely new strategy for attenuating the virus.”

Vivaldi’s technology originated at Mount Sinai School of Medicine in New York. Scientists Peter Palese and Adolfo García-Sastre discovered that a protein produced by a gene called Influenza NS1 prevents flu-infected cells from producing interferon. That’s a problem, because interferon really helps the human body fight off the flu, by blocking the virus from replicating.

The scientists went on to discover that deleting part of the NS1 gene essentially immobilized the flu virus, because it stimulated the cells’ interferon response, which then prevented the virus from reproducing. Studies in animals suggest that administering this mutant virus as a vaccine provides cross protection against multiple strains of the flu.

The technology could greatly streamline the annual flu-vaccine production process. Today’s vaccines are “trivalent,” meaning they raise immunity against the three influenza strains (two type A strains and one type B strain) that are expected to be dominant in the upcoming flu season. Vivaldi has generated a master truncated NS1 vaccine for all influenza A strains, and second one for all influenza B strains. The company is also developing rapid-production techniques that could make the vaccine useful in a pandemic, when huge quantities need to be produced and delivered to vaccination centers in a hurry.

The effort to turn Mount Sinai’s flu discoveries into a company started 3,000 miles away, in the office of Douglass Given (pictured above), a partner at Bay City Capital in San Francisco. Given, a scientist and physician trained in infectious diseases, had received his Ph.D. in Kieff’s lab. “I wanted to do something … Next Page »

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Immune Design aspires to become a bigger company, and now it has recruited a CEO from a bigger company.

The Seattle-based vaccine developer is announcing today that its new chief executive is Carlos Paya, the former president of Elan, the Ireland-based biotech company which has significant operations in South San Francisco. Paya is replacing Immune Design’s founding CEO, Steve Reed, who will continue to serve on the company’s executive management team and board. Bruce Carter, the executive chairman, is staying in his position.

“We are fortunate to have someone of Dr. Paya’s caliber joining Immune Design,” Reed said in a statement.

Paya’s prior job was at Elan, the company known for developing the hit multiple sclerosis drug natalizumab (Tysabri). He oversaw commercial, marketing, R&D, and clinical operations there since November 2008. Before that, he was with Indianapolis-based pharma giant Eli Lilly (NYSE: LLY), as vice president of Lilly Research Laboratories. Paya, an immunologist by training, was a member of the faculty at the Mayo Clinic before going into the pharmaceutical industry.

Immune Design was founded in 2008 with technology from the Caltech lab of Nobel Laureate David Baltimore, and from Reed’s team at the Seattle-based Infectious Disease Research Institute. The technology is based on a vector from Baltimore’s lab that makes it possible to specifically stimulate dendritic cells of the immune system, which are known for sending sentinel warning signals about pathogens to other cells of the immune system. That targeting ability is being combined with synthetic chemical compounds called adjuvants, which are used to boost the effectiveness of vaccines.

The adjuvants from Reed’s lab, when combined with Baltimore’s precise delivery system, offer an opportunity to trigger highly potent, more specific immune responses in the body than vaccines from the past, according to Rick Klausner, a partner with The Column Group, one of the company’s founding investors.

The company has raised $50 million in two rounds of venture financing, and last year struck its first major partnership with AstraZeneca’s MedImmune unit to develop new vaccine candidates.

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Gene sequencing has gotten incredibly fast and cheap, and researchers around the world are pouring huge volumes of genomic data onto their private servers, in the hope they will sift through it all to make groundbreaking discoveries. Should so much genomic data be so closely guarded, or should it be poured into a free and open database that all scientists share?

The idea sounds utopian in a high-risk, high-reward industry that protects intellectual property like Fort Knox. But no one disagrees that today’s approach to drug development takes too long, costs too much, and is too unpredictable.

Stephen Friend thinks shared data would change all of that—and allow researchers to see patterns they wouldn’t otherwise see, and make insights that would never emerge any other way. So he did something two years ago that most people would consider quixotic: He quit his high-powered job as a senior vice president of cancer research at Merck to go on a mission to disrupt biology.

The founding idea, at a nonprofit called Sage Bionetworks, was to spark an online movement like the one we’ve seen with open-source software or Wikipedia, in which thousands of loosely affiliated people around the world pool their brainpower to do something great. In this case, the wisdom of the crowd could improve drug development and personalize medicine.

The Sage Commons is built on the notion that the genomic symphony is too bewildering for any individual or team—even at a place with as many dollars and brainiacs as Merck—to figure out. That seems pretty obvious.

But two years into this endeavor, Friend has learned how many people still resist any change to business as usual. Academic institutions still cling to their intellectual property out of a hope it will someday make them money. Scientists, by and large, keep their experimental data close to the vest in the hope they can get career-making papers published in Science or Nature. Many drugmakers can’t really imagine sharing anything valuable outside their corporate firewalls, lest it undermine their competitive standing. So while Facebook and Twitter may have proven that humans have a deep-seated desire for sharing, this impulse is still widely suppressed in biomedicine.

Stephen Friend

When I visited Friend at his office in Seattle on Friday morning, he was brimming with his usual enthusiasm, but was also sober about how hard it is to get people to change their ways, and to get them to share for the greater good. When I asked him what the biggest obstacles are to this mission, he didn’t hesitate: “Apathy, and ignorance.”

But if anybody can spark a new way of thinking, Friend is the guy. Once described by Forbes as “one of the last great dreamers” in the pharmaceutical business, Friend has a rare blend of scientific chops, entrepreneurial success, Fortune 500 leadership experience, high-level connections in biology and IT, and the infectious energy and charisma that makes smart people want to climb mountains for him.

Which is why Sage has scooped up more than $20 million in support so far. It has built a team of 30 employees. Companies like Merck (NYSE: MRK), Pfizer (NYSE: PFE), AstraZeneca (NYSE: AZN), and Quintiles have contributed some combination of money and data to the cause. Amazon Web Services, the cloud-computing unit of the e-commerce giant, is hosting the massive amounts of genomic data that Sage wants to put in its public repository.

Some world-class scientists at Stanford University, Columbia University, UC San Francisco, and UC San Diego have agreed to pool their experimental genomic data. The FDA has become curious about how an open data repository could be used to track adverse events with drugs. Scientists from other disciplines, like physics and astronomy, have been vocal advocates for … Next Page »

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This was a pretty quiet news week for Seattle biotech except for one big decision that affects the hot cancer drug company in town.

—Seattle-based Dendreon (NASDAQ: DNDN) has produced enough evidence to win full reimbursement from Medicare for its $93,000 prostate cancer drug, sipuleucel-T (Provenge). This move was widely expected since Dendreon passed muster at a public hearing in November, but it’s still a pretty big win.

—Sage Bionetworks, the Seattle-based nonprofit seeking to spark an open-source movement for biology, said this week it has started working on projects for a couple of supporters—Japan-based Takeda Pharmaceutical and the CHDI Foundation. Both projects are about creating computational models for neurological disorders, which might help researchers do a better job of developing treatments. Sage also recently struck a deal with AstraZeneca to help with its cancer research.

—You’d never know it by driving by this nondescript warehouse in Bellevue’s Factoria neighborhood, but Clarisonic is fast becoming one of the biggest tech startup hits of the past few years in Seattle. The company, which makes a sonic wave brush that helps women get rid of dirt, oils, and makeup, surpassed $100 million in sales last year, its fifth year on the market, according to president Jack Gallagher. Who’s buying this device, which costs between $149 and $225? Pop sensation Lady Gaga and her mom, for starters.

—Seattle-based Frazier Healthcare Ventures completed its acquisition this week of a medical instrument repair and management company, OnSite Services, from San Diego-based Carefusion (NYSE: CFN). Terms weren’t disclosed.

—AVI Biopharma (NASDAQ: AVII), the Bothell, WA-based developer of RNA-based therapies, hired Peter Linsley as its new chief scientific officer. Most recently, Linsley was the chief scientist at San Diego-based Regulus Therapeutics, but he’s a familiar name in these parts, from his past experience with Merck/Rosetta Inpharmatics and Bristol-Myers Squibb.

—This week in BioBeat, I took aim at Big Pharma, saying it has grown too big and bureaucratic to develop innovative new drugs, and that it would be better off breaking up into nimbler, more manageable companies. I’d like to hear your comments on this, whether you think this is spot-on, dead wrong, or somehow beside the point.

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Sage Bionetworks, the Seattle-based nonprofit seeking to spark an open source movement for biology, said today it has begun work for a couple of partners—Japan-based Takeda Pharmaceutical and the CHDI Foundation. Both projects involve building computational models for neurological diseases. Takeda said it November that it agreed to pay $3.6 million over four years to support the research. Sage didn’t disclose the terms of CHDI’s support in today’s statement, although Sage said it is working with Massachusetts General Hospital to analyze tissues from Huntington’s disease patients. Sage also recently received support from pharmaceutical giant AstraZeneca to perform cancer research.

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Sanofi-Aventis and Merck KGaA announced recently they are teaming up to test new cancer drugs in combination, joining a growing trend among drug makers to combine different cancer therapies in early-stage clinical studies.

Combinations of different drugs are used frequently in the treatment of cancer, but such regimens are normally developed only after medicines reach late-stage testing or are already on the market.

Now that is starting to change.

Some experts believe such combinations of experimental-stage drugs could in the future become commonplace as researchers hunt for better “targeted” treatments to disrupt the multiple signaling pathways that are used by cancer cells to proliferate and grow.

Companies have undertaken innovative strategies to study these drugs in combination. In June 2009, AstraZeneca and Merck & Co. entered into an agreement to conduct joint early stage clinical trials of their respective cancer drugs – AstraZeneca’s MEK inhibitor and Merck’s AKT inhibitor.

“There is strong scientific rationale to suggest that the potential benefit of this combination to cancer patients may exceed the sum of the parts,” AstraZeneca said in a press release describing the partnership with Merck & Co.

This latest collaboration involves the experimental MEK inhibitor from Merck KGaA and two investigational agents from Sanofi-Aventis, SAR245408 and SAR245409, which are both inhibitors of the PI3K/mTOR pathway and obtained through Sanofi’s partnership with Exelixis.

In the current collaboration, each company will be responsible for conducting an initial Phase I study. Sanofi-Aventis will be granted a license to test Merck’s MEK inhibitor in combination with SAR245408, while Merck will assess its drug in combination with SAR245409.

There are some considerable clinical and regulatory hurdles to developing two drugs in combination. Recently, however, the FDA has taken a significant step to encourage companies to work together . . . or at least consider the possibility.

The FDA issued draft guidelines designed to encourage companies to work in tandem to develop two or more new drugs to be used in combination to treat cancer and infectious diseases, among other illnesses. In addressing the new guidelines, FDA commissioner Margaret Hamburg said they are the result of a growing understanding that experimental therapies may need to be used together in order to be more effective or to prevent drug resistance.

“We are not fully harnessing the promise of this science for the benefit of patients,” Hamburg told an audience recently. “We clearly need to act.”

Advocates for new treatments for cancer said they see the Agency’s proactive outreach as the first step to establishing a clear regulatory pathway for these combination therapies and a move that will spur more collaboration between companies to develop these novel combinations.

Despite the excitement, efforts to study investigational drugs in combination are still in their infancy. Phase I is the first stage of clinical testing, so these new drug “cocktails” are still several years from reaching the market. Scientific, clinical, regulatory and intellectual property hurdles all must all be overcome if these novel combinations are to provide breakthrough cancer therapies for the patients who desperately need them.

One thing is for certain – this new trend is likely here to stay.

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The Dana-Farber Cancer Institute in Boston made headlines earlier this month after siding with Novartis in a brewing legal battle with a Dana-Farber spinout, Gatekeeper Pharmaceuticals. The disagreement stems from both companies claiming they are the rightful licensees of certain intellectual property (IP) created by Dana-Farber researchers.

The IP, originally committed to Gatekeeper via an option agreement, was later determined to fall under a broad 2005 alliance with Novartis, which granted the pharma exclusive rights to certain Dana-Farber projects. This dispute over who controls the licensing rights to a potential cancer drug is sure to bring attention to the issues inherent in broad strategic alliances between academia and industry.

It’s common for companies to sponsor the work of an individual lab or to support a specific project, but these types of broad institutional strategic alliances that grant rights to wide areas of technology were once rare, even controversial. But they have been proliferating in recent years. Washington University in St. Louis (Pfizer), Cancer Research UK, the University of Pennsylvania (AstraZeneca) and the Salk Institute (Sanofi-Aventis) are a few who have inked deals within the last couple of years. While many of these academic institutions are wading for the first time into this style of arrangement, the Scripps Research Institute has managed large strategic industry alliances for the better part of the last three decades and currently counts Pfizer and Novartis as major corporate partners.

At Scripps, these deals have evolved to include research funding and IP licensing components. They provide important benefit to both Scripps and our corporate partners. Scripps gains valuable research and discretionary funds, used to seed early research projects and recruit/retain top faculty, in addition to enabling access to expertise and infrastructure more prevalent in a pharmaceutical company (e.g. specialized animal models). In turn, our partners gain access to the kind of transformative research that is uniquely enabled in academia.

Despite the obvious benefits, broad research alliances such as these can also present challenges-inadequate communication, misalignment of incentives and a community perception that the academic partner is inaccessible to other potential industrial collaborators. These challenges need to be managed properly if both parties are to realize full value from the relationship.

Broad alliances involve a large amount of information exchange, the sheer volume of which necessitates regular attention. Systematic, frequent and open communication … Next Page »

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NanoBio, the Ann Arbor, MI-based developer of new vaccine formulations made to be more potent and easy to deliver, has snapped up a $6 million grant from the Seattle-based Bill & Melinda Gates Foundation. The money will help fund development of the first nasal spray vaccine against one of the most common bugs that causes lung diseases like pneumonia in infants.

The company, a University of Michigan spinoff founded in 2000, secured the support to study its experimental vaccine against respiratory syncytial virus (RSV). This deal allows NanoBio, a for-profit company, to retain the commercial rights to this vaccine in wealthy countries, while the foundation will have access to the vaccine in the developing world.

No one has yet developed a vaccine for RSV infections, and it’s clearly one of the bugs that public health officials would love to tamp down around the world. Almost all infants get this contagious infection at least once by the age of two or three, and it causes an estimated 900,000 hospitalizations every year in the U.S. and Europe for a host of lung complications like bronchiolitis and pneumonia. The latter disease is one of the leading killers of children in sub-Saharan Africa. AstraZeneca’s MedImmune unit made a fortune—$1.23 billion in 2009 to be exact—through selling palivizumab (Synagis) as an antibody treatment for RSV infections, although its nowhere near as practical as a vaccine would be in poor countries, where it would be too expensive. But that robust market makes it clear that if NanoBio can develop a vaccine, it will have an opportunity to make money in wealthy parts of the world, and to make an even bigger impact around the world with help from the Gates Foundation.

“We believe our program holds tremendous promise for addressing a number of global health challenges,” said James R. Baker, Jr., NanoBio’s Founder & CEO, in a statement.

NanoBio made waves back in mid-September, when it reported some eye-opening results of a nasal spray vaccine it has developed for seasonal flu. The study of 199 healthy adults found that NanoBio’s NB-1008, as a nasal spray, was safe and capable of triggering an immune response against the flu virus in both the bloodstream and the mucosal membranes like those that line the nose, where people usually first encounter pathogens. This two-pronged form of immunity hasn’t been shown before with conventional flu vaccines that are injected into a muscle, or with the currently available nasal spray flu vaccine (FluMist).

The NanoBio approach essentially took a commercially available flu vaccine and combined … Next Page »

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We saw some in-depth profiles of New England-area biotechs’ drug development strategies, as well as breaking news on financings and partnership deals.

—While Bay Area biotech startup Gatekeeper Pharmaceuticals, Boston’s Dana-Farber Cancer Institute, and Novartis continue their legal wrangling over a potential lung cancer drug, Waltham, MA-based Avila Therapeutics is working on its own treatment for the disease. The biotech is using its covalent drug technology in a partnership with Boulder, CO-based Clovis Oncology to discover treatments for non-small cell lung cancers that are resistant to existing drugs.

—Ryan took a look at how Waltham-based biotech Alkermes navigated the aftermath of a negative regulatory decision. The firm’s operations have stayed the same and it has not made any layoffs, despite its request for approval of a once-weekly version of the diabetes drug exenatide (Bydureon) being shot down by the FDA.

—Cerulean Pharmaceuticals, a Cambridge, MA-based developer of nanoparticle drugs, brought in a $24 million Series C funding round, led by Lilly Ventures, the venture arm of drug giant Eli Lilly (NYSE: LLY). The startup will put the funding, which also came from existing backers Bessemer Venture Partners, Lux Capital, Polaris Venture Partners, and Venrock Associates, toward a mid-stage clinical trial of its lead drug, CRLX101, for patients with lung cancer.

—Verastem, a Boston-based startup out to develop cancer-fighting drugs that target cancer stem cells, kicked off with $16 million in Series A funding. The startup was founded with investments by Longwood Founders Fund, and the Series A round also includes Bessemer Venture Partners, Cardinal Partners, and MPM Capital. Founded by MIT biologists Robert Weinberg and Eric Lander, Verastem has developed a … Next Page »

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Drug giant Pfizer (NYSE: PFE) announced today that it is establishing an entrepreneurship partner network with academic medical research centers, called the Global Centers for Therapeutic Innovation, to be headquartered in Cambridge, MA. Yesterday Luke reported that UC San Francisco had inked a deal through the program, in which Pfizer could pay up to $85 million over five years to help get discoveries made at the school to market. The Global Centers program will first focus on U.S. institutions and later transition to also develop partnerships abroad, and will be led by Anthony Coyle, a former executive at AstraZeneca’s MedImmune Biologics division.

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An experimental lung cancer drug discovered at Boston’s Dana-Farber Cancer Institute is currently at the center of a lawsuit involving Dana-Farber, Swiss drug giant Novartis, and Millbrae, CA-based Gatekeeper Pharmaceuticals. But while that complicated case continues to unfold, Waltham, MA-based biotech startup Avila Therapeutics is working on a similar molecule, which is designed to treat certain drug-resistant forms of lung cancer.

Avila, founded in 2007, has gained wide attention for its covalent drug chemistry, which enables drug molecules to form strong bonds with disease proteins and block their activity. Its lead molecules target hepatitis C virus as well as a protein involved in certain B cell cancers and autoimmune diseases. The durable bonds its drugs are designed to form with disease proteins offer potential advantages such as reducing the dosages patients need to take for the therapy to be effective and limiting treatments’ toxic side effects.

Since this spring, Avila has been applying its covalent drug technology in a $209 million partnership with Boulder, CO-based Clovis Oncology to discover new treatments for non-small cell lung cancers that are resistant to Roche and OSI Pharmaceuticals’ blockbuster cancer pill erlotinib (Tarceva) and AstraZeneca’s gefitinib (Iressa). The cancer’s resistance to those existing therapies is often linked to a mutation (called the T790M mutation) in the gene for a protein called an epidermal growth factor receptor (EGFR).

There’s a huge amount of interest in new lung cancer treatments among drug developers. Lung cancer is the leading cause of cancer deaths among men and women in the U.S., according to the National Cancer Institute. Non-small cell lung cancer, the most common type of lung cancer, is fueling a lot of the activity; New York-based drug giant Pfizer and German drug maker Boehringer Ingelheim both have drugs for this type of lung cancer in late-stage clinical trials, for example. There are many more companies at earlier stages of developing drugs against non-small cell lung cancer.

Even though Avila’s and Dana-Farber’s efforts in this crowded field are relatively young, both are notable because they aim to produce drugs that target tumor cells with a specific mutation of EGFR linked to drug resistance while sparing healthy tissues. Studies indicate that most patients who take erlotinib or gefitinib develop resistance to the drugs most often after a year, and the T790M mutation is involved in half of those cases of resistance. “That’s a real motivator to try to develop a drug candidate as soon as possible,” said Katrine Bosley, Avila’s CEO. “I think that’s why there is such a strong interest in this area—because it’s such a real clinical problem.”

Avila and Clovis are hoping to ask the FDA for permission to begin human studies with a drug from their ongoing research collaboration by the end of … Next Page »

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