Employment in San Diego’s life sciences sector grew by 15 percent over the past two years, as biopharmas, medical device companies, and other employers added roughly 5,550 jobs here—raising employment in the sector to 41,937 in 2011, according to a report released today by Biocom. The report says overall employment in San Diego increased by 1.1 percent over the same period, gaining about 20,600 jobs to reach 1.83 million in 2011.

The 40-page economic study says San Diego’s life sciences cluster also is expected to outpace the nation in terms of job growth and economic impact over the next two years, as another 2,770 jobs are added by 2013. A broader snapshot that includes life sciences companies in neighboring Orange, Riverside, and Imperial Counties projects the region will add more than 6,000 workers over the next two years.

Despite a significant decline in venture capital funding, the report says the four-county region of Southern California will continue to retain its high standing and competitive advantage in the life sciences. By 2013, there will be 70 percent more jobs in the life sciences in these four counties than the national average.

While venture capital funding is a key indicator of entrepreneurial activity and business formation, the report says the sharp decline in Southern California VC investments, from $1.1 billion in 2007 to $553 million in 2010, reflects the severe economic downturn and other industry trends underway nationwide.

San Diego’s strength was especially apparent in federal funding for biomedical research. Of the top 10 research institutions receiving National Institutes of Health grants in 2011, nine are in San Diego. The $835 million in grants awarded last year to San Diego scientists accounted for more than 85 percent of the grants allocated in the four-county region.

The report says the four-county life sciences cluster comprises more than 3,500 companies and employs over 97,000 people. On average, salaries range between $54,141 and $116,462, well above the national and regional averages. Including direct, indirect, and induced employment, the report says this region supports a total of 248,800 jobs that pay over $17.7 billion in wages and generate $57 billion in economic activity.

San Diego County alone accounts for 1,700 companies that employ 41,937 people. Including direct, indirect, and induced job, San Diego’s industry supports more than 106,000 jobs that pay $7.5 billion in wages and generate roughly $22 billion in overall economic activity. A .pdf file of the full report can be downloaded here.

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Web startups, venture firms, life sciences companies, and a biofuels developer rounded out the deals news this week.

—Cambridge, MA-based Flagship Ventures announced it had closed a $270 million fund, surpassing the $250 million it had originally targeted for its fourth fund.

—Extreme Reach, a Needham, MA-based startup developing cloud storage technology for delivering video ads to TV and Web publishers, said it closed a $9 million credit line from TD Bank. The startup also acquired commercial talent rights management and payment firm Spotlight Business Affairs, in a deal that enables Extreme Reach’s ad distribution system to be in compliance with existing talent and rights agreements.

—Massachusetts regained the number two spot for venture funding and deals in the fourth quarter of 2011, with $959 million invested in 93 transactions, according to a report from the data firm CB Insights. Nationally, venture dollars and deals had their strongest showing in a decade, at $30.6 billion invested in 3,051 deals.

—Cambridge-based Constellation Pharmaceuticals inked a drug development deal with Roche’s Genentech unit that’s worth $95 million in an upfront payment and three years of research support. It’s also eligible for milestone payments and royalties on the products that could potentially result from the deal.

—Bedford, MA-based Joule Unlimited announced it had pulled in $70 million in financing from the aforementioned Flagship Ventures and other new and existing investors whose identities it did not reveal. The money will go to a New Mexico facility that Joule hopes will demonstrate its ability to scale its technology for producing fuels from sunlight and carbon dioxide.

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San Diego’s SG Biofuels, an agricultural biotech developing the Jatropha plant to produce biofuels, says today it has raised $17 million in a Series B round of financing led by Thomas, McNerney & Partners. San Diego-based Finistere Ventures also joined the round, along with existing investors, Carlsbad-based Life Technologies (NASDAQ: LIFE) and Flint Hills Resources, the Kansas refining and chemicals business owned by Koch Industries.

Thomas, McNerney partner Pratik Shah, who moved his office to San Diego from San Francisco last year, has joined SG Biofuels’ board, along with Jerry Caulder, Finistere’s managing director and the former CEO of Mycogen, an agricultural biotech founded in San Diego.

SG Biofuels says it will use the additional capital to expand its research and development, advance commercialization efforts, and scale global operations. The company says it is working with an airline industry consortium to plant 250,000 acres of Jatropha. The agricultural biotech has focused on improving the jatropha plant to optimize its productivity in various climate zones. The shrub’s golf ball-size seeds produce oil that can be processed into jet fuel, biodiesel, and other fuels.

In a statement from the company, SG Biofuels CEO Kirk Haney says, “The funding comes at a time when we’re experiencing significant commercial adoption of our hybrid Jatropha and will be instrumental as we continue to expand our global footprint.”

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Joule Unlimited, a biofuels startup located in Bedford, MA, announced today that it has pocketed $70 million in financing to put toward a facility underway in Hobbs, NM, that will demonstrate Joule’s process for converting sunlight and carbon dioxide into fuels such as diesel and ethanol.

The new money brings Joule’s funding total to more than $110 million, and comes from founding Joule investor Flagship Ventures, as well as new and existing investors whose identities were not disclosed. Joule will also use the new funding for its technology development and global expansion, according to the announcement. In April 2010, Joule raised $30 million in second-round funding from Flagship and other institutional investors.

The Hobbs, NM, site is expected to be up and running later this year, and is designed to demonstrate how Joule’s technology could scale up to thousands of acres for commercial production. Joule now has 11 patents, covering technology such as  an engineered bacterium that produces liquid hydrocarbon fuels from sunlight and carbon dioxide, and a method for producing ethanol at high volumes and high efficiencies.

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It’s probably a good sign for the Boston tech startup community that we have to round up all these decent-sized financings just to keep up with the news. On the other hand, it’s just money raised in pursuit of bigger goals.

—GrabCAD, based in Cambridge, MA, raised $4 million more from existing investors, bringing its funding total to a little over $5 million. GrabCAD is building an online marketplace for connecting engineers with people and organizations that need stuff built. The legendary David Skok of Matrix Partners has joined GrabCAD’s board.

—Cambridge-based Krush has pulled in $4.5 million from undisclosed investors, according to a regulatory filing. The company is trying to own the “product graph” for brand marketing and development, starting with action sports apparel and lifestyle brands.

—Moontoast, based in Boston and Nashville, has raised $6 million from The Martin Companies and other investors. Moontoast is building a social commerce platform; its niche is artists and brands looking to generate sales from their social media followers.

Meanwhile, in the health IT sector, Linkwell Health has raised $8.3 million, and in biofuels, Cambridge-based Novogy has pulled in $4 million, according to reports in Mass High Tech.

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Here’s another data point for New England cleantech investors. Coskata, a Warrenville, IL-based developer of cellulosic ethanol, has filed paperwork for an initial public offering. The proposed maximum offering is $100 million, but as usual, that doesn’t mean much at this point.

Coskata is backed by a couple of Boston-area venture firms—Advanced Technology Ventures and Greatpoint Ventures. ATV (owning 17.7 percent) and Greatpoint (15.6 percent) are the third and fourth largest stakeholders in the company, behind Khosla Ventures and Blackstone Group. General Motors is also an investor in the company. Coskata has raised more than $80 million in VC funding since 2008 but isn’t making money yet.

It’s a difficult climate for biofuels companies. Nevertheless, Coskata isn’t the only one testing the IPO market. Lebanon, NH-based Mascoma filed to go public in September. Mascoma, which is building a cellulosic ethanol refinery in Michigan, is backed by another pair of Boston-area VC firms, Flagship Ventures and General Catalyst, as well as Khosla Ventures.

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November was a big month for news in the algae-based biofuels sector.

On November 7, roughly four months after renewable fuels were approved for use in commercial aviation, United Airlines flew passengers from Houston to Chicago aboard a Boeing 737-800 powered by a mixture of algae-based jet fuel and conventional, petroleum-based fuel. Two days later, Alaska Airlines started 75 passenger flights (with its sister airline, Horizon Air) using a biofuel blend made from recycled cooking oil.

Ten days later, a decommissioned Navy destroyer arrived at the Naval Surface Warfare Center in Port Hueneme, CA, following a 17-hour cruise from San Diego, powered by a 50-50 blend of algal biofuel and a standard, petroleum-based military fuel.

A day later, Microsoft founder Bill Gates called for a massive boost in federal R&D funding for biofuels and other emerging energy technologies. In a guest editorial published in the May 18 issue of Science magazine, Gates urged the government to more than triple its funding for new energy technologies—from about $5 billion a year to $16 billion annually. Even during a time of economic crisis, Gates says it’s imperative to protect America’s interests.

Gates has moved to reshape the energy industry personally, by investing in several cleantech companies, including Sapphire Energy, a San Diego-based startup developing algal biofuels (although it wasn’t behind any of last month’s news).

Amid this fusillade of alternative energy news, I was eager to put a few questions to Jason Pyle, Sapphire Energy’s CEO and a San Diego Xconomist.

Xconomy: What is the next big milestone for the algal biofuels industry?

Jason Pyle: As an industry and at Sapphire, we’ve spent the last few years on R&D and proving that crude oil replacements like green crude from algae are possible and will scale with proper investment and government support. Although we’re still a few years away from reaching full commercial readiness, as an industry we’re scaling up at a pace that would be considered inconceivable by traditional oil and gas companies. Reaching commercial scale is critical. The next big milestone for Sapphire Energy is to complete construction and begin operating our commercial demonstration plant in Columbus, NM.

X: Do you see algal biofuels moving into aviation first, or does another sector make more sense to you?

JP: The great part about where Sapphire Energy finds itself as a producer of crude oil replacements is that demand for crude oil continues to rise significantly. Over the next 25 years as developing nations use more and more crude oil and we stretch the limits of the crude oil resource, all of the leading experts are projecting a 35-million-barrel-per-day gap between supply and demand. The U.S. military recognizes this gap as a major destabilizing issue—and as a serious strategic military issue in the years ahead—and is preparing our nation to not have to confront its consequences.

The U.S. military is making investments in the development of these technologies for strategic reasons because they understand a simple fact: that those nations who control energy resources maintain strategic advantage over those who do not. So soon, we will see the U.S. military as the leading customer for crude oil replacements. As pressure rises on … Next Page »

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When Verdezyne said last year it had made adipic acid in the laboratory, the Carlsbad, CA, industrial biotech said its eco-friendly fermentation process could make the valuable chemical for 20 percent less than it would cost a conventional petrochemical plant.

Today, Verdezyne says it is now operating a pilot plant in Carlsbad that can make adipic acid at an estimated cost savings of 30 to 35 percent. Using genetically engineered yeast and raw material from palm oil and other renewable sources, the facility is making “multiple kilogram” batches of adipic acid in production runs that take roughly 100 hours, according to Verdezyne CEO E. William Radany.

“We’ve done some significant metabolic engineering to come up with [yeast strains] that give us a significant cost advantage” in making petroleum-based chemicals, Radany said.

In a statement issued by the company today, Radany says Verdezyne’s pilot plant represents a key milestone in the development of a sustainable replacement for adipic acid, an important petrochemical product. “This is the first demonstration of the production of bio-based adipic acid at scale from a non-petroleum source,” he says.

Verdezyne Fermentation Tank

After raising an undisclosed amount of capital in May, Radany says Verdezyne built the pilot plant to optimize the processes needed to move to large-scale commercial production of adipic acid, a so-called “intermediate chemical” needed to make nylon 6,6. As I’ve reported previously, Verdezyne has taken a circuitous route to reach this stage. The company, which now has 46 employees, currently has enough cash for its operations, but will need to raise another round in 2012, Radany said. Verdezyne’s current investors include BP Alternative Energy Ventures, DSM Venturing B.V., OVP Venture Partners, and Monitor Ventures.

Verdezyne says its “green” adipic acid is identical to the petroleum-based polymer, and can be used to manufacture the nylon used to make clothing, carpets and other textiles, as well as polyurethane resins and engineered plastics. The company estimates the global market for adipic acid at more than $6 billion a year.

“The main goal of the pilot plant is to continue to validate your economics and your processes,” Radany told me recently. He described the facility as a fully integrated operation that will be used to optimize a variety of processes, including the ideal mix of ingredients and production cycle, as well as the filtration and separation of adipic acid from the fermentation broth.

Verdezyne says its proprietary yeast constitutes about 10 percent of the broth in a fermentation tank. The yeast consumes inexpensive “fatty acid distillates” and produces nearly 100-percent pure adipic acid, Radany said. He described the raw material as “non-food vegetable oils” that are typically sold at a low cost to soap manufacturers. The company says its production methods also generate less carbon dioxide and other pollutants compared with conventional petroleum-based production.

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It is a dark time for biofuels companies—and industrial biotech around Boston, more broadly.

Xconomy has learned that Qteros, a heavily funded developer of cellulosic ethanol technology based in Marlborough, MA, has laid off most of its staff, including its CEO John McCarthy. The news was reported earlier today by Dan Primack at Fortune. Xconomy received a tip yesterday from a source with knowledge of the company.

The source said that Qteros “couldn’t raise money” and was “reduced to a skeleton crew to sell anything of value.” Mick Sawka, who is listed on the company’s website as senior vice president, is the acting CEO, according to the source. Messages left with Qteros and Battery Ventures, one of the company’s lead investors, were not returned.

Qteros started in 2006 as SunEthanol (it changed its name in 2008), out of UMass Amherst. Its investors include Battery, Venrock Associates, Long River Ventures, Soros Fund Management, Camros Capital, Valero Energy, and BP. By our count, the company had raised nearly $30 million prior to its most recent financing, which was a $22 million Series C round announced at the beginning of this year.

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Like a lot of big companies that offer contract R&D and specialized services, Columbus, OH-based Battelle has kept an office in San Diego for decades, mostly to manage technical programs and help clients like the U.S. Navy and Marine Corps on special projects.

That started to change, though, just over a year ago when Bhima Vijayendran arrived in San Diego from Malaysia. Vijayendran spent his previous three years leading research at a renewable energy laboratory in Kuala Lampur operated jointly by Battelle and Japan’s Mitsubishi Corp for PETRONAS, Malaysia’s government-owned oil and gas company.

“Until recently, this used to be more of a service office in San Diego,” says Vijayendran, a materials expert recognized for his work in polymers and surface chemistry. “Because of my background and my interests, I’m trying to bring a little bit more of a technology flavor” to Battelle’s San Diego operations.

Among other things, Vijayendran says he’s on the lookout for new business opportunities with local companies, as both an R&D partner and as a potential investor. Aside from managing seven federal research laboratories, Battelle has focused its business in three areas—national security, health and life sciences, and energy and cleantech. These focus areas coincide with some of San Diego’s most-prominent innovation clusters, so it would seem like a business match made in heaven.

Battelle is no ordinary business, however. It is the largest private nonprofit R&D organization in the world, known officially as the Battelle Memorial Institute, doing $6.5 billion in contract research with a global workforce of more than 22,000 employees. When Battelle licenses its technology, sells its stake in a startup, or acquires a new laboratory management contract, Vijayendran says the company donates 25 percent of the proceeds to charitable causes. Past inventions include xerography copier technology (which Battelle sold to Xerox), the scannable universal product code, the compact disc, and fiber optics technologies now owned by JDS Uniphase.

“We strongly believe that we’ve got to do creative work,” Vijayendran says. “We’ve got to make discoveries and inventions, but more importantly, these things have got to … Next Page »

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It was another big week for life sciences news in San Diego, with interesting developments in agricultural biotech, industrial biotech, and genomic sequencing. This is our wrap up of what you need to know.

—San Diego’s Synthetic Genomics spun out a new San Diego-based agricultural biotech, Agradis, with $20 million in Series A financing and proprietary technology that can be used to develop improved hybrid crops such as castor and sweet sorghum. Mexican investor and businessman Alfonso Romo is a co-founder of Agradis, along with J. Craig Venter, Synthetic Genomics’ chairman and CEO.

—TedMed is underway this week at the Hotel del Coronado. Peter Diamandis, the chairman and co-founder of the X Prize Foundation, took the stage yesterday to announce some changes in its $10 million competition in genomic sequencing. The foundation, based near Los Angeles, says the $10 million Archon Genomics X Prize presented by Medco will be awarded to the first team that accurately sequences the whole genome of 100 people within 30 days for $1,000 or less per genome, and at an error rate no greater than one per million base pairs. The prize is intended to open the way to new era of personalized medicine with unprecedented accuracy.

—San Diego’s Illumina, (NASDAQ: ILMN), the market-leading maker of DNA sequencing equipment, said it’s eliminating 200 jobs, or about 8 percent of its workforce. Illumina said a restructuring of its business is expected to add a $15 million to $17 million charge on the company’s income statement, mostly in the fourth quarter.

—In a separate announcement, GenoLogics of Victoria, BC, said it has raised $8 million through a strategic financing in the company by San Diego’s Illumina. GenoLogics said it plans to develop genomics software tailored for cheaper desktop sequencers, to build up its sales and marketing efforts, and develop new applications.

—The MoneyTree Report on third-quarter venture capital activity found … Next Page »

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After spinning out a startup last year to develop next-generation vaccines, San Diego’s Synthetic Genomics says today it has joined forces with a Mexican investor to form Agradis, an agricultural biotech that will seek to commercialize its advances in plant breeding and genomics.

With $20 million in Series A financing, Agradis is intended to accelerate the advances Synthetic Genomics has made with bacteria and other microbes that provide nutrients and disease resistance for the root systems of plants. Alfonso Romo, the Mexican businessman and investor who was Synthetic Genomics’ initial lead investor, is a co-founder of the startup, along with J. Craig Venter, the genomics pioneer and chairman and CEO of Synthetic Genomics.

“We’ve been having these discussions for a very long time,” Venter told me this morning. “With the success in finding the microbes, we decided to put all the discussions together.”

Synthetic Genomics (SGI) has amassed a huge collection of these microbes and has been screening and characterizing their activity, Venter explains. The benefits can be conveyed to plants by simply coating the seed with the microbes, he says, and a number of field trials are underway in the United States.

“The reason we’re doing this as a spinout instead of keeping it at SGI [is that] with all the different areas that we’re working in, this allows the investors to invest just in the agricultural portion,” says Venter. “As you saw last year, we spun out the vaccine company. We have so much diversity because our technology works in so many spaces.”

Agradis investors include Plenus, Romo’s investment and operating company, Synthetic Genomics itself, and Draper Fisher Jurvetson, among others. Synthetic Genomics has focused mostly on developing algae-based biofuels and bio-based chemicals since the company was founded. It has been working with Exxon Mobile to make a biological substitute for petroleum-based crude oil, with BP on ways to use microbes to alter fuel processes, and with Novartis and others to advance the rapid development of new vaccines.

The goal for Agradis is twofold: to produce superior castor, sorghum, and other cash crops through genomic advances and to develop plant-associated microbes in ways that can protect and foster plant growth. The startup has licensed extensive germplasm collections, breeding programs, and plant cultivars from Plenus, and genomics expertise from Synthetic Genomics.

“The first part of this is using microbes to … Next Page »

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—Amazon (NASDAQ: AMZN) jumped into the tablet game with the much-hyped Kindle Fire device, but don’t be fooled. The new tablet is not about Amazon getting into the hardware business—it’s much more about making sure that consumers get access to Amazon’s slew of cloud services and traditional shopping on something other than Apple’s iPad, which requires a 30 percent revenue cut on offerings like books (or a tricky workaround).

—Speaking of digital content, streaming-music service Rhapsody bought Napster from Best Buy in a deal that made the retailer a minority shareholder. Rhapsody, spun out of RealNetworks last year, has been facing a lot more competition on a model it helped pioneer with increased heat from startups, including European import Spotify. The Napster deal might lead to a little more pond-crossing: Rhapsody tells us it also has an option on the international subscribers of Napster, where the cat-headphone brand could live on.

—Big-name venture capitalist Vinod Khosla dropped into town for Startup Weekend EDU at the University of Washington, an event co-organized by Seattle startup TeachStreet. Khosla, interviewed by VC/blogger Michael Arrington, told the budding entrepreneurs to aim for a big impact with their projects. Arrington also made a little news: He disclosed that Khosla was an investor in the new CrunchFund.

—We went back into the court filings to check in on a very interesting summer for Seattle daily-deals startup Tippr. Run by entrepreneur Martin Tobias, Tippr has been proudly proclaiming the trove of patents it purchased from Paul Allen as a key asset in the ballooning daily deals sector. And it made that case in a big federal lawsuit, which eventually pulled in 14 defendants. They’ve all settled now, with at least one likely signing a licensing agreement.

—What’s the key to keeping a research arm cranking inside a global technology behemoth for two decades? In Rick Rashid‘s view, it’s to make the R&D shop into a utility—something that’s always there, ready for product leaders to come over and grab off the shelf when they need it. That’s how Rashid, the head of Microsoft Research, described serendipitous successes like the Kinect controller in an interview marking MSR’s 20th anniversary.

—Over on the cleantech side of things, we saw UW and WSU land an $80 million grant from the federal government to spur biofuels research in the Northwest. Each university gets $40 million over five years, with U.S. Agriculture Secretary Tom Vilsack sounding pretty bullish on the prospects of developing wood-based biofuels with the research boost.

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We had an unusual mix of headlines this week on RNA interference, biofuels, and a quiet little startup in Bothell with Icos pedigree.

—There weren’t any major life science company financings to report this week, but the state’s academic centers had something to crow about with $80 million in new federal grants going to the University of Washington and Washington State University. The money is intended to help scientists find ways to turn lots of our regional biomass into renewable fuels, and hopefully create a few jobs along the way.

—I’m trying an experiment next week with a “Tweetchat” with one of the industry leaders in the field of RNA interference—John Maraganore of Cambridge, MA-based Alnylam Pharmaceuticals. For those of you interested in RNAi, and who have Twitter accounts, this will be a good opportunity. It will start at 10 am Pacific on October 4th, and go for about 30 minutes. The idea is to have an open conversation about where this whole gene-silencing business is going after a series of well-documented setbacks. For those of you not on Twitter, but interested in sending a question in to Maraganore, shoot me an e-mail. There is no shortage of interest in RNAi here in the Northwest, with Seattle-based PhaseRx, Bothell, WA-based Marina Biotech, Vancouver, BC-based Tekmira Pharmaceuticals, Vancouver, BC-based Alcana Therapeutics, and Seattle-based Groove Biopharma all working on various pieces of the puzzle.

—Cocrystal Discovery, led by a couple former Icosahedrons in Gary Wilcox and Sam Lee, has kept a pretty low profile its first three years in business. But that’s starting to change now that this company struck a new partnership with Israel-based Teva Pharmaceutical, and Wilcox gave me the inside scoop on what this team is setting out to do with antiviral drugs against hepatitis C, flu, and more.

—Adaptive TCR, a spinoff from the Fred Hutchinson Cancer Research Center, named a few familiar local biotech names to its roster of various advisors. Lee Huntsman of the Life Sciences Discovery Fund has joined Adaptive’s board of directors; Cassian Yee of the Hutch has been added to the scientific advisory board; and Carol Gallagher (formerly of Calistoga Pharmaceuticals) and Stewart Parker of the Infectious Disease Research Institute have been named to the startup’s corporate advisory board. Adaptive, for those just tuning in to this story, is using the tools of modern DNA sequencing and computing to help scientists better understand how DNA get shuffled around in B and T cells that make up our adaptive immune systems.

—We had a lot of perspective this week on what it’s like for women in biotech—not something I’ve written much about here the past three years. This week in BioBeat I talked about what looks like a potent new force for closing the gender gap in biotech—a new all-female networking group called Women in Bio. Coincidentally, we also had a guest post from Lisa Suennen, a venture capitalist in San Francisco, who talked about another women-dominated biotech event she recently attended in the Bay Area.

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We have a lot of biomass here in the Northwest (i.e., trees) and a lot of smart scientists at the University of Washington and Washington State University. Now the federal government is kicking in some money to see what the Northwest can do to combine the biomass and the brain mass to produce the kind of fuels that drive the economy.

The University of Washington and Washington State University have been awarded $80 million in federal grants to, as the Seattle Times put it today “kick-start a biofuels industry in the Northwest.” The UW and WSU will each get $40 million, the Times said. Tom Vilsack, the U.S. Secretary of Agriculture, is planning to make the announcement today at Sea-Tac International Airport.

Vilsack told the Times he was confident that when the five-year grant cycle is over, scientists will have found a way to spark an industry that uses trees as raw material for fuel. “I’d bet my life on it,” he told the newspaper.

The Northwest has seen pretty limited activity so far in biofuels, as many companies have scrambled to deal with high commodity prices and a down economy. But there has been action going on behind the scenes in the local politics, business, and scientific communities—principally through a group known as Sustainable Aviation Fuels Northwest. This effort, which I wrote about here in April, wants to keep the focus on using renewable sources of biomass for aviation fuel.

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Big news today in New England cleantech—a sector that could certainly use some positive developments. Lebanon, NH-based Mascoma, a biofuels firm that plans to break ground on a cellulosic ethanol plant in Michigan later this year, has filed for an initial public offering. In its SEC filing, Mascoma says it intends to sell up to $100 million worth of shares in its IPO, which is being underwritten by Morgan Stanley, UBS Investment Bank, and Credit Suisse. (The $100M figure doesn’t mean much at this point, though.)

A number of big venture firms are investors in Mascoma. Among them are Khosla Ventures (which owns 17.5 percent of the company), Flagship Ventures (8.7 percent), General Catalyst (8.3 percent), and Kleiner Perkins Caufield & Byers (7.2 percent). But the largest owner is SunOpta (NASDAQ: STKL), a Canadian food and mineral company that has gained a 20.6 percent stake in Mascoma, mostly through a $51 million merger a year ago. As of the fall of 2009, the company said it had raised about $100 million in private equity and another $100 million in government grants and loans.

Mascoma started in 2005 out of Dartmouth College and is led by CEO Bill Brady. The company has developed a process for producing ethanol from non-food plants such as wood chips and grass. So far it’s not profitable. Mascoma made $15.5 million in revenues in 2010, but had a net loss of $25.9 million. For the first six months of 2011, the firm made $6.7 million in revenue and had a net loss of $14.5 million.

Xconomy first profiled Mascoma in 2009, when the startup gave us access to its lab facilities in New Hampshire. We also wrote about the company’s plan for its Michigan operations last year, with a major update early this year.

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Detroit-based alternative energy startup NextCAT last week announced it has received a Phase II Small Business Innovation Research award from the National Science Foundation (NSF) in the amount of $498,830, bringing NextCAT’s total grant funding to $1.3 million.

The company is working to commercialize a class of biofuel catalysts developed at Wayne State University. The technology would enable biofuel producers to convert low-cost raw materials such as waste vegetable oil, animal fats, and residual corn oil into biodiesel—good news in an era where the cost of the traditional feedstock used in biodiesel production has risen dramatically.

In addition to NSF funding, NextCAT has secured seed money from Automation Alley, Michigan’s largest technology business association, and the state’s Michigan Pre-Seed Capital Fund to design, build and install a pilot reactor at a major biodiesel equipment manufacturer’s engineering center.

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SG Biofuels, an Encinitas, CA-based startup developing biofuels says it has formed an alliance with Bharat Renewable Energy to produce hybrid varieties of Jatropha that can be grown in India and used to produce biodiesel. SG Biofuels says it is optimizing crop species by using environmentally friendly biotechnology to develop elite hybrids of crops with desired traits—not to be confused with genetically modified organisms (GMOs).  SG Biofuels and Bharat Renewable Energy, a joint venture of India’s second-largest petroleum company, will work to develop the most commercially viable hybrid varieties and plan to plant more than 86,000 acres of Jatropha.

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A state initiative intended to facilitate technology commercialization by designating regional iHubs (or innovation hubs) has expanded San Diego’s iHub to include much of Southwest Riverside County. The California Governor’s Office of Economic Development established the San Diego iHub last year, enabling a local consortium to apply for federal economic stimulus funding in three focus areas: mobile health, biofuels, and solar energy and energy storage. Expanding San Diego’s iHub designation will expand the consortium and add the field of biomimicry as an additional focus area. San Diego and Riverside already have joined forces to collaborate on a grant application for the i6 Challenge, a $12 million federal competition intended to stimulate green technology development, new venture formation, jobs, and economic growth.

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Busy day for a couple of well-known cleantech companies around Boston. One public company has signed a big deal in China, while the other, an ambitious upstart, is carefully protecting its intellectual property as it heads toward large-scale commercialization.

—A123 Systems (NASDAQ: AONE), the Waltham, MA-based maker of lithium ion batteries, said today it has won a contract with China’s Dongfang Electric, a large manufacturer of wind turbines and power equipment. A123 will provide an energy storage system for Dongfang’s manufacturing facility in Hangzhou by the end of this year. Financial terms weren’t given. If all goes well, this will be A123’s first storage system installed in China.

A report in CNET today has more context on the deal: A123’s battery bank will be attached to a 1.5-megawatt wind turbine and diesel generator to test how well the batteries can smooth out the dips in wind energy production. A123 has car battery manufacturing facilities in China, but no grid storage systems there yet, the report says.

—Joule Unlimited, the Cambridge, MA-based biofuels startup, said today it has been awarded a pair of U.S. patents that cover its method for producing ethanol at high volumes and high efficiencies. The method involves genetically engineering “photosynthetic bacteria”—microorganisms that convert sunlight and carbon dioxide into ethanol without fermenting sugars from cellulose or other types of biomass. The patents (#7,981,647 and #7,968,321), which were granted in the past month, cover various enzymatic mechanisms that Joule has engineered into cells to maximize their ethanol productivity.

Joule has received plenty of media attention since it started in 2007. The company is also applying its method to produce energy in the form of diesel fuel, which could power trucks and planes. Joule has previously been awarded patents in the area of diesel production. The overarching idea is to replace fossil fuels, but most biofuels makers have found “they can’t compete on a cost basis,” said Joule senior vice president Troy Campione, on a panel at our XSITE conference last month. Joule, of course, believes it is different.

The company has a pilot plant in Texas that has been producing ethanol and is slated to start producing diesel later this year. Joule says it has also signed a lease for land in New Mexico on which it is building a demonstration-scale plant that will begin operations next year.

While the new patents should help distance Joule from some of its competitors, they don’t necessarily get the company to commercialization any faster. George Church, the Harvard geneticist (and chairman of Joule’s technical advisory board), was quoted in the New York Times in March saying, “It’s not a totally obvious organism and they’ve changed it pretty radically, so it’s not clear they can protect everything by patents.”

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