Steve Holtzman got his first taste of corporate venture capital back in 1987, when he raised money from SR One, back when it was part of an old company known as Smith, Kline & French.

The concept was unorthodox 25 years ago, yet over time, most every Big Pharma company has become an active equity investor in biotech startups. But Holtzman, early in his tenure as lead dealmaker at Weston, MA-based Biogen Idec (NASDAQ: BIIB), chose to buck the trend, helping put the kibosh on the company’s VC investment group in the past year. This was no small decision, given that Biogen started its venture investing group in 2004, committed $200 million to it, and made investments in companies like San Diego-based Intellikine, South San Francisco-based iPierian, San Diego-based Calcimedica, and Cambridge, MA-based Aveo Pharmaceuticals (NASDAQ: AVEO), among others.

Holtzman outlined four main reasons why Biogen has gotten out of the VC game during an interview earlier this month at the JP Morgan Healthcare Conference. But before diving into those reasons, they should be placed in the context of what’s been a busy first year of dealmaking he has overseen as part of CEO George Scangos‘s new management team at Biogen.

Besides shutting down the venture investment effort, Biogen also closed down its startup incubator, so that more resources could go to internal R&D projects, Holtzman says. Given that Biogen has plenty of drug candidates (six) in the third and final phase of clinical trials usually required for FDA approval, Holtzman’s mandate has been to in-license drugs that can fill gaps in the early-stage part of the pipeline. Two recent partnerships, with South San Francisco-based Portola Pharmaceuticals and Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS), reflect that desire. Expect more in-licensing of early-stage drug candidates for autoimmune and neurological disorders in the year to come, Holtzman says.

Given that backdrop, here are the four arguments that Holtzman says are commonly made in favor of corporate VC activity, which he says don’t make sense for Biogen:

1. “Corporate VC investing provides a window on novel technologies.” That might sound reasonable on the surface, but Holtzman says it’s not necessary, and not the best way to stay plugged in. “I’d submit to you that the best window on novel technologies comes from your scientists, who are identifying new things all the time,” Holtzman says.

2. “It’s a good way to network with VCs who have an inside look at what’s hot. If you don’t invest with them, you aren’t connected to them.” This argument doesn’t apply to Biogen, because its senior executives—particularly Scangos, R&D head Doug Williams, and Holtzman—have all been in the biotech business for 25 years and have extensive Rolodexes in the venture capital world.

“We are intimately familiar with all the VC players on a first-name, friendly basis,” Holtzman says. “We have multiple meetings here [at the JP Morgan conference] with the leading VCs in the industry, where they sit down and go through every company in their portfolio that might be of interest to us. We are very happy to do that. We get calls regularly from VCs who say, ‘We’re thinking of starting a company in the following area. Are you interested in that area?’ And beyond that, they ask us, ‘What do you think are the interesting areas where we ought to start companies?’

Personal relationships with the VCs can be forged … Next Page »

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The life sciences industry is booming in the Boston area. Witness some of our headlines just over the past few weeks: Flagship Ventures closed a $270 million fund to invest in new biotech companies; startups RaNA and Warp Drive Bio raised significant VC rounds; pharma giant Merck led a $10 million financing of diagnostics firm Daktari. And last year, Pfizer built up its Kendall Square R&D hub and hired 400 new employees there.

So who are the entrepreneurs to watch over the next 10 years, and what can they teach the newest class of biotech executives? We’ll turn the spotlight on five of the region’s biotech CEOs at our next Boston life sciences event, “Xconomy Forum: New England’s Emerging Biotech Stars.” We have a great lineup of biotech up-and-comers, who will give presentations on their emerging companies at this event, which will be held April 4 at Biogen Idec’s campus in Kendall Square:

Chip Clark, CEO, Genocea Biosciences
Doug Fambrough, CEO, Dicerna Pharmaceuticals
Tillman Gerngross, CEO, Adimab
Joanna Horobin, CEO, Syndax Pharmaceuticals
Joseph Yanchik, CEO, Aileron Therapeutics

This afternoon conference will also feature keynote talks from George Scangos, the CEO of Biogen Idec (NASDAQ: BIIB), and Mark Levin, co-founder and partner at Third Rock Ventures.

And that’s not all. We’re also planning a panel discussion that will provide advice for securing research grants from non-profit foundations. We’ll hear from the Juvenile Diabetes Research Foundation, the Multiple Myeloma Research Foundation, and Dana Callow, managing general partner at Boston Millennia Partners a member of the board of the Leukemia & Lymphoma Society.

We hope you’ll join us for what’s sure to be a stimulating afternoon of discussions and networking on April 4. Register today for our special super-saver rate.

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As the time draws near for the annual J.P. Morgan Global Healthcare Conference in San Francisco, it seems as if there has been a surge in deals for local life sciences companies. Here’s our rundown:

—Biogen Idec (NASDAQ: BIIB) agreed to pay Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) $29 million, with the potential for more payments down the road as part of a new drug development partnership. Biogen and Isis agreed to collaborate to advance an experimental drug that Isis has identified for treating spinal muscular atrophy, a rare genetic disease that causes severe muscle atrophy and weakness in newborns. The deal could eventually be worth as much as $299 million for Isis.

—Denmark’s Novo Ventures led a $30 million Series B financing for San Diego-based Elevation Pharmaceuticals to fund development of an aerosol therapy Elevation has been developing for patients living with chronic obstructive pulmonary disease (COPD). Heath Lukatch, a San Francisco-based partner of Novo Ventures told me the funding should be enough to carry development of Elevation Pharmaceutical’s aerosolized bronchodilator drug to the threshold of final-stage trials.

—San Diego-based Santarus (NASDAQ: SNTS) asked the FDA to approve its new drug application for budesonide (Uceris), an oral tablet it has been developing with Italy’s Cosmo Technologies for treating mild cases of ulcerative colitis. If the FDA accepts the new drug application for review, Santarus says it has agreed to make a $4 million milestone payment to Cosmo. Ulcerative colitis is a form of inflammatory bowel disease that causes painful inflammation and ulcers inside the colon.

—Proacta, a San Diego-based cancer-drug developer has raised $500,000 toward a $3 million round of financing, according to VentureWire. The biotech was founded at least six years ago to advance a new group of anti-cancer molecules that are active in hypoxic tissue, which were identified by researchers at New Zealand’s University of Auckland and Stanford University. The company says it has raised $43 million through two private financings, and its investors include Alta Partners, Clarus Ventures, Delphi Ventures, Endeavour Capital (New Zealand), GBS Venture Partners (Australia), Genentech, No 8 Ventures (New Zealand) and Roche.

—San Diego-based Afraxis, which is developing drugs to treat Fragile X syndrome and autism, secured $300,000 toward a $2 million round of debt, rights and securities, according to a recent regulatory filing. The startup is pursuing a … Next Page »

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Clinical trial results and drug collaborators made up the New England life sciences news this week.

—New Jersey-based drugmaker Merck announced backing a few Boston-area companies in the past few weeks. Its Global Health Innovation Fund led a $10 million financing for Cambridge, MA-based Daktari Diagnostics, a developer of technology for testing small quantities of blood and other fluids that it hopes can monitor HIV patients in the developing world. And Merck pledged $17 million to Marlborough, MA-based Physicians Interactive Holdings. The company will put the money towards developing its online and mobile tools to connect doctors and pharmaceutical companies.

—An experimental drug from Cambridge-based Alnylam Pharmaceuticals (NASDAQ: ALNY) helped lower so-called bad cholesterol by an average of 39 percent at the highest dose studied in a small clinical trial.

—Aveo Pharmaceuticals (NASDAQ: AVEO) of Cambridge said it met it goals in a clinical trial called TIVO-1 of its experimental drug for treating kidney cancer. In the study of 517 patients, Aveo’s tivozanib was able to keep tumors from spreading a median of 11.9 months, compared with 9.1 months for another drug in its class from Bayer and Onyx Pharmaceuticals. It was a narrow victory, though, as the trial’s goal was to show the Aveo drug kept tumors from spreading about an extra three months.

—Weston, MA-based Biogen Idec (NASDAQ: BIIB) said it will pay Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) up to $299 million for collaborating on a treatment for a spinal muscular atrophy, a rare disorder found in newborns.

—Inspiration Biopharmaceuticals moved into its new digs in Kendall Square, after more than seven years of operating as a virtual biotech company that’s pursuing hemophilia treatments. It was founded by hedge fund manager John Taylor and Scott Martin, a Texas energy veteran whose son has hemophilia.

—The founders of Sermo, a Cambridge-based provider of an online community for doctors, are moving on to a new spinoff called par8o, the online publication Pharmalot reported. CEO Daniel Palestrant and chief medical officer Adam Sharp say on the par8o website that the new company will be focused on more efficiently connecting doctors and patients.

—Watertown, MA-based Forma Therapeutics inked a deal with Germany-based Boehringer Ingelheim that provides $65 million in upfront cash and four years of R&D support for discovering cancer drugs. Forma, which now has seven partnerships with heavy hitters, could also get potentially $750 million more from Boehringer Ingelheim as the cancer drugs move through development.

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Isis Pharmaceuticals has found a new partner in Biogen Idec that’s betting a large amount of money on a new therapy for a rare spinal disorder in newborns.

Weston, MA-based Biogen Idec (NASDAQ: BIIB) said today that it has agreed to work with Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) on an experimental antisense drug for spinal muscular atrophy in a collaboration that could be worth as much as $299 million. Isis will get $29 million in upfront cash, plus another $45 million from Biogen for development before it may choose to get a license. If Biogen buys a license to the Isis drug candidate, then Isis could get another $225 million in a license fee and milestone payments, plus a double-digit percentage royalty of product sales, if there are any.

Spinal muscular atrophy is a genetic disease that affects an estimated one out of every 10,000 newborns, and causes severe muscle atrophy and weakness. The disease is caused by a faulty version of a gene called survival motor neuron 1 (SMN1) which doesn’t produce enough of the SMN1 protein needed to maintain muscle strength. Spinal muscular atrophy has various forms that cause disability, and in the most severe cases, death in infants. The Isis drug, which comes as an injection into the spine and recently entered clinical trials, is designed to help produce more of the functional SMN1 protein.

Spinal muscular atrophy “is a heartbreaking disease—it can kill children before their 2nd birthday and there are currently no therapies to treat the disease,” said George Scangos, Biogen’s CEO, in a statement. “It is exactly the kind of disease and program that we are focused on at Biogen Idec. The unmet need could not be any greater, the program fits with our mission to bring innovative therapies to patients with serious neurologic diseases, and Isis’ antisense compound has the potential to be a highly effective, first-to-market therapy for this deadly disease.”

Isis, whose business is built around doing scientific work on antisense drugs and then finding partners to finish development, said Biogen fits the bill for this condition because of its expertise in neurology.

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‘Tis the season to reflect on the past year and take a look at some of Xconomy Boston’s top stories.

As usual, these aren’t necessarily the highest-traffic stories (though in some cases they are). They are stories that exemplify what we are trying to deliver to our readers every day—narratives about the people, companies, and ideas that are shaping the future of technology, life sciences, and cleantech in our region, and across the country.

It was very hard to pick just 20 stories, like I usually do. I guess that’s a good thing. So I fudged it and actually picked slightly more—a dozen tech stories, and a dozen life sciences and cleantech stories.

In any case, our editor’s picks for 2011 span the fields of software, mobile, Internet, security, health IT, biotech, life sciences, energy, and hardware/materials.

They range in topic from people stories (Adriana Jenkins, Steve Jobs) to company strategies (Acme Packet, Vertex) to trends and analysis (big data, biotech risks); from universities (Harvard accelerator) to startups (MedicalRecords, Harvest Power) to big companies (IBM, Pfizer, Biogen Idec); from Q&As (Rob Day, Jim Baum) to company profiles (EnVivo, MC10) to news features (testing the nation’s first car collision-avoidance system); and from big community projects (Entrepreneur Walk of Fame) to cheeky area clusters (top 10 “boring” tech companies).

Here they are in their full glory, our top 20-ish stories of the year, sorted by sector:

Top 12 Tech Stories

Adriana Jenkins, Boston Biotech PR Maven, Dies from Breast Cancer at 41

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Seattle-based Allozyne wasn’t able to go public this year, so it has fallen back on Plan B, tapping its existing venture capital backers one more time in a bid to create more value around its lead multiple sclerosis drug candidate.

Allozyne, which has spent about $50 million since its founding in 2005 and was down to its last $1.3 million in cash at the end of June, has raised an undisclosed amount of new venture capital from its existing investors, according to CEO Meenu Chhabra. The money from Arch Venture Partners, MPM Capital, and OVP Venture Partners will be used to help the company push ahead with a plan for 2012 to move its lead multiple sclerosis drug into the third and final phase of clinical trials normally required for FDA approval, Chhabra says.

“The syndicate is extremely excited that we are on a Phase III trajectory in 2012,” Chhabra says.

Allozyne remains a private, independent company after it pulled the plug on a six-month effort to merge with San Francisco-based Poniard Pharmaceuticals (NASDAQ: PARD), which was supposed to turn Allozyne into a public company. Selling the proposal to shareholders took longer than expected, and the deal ultimately fizzled because Poniard had fallen out of compliance with NASDAQ listing requirements that say a company must have a minimum market capitalization of $15 million. That was the whole point of the transaction—getting a NASDAQ listing in order to tap large funds that invest in public companies—so it no longer made sense to go through with the deal, Chhabra says.

Moving on, Allozyne turned to additional private financing, and continues to talk with partners and mull other options, like another reverse merger or a conventional initial public offering of shares, Chhabra says. The company has about 20 employees, and hasn’t made any staff cutbacks, she says.

Allozyne’s next strategic move depends heavily on an aggressive clinical development plan for its lead asset, AZ01. Allozyne is looking to leapfrog from Phase I trials all the way to Phase III—skipping the usual intermediate step, Chhabra says. The company believes that is possible because it isn’t blazing a completely new trail with a new molecular entity, but rather is taking an existing drug the FDA knows well—interferon-beta—and packaging it in a new way so it can be injected less frequently than the existing products on the market. Weston, MA-based Biogen Idec (NASDAQ: BIIB) has established this quicker-than-usual regulatory pathway with its own version of a long-lasting version of interferon-beta.

The Allozyne proposal, which it plans to make to the FDA at a meeting in early 2012, will be to enroll 700 patients who will be … Next Page »

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Illinois-based Baxter International (NYSE: BAX) is tapping into Cambridge, MA-based Momenta Pharmaceuticals’ abilities as a generic drugmaker in a new collaboration deal focused on developing so-called biosimilars, or knockoffs of biologic drugs.

Momenta (NASDAQ: MNTA) will receive $33 million upfront in the deal, according to an announcement yesterday, and could receive another $419 million in potential milestones and option fees. The companies will develop up to six biosimilar compounds under the agreement.

Last year Momenta nabbed FDA approval for a generic version of Sanofi’s anti-clotting drug enoxaparin (Lovenox). That product is being marketed by Sandoz. And the FDA is currently reviewing Momenta’s generic form of  glatiramer, a multiple sclerosis drug marketed today by Teva Pharmaceuticals under the brand name Copaxone.

The Momenta-Baxter deal is the latest we’ve reported in a string of activity around biosimilars. Just this week, Thousand Oaks, CA-based Amgen (NASDAQ: AMGN), which has R&D operations in Cambridge, announced a $400 million partnership with New Jersey’s Watson Pharmaceuticals to develop biosimilar cancer drugs. Earlier this month, Weston, MA-based Biogen Idec (NASDAQ: BIIB) and Korean conglomerate Samsung formed a $300 million joint venture focused on biosimilars. And Merck (NYSE: MRK) has been fine-tuning its own biosimilars strategy in preparation for guidelines the FDA is expected to release on how to develop the generic biotech drugs.

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According to the National Science Foundation, eighth grade girls are half as likely to be interested in science, technology, engineering and math (STEM) careers as boys—a dramatic change from second grade, where the numbers are roughly equal. This trend continues through high school, college and into the workplace, as even women with advanced science degrees tend to leave the field at higher rates than their male counterparts. The numbers also show that careers of men and women in bioscience progress at markedly different rates; while women and men each hold about half of the graduate degrees in biology, far more senior leadership roles are held by men than women (17 percent vs. 83 percent, respectively.)

Women In Bio Greater Boston (WIB-GB) is one group that is trying to change that. It is the newest chapter of a fast-growing international trade association aimed at fostering leadership, entrepreneurship and careers of women in the biosciences. Comprised of professionals across the career continuum—from those just starting out to industry veterans—the group plans to leverage the region’s strong biotechnology supercluster to provide career development opportunities for women in New England. Programming being planned for 2012 includes networking, mentoring and educational events specifically geared at the interests of and challenges faced by women working in this industry.

Similar WIB chapters in Washington, DC/Baltimore, Research Triangle Park, Seattle and Chicago are enjoying enthusiastic participation in both social and career-enhancing programs, such as an expert lecture on IP in Chicago and a national team entry in the Walk for the Cure in DC. In addition, Washington/Baltimore, RTP, and now Boston have organized a special series aimed at young girls interested in science, called Young Women In Bio (YWIB).

As part of the YWIB series, Biogen Idec opened its doors as host to 25 curious middle school girls from across Massachusetts on December 1. It was an educational, fun program designed to provide the students with first-hand knowledge of the biotechnology and life sciences industry. Nadine Cohen, Biogen’s senior vice president of regulatory affairs, provided a welcome and an overview of the company, biotechnology, and the field’s range of career paths. Community lab director Tracy Callahan, and lab manager Jennifer Greenberg took the visitors on a site tour, engaged them in a hands-on lab experiment (involving M&Ms!), and visited the purification lab to share information about the crucial assays used in biotechnology. A shadow experience demonstrated a “day in the life” of several Biogen employees. Scientist mentors led the visitors to their individual work areas as they explained their roles, shared how they became interested in science, displayed and explained a variety of lab equipment, and answered insightful questions from the inquisitive young ladies.

Lisa Geller, program chair of the Women in Bio Greater Boston chapter, explained why the group is spearheading these events. “As successful women who are passionate about working in the biotechnology industry, we hope to fuel a similar interest in the next generation of female scientists and business leaders. We hope that our Young Women In Bio program blossoms into an ongoing series for girls from early middle school into high school to continue keep them interested as they get older.”

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Drugs, conglomerates, medical nutrition companies, and biotechs dominated the New England life sciences news this week.

—EnVivo Pharmaceuticals of Watertown, MA, said its experimental schizophrenia drug EVP-6124 demonstrated statistically significant improvements in patient cognitive function in a Phase 2b study. Patients also demonstrated improvements in what are known as negative schizophrenia symptoms, such as inability to experience pleasure and to carry on normal social interactions.

—Weston, MA-based Biogen Idec is forming a $300 million joint venture with the Korea-based conglomerate Samsung to develop biosimilars, which are low-cost versions of biotech drugs that are losing their patents. Biogen (NASDAQ: BIIB) will get a 15 percent stake in the operation for the $45 million it’s putting in, and Samsung is fronting $255 million.

—Cambridge, MA-based Momenta Pharmaceuticals bought the assets of Virdante Pharmaceuticals, a nearby biotech that raised $30 million in venture capital and is apparently winding down its operations. Virdante was developing technology for increasing the anti-inflammatory properties of antibodies. Momenta (NASDAQ: MNTA) paid $4.5 million for the assets, with potentially $51.5 million more to come in milestones, and plans to plug the technology into its discovery platform.

—I profiled Cambrooke Foods, an Ayer, MA-based maker of low-protein foods and metabolic formulas for patients with conditions such as phenylketonuria (PKU), which can be treated with proper diet. Read here about the company’s founders, growth, and latest products.

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[Update: Noon ET, 12/9/11] We’re less than a week away from Xconomy’s biggest event of the year for the Boston biotech community, “The Genetics Institute Impact.”

This is shaping up to be a truly special reunion for the people who built one of Boston’s pioneering life sciences companies, and who are still making waves in the industry today. [Update] More than 270 people have registered, and we are sold out for the festivities next Wednesday evening, Dec. 14, at the Koch Institute for Integrative Cancer Research at MIT.

The agenda will be a little different from some other Xconomy events. We’re going to start off by inviting a handful of Genetics Institute alumni to share a favorite anecdote from their days at GI. These could be tales about ups and downs, thrills, horrors, or just plain funny or embarrassing moments that revealed a lot about what made GI such a great adventure. I don’t know what the speakers plan to say, but I’m sure it will be short and sweet and memorable.

Once those remembrance talks are done, I’ll moderate a 20-minute keynote chat with GI’s longtime CEO Gabe Schmergel and the company’s scientific co-founders—Tom Maniatis and Mark Ptashne.

I’m sure these guys could carry on all night. On yesterday’s prep call, Maniatis and Ptashne started jogging each other’s memory banks, revealing tales about former Harvard University president Derek Bok and legendary former CBS chairman Bill Paley (a GI investor). I could have listened for hours, but the goal is to ask just a few questions, and keep the program brief. That way there will be plenty of time for catching up with old friends.

Besides the talks, we will have a cool memorabilia display to check out thanks to contributions from Dale Blank, Gina Nugent, and others. If you have photos from GI in some kind of electronic format like jpeg or gif, now’s the time to send those my way so I can make this display even better. Just shoot me a note at ltimmerman@xconomy.com. And if you have some favorite music that people at the company used to like to listen to—and it’s on CD, Pandora, or at least something other than vinyl or cassette tapes—let me know. I’m taking suggestions for what ought to be on the GI soundtrack.

Here’s the actual program, which we will print up for those of you there at the event. If you couldn’t tell, I’m looking forward to meeting a lot of fascinating people at this event and learning a bit more about a special time and place in the history of the biotech industry. Those of you who show up early at 4:30 pm can get a jumpstart on networking before the program starts at 5:30 pm. See you there Wednesday evening.

4:30 pm—Registration/networking

5:30 pm—Host welcome, Koch Institute

5:35 pm—Introductions, Xconomy

5:40 pm—Remembrance talks

Adelene Perkins, CEO, Infinity Pharmaceuticals

Tuan Ha-Ngoc, CEO, Aveo Pharmaceuticals

Tony Evnin, partner, Venrock Associates

John Knopf, CEO, Acceleron Pharma

Abbie Celniker, CEO, Eleven Biotherapeutics

Sha Mi, Distinguished Investigator, Biogen Idec

5:55 pm—Keynote chat

Gabe Schmergel, former CEO, Genetics Institute

Mark Ptashne, co-founder, Genetics Institute

Tom Maniatis, co-founder, Genetics Institute

Luke Timmerman, national biotech editor, Xconomy (moderator)

6:15 pm—Networking

7:30 pm—End

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[Updated 12/6/11 10:35 am. See below.] Today Biogen Idec (NASDAQ: BIIB) and Seoul, Korea-based conglomerate Samsung announced that they are teaming up to develop and market biosimilars—low-cost versions of biotech drugs that are losing their patent protection. The two companies will form a joint venture, based in Korea, which will be funded by $255 million from Samsung and $45 million from Biogen. Biogen, based in Weston, MA, will take a 15 percent stake in the venture.

[Material added to provide further details on Eidetica.] Biogen has long hinted at its interest in biosimilars. In 2009, Xconomy reported that the company had quietly set up a Swiss subsidiary called Eidetica to develop and manufacture biosimilars. A spokeswoman for Biogen told Xconomy today that the company started Eidetica to explore biosimilars but discontinued the initiative. “We are not currently pursuing any biosimilars strategy on our own outside of this [Samsung] joint venture,” she says.

Biogen hasn’t said much else about its biosimilars strategy, but in January of this year, CEO George Scangos told Bloomberg that he expected them to constitute “a meaningful revenue stream” and that the company was working on several biosimilar molecules. Biogen said today that the Samsung joint venture would not pursue biosimilar versions of proprietary Biogen drugs.

Biogen is the latest in a string of companies to aggressively pursue biosimilars. In October, Michael Kamarck of Merck (NYSE: MRK) told Xconomy that his company had embarked on a multifaceted plan to develop biosimilar versions of several blockbuster drugs, including Amgen’s filgrastim (Neupogen) and pegfilgrastim (Neulasta). Kamarck reiterated Merck’s commitment to biosimilars at the company’s R&D briefing for analysts in November.

Samsung may seem an unlikely partner for Biogen in this latest endeavor. But in fact, in May 2010, Samsung declared biotech to be one of five new strategic businesses that would drive its growth going forward, and it committed to invest $2 billion into the sector by 2020.

Biogen Idec did not immediately respond to a request for comment on today’s announcement. The price of Biogen’s stock, at $11.79 per share, was unchanged in pre-market trading.

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Seattle Genetics has had a bit of a dust-up today in the stock market, as investors have been seeking to make sense of a second case of a dangerous adverse event seen in a patient on the company’s new lymphoma drug.

Shares of the company (NASDAQ: SGEN) dipped almost 6 percent early in the day, after Wall Street analyst Elliot Favus circulated a report about how a second case of progressive multifocal leukoencephalopathy (PML) has been diagnosed in a patient taking the company’s flagship lymphoma drug. Favus, known for his bearish positions, didn’t immediately respond to a request for a copy of his report.

Seattle Genetics stock regained much of its value as the day went on, but news on PML is bound to rattle nerves on Wall Street. That’s because this condition is a rare, and sometimes deadly, brain infection that patients sometimes get when taking modern targeted biologic drugs like Biogen Idec’s natalizumab (Tysabri), and Roche/Genentech’s rituximab (Rituxan). The Tysabri case in particular made headlines, and prompted that drug to be temporarily withdrawn from the market, until scientists better understood the risks and benefits. Since Seattle Genetics’ brentuximab vedotin (Adcetris) only arrived on the market in August, and Seattle Genetics depends heavily on it as its only marketed product, it’s understandable why investors got jumpy.

The Seattle Genetics drug, for patients with Hodgkin’s lymphoma and anaplastic large cell lymphoma, has shown impressive effectiveness in clinical trials. It provided significant tumor shrinkage in 75 percent of patients with relapsed forms of Hodgkin’s disease in a clinical trial, and in about 86 percent of patients with anaplastic large-cell lymphoma. Researchers are still following patients to see how long those responses really do last, and to what extent they may help people live longer. The most common side effects found in clinical trials were a depletion in infection-fighting white blood cells, nerve damage in the fingers and toes, fatigue, nausea, and anemia.

Clay Siegall

CEO Clay Siegall offered a spirited defense of his product today when I reached him by phone. The PML association with Adcetris isn’t new, he said, as the first page of the product’s FDA approved prescribing information includes a warning about the condition. The warning says that a patient in clinical trials, who had received four prior chemotherapy regimens before getting Adcetris, died from PML.

Siegall did confirm that a more recent, second case of PML in an Adcetris patient has been diagnosed. That case was reported to the company, which shared with the information with the FDA. He wouldn’t comment on the patient’s condition, saying that it is company policy not to talk about individual patients.

To provide some context, Siegall notes that PML is part of the underlying disease that some patients have with lymphomas. In some cases, patients get multiple rounds of chemotherapy, which suppresses their immune systems, and makes them more vulnerable to … Next Page »

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Today’s news: Weston, MA-based Biogen Idec, the largest maker of injectable treatments for multiple sclerosis, met its goals in a second clinical trial for an oral pill to treat the disease. The pill reduced flare-ups by 44 percent when taken twice per day, and by 51 percent if taken three times a day. Bedford, MA-based iRobot announced layoffs last week of 8 percent of its staff, or 55 employees across Massachusetts, North Carolina, and California, despite showing a strong third quarter profit. Boston startup accelerator MassChallenge awarded $1 million to be split across 17 startups, and Bay State companies collectively raised $250 million in venture capital last month. The total funding for the third quarter was $505 million, down by about half from the previous quarter when there was talk of a tech bubble.

In case you missed it this morning, have a listen. The Xconomy Report airs every Friday morning at 7:49am on 89.7 FM.

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

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

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

Top 10 Tech Stories:

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It was a meaty New England life sciences week, with clinical advances, new funding, CEO hires, and acquisitions headlines.

—Sanofi hired David Meeker as the new CEO of its Cambridge, MA-based Genzyme unit. Meeker, who got started at the company in 1994, will move into his new role on November 1 and will lead the rare diseases and multiple sclerosis divisions. Other Genzyme units have already been integrated into Sanofi’s global operations.

—My colleague Arlene took a closer look at Cambridge-based Rhythm Pharmaceuticals, a startup developing diabetes and obesity drugs. Rhythm is navigating a crowded but struggling drug space with licensed compounds from the French biotech company Ipsen.

—Lexington, MA-based Cubist Pharmaceuticals (NASDAQ: CBST) will acquire Adolor for $4.25 per share in cash ($190 million total), plus milestones for Adolor’s experimental drug for treating chronic opioid-induced constipation, ADL5945. That pushes the total value of the deal to $415 million. The transaction was made possible, Cubist says, when pharma giant GlaxoSmithKline (NYSE: GSK) dropped out of a co-promotion deal with Adolor (NASDAQ: ADLR) after their drug for accelerating healing after bowel surgery ran into safety issues and was only cleared for in-hospital use.

—Weston, MA-based Biogen Idec (NASDAQ: BIIB) met its goals in a second clinical trial of its first pill for multiple sclerosis. In the study, Biogen’s pill reduced MS flareups by 44 percent when patients took it twice a day, and by 51 percent when they took it three times a day. The company’s stock shot up 7.6 percent to $115.07 per share at 10:06 Eastern time after the news. Biogen also announced it would pay $45 million upfront to South San Francisco-based Portola Pharmaceuticals to collaborate on autoimmune disease drugs.

—Atreaon, a new Newton, MA-based biotech company, raised $8 million of a potential $20 million equity round, according to an SEC filing. And Watertown, MA-based Arsenal Medical, a developer of biomaterial-based treatments, said it was spinning out a new company called 480 Biomedical. It also announced it had raised $3 million and 480 had raised $15 million, from return Arsenal investors return investors Polaris Venture Partners, North Bridge Venture Partners, and Intersouth Partners. The new spinout will focus on developing scaffold and delivery technology for treating a form of peripheral vascular disease known as SFA occlusive disease.

—Cambridge-based BIND Biosciences and Watertown-based Selecta Biosciences each received $25 million from Rusnano, a $10 billion Russian federation fund focused on nanotechnology startups. Each company, which will establish Moscow subsidiaries, also took in another $22.25 million from new and existing investors.

—Cambridge-based Vertex Pharmaceuticals (NASDAQ: VRTX) announced revenues of $659 million for the quarter ended September 30, its first ever profitable quarter from its own product sales. (Vertex turned a profit once before due to a one-time milestone payment.) The $221 million ($1.02 a share) profit last quarter was drive in part by Vertex’s new FDA-approved drug telaprevir (Incivek) for patients with hepatitis C that was cleared by the FDA in May.

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South San Francisco-based Portola Pharmaceuticals has formed a lucrative alliance today with Biogen Idec (NASDAQ: BIIB) to co-develop drugs for autoimmune diseases, seeking to stop the immune system from attacking healthy tissues like a virus.

Under the deal, Portola is granting Weston, MA-based Biogen Idec an exclusive worldwide license to co-develop oral pills that block a biological target called Syk. In return, Biogen Idec has agreed to pay Portola $45 million upfront, with $36 million coming in cash, and the rest from an agreement to buy a $9 million equity stake in the smaller company. Portola is also eligible for $508 million in future payments if the drug program reaches certain development and regulatory milestones, the companies said. Biogen will lead development and the commercial push for the oral Syk inhibitor program in two big markets—rheumatoid arthritis and lupus—while Portola will retain the lead development role for the drug in smaller markets.

Biogen and Portola have agreed to a 75/25 split of the worldwide costs and profits of the drug program.

“This program is an excellent strategic fit with our focus on immunology,” said Biogen Idec CEO George Scangos, in a statement. “Portola is a high-quality company with a great track record in small molecules, and we have crafted a collaboration that truly is a win for both companies. We will now focus on a thoughtful and aggressive program to fully explore the potential of Portola’s compounds against this very interesting target, with the goal of creating an effective, safe and convenient oral treatment for patients with debilitating autoimmune and inflammatory diseases.”

Biogen Idec is the world’s largest maker of drugs for multiple sclerosis, a neurodegenerative disease in which the immune system goes haywire and attacks the fatty coating around nerve fibers. Last year, it scrapped a number of programs in its pipeline, including cancer drugs, to focus more on what it considers this strength.

Portola’s lead drug candidate is still at the earliest phase of clinical development, with a code name of PRT062607. Portola has raised a ton of venture capital in its history, around $220 million as of July 2009. Its backers include Abingworth Management, Advanced Technology Ventures, AllianceBernstein, Alta Partners, Brookside Capital, CIDC Consulting, D.E. Shaw, Frazier Healthcare Ventures, Goldman Sachs, IBT Management Corp., MPM Capital, Prospect Venture Partners, Sutter Hill Ventures, Teachers’ Private Capital, T. Rowe Price, Apothecary Capital, Janus Capital and PAC-Link BioVentures.

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Biogen Idec’s new oral pill for multiple sclerosis passed its first pivotal trial back in April, and today the company got the confirmation it was looking for from a second major study.

The Weston, MA-based biotech company (NASDAQ: BIIB) said today that dimethyl fumarate (BG-12) met its main goal of reducing multiple sclerosis flare-ups over a two-year period in a study of 1,430 patients with relapsing forms of MS. As a twice-daily pill, the Biogen Idec drug was able to reduce MS flare-ups by 44 percent when compared to a placebo, and by 51 percent when it was given three times a day, the company said. Both doses of the new treatment showed “favorable” safety and tolerability, Biogen Idec said, that was similar to what scientists saw this spring in another study of about 1,200 patients. The drug also met all its secondary goals in the study, in both doses, the company said.

Shares of Biogen Idec rose by $8.20 a share, or 7.6 percent, to $115.07 at 10:06 am Eastern time after the news.

“We now have strong positive results for BG-12 in two robust pivotal clinical trials with more than 2,600 patients,” said Doug Williams, Biogen Idec’s executive vice president of R&D, in a statement. “We are gratified by these strong efficacy and safety results, which, when combined with BG-12′s oral route of administration, position it as a potentially important MS therapy. We are working aggressively to prepare our regulatory submissions with the goal of making BG-12 available to MS patients as quickly as possible.”

The new oral drug is critical for Biogen’s long-term competitive standing as the world’s largest maker of multiple sclerosis drugs. Biogen’s key franchises today are with the injectable therapies interferon beta (Avonex), and natalizumab (Tysabri). But each of these products has its weaknesses—patients tend to relapse on interferons over time and grow weary of the injections, while Tysabri is dogged by a dangerous side effect known as PML. Many of the 400,000 U.S. patients with multiple sclerosis have long desired oral pill alternatives, and haven’t had one until recently. Swiss pharmaceutical giant Novartis won FDA approval a year ago for fingolimod (Gilenya). Another oral MS drug from Hawthorne, NY-based Acorda Therapeutics (NASDAQ: ACOR) called dalfampridine (Ampyra) is cleared by the FDA to improve walking ability of MS patients.

Thomas Wei, an analyst with Jefferies & Co, wrote earlier this week that he heard positive feedback about the oral MS drug from Biogen, when he surveyed 17 neurologists at a recent medical meeting called ECTRIMS. He has a $124 a share price target on Biogen stock.

“Many physicians deferred judgment when asked about BG12, citing the lack of head-to-head data relative to other oral therapies,” Wei wrote in an Oct. 24 note. “However, there was universal acknowledgment that the data from the first Phase 3 trial of BG12 was highly robust. For those willing to give an opinion, we found that BG12 was always the oral drug of choice.”

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One of the scientists at Biogen Idec pushing for a new kind of regenerative medicine got some of her most valuable experience, and inspiration, back in the day at Genetics Institute. So we’re thrilled to have Sha Mi join what is shaping up to be a truly special gathering of alumni from GI, one of the pioneering companies in the Boston biotech scene.

Sha Mi, the distinguished investigator in Biogen’s discovery neurobiology group, has agreed to join the lineup of confirmed speakers at the next big Xconomy Boston life sciences event—”The Genetics Institute Impact” on Dec. 14. Sha Mi, who worked at GI from 1995 to 2000, will join the ranks of speakers who will offer a short story about one of their favorite memories from their GI days.

Besides Sha Mi (who sometimes goes by “Misha”) you can expect to hear these short stories from Adelene Perkins of Infinity Pharmaceuticals, Tuan Ha-Ngoc of Aveo Pharmaceuticals, Abbie Celniker of Eleven Biotherapeutics, Tony Evnin of Venrock Associates, and John Knopf of Acceleron Pharma. Plus, we’ll have a keynote chat with the two scientific co-founders of GI—Tom Maniatis and Mark Ptashne—along with longtime CEO Gabe Schmergel.

Sha Mi, distinguished investigator, Biogen Idec

Sha Mi is best known these days for her discovery work on a drug that seeks to be the world’s first regenerative medicine for multiple sclerosis. This experimental drug, which Biogen Idec has advanced into clinical trials, is designed to block a protein called Lingo-1 that interferes with the body’s production of myelin, the fatty insulating coating around nerve fibers. People with multiple sclerosis have an overactive immune system that eats away at the myelin layer, and they have no ability to regenerate myelin to protect their nerves. That means nerve impulses that control speech, vision, and movement get short-circuited, sort of like when an electrical wire is stripped of its insulation.

According to Sha Mi’s hypothesis, the new drug should be able to help regenerate the protective myelin coating around nerves. And if you can regenerate myelin, it’s conceivable you can restore lost neurological function, like the ability to see, talk, and walk. It will take a long time to find out if this works in humans, but the experimental drug has already cleared some significant hurdles by making it into the clinic.

I’m personally excited to hear Sha Mi tell her story about a memorable time at GI that help propel her along her current path. And I’ve heard great feedback from many GI alumni, and friends of GI alumni, who are looking forward to this special event. Tickets are going fast, so if you haven’t gotten one yet, be sure to sign up here at the registration page. See you there Dec. 14.

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Football season is getting started this week, and I’m pumped. This is the time millions of people test their wits against friends (and strangers) in fantasy football. For fellow biotech nerds who aren’t familiar, this is a little bit like the stock market—you try to pick a diversified portfolio of pro football players who you think are going to have great seasons. And you try to avoid the losers.

Since I just finished drafting my fantasy team, I thought it would be fun this week to evaluate biotech a bit like I analyze football players. So here goes, with a somewhat tongue-in-cheek set of awards and predictions about the ups and downs to watch this season among the companies, players, and drugs that make biotech so darn interesting.

Reggie Bush don’t-believe-the-hype award: Brisbane, CA-based Intermune (NASDAQ: ITMN). The former Heisman Trophy winner from USC had a dazzling college career, but has been a dud in the pros. Intermune, too, saw a monster wave of enthusiasm earlier this year, and its stock briefly topped $50 in April. The company has already dropped back into the mid-$20s, but it still has a market valuation of about $1.5 billion. All of this excitement has been for one new drug that was rejected by the FDA, and then approved in the European Union for patients with idiopathic pulmonary fibrosis. It all looks to me like investors have gotten carried away. This disease is a rare condition, Intermune is blazing a new trail on its own with physicians and patients, and quite a few European countries are basically broke.

LaDainian Tomlinson fading superstar award: Amgen’s erythropoietin anemia drug franchise. The future Hall of Famer did amazing things for the San Diego Chargers, but now he’s 32, near the end of his career. He’s given up the starting tailback job with the New York Jets to Shonn Greene, which means LT won’t have to carry the load all by himself, which could lengthen his career. Thousand Oaks, CA-based Amgen (NASDAQ: AMGN) had a similarly spectacular run with its erythropoietin anemia drug franchise, but after battling years of safety controversies, this product’s best years are behind it. Fortunately for Amgen, it has the equivalent of Greene’s fresh legs with its new antibody drug denosumab, which it is marketing as Prolia for osteoporosis and Xgeva for cancer-related bone loss. But just like Shonn Greene is no LT, d-mab is no EPO.

Packers-Bears best rivalry: Vertex-Merck. The Green Bay Packers and Chicago Bears have the oldest and one of the most intense rivalries in football, and there are few things I enjoy more than watching my World Champion Packers beat the Bears. I don’t have a rooting interest in the battle between Vertex Pharmaceuticals and Merck in the hepatitis C field, but this has the elements of a great rivalry. Vertex has superior data for its drug from clinical trials, but Merck’s drug is also a big step up over the old hepatitis C regimen, and it has money, manpower, and sales history with doctors that can’t be dismissed. To add another layer of intrigue, Vertex founder Josh Boger and CEO Matt Emmens both worked earlier in their careers at Merck, so these are familiar enemies.

Tom Brady sleeper pick of the year: Richmond, CA-based Sangamo Biosciences (NASDAQ: SGMO). The legendary 3-time Super Bowl-winning quarterback was the ultimate sleeper pick coming out of college, and the New England Patriots were able to grab him in the sixth round of the 2000 draft. Sangamo has been around for a long time with a technology for specifically silencing genes, which investors aren’t giving much value. But Sangamo is expecting some clinical trial results this fall from a mid-stage clinical trial of its new drug for patients with diabetic neuropathy. If the data are positive, it could propel this company from the bench to stardom.

Tedy Bruschi comeback player of the year: South San Francisco-based Exelixis (NASDAQ: EXEL). The former Patriots linebacker and 3-time Super Bowl champion suffered a rare heart condition that caused a stroke, which looked like it would send him into retirement in 2005. But he beat the odds, coming back to play some more great football. Exelixis, too, looked like it was in big trouble just a year ago after it made some big layoffs, one of its partners (Bristol-Myers Squibb) threw in the towel on its lead drug candidate, and its CEO left for a new job. But Exelixis’ lead drug, cabozantinib, has shown an impressive ability to treat the debilitating bone pain that strikes men with advanced prostate cancer. Investors have heard researchers rave about this drug, and have pumped new life into the stock, which enabled Exelixis to raise a lot more money. Now Exelixis needs to prove the results in more rigorous studies, but it is certainly back in the game.

Baltimore Ravens defensive team of the year: The FDA’s division that reviews obesity and diabetes gets this award in a landslide. Like the NFL’s notoriously violent defender, Ravens linebacker Ray Lewis and his teammates, the FDA has … Next Page »

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