New England Patriots owner Robert Kraft may still be smarting from his team’s loss to the New York Giants in the Super Bowl, but at least one of Kraft’s other organizations has some good news to cushion the blow: Boston-based Acetylon said today that it has received a $15 million equity investment from Celgene (NASDAQ: CELG), the biotech giant based in Summit, NJ.

Acetylon was founded in 2008 and backed with $40 million from several individual investors, including Kraft. The company is working on a class of drugs that inhibit enzymes called histone deacetylases (HDACs). These enzymes regulate gene expression and play a role in many cancers. Last fall, Acetylon began human trials of its lead compound, ACY-1215, in multiple myeloma. Celgene is a leader in that field with its blockbuster myeloma treatment lenalidomide (Revlimid). “Celgene has a strong strategic and market interest in hematological malignancies and other cancers, and we will benefit from their guidance and input,” says Walter Ogier, CEO of Acetylon.

In the past, drug developers have tried to inhibit several HDACs at one time, but Acetylon’s compound targets only one, HDAC6. That selectivity may cut down on side effects such as fatigue and nausea—and it was one of the main reasons Celgene was attracted to Acetylon’s research. “Acetylon has established itself as the leader in developing next generation, selective HDAC inhibitors for cancers as well as non-cancer disease indications and we believe the company’s approach could significantly benefit patients,” said Mark Alles, Celgene’s chief commercial officer, in today’s release.

Acetylon’s scientists plan to test ACY-1215 in combination with bortezomib (Velcade), made by Millennium Pharmaceuticals. “We anticipate a similar opportunity to test it in combination with [Celgene's lenalidomide] and potentially the next-generation of the drug,” which Celgene is currently testing in clinical trials, Ogier says.

Celgene’s investment in Acetylon is a pure equity deal, and Celgene will not receive rights or options to the startup’s technology. Alles will take a position on Acetylon’s board as a non-voting observer—meaning he’ll mostly have an advisory role. “They’ll have a closer view on our progress,” Ogier says. As for whether or not Celgene might become interested in forming a closer research alliance in the future, Ogier says, “anything could happen.” In the meantime, the deal “doesn’t preclude us from forming other partnerships,” he says. “I think this is good for both companies.”

Celgene has taken quite a bit of interest in the Boston biotech scene of late. On January 26, the company announced it was buying Bedford, MA-based Avila Therapeutics for $350 million. Last year, Celegene participated in a $30 million funding of Cambridge, MA-based Acceleron and it extended a partnership with Cambridge-based Agios, adding $20 million to a $130 million alliance. In May 2011, Celgene signed on to use Boston-based Foundation Medicine’s genomics testing technology in trials of cancer drugs, with the goal of identifying patients who are most likely to respond well to the medicines.

For Acetylon, the Celgene infusion kickstarts an already ambitious plan for ACY-1215. The company is currently finishing up the first stage of a Phase 1 trial, and plans to begin the combination phase of the trial later this year, Ogier says. The $15 million investment “is significant for a company at our stage,” Ogier says. “It will allow us to augment our cancer program.”

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Plans for IPOs and venture funding dominated the New England deals news this week.

—A new seed fund, backed by venture firm New Enterprise Associates and hosted by Harvard, came out of the woodwork last week. The Experiment Fund will invest up to $250,000 in seed funding in selected startups, with a focus on technologies that come out of Cambridge, MA. The news broke just a few days ahead of Facebook—the one that got away—revealing its plans to go public.

—Radius Health, a Cambridge-based startup working on treatments for osteoporosis, filed paperwork indicating its plans to raise as much as $86 million in an initial public offering.

—A PricewaterhouseCoopers and National Venture Capital Association report shows a mixed picture for life sciences investing in 2011, my colleague Arlene reported. Biotech companies raised $4.7 billion, showing a 22 percent increase over 2010, but the deal volume for the sector dropped 9 percent to 446 transactions. Medical devices companies also showed an increase in funding dollars but a drop in number of deals.

—Cambridge-based Brightcove set the price range of its initial public offering at $10 to $12 per share, according to an amended filing with the SEC. The video hosting startup plans to sell 5 million shares, and give underwriters the option to purchase another 750,000 shares. Brightcove first filed paperwork last August indicating it intended to raise $50 million in an IPO.

—Synchroneuron of Waltham, MA, nabbed $6 million in Series A funding from Morningside Technology Ventures. The startup is developing treatments for movement disorders such as tardive dyskinesia.

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Cambridge, MA-based Radius Health, which is on a quest to enter the multibillion-dollar market for osteoporosis treatments, said today it has filed to go public. The company hopes to raise $86 million in the proposed offering. The IPO will be underwritten by UBS Investment Bank and Leerink Swann, and co-managed by Cowen and Company and Rodman & Renshaw.

Radius’s lead compound, BA058, is a new type of “anabolic,” or bone-building, drug. In early trials, patients have re-grown bone with little risk of developing hypercalcemia, a dangerous overload of calcium that can result from current treatments. If the drug proves effective in pivotal trials, which the company is running now, it could become a major contender in a very large market. A recent study by Global Industry Analysts of San Jose estimated that the annual market for osteoporosis treatments will reach $8.8 billion by 2015.

The current iteration of Radius’s drug is an injection, but the company is working on a more convenient dosing option—a patch it’s developing in a collaboration with 3M (NYSE: MMM). Using 3M’s “microneedle” technology, Radius developed a patch containing 360 tiny needles that deliver a full dose in about 15 minutes.

Radius last made news in May, when it raised a staggering $91 million and merged with an unlisted shell company in preparation for an IPO. The company’s investors include MPM Capital, BB Biotech Ventures, MPM Bio IV NVS Strategic Fund, the Wellcome Trust, HealthCare Ventures, Scottish Widows Investment Partnership, BB Biotech, Brookside Capital, Saints Capital, Nordic Bioscience, and Ipsen Pharma.

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Applied Proteomics hasn’t exactly been operating in stealth mode since it was founded five years ago. Co-founders David Agus, a cancer specialist at USC, and Danny Hillis, the MIT-trained computer scientist, gave TedMed talks about the startup’s technology, which provides a 40-gigabyte snapshot of all the proteins circulating in a drop of blood. By pure coincidence, I watched John Stewart’s Feb. 2 interview with Agus last night on “The Daily Show.”

“Danny and David had the foresight to build the tool before trying to use the tool,” says John Blume, a molecular biologist who joined API in 2008 as chief scientific officer. “Although the company wasn’t in stealth mode, the first several years were spent in taking the time to make it right, and then to use it and avoid some of the stumbling blocks.”

Now Applied Proteomics is raising the curtain on several steps that mark its progress beyond a seed-stage startup that was incubating at Applied Minds, an industrial think tank that Hillis founded in Glendale, CA, with a colleague from Disney Imagineering. After moving the headquarters to San Diego late last year, Applied Proteomics is today naming a new CEO—Peter Klemm, a veteran in molecular diagnostics and the former CEO of Lexington, MA-based Predictive Biosciences.

Danny Hillis

The company known as API says it also secured $22.5 million last June in Series B funding from Domain Associates (San Diego partner Jim Blair joined the board), Seattle’s Vulcan Capital, and returning angel investors. Klemm tells me the company raised $4 million from angel investors (who prefer to go unnamed) in what amounted to API’s Series A round in 2007.

David Agus

API’s goal, Klemm says, is nothing less than to “elevate molecular diagnostics to another level beyond the genome” by measuring the proteins made by genes—a long-sought technology that is expected to help doctors improve medical care for individual patients. Because proteins carry out most cellular functions, the company says a snapshot of all the proteins circulating in the body at a given moment represents “the most powerful source of information” in terms of understanding a patient’s health status.

Quantifying all the proteins in the body, Klemm says, can help doctors optimize the course of treatment for individual patients by making it easier to identify the specific drugs that would have the greatest effect on blocking specific proteins or signaling pathways, which can vary dramatically from person to person.

In a statement from the company, Hillis says, “For the first time, we can look at all the proteins in the body with remarkable specificity and sensitivity and use proteomic technology to create … Next Page »

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—San Diego’s Amylin Pharmaceuticals says Bydureon, its new once-a-week drug for treating Type 2 diabetes can hit the market as early as next month, after the FDA cleared Bydureon. The FDA rejected the Amylin’s drug twice before. An estimated 26 million people in the United States, or roughly 8 percent of the population, have type 2 diabetes.

—San Diego’s life sciences sector has expanded since 2009, with employment increasing by more than 5,550 jobs, or 15 percent, over the past two years, according to a new economic report from Biocom, the local industry group. The comprehensive study counted more than 1,700 life sciences companies with a total of 41,937 employees throughout San Diego County in 2011, and says those numbers are expected to grow over the next two years.

—The FDA gave its approval to Cambridge, MA-based Vertex Pharmaceuticals (NASDAQ: VRTX), which has substantial operations in San Diego, for a new drug called Ivacaftor (Kalydeco), developed to treat a rare form of cystic fibrosis. The twice-a-day pill targets about 4 percent of the 30,000 patients in the U.S. with cystic fibrosis.

—Johnson & Johnson’s reorganized R&D operation in San Diego, now known as Janssen Healthcare Innovation, is trying an experiment in innovation by creating an incentive prize challenge. Janssen is offering a total of $250,000 for technology that helps improve care for patients who have just been discharged from a hospital.

—The folks who produce the quarterly MoneyTree report on venture capital funding just released a deeper dive into the details of life sciences investments. The survey shows that VC funding for life sciences increased 21 percent nationwide in 2011, with a total of $7.5 billion going into 785 deals. San Diego ranked third among metropolitan regions in terms of capital invested in the fourth quarter. The top five are Bay Area ($498 million), Boston ($384 million), San Diego Metro ($193 million), NY Metro ($98 million), and Orange County ($97 million

—Optimer Pharmaceuticals (NASDAQ: OPTR) CEO Pedro Lichtinger outlined his plans for expanding the market for the company’s first product, the antibiotic fidaxomicin (Dificid), as a preventative therapy for hospital patients at risk for a nasty intestinal infection called C. difficile. San Diego-based Optimer is planning a clinical trial to prove the drug can help prevent severe diarrhea in patients undergoing bone-marrow transplants.

—A tweet from Bob More of Frazier Healthcare Ventures prompted Luke to delve into the importance of character among life sciences leaders in his BioBeat column. “Politics pretty similar to backing CEO’s,” More said. “Newt may be smart and a good debate guy. But Newt=Smug. Never back smug,”

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Seattle-based Dendreon Corp. (NASDAQ: DNDN) said today it has named John Johnson to the position of president and CEO, succeeding longtime CEO Mitchell Gold. Johnson was previously the CEO of East Brunswick, NJ-based Savient Pharmaceuticals (NASDAQ: SVNT).

The appointment comes after a difficult run for Dendreon. In 2010, the company won approval for sipuleucel-T (Provenge), the first in a new class of immune-boosting therapies for prostate cancer. But the product has been slow to take off, causing the company to fall short of Wall Street expectations. On January 5, Dendreon surprised investors by announcing that it sold $228 million of the drug in 2011—better-than-expected results—but it hasn’t been enough to sway shareholder sentiment.

Today’s news was welcome on Wall Street. “I am very pleased to hear this morning about Dendreon’s succession plan for its CEO and Chairman,” wrote shareholder activist Brad Loncar in a statement.” In August, Loncar sent a letter to Dendreon chairman Richard Brewer expressing concerns about poor management at the company. “After joining together and asking for this change, this is a big win for Dendreon’s shareholders and for corporate governance in general.”

Dendreon’s shares rose 6 percent to $14.40 in pre-market trading.

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When you hear about personalized medicine, you might think first of the applications for cancer treatment, or maybe cystic fibrosis. But Dave Martin, the former head of R&D at Genentech, is thinking about personalized medicine in a whole new context—for antibiotics.

This concept, at South San Francisco-based AvidBiotics, is still at its earliest stages of development, and the company’s most promising antibiotic candidate probably won’t enter clinical trials until 2013, Martin says. But the program has potential to become a fascinating case study that nudges the healthcare system away from the reactionary, “one-size-fits-all” antibiotic prescribing habit that has led to problems with drug-resistant superbugs.

Here’s how AvidBiotics is thinking about taking on a dangerous bacteria called Clostridium difficile, or “C. diff.” About 3 percent of U.S. adults have C. diff in their guts already, and it usually co-exists just fine with all the other bacteria, causing no problems. But C. diff can become a problem if a patient comes to the hospital in a high-risk situation to get a certain form of surgery, cancer care, or maybe to spend time on a ventilator in the intensive-care unit. Knowing there’s a high risk these patients will get a virulent form of C. diff, the hospital can run a 45-minute diagnostic test from Sunnyvale, CA-based Cepheid to see if the patient is a carrier.

If so, the doctor could someday prescribe a targeted “narrow-spectrum” antibiotic from AvidBiotics that’s designed to kill the C. diff bug, and spare virtually all the normal, healthy bacteria in the gut. By using the drug in a preventive setting, doctors hope to stop the bug before it causes the nasty diarrhea that hospitals dread. An estimated 700,000 people a year are affected by C. diff, and the death rate is estimated at about 6 percent. By attempting to prevent the worst symptoms before they appear, a drug/diagnostic combo has potential to greatly reduce the number of long-term hospitalizations, which can easily cost the healthcare system more than $100,000 per episode.

“An ounce of prevention is really valuable in this disease. If we can prevent this disease in high-risk patients, rather than waiting until patients are very sick, then everybody wins,” Martin says.

This would represent an unusual approach to antibiotics. These drugs today are often prescribed after a patient gets sick. The doctor doesn’t know right away what bug caused it, and he or she has to wait a day or two for a lab culture to provide the answer. Rather than wait around for symptoms to get worse, the doctor often has to act quickly, prescribing a carpet bomb “broad spectrum” antibiotic that kills all kinds of bacteria, both bad and good. Researchers know that this indiscriminate killing of bugs in the gut interferes with the natural equilibrium, and creates problems for people’s immune systems, and nutrient absorption, that can linger for months, Martin says.

AvidBiotics isn’t the only company thinking about a prevention strategy with a narrow-spectrum antibiotic—San Diego-based Optimer Pharmaceuticals (NASDAQ: OPTR) is pursuing a similar strategy with its newly marketed product, fidaxomicin (Dificid). That company, which I reported on earlier this week, is studying its new FDA-approved antibiotic as a way to prevent C. diff infection in patients undergoing bone marrow transplants, where C. diff infections are known to increase the death rate, and cost an average of $130,000 per patient to treat. (Martin says the Optimer drug is an important advance, but he believes his company’s experimental drug is designed to more narrowly hit C. diff, while sparing other forms of bacteria.)

AvidBiotics, which I profiled here in September 2010, is using technology platform it licensed from UCLA to make engineered proteins that hit specific molecular targets on the surface of bacterial cells. These molecules, which the company calls Avidocins, are supposed to … Next Page »

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Bonnie Ramsey said three years ago that a cystic fibrosis drug from Vertex Pharmaceuticals was a huge medical advance in the making, and would end up being an achievement on par with putting a man on the moon, at least for her patients.

Yesterday, she says, was the day it truly felt like she was part of a team that reached the moon-shot goal. The good news came when the FDA approved Vertex’s ivacaftor (Kalydeco) as the first drug of its kind to work by treating an underlying genetic defect for cystic fibrosis.

“It’s a really big day,” says Ramsey, a leading CF physician/scientist at Seattle Children’s Hospital and the University of Washington. “Even though it’s for a small subpopulation, the treatment paradigm has completely changed. It’s no longer about just treating the symptoms, it’s about treating the genetic defect. That’s a real game-changer.”

The drug from Cambridge, MA-based Vertex (NASDAQ: VRTX) is now FDA approved for patients age six and older who have what’s known as a Class 3 gene mutation called G551D. This mutation is found in about 4 percent of the 30,000 patients in the U.S. with cystic fibrosis. The disease, the result of various mutations to a gene called CFTR, causes the poor transfer of water and salt across cell membranes, which leads to the buildup of thick, sticky mucus in the lungs, and poor absorption of nutrients. It means patients have to endure hours a day of treatment their entire lives, and the median life expectancy is about 39 years. Doctors currently treat the symptoms of the disease, through things like inhalable antibiotics, but Vertex’s drug is the first FDA-approved therapy that works by altering an underlying disease-related protein.

Bonnie Ramsey of Seattle Children's Hospital

Ramsey has had an instrumental role in developing this drug since its infancy. As the executive director of the Cystic Fibrosis Foundation’s Therapeutic Development Network, back in 2000 she began collaborating with the drug’s original developer, San Diego-based Aurora Biosciences (later acquired by Vertex.)

Ramsey was the lead investigator of a pivotal study of 161 patients, known as Strive, which yielded results in February that laid the foundation for yesterday’s FDA approval. The study showed that patients age 12 and older on the twice-daily pill from Vertex had about a 10.6 percent absolute improvement in their ability to force out air from their lungs in one second—compared with a placebo. The effect held up over the full 48-week course of the study. Researchers also saw significant improvements in being able to gain weight, while also reducing cough, sputum production, and the incidence of pulmonary exacerbations. Side effects included headache, and upper respiratory tract infections, researchers said, although more patients dropped out of the placebo group than the drug group. A second study verified the effect in younger patients, age six and above.

What excites scientists is that the drug has a compelling foundation in biology. It is designed to … Next Page »

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This week’s deal news covered a breadth of sectors: biotech, medical devices, mobile applications, software, and robotics. Not to mention a major venture capital fund raise.

—Waltham, MA-based drugmaker Avila Therapeutics was bought by New Jersey-based Celgene (NASDAQ: CELG) for $350 million, with as much as another $575 million available in milestones. Avila is a maker of “covalent” drugs that are designed to shut down the activity of disease-causing proteins for a prolonged period of time.

—Verastem, a young Cambridge, MA-based biotech working on drugs targeting cancer stem cells, completed its initial public offering, led by UBS and Leerink Swann. The IPO (5.5 million shares sold at $10 apiece) represented a strong showing among investors, as Verastem originally indicated it planned to sell 4.5 million shares priced between $9 and $11 each. The underwriters have a 30-day option to buy another 825,000 shares.

—Burlington, MA-based ConforMIS, a maker of knee implant systems, raised $89 million in a Series E funding from private equity investors and government investment funds abroad. The company said it will put the money toward sales, manufacturing, and expansion of its technology.

—Co3 Systems, a maker of data loss management software, received new funding from Fairhaven Capital. The Cambridge, MA-based startup said it will put the money (whose sum was undisclosed) toward sales, marketing, and engineering.

—Malborough, MA-based medical device startup Navilyst Medical will be acquired by Albany, NY-based AngioDynamics (NASDAQ: ANGO) in a transaction valued at $372 million, based on the company’s $14.20 per share closing stock price Monday. Navilyst, which focuses on … Next Page »

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[Updated: 1:25 pm] Vertex Pharmaceuticals is now officially more than just a one-hit wonder.

The Cambridge, MA-based biotech company (NASDAQ: VRTX), best known for its hepatitis C drug, has won clearance from the FDA to start selling a new twice-daily pill called ivacaftor (Kalydeco) for a rare form of cystic fibrosis. The FDA said today the Vertex drug can now be used for patients age six and older who have a gene mutation called G551D. About 1,200 patients in the U.S., or roughly 4 percent of the total population of 30,000 cystic fibrosis patients, have the mutation.

The approval came faster than expected, as Vertex turned in its application in October, and the FDA had a deadline of April 18 to complete its review. The company plans to start shipping the drug to pharmacies this week, the company said.

“Kalydeco is an excellent example of the promise of personalized medicine—targeted drugs that treat patients with a specific genetic makeup,” said FDA Commissioner Margaret Hamburg, in a statement. “The unique and mutually beneficial partnership that led to the approval of Kalydeco serves as a great model for what companies and patient groups can achieve if they collaborate on drug development.”

The new cystic fibrosis drug has been highly anticipated for years, and the application to the FDA is based on clinical trial results that arrived in February. The study of 161 patients found that patients on the Vertex drug had about a 10 percent absolute improvement in their ability to force out air from their lungs in one second—a common measure of success in treating lung disease—compared with those on a placebo. The effect lasted over the entire 48-week course of the study. Researchers also saw significant improvements in reducing cough, sputum production, and the incidence of pulmonary exacerbations. Side effects included headache, upper respiratory tract infections, nasal congestion, rash, and dizziness, although more patients on the placebo group dropped out of the study early because of side effects, Vertex said.

While the 10 percent absolute improvement in breathing ability for people with a deadly lung disease might not sound like much, it is a big step forward for the disease. Cystic fibrosis, the result of mutations to a gene called CFTR, causes the poor transfer of water and salt across cell membranes, which leads to the buildup of thick, sticky mucus in the lungs. That effectively suffocates people over time, and often ends up killing people in their late 30s or early 40s. Doctors currently treat the symptoms of the disease, but Vertex’s drug is the first FDA-approved therapy that works by altering an underlying disease-related protein.

[Updated pricing information] Based on the small patient population that has the G551D mutation, and the significant benefit the drug provides to them, Vertex set the price at $294,000 per patient per year, Nancy Wysenski, Vertex’s chief commercial officer, told analysts today on a conference call. The company estimates that about 60 percent of eligible patients have private health insurance, while the rest are covered by government insurance, Wysenski says. As is common for companies selling high-priced medications, Vertex has established programs to help get the drug to patients who can’t afford it. Vertex said it will provide free medicine to uninsured families with household incomes of less than $150,000 a year, and it will provide assistance in making co-payments for those with insurance.

“We have a strong commitment to help patients 6 and older get Kalydeco,” Wysenski said on the conference call.

The drug was developed as part of a 13-year long collaboration with the Cystic Fibrosis Foundation, which put more than $70 million into the development program, along with Vertex, and the drug’s original developer that was acquired by Vertex-San Diego-based Aurora Biosciences. Because of its support, the Cystic Fibrosis Foundation will collect a royalty on Kalydeco sales that will start in the “high-single digit” percentage of sales, and escalate to “just below the teen level” as the drug reaches undisclosed sales milestones, according to Vertex finance chief Ian Smith.

Vertex has a number of plans ongoing to expand the use of Kalydeco beyond this initial small group of patients in the U.S. The company has applied for approval in the European Union, and hopes to receive clearance there to start selling in the third quarter. It is also running a trial of the drug in patients under the age of six; as a treatment for certain other gating mutations of the CFTR gene; and in combination with other medicines that seek to correct additional mutations.

Based on the price and number of patients in the U.S., Vertex can expect peak U.S. sales from the G551D patient population of about $550 million, said analyst Mark Schoenebaum of ISI Group, in a note to clients.

Vertex shares climbed 6 percent t0 $36.90 at 1:45 pm Eastern.

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Pfizer was where Pedro Lichtinger learned about pharmaceutical marketing from people who did some amazing things. For starters, New York-based Pfizer (NYSE: PFE) turned an old-school antifungal medicine into a $1.6 billion cash cow. Now as the CEO of San Diego-based Optimer Pharmaceuticals (NASDAQ: OPTR) Lichtinger is borrowing some ideas from that experience, looking to make the most of his company’s new antibiotic.

Optimer won FDA approval last May for its first marketed product, a twice-daily pill called fidaxomicin (Dificid). That drug is designed to fight a bug called C.difficile that causes diarrhea so severe it can kill patients, especially frail elderly people. It is a common problem in hospitals. The company got off to a respectable start, generating about $24 million in gross sales in its first six months. But the market for treating this pathogen, after it has been diagnosed in a hospital lab, isn’t huge. Optimer can expect to generate about $153 million in U.S. sales in 2015, according to analyst Eun Yang of Jefferies & Co.

So to get the biggest possible bang out of this new molecule, Optimer is thinking about not just treating “C.diff,” but preventing it. Like Pfizer did with fluconazole (Diflucan), Optimer sees a long-range future in which physicians will prescribe the product as part of a standard regimen as a preventive medicine for patients who are at high risk of getting C.diff and who are likely to face a lot of suffering and high-cost hospital interventions if they get the bug. The initial plan is to start with a clinical trial to prove the Optimer’s drug can help prevent that problematic result in patients undergoing bone-marrow transplants.

If this preventive strategy works, then Optimer’s new medicine could be used by up to 20,000 patients a year who undergo such transplants. Given that the drug is currently priced at $2,800 for a typical 10-day course, and it is likely to go up over time, so it could possibly add another $230 million to $380 million in annual sales by 2020, Lichtinger says.

“I came from Pfizer where this concept was applied to Diflucan, where years ago, it was the first major antifungal applied for prophylactic use,” Lichtinger says. “It’s still used today as a generic. I saw that drug go from a relatively small drug into a $1.6 billion drug as a result of this prophylactic approach.”

He was quick to add that he’s not forecasting Optimer’s drug will approach that rarefied sales figure, but he does add there is a wide variety of other patient groups that could benefit from getting preventive C.diff treatment, such as vulnerable patients undergoing heart or liver transplants, certain cancer patients, or those on ventilators in hospital intensive care units. “The opportunity is certainly even bigger than with the primary C.diff indication,” Lichtinger said during an interview earlier this month at the JP Morgan Healthcare Conference in San Francisco.

Bone marrow transplants seem like an obvious place … Next Page »

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Good morning from Mountain View, CA, and from the close of the 2012 Personalized Medicine World Conference, which brought together thought leaders of business, government, healthcare-delivery, research and technology. Four themes that emerged from this year’s program:

• Greater optimism, triggered by the 2011 approvals of two major oncologic agents paired with companion diagnostics: vemurafenib (Daiichi Sankyo and Roche / Genentech) for patients with metastatic melanoma with a mutant biological pathway known as BRAF V600E and crizotinib (Pfizer) for patients with non-small-cell lung cancer that overexpresses a protein called ALK. Walter Koch from Roche and Hakan Sakul from Pfizer proudly discussed their development processes and speedy approval timelines. Those approvals were also cited by several other talks as examples of major progress made in the quest to deliver the right drug to the right patient.

• Greater clarity from the FDA. Although the FDA was not able to meet its self-imposed deadline of year-end 2011 to finalize guidance to industry on the best practices for developing companion diagnostics, Elizabeth Mansfield reiterated Commissioner Hamburg’s commitment to personalized medicine and told the audience to expect final guidance before the end of June. Mansfield also said that the FDA would provide guidance on how to co-develop a drug & test in parallel, as well as how to “enrich” clinical trials through careful selection of patients, based on their genetics. Both of these important regulatory steps could happen in 2012. The most surprising revelation, though, was Mansfield’s staffing: her group has just four people to evaluate all personalized-medicine-related medical devices.

• More sequencing. Just a few weeks ago at the JP Morgan Healthcare Conference, 800-lb sequencing gorillas Illumina and Life Technologies / Ion Torrent announced that scientists can expect the $1,000 genome by the end of 2012. Piggybacking on that announcement, Mostafa Ronaghi, chief technology officer of Illumina, presented a thorough overview of his company’s progress to date, bragging that 90 percent of all sequences produced worldwide had been produced on an Illumina instrument. Among other projects, Ronaghi’s team is working on techniques to accurately cover the 8 percent of the genome that cannot be sequenced because of repetitive regions. (Ronaghi made his presentation just hours before news broke of Roche’s unsolicited $5.7 billion takeover bid for Illumina.)

• More translational bioinformatics. Given the implied data glut that whole genome sequencing will produce, last week’s conference revealed more accomplishments in the application of bioinformatics to the remedy of disease. One of the unsung heroes of this year’s conference was Elizabeth Worthey from the Medical College of Wisconsin, who walked the audience through a case study of a pediatric patient presenting with undefined inflammatory bowel disorder. Worthey’s whole exome sequencing and variant analysis of the patient revealed a key mutation in the XIAP gene. A cord blood transplant ultimately cured the child, who was eating, drinking and playing again within four months.

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[Corrected 2/8/12. See below.] The Bill & Melinda Gates Foundation has joined with 13 pharmaceutical companies and leading public health organizations as part of a massive $785 million drive to wipe out—or at least better control—10 historically neglected tropical diseases by the end of the decade. [Edited to reflect that the total value of the initiative is $785 million not, as originally reported, $785 million. We apologize for the error.]

The initiative will focus on diseases that affect one out of every five people on Earth (1.4 billion people), but don’t get effectively treated because there isn’t a strong enough market to sell drugs to people who can’t afford them. The Seattle-based Gates Foundation is contributing $363 million over five years for research into the neglected diseases, while other money from groups like the U.S. Agency for International Development and Britain’s Department for International Development will finance better distribution of existing medications that are effective. The initiative was announced today in a press briefing in London.

“It used to be that people would commit to a donation but nobody would order the drug because there wasn’t money to do the delivery,” Bill Gates told Bloomberg News in an interview. “Here, because you’ve got delivery money being committed and manufacturing money being committed, every year the amount of people who get this mass drug administration is going to be 10 times what it’s been.”

GlaxoSmithKline CEO Andrew Witty added in a statement that, “Many companies and organizations have worked for decades to fight these horrific diseases. But no one company or organization can do it alone. Today, we pledge to work hand-in-hand to revolutionize the way we fight these diseases now and in the future.”

Here’s who is participating in the initiative, and what they are contributing, according to today’s statement. You can also check out reports from Bloomberg News and the Wall Street Journal.

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South San Francisco-based Genentech said today that a cancer drug it developed with Curis (NASDAQ: CRIS), which is based in Lexington, MA, was approved by the FDA to treat basal cell carcinoma, a common form of skin cancer. The drug, called vismodegib (Erivedge), will be prescribed to patients with carcinomas that have spread to other parts of the body or that have returned after surgery or prior treatment. “These are patients who until now had no effective treatments,” says Genentech’s Jennifer Low, global development leader for vismodegib. “We’re really excited to be giving them new hope.”

Investors who made early bets on Curis are cashing in today. Shares of the company, which had nearly doubled in the last six months in anticipation of the approval, fell nearly 5 percent in morning trading to $4.94. This is the first approved product for Curis, which was founded in 2000, and the FDA nod sparks a $10 million milestone payment under the company’s agreement with Genentech, a unit of Swiss pharmaceutical giant Roche. Curis will also receive royalties on sales of the drug, which is a once-daily pill.

Vismodegib is also the first product approved in an emerging class of molecules that inhibit a target with a funny name: the hedgehog signaling pathway. The pathway, named after a mutant fruit fly in which it was discovered, is a network of proteins that cells use to send signals to each other. About 10 years ago, Genentech teamed up with Curis to explore whether inhibiting the pathway might offer a new way of treating skin cancer. “This approval validates the role hedgehog inhibition plays in metastatic and locally advanced basal cell carcinoma,” Low says.

In a late-stage trial, vismodegib shrank cancerous lesions in 43 percent of patients with locally advanced basal cell carcinoma and in 30 percent of patients whose disease had spread beyond the skin. Genentech says the drug will be available in one to two weeks.

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Cell Therapeutics suffered an embarrassing defeat the last time it appeared in front of an FDA advisory panel and today the company made a move that will enable it to avoid another public shellacking, at least for a while.

The Seattle-based biotech company (NASDAQ: CTIC) said today it has withdrawn its application to start selling pixantrone (Pixuvri) as a new lymphoma drug in the U.S. after saying today it needed more time to prepare for a Feb. 9 meeting of the FDA’s cancer drug advisory panel. The company said it asked the FDA to allow it to present at the March meeting instead, but when the agency said no, Cell Therapeutics withdrew the application. That means the agency’s April 24 deadline to complete its review of the application has been voided, although Cell Therapeutics said today it plans to resubmit its application later in 2012.

The last time Cell Therapeutics appeared at the FDA’s Oncologic Drugs Advisory Committee (ODAC), in March 2010, the panel voted 9 to 0 against the company’s pixantrone application. The chair of the FDA panel at the time, Gail Eckhardt of the University of Colorado at Denver, said the Cell Therapeutics application was “disturbing,” partly because it only enrolled 140 of the 320 patients needed to generate a statistically valid result. The head of the FDA’s cancer drug office, Richard Pazdur, said at the time that the Cell Therapeutics application depended on “a single incomplete trial.” The initial application was turned down by the FDA in April 2010.

By withdrawing the application just before the next advisory panel, Cell Therapeutics contradicted one of its own statements from less than a month ago, when it said it believed it had addressed the concerns raised by the FDA.

“We are pleased the Office of Oncology Drug Products (OODP) chose to bring our pixantrone new drug application back to ODAC for review now that we have provided additional information and data recommended by the Office of New Drugs (OND) that we believe addresses the issues raised in the OODP Complete Response Letter of April 2010,” James Bianco, the company’s CEO, said in a Jan. 3 statement.

Shares of Cell Therapeutics fell 18 percent today to $1.09 in early trading.

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Newt Gingrich comes across on TV as someone who radiates smugness. It’s that sense that he’s not just confident in his own abilities, but extremely satisfied with his talents and his utter superiority over mere mortals like you and me.

I’m no political pundit, nor a psychologist, so I’ll let others analyze whether Newt is presidential material. But good old Newt got me thinking this past week about this specific character trait, and other unappealing elements of personality, that we often see in leaders of the life sciences industry. Bob More, a veteran venture capitalist with Frazier Healthcare Ventures, inspired me to delve into character this week with one recent comment on Twitter.

“Politics pretty similar to backing CEO’s. Newt may be smart and a good debate guy. But Newt=Smug. Never back smug,” More wrote on his Twitter account (@Bobmorevc).

Given how often people harp about the need to find superb management teams for developing new drugs or devices, I followed up with More to hear his thoughts on character traits to back, and to back away from, in life science entrepreneurs.

The No. 1 character trait to look out for, according to More and his mentor Jim Blair at Domain Associates, is trustworthiness. Dishonesty, to them, is the king of all deal-breakers. For example, More says he once worked for six months scrutinizing every imaginable aspect of a prospective investment for Domain, which he was quite excited about. Then at the last minute, the entrepreneur mentioned a slight change to the term sheet.

Bob More

“It felt like one of those things where a real estate agent comes in at last minute, and says ‘Oh, it’s just another $6,000 fee for the house,’” More recalls. He left that meeting with doubts about the executive’s credibility in other situations. When he asked Blair for advice, the response was memorable: “Kill the deal. Life is too short to deal with people like that,” More recalls Blair saying at the time. (Blair confirmed the story, and added that it wasn’t the only time he’s stopped an investment because of character concerns.)

This is tricky stuff, because all kinds of dishonesty unfortunately passes for standard procedure in business—ever hear of an executive resigning to “spend more time with family?” But the honesty thing is worth harping on in this specific context, because it strikes me that life sciences has more than its share of spinmeisters, hypesters, smoke-and-mirrors actors, and worse. One of the sure tests of honesty, More says, is to ask whether an executive will be candid and forthright about bad news in private, so that board members or advisors can work together constructively to solve the problem.

“You can deliver good news whenever, but delivery of bad news should be pretty quick. If you’re hiding bad news or hoping it will go away, it’s not a good trait,” More says. “When people are forthright, it builds trust.”

Then there’s smugness, that arrogance or sense of superiority. Developing innovative new drugs or devices requires a strong ego, high IQ, stamina, an inspiring personality that attracts other people, and other things. Often, that combination spills over into smugness or arrogance. More says he watches for a lot of the same cues that his sister, a teacher, watches for … Next Page »

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[Updated: 3:47 pm] Amylin Pharmaceuticals and Alkermes have gone to the FDA twice before to seek approval of their new diabetes drug, and been turned back, but now the persistence has paid off. The FDA has cleared their once-weekly injectable diabetes drug for sale in the U.S.

San Diego-based Amylin (NASDAQ: AMLN) and Dublin- and Waltham, MA-based Alkermes (NASDAQ: ALKS) today won clearance to start selling exenatide once-weekly (Bydureon) in the U.S., according to a letter posted on the FDA website. The approval came after the agency held up the application twice before—first in March 2010, and again in October 2010, saying it needed further assurance that the drug doesn’t cause an irregular heart rhythm known as QT prolongation. The companies expressed confidence back in July that the issue had been resolved, based on results of an additional clinical trial. The drug won approval in Europe back in June.

[Updated with added detail on Alkermes royalty] The long-awaited U.S. approval is vital to future of Amylin, as it started investing back in 2005 in a $500 million Ohio factory to mass-produce the new drug. Amylin’s fortunes have become even more tied to Bydureon since November, when longtime partner Eli Lilly bowed out of a collaboration to co-market the drug. Alkermes, which provided technology that made the drug last long enough in the bloodstream to turn it into a once-weekly injection, will pick up an 8 percent royalty on sales of the first 40 million units sold in a single year, and a 5.5 percent royalty once sales exceed 40 million units in a single calendar year. While there is competition from Novo Nordisk’s liraglutide (Victoza) as a once-daily injection for diabetes, and various other oral pills and injectable insulin, the new drug from Amylin and Alkermes is the first treatment that can be injected as little as once a week. Amylin has been marketing the original form of exenatide (Byetta) as a twice-daily injectable since 2005.

About 25 million people in the U.S. have the disease, and numbers are growing fast as the nation’s obesity rate continues to surge. The new Amylin drug could generate $1.25 billion in peak U.S. sales in 2018, said Cory Kasimov, an analyst with JP Morgan, in a note to clients on Nov. 11.

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Bad news out today from Infinity Pharmaceuticals. The Cambridge, MA-based biotech company said it is halting a mid-stage clinical trial of its drug for pancreatic cancer early after learning that patients were living longer in the placebo comparison group. Infinity (NASDAQ: INFI) shares fell more than 30 percent after the news.

The trial of 122 patients showed that when patients got Infinity’s saridegib (IPI-926) in addition to gemcitabine chemotherapy, they were living less than the six months they were expected to based on historical studies with the chemo drug alone. No unexpected side effects were seen among patients on the Infinity drug or in the control group, the company said.

This is a painful setback for Infinity. The company just last week released some more encouraging data from an early-phase study of the drug in 16 patients, which suggested it offered a benefit by shrinking tumors and helping them live a median time of about 10 months. The plan for this year was to wait for the results from the more rigorous study of 122 patients, to get a firm answer on whether it could help pancreatic cancer patients live more than the expected six months. Even though the drug failed in that study, Infinity said it still believes in the drug’s potential because it inhibits a pathway known as hedgehog that plays a role in multiple cancers. Infinity currently is testing the new compound in mid-stage trials against myelofibrosis and chondrosarcoma. Those studies are continuing, the company said.

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It’s that outlook time of year, and Mark Heesen, president of the National Venture Capital Association (NVCA), was in San Diego earlier this week, talking about the 2012 outlook for venture capital. Today he’ll make a similar presentation to the New Jersey Technology Council. Next week,  John Taylor, the NVCA’s director of research is set to talk in Florida about the 2012 outlook.

Heesen began his presentation in San Diego by saying, “Be prepared for a roller coaster ride here, because that’s where we’ve been for the past year—and that’s where we’re going.”

In a conversation with Xconomy yesterday, Heesen talked about some of the broader trends he’s charting throughout the United States. Here are some of the takeaways from our talk, and from Heesen’s presentation in San Diego:

—The VC industry continues to contract. Venture capital investments in U.S. startups peaked in 2000, when VCs sank $99 billion into emerging companies of all kinds. There were 1,022 venture capital firms at that time, and they were collectively managing $220 billion worth of invested capital. In 2010, VCs invested more than $20 billion into startups of all kinds. The number of VCs had plunged by almost 55 percent—to 462 VC firms with $177 million under management.

—VCs are raising more capital from their limited partners, but it isn’t enough to sustain current investment levels. In 2011, U.S. venture firms raised a total of $18 billion. That was up significantly from the $14 billion that VCs raised in 2010—but it falls $10 billion short of covering the $28 billion that VC firms invested in 2011. As a result, Heesen says he expects venture investments in U.S. technology and life sciences companies to decline in 2012.

—A handful of VC firms accounted for … Next Page »

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Prostate cancer was once a backwater for innovation, but suddenly it’s become one of the most competitive battlegrounds in all of biotech. And one of the darkhorses in this race, Bothell, WA and Vancouver, BC-based OncoGenex Pharmaceuticals, is getting ready to show next week whether it has another contender in the pipeline.

OncoGenex (NASDAQ: OGXI) is preparing to release interim results next week from a clinical trial that could offer a hint of effectiveness of a prostate cancer drug called OGX-427. If OncoGenex can show in this 72-patient study that its compound is slowing the spread of tumors, and lowering prostate-specific antigen (PSA) scores, then it could be in position to run a more meaningful trial that asks whether it can prolong lives, or work well in combination with other therapies. The preliminary data are expected Feb. 2 at the American Society of Clinical Oncology’s Genitourinary Cancers Symposium in San Francisco.

Results from this trial, and another study among patients with bladder cancer, mean a lot for OncoGenex during what has been a long period without much big news for investors and researchers to chew on. The company is now enrolling 800 patients into a pivotal study of its lead prostate cancer drug, custersin, but expects it will have to wait until the fourth quarter of 2013 to find out whether that treatment can extend lives of prostate cancer patients. While OncoGenex makes that long slog through development, it has seen companies like Dendreon, Johnson & Johnson, Medivation, Bayer, and Exelixis continue to jockey for position at various stages of therapy, each with distinct modes of treatment, for men with prostate cancer. The disease kills about 30,000 men in the U.S. each year.

“A lot of focus for us is on custersin, but while that’s going on, we continue to mature our OGX-427 data,” Michelle Burris, OncoGenex’s executive vice president of operations, said during a meeting at the JP Morgan Healthcare Conference earlier this month. While she notes the second OncoGenex drug has shown encouraging ability to work on its own in small studies, she acknowledged it will have to find a niche in a competitive landscape—and says that it can. “It plays nice with a number of different therapies,” she says.

Michelle Burris, OncoGenex's executive vice president of operations

The OncoGenex drug, given through an IV infusion, is designed to work by blocking a biological target known as heat-shock protein 27 (Hsp27). That protein is believed to play a role in helping cells survive under stressful conditions. It’s supposed to help stabilize proteins that keep cells from committing suicide. By inhibiting its activity, you could in theory allow cancer cells to naturally undergo the cell death (apoptosis) process. But there’s also another mechanism of hsp27 that researchers find interesting. It is thought to work as a “chaperone” molecule that helps shuttle in male hormones that fuel prostate tumors.

Researchers believe that could be useful because hormone deprivation therapies have long been standard treatment for prostate cancer, and patients end up developing resistance over time. Two new hormone-blocking therapies, Johnson & Johnson’s abiraterone (Zytiga) and Medivation’s MDV-3100, have both been shown in clinical trials to extend lives of men who resist conventional treatments by blocking male androgen receptors in a different way. OncoGenex’s bet is that even while those drugs are doing their thing, Hsp27 is operating as a chaperone that allows some residual androgens into the tumor, which help provide it with some sustenance.

This theory of cancer biology is being tested in a trial sponsored by the British Columbia Cancer Agency, and led by Kim Chi. The key study enrolled 72 patients with prostate cancer that … Next Page »

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