Several of New England’s life sciences firms had good news to report this week.

—Ryan gave a run-down of the key insights to emerge from our Xconomy Forum on pharma innovation. Sirtris CEO Christoph Westphal, for example, offered insight into one of the biggest biological mysteries around the Xconomy office: how Luke manages to eat so much and stay so thin.

—Cambridge, MA-based Gloucester Pharmaceuticals won FDA approval for romidepsin (Istodax), a treatment for a rare cancer called cutaneous T-cell lymphoma. Gloucester expects to begin marketing the drug in January.

—Noah Beerman took the reins of RXi Pharmaceuticals (NASDAQ: RXII), a developer of RNA interference drugs. Previous president and CEO Tod Woolf will remain on the Worcester, MA-based company’s scientific advisory board.

—Lexington, MA-based Concert Pharmaceuticals started human testing of an anti-HIV drug called CTP-518. Reaching the milestone will trigger a $12 million payment from Concert’s partner, GlaxoSmithKline.

—After announcing earlier this year that it was considering strategic options, including a sale, Cambridge-based Helicos Biosciences (NASDAQ: HLCS) took itself off the block, citing “improving standalone prospects and its current market valuation.”

—Cambridge-based Ironwood Pharmaceuticals inked a $75 million-plus deal with Japan-based Astellas Pharma. The agreement gives Astellas rights to market Ironwood’s lead drug candidate, the constipation treatment linaclotide, in Japan, Indonesia, the Philippines, Korea, Taiwan, and Thailand.

—Aileron Therapeutics, also of Cambridge, published research in the journal Nature indicating that its “stapled peptide” technology can be used to block the production of a protein called Notch that’s implicated in uncontrolled growth of cancer cells. Luke put the news in the context of Aileron’s efforts to develop drugs that hit previously unreachable targets.

—Ryan checked in with Cambridge-based electronic health records provider Dossia. After launching to much fanfare in December 2006, the non-profit is making slow progress in getting its system adopted, but it has recently solidified its leadership team and made other changes it hopes will help.

—Cambridge-based Alnylam Pharmaceuticals (NASDAQ:ALNY) announced the formation of an internal group called Alnylam Biotherapeutics focused on applying the company’s RNAi technology to increase the output of biomanufacturing processes.

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Concert Pharmaceuticals, the Lexington, MA-based company that chemically modifies existing drugs to make them more attractive, has started human testing of an HIV medication which it hopes will help GlaxoSmithKline wrestle back market share it has been losing to Gilead Sciences, the world’s largest maker of HIV drugs.

Concert will receive a $12 million payment from GlaxoSmithKline for starting the trial of a drug it calls CTP-518. It’s one small piece of the collaboration announced in June that could be worth more than $1 billion over time to the smaller company. I heard about this bit of news, and what it means strategically to Concert, when I visited CEO Roger Tung at the company’s office last week.

The basic idea is to take a common protease inhibitor, Bristol-Myers Squibb’s atazanavir (Reyataz), and swap out a few hydrogen atoms on the molecule with deuterium atoms. This is supposed to retain the drug’s viral killing punch, while making it last longer in the body. That’s desirable because it could allow doctors to quit prescribing a booster drug from Abbott Laboratories called ritonavir that adds cost, complexity, and hassles, Tung says. If the Concert drug is able to remain potent long enough in the bloodstream on its own, then it could be combined with other antivirals to create a convenient once-daily pill to compete with Gilead Sciences’ efavirenz emtricitabine tenofovir (Atripla), a drug that has helped Gilead surpass Glaxo as the world’s leading maker of HIV drugs the past couple of years.

“Doctors don’t like prescribing ritonavir, and patients don’t like taking it,” Tung says. “Our hope is to take a great drug and make it more tolerable and easier to take. The idea is to be the most tolerable, best-in-class HIV inhibitor.”

Without going too far into how this works, Concert says the deuterium atoms it is swapping into CTP-518 are supposed to form stronger bonds to the rest of the molecule than the traditional hydrogen bonds. By creating a more bulletproof package that stands up to the usual digestive processes, a greater amount of the drug and desirable metabolic byproducts are supposed to make it through the intestines and into the bloodstream, Tung says. That means the Concert drug should cause less irritation in the gut that can lead to diarrhea and nausea, and that it can use lower doses to get the same amount of drug into the bloodstream.

Getting rid of the ritonavir booster drug is important, Tung says, because …Next Page »

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New England companies raised more venture dollars and completed more VC deals in the second quarter of 2009 than they did in the first three months of this year, according to two reports on venture investment activity released recently. Still, the total number of deals and capital invested in the region during the three months that ended June 30 are way off from a year ago.

Firms in New England invested a total of $640.1 million in 85 deals during the second quarter, down from $1.05 billion that went into 94 deals during the same period last year, according to Dow Jones VentureSource. Perhaps some solace can be derived from the fact that the 85 deals done during the quarter amounted to a 57 percent increase over the 54 VC deals completed during the first quarter of 2009. Total VC dollars invested, however, increased by less than 2 percent, to $640.1 million in the second quarter from $629.2 million in the first three months of 2009. (See our Top 10 Deals list for the quarter on page 2 of this article.)

Regional data from The MoneyTree Report released yesterday by PricewaterhouseCoopers, the National Venture Capital Association, and Thomson Reuters shows a similar trend. The MoneyTree survey counted $466.9 million invested in 76 deals during the second quarter, down from the $825.8 million that went to 128 deals during the same quarter of 2008. (The rival surveys use different methods, sources, and criteria to prepare their respective reports.) MoneyTree showed a 15 percent uptick in venture capital invested from the previous quarter, but only an 8.6 percent increase in the number of deals.

Despite the rise in venture activity compared to the first quarter, the recession still appears to be weighing on VC firms’ willingness or ability to dole out money to tech startups. The Dow Jones figures show that deal amounts in New England are getting smaller even in sectors like healthcare where venture-backed companies are keeping pace with the number of deals they completed last year. And if what venture investors tell us is true, many recent deals involve older companies in need of capital to stay afloat until those companies can go public or find a corporate buyer. That could mean less money for new startups in search of capital to get their operations off the ground.

Here are some of the key figures that Dow Jones reported:

—The median deal amount across all sectors in New England was $4 million in the second quarter of 2009, way down from the median deal size of $7.6 million during the same period last year.

—The number of the region’s healthcare deals—involving biotech, medical devices, healthcare IT, and health services firms—was up slightly in the second quarter compared to the same period last year, from 28 to 29 financings. But total dollars invested fell to $370.3 million in the second quarter from $444.6 million in Q2 of 2008.

—Energy companies in the region raised only $8.2 million in four deals in the second quarter of this year, down from $24.4 million in six deals in the same quarter last year.

—The number of IT deals held relatively steady at 35 in the second quarter, down from 40 deals in the same period of 2008. Still, the total raised declined from $398.4 million to $150.2 million in the same quarter-to-quarter comparison.

See next page for the region’s Top 10 venture financings of the second quarter. …Next Page »

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The B word (billion) cropped up in not one but two deals in this week’s New England tech and life sciences news.

—Cambridge, MA-based E Ink agreed to be acquired for $215 million by Taiwan-based display manufacturer Prime View International. The Taiwanese firm was already a partner of E Ink’s on the manufacture of its electronic paper display technology, which is used in Amazon’s Kindle and other e-book devices. Wade had a great interview with E Ink CEO Russ Wilcox after the deal was announced.

—RxVantage of Providence, RI, took in a $500,000 seed investment from Providence venture firm Slater Technology Fund. The startup provides Web-based scheduling software for healthcare companies and doctors’ offices.

—Hopkinton, MA-based EMC (NYSE: EMC) launched a bidding war with Sunnyvale, CA-based rival NetApp (NASDAQ: NTAP) over Data Domain (NASDAQ: DDUP), a Santa Clara, CA-based data deduplication company. NetApp had already offered $25 a share for Data Domain on May 20; EMC came in with a $30 per share offer on June 1—a deal that would value Data Domain at $1.8 billion. NetApp came back two days later with a $1.9 billion offer, which is still on the table.

—Optical-switch maker Polatis of Andover, MA, and Cambridge, England, routed $8 million into its coffers from existing investors 3i Ventures, Alta-Berkeley Ventures, DFJ Esprit, …Next Page »

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Many of New England’s drug developers were down in Florida this week for the big annual meeting of the American Society of Clinical Oncology. Here’s what they had to report, as well as the news from the firms that didn’t make the trek south.

—Ryan profiled the efforts of Alnara Pharmaceuticals to develop an enzyme-replacement treatment for patients with cystic fibrosis. The Cambridge, MA-based startup recently completed a late-stage clinical trial of the drug, called liprotamase, and calls the results “extremely encouraging.” The company didn’t disclose details, although it says it hopes to gain FDA approval for the drug and begin marketing it in the U.S. next year.

—Proteon Therapeutics of Waltham, MA, added $12 million onto its Series B financing round, bringing the total for the round to $50 million. New investors Bessemer Venture Partners and Devon Park Bioventures contributed the bulk of the new capital.

—Needham, MA-based Celldex Therapeutics (NASDAQ:CLDX) forged an agreement to acquire Branford, CT-based CuraGen (NASDAQ:CRGN) in an all-stock transaction that values CuraGen at $94.5 million and gives Celldex multiple CuraGen assets, including 11 antibody drugs for cancer and at least $54.5 million in banked cash.

—Aveo Pharmaceuticals of Cambridge, MA, presented data from a 272-patient clinical trial of its cancer drug candidate, tivozanib, indicating that the drug may help shrink kidney tumors and prevent their spread with minimal side effects. Aveo plans to initiate a pivotal clinical trial of the drug later this year

—Lexington, MA-based Antigenics (NASDAQ: AGEN) unveiled preliminary data culled from a failed clinical trial that ended in 2005 that indicate that vitespen (Oncophage), the company’s immune-boosting treatment for cancer, may help certain kidney cancer patients live longer. Luke explored the treatment’s history and its prospects for finally reaching the market.

—Data from another failed clinical trial, conducted by Cambridge, MA-based Infinity Pharmaceuticals (NASDAQ: INFI), indicate that the company’s experimental lung cancer drug, IPI-504, might eventually prove to be safe and effective if given at a lower dose, and only to patients with a particular genetic makeup.

—Mansfield, MA-based medical device maker Innovative Spinal Technologies filed for Chapter 7 bankruptcy protection after shuttering operations earlier this year. What’s left for the creditors? Between $1 million and $10 million of assets, which include nine frozen human cadavers.

—Ryan got a good look at Avedro, a Waltham, MA-based startup out to develop a less-invasive alternative to Lasik vision-correction technology. Avedro’s 10-minute procedure, called Keraflex, uses microwave energy to shrink corneal tissue, providing vision correction that lasts for about two years.

—Results from second Phase III trial of an antidepressant being developed by Clinical Data (NASDAQ:CLDA) were positive. The Newton, MA-based firm plans to file for FDA approval of the drug, vilazodone, by the end of this year.

—Lexington, MA-based Concert Pharmaceuticals inked a deal with London-based GlaxoSmithKline (NYSE:GSK) potentially worth more than $1 billion. Glaxo will pay $35 million in upfront payments and equity investments for access to Concert’s technology for swapping some of the hydrogen atoms in existing drug molecules with a deuterium in order to improve their performance. The drug giant will also have rights to three programs in Concert’s R&D pipeline, including a deuterium-modified version of the anti-HIV drug atazanavir.

—Waltham, MA-based ImmunoGen captured some of the attention at the big ASCO meeting in Florida, as the maker of critical technology to increase the potency of Genentech and Roche’s trastuzumab-DM1 for breast cancer. This drug showed an ability to shrink tumors in patients who failed multiple prior therapies, and is currently moving along in a pivotal clinical trial.

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Concert Pharmaceuticals has hooked a whale in the drug industry, London-based GlaxoSmithKline, for its first corporate partnership deal concerning the biotech startup’s deuterium-modified drugs. Lexington, MA-based Concert reports today it will receive $35 million from Glaxo (NYSE:GSK) in upfront payments and equity investments in the deal, which could be worth more than $1 billion to Concert depending on factors such as the success of the drug programs involved.

The deal is a big endorsement for Concert’s ability to swap out some of the hydrogen in existing drug molecules with a hydrogen-relative called deuterium, resulting in drugs with unique chemical compositions and potentially greater effectiveness than the original versions. The deal with Glaxo involves the development of three programs in Concert’s R&D pipeline as well as the application of Concert’s deuterium modification on three drugs in Glaxo’s pipeline. Glaxo will continue to develop those three drugs. Concert’s lead drug candidate included in the deal is a deuterium-modified version atazanavir, an anti-viral drug marketed under the trade name Reyataz for the treatment of HIV. The other compound named in the deal is a preclinical drug for chronic renal disease, and the third has yet to be named.

Glaxo is already a powerhouse in the market for HIV treatments, and in April the firm announced that it would form a new company in partnership with drug giant Pfizer (NYSE:PFE) to develop and market HIV drugs.

In preclinical studies, Concert says, its deuterium-modified atazanavir retains its anti-viral effects and is metabolized slower in the liver than the unmodified version. Slowing the metabolism of atazanavir could extend the duration of its anti-viral activity in the body and eliminate the need to take it with ritonavir, another HIV treatment that is intended to boost the effectiveness of the former drug by inhibiting an enzyme in the body that chews up atazanavir. Atazanavir brought $1.29 billion in sales revenue to New York-based drug giant Bristol-Myers Squibb (NYSE:BMY) last year. Concert’s modified atazanavir is due to begin clinical trials later this year.

The deal give Glaxo the option to license any of the three Concert drugs involved in the pact once certain clinical milestones are met. Concert is responsible for research and development of those programs for now. Also, Concert is eligible for milestone payments on drugs that Glaxo opts to develop as well as double-digit royalties on potential sales of drugs involved in the deal, company CEO Roger Tung said, in an interview.

“The economics of the deal are very favorable for Concert,” Tung said. “It comes at a time when it’s a difficult economic climate overall.”

Concert, which has raised $96 million since it was founded in 2006, already had enough cash to support its operations and clinical programs for two years without the deal with Glaxo, said Steve Bernitz, the company’s chief business officer. He did not provide specifics on how much longer the Glaxo deal extends the firm’s cash runway, but said that the impact was significant.

Xconomy got the inside scoop on Concert’s deuterium-modified drugs last year when Luke talked to Tung, a former senior scientist at Cambridge, MA-based drug developer Vertex (NASDAQ:VRTX).

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I recently had coffee with a venture capitalist at the Starbucks across the street from Biogen Idec’s (NASDAQ:BIIB) headquarters in Kendall Square, and he asked me what I thought were the biggest life sciences deals of 2008. The question is really tough to answer, both because the answers are somewhat subjective and I didn’t want to forget to mention a big M&A event. (Full disclosure: I was also distracted by the uncanny sweetness of my eggnog latte.)

So I turned the question over to him (a good technique for avoiding a question without avoiding a topic). Naturally, he mentioned deals that involved his venture firm as an investor or stockholder. Similarly, I mentioned the deals that Xconomy had covered. The result of our conversation was an incomplete recollection of the most important deals of the past year, but it inspired me to research the topic further.

It was indeed a big year for life sciences deals in the Boston area, despite the lack of IPOs. Instead of tallying the “biggest” deals of 2008 in terms of dollars, I’d rather talk about the “most memorable” deals. (To look at the biggest of the big, check out this fun post from the In Vivo Blog.) Why look at this differently? Because there are some deals that didn’t boast the largest sums but were still meaningful because of the giant leaps of faith investors made in an emerging field of science.

So let’s reminisce about the deals (listed here in no particular order):

Concert Pharma Jammed with VCs

—Concert Pharmaceuticals is working on a method to retool the chemical composition of existing drugs to make new pharmaceuticals. The Cambridge, MA-based startup, which swaps the hydrogen atoms of existing drugs with deuterium atoms to form new treatments, raised $37 million in a Series C round of private equity financing in the first half of 2008. Luke wrote about the company’s lead drug candidate, a form of antidepressant paroxetine (Paxil) that has undergone the firm’s deuterium-for-hydrogen makeover, to treat hot flashes.

ProteoStasis Launches With Big Cash Stash

—Here’s one exception to the issue of scarce financing for newly hatched biotech firms—also known as the valley of death. Cambridge-based ProteoStasis Therapeutics pretty much leapt from the gates last year with …Next Page »

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The first thing I noticed when I sat down in the office of biotech investor Rich Aldrich was a shelved paperback copy of Barbarians at the Gate, the book about the legendary leveraged buyout of R.J.R Nabisco. It reminded me that Aldrich is a main character in a somewhat similar book about the biotech industry, The Billion-Dollar Molecule. That book chronicles the formation and innovative strategy of Cambridge, MA-based biotech firm Vertex Pharmaceuticals (NASDAQ:VRTX), where Aldrich served as chief business officer and helped build the firm into a formidable force in the biotech industry. (Vertex has a significant presence in San Diego as well.)

In his office on the 15th floor of downtown Boston’s Prudential Tower, Aldrich looked to be living the dream. He sat back in a chair next to a framed Boston Celtics jersey. (Aldrich is part of the group that purchased the venerable NBA franchise in 2002, and, yes, he has the championship ring from last season to prove it.) Aldrich’s office is in the same suite as RA Capital Management, the biotech hedge fund he founded in 2001 after leaving Vertex, yet he has long turned over day-to-day management of the enterprise to managing member Peter Kolchinsky. (I wrote about Kolchinsky and the growth of RA Capital, which is a stockholder in San Diego-based diagnostics firm Sequenom (NASDAQ:SQNM), earlier this year.)

Aldrich, unlike in the intense days captured in Billion-Dollar Molecule, is no longer tied to one job or one company. He now lends his deal-making expertise to young biotechs; he is chairman of Cambridge startups Concert Pharmaceuticals and Alnara Pharmaceuticals, and serves as a director of several other companies. And Aldrich had front-row seats, as a director of Sirtris Pharmaceuticals, to that Cambridge-based firm’s sale to GlaxoSmithKline for $720 million in May 2008.

I spoke with Aldrich, who’s now 54, about life after Vertex and the state of the biotech industry in Boston and beyond:

Xconomy: Have you ever thought about going back to an operational role at a biotech company?

Aldrich: I have, …Next Page »

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There was not one venture financing among Boston-area life sciences firms that I could find this week, but plenty of news nonetheless.

—Luke took a look at Provasculon, the second company to be taken under Biogen Idec’s (NASDAQ: BIIB) wing at its Cambridge, MA-based incubator. Formed around research from Boston’s Brigham & Women’s Hospital, Provasculon is aiming to develop drugs that help stimulate the growth of new blood vessels after they’ve been damaged by a heart attack.

—Natick, MA-based Boston Scientific (NYSE: BSX) went into PR-damage-control mode after co-founders Pete Nicholas and John Abele involuntarily sold off about 13 million of their shares of company stock in one day as part of an automatic share-selling plan. The company later explained that 31 million of Abele’s and Nicholas’ shares had been sold that week through the automatic plan, and that further sales were possible. Both founders expressed regret about the sales. Boston Scientific CEO James Tobin, meanwhile, exercised $2.1 million worth of options on company shares, reportedly as an “an expression of confidence in the company.”

—Luke orchestrated a conversation with Roger Tung, the CEO of Concert Pharmaceuticals, a Lexington, MA-based startup whose strategy of taking existing drugs and replacing a few of the hydrogen atoms with deuterium atoms has yielded potential treatments for menopausal hot flashes and HIV.

—Ryan checked in with Mark Benedyk, the new head of Pfizer’s (NYSE:PFE) incubator in La Jolla, CA. Though the previous incubator chief had made public comments about launching a second Pfizer incubator in the Boston area, Benedyk said he wants the incubator to be a virtual entity in markets outside of its San Diego base.

—Lexington, MA-based Synta Pharmaceuticals (NASDAQ: SNTA) earned $25 million from GlaxoSmithKline for reaching milestones in development of the cancer drug elesclomol, which is in late-stage trials as a treatment for metastatic melanoma.

—RXi Pharmaceuticals obtained a worldwide license from the University of Massachusetts Medical School for technology for the oral delivery of treatments based on RNA interference. The Worcester, MA, firm, co-founded by the medical school’s Craig Mello, focuses exclusively on RNAi-based drugs.

—Biotech veteran Keith Dionne, the former CEO of Alantos Pharmaceuticals, took the reins as president and CEO of Boston’s Surface Logix, a privately held developer of small-molecule drugs.

—Cambridge, MA-based Targanta Therapeutics announced it has a date (November 19) to make the case to the FDA for approval of its antibiotic, oritavancin, for hard-to-treat skin infections. The FDA has until December 8 to review Targanta’s application for the drug, which would be its first marketed application.

—Biogen Idec found itself the subject of much debate when it denied the request of a dying cancer patient—a famous trial attorney and Democratic fund-raiser—for access to Tysabri, a drug currently only approved for treating multiple sclerosis and Crohn’s disease. Luke explained the complicated circumstances of the case, and the reasoning behind Biogen’s decision. Be sure to read readers’ comments as well; the discussion is getting really interesting.

—Wilmington, MA-based Charles River Laboratories International (NYSE:CRL) said it’s opening a 60,000-square-foot pre-clinical facility in Shanghai to support the global drug-development needs of its clients.

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Concert Pharmaceuticals caught my eye a few weeks back with something unusual—an experimental drug for the hot flashes women get during menopause, without the risks of standard hormone-replacement therapy.

I didn’t have a chance to interview CEO Roger Tung last month when his Lexington, MA-based company took this drug into its first clinical trial, so a follow-up was in order. Tung bears watching because he was one of the people who left Merck with Joshua Boger in 1989, and became employee No. 9 at Cambridge, MA-based Vertex Pharmaceuticals, where he stayed until 2005.

Tung’s new company got off to an auspicious start the next year with a long list of venture capital backers, and he has shown good timing. Tung raised a $37 million round in May for Concert that will help it weather the financial storm through 2010, he says

So what does Concert have under the hood? It takes existing drugs that have well-understood safety profiles, replaces a few hydrogen atoms with deuterium atoms to change how they are metabolized, and sees if that can give the drugs enhanced properties such as fewer drug-drug interactions or more stable absorption, Tung says. (It also creates a newly-patentable set of compounds for Concert.) The company’s lead candidate, CTP-347, is a modified form of paroxetine, long marketed by GlaxoSmithKline as the anti-depression drug Paxil. This drug is off-patent, and reached $3 billion in annual sales at its peak, so a lot is known about its safety profile. Nobody had ever developed it for hot flashes, and no alternatives for hot flashes exist beyond hormone-replacement therapies, which many women avoid because of the risks (a bit more on this below).

“I wanted to create a differentiated compound with real benefit for medicine, strong reimbursement profile, lower development risk, and shorter timelines,” Tung says.

By taking paroxetine and replacing certain hydrogen atoms with deuterium, Concert believes it has found a way to get the benefits against hot flashes without the side effects. Wyeth’s Pristiq, another anti-depression drug, showed a benefit last year against hot flashes in a clinical trial and a trial published in the Journal of the American Medical Association suggests paroxetine may work for hot flashes at lower doses than for depression, Tung says. The Concert drug has another advantage of minimizing the older paroxetine’s action against a key liver enzyme for drug metabolism, CYP2D6. That enzyme is needed to break down tamoxifen, a drug taken by millions of menopausal women to prevent breast cancer. Interfering with that enzyme can cause what amounts to a traffic jam in the liver, leading to side effects. It only makes sense that any new drug for hot flashes will have to behave well in tandem with tamoxifen.

Hormone replacement therapies like Wyeth’s Prempro work against hot flashes, but the landmark Women’s Health Initiative results in 2002 showed the drugs can raise the risk of breast cancer and heart attacks for some women. An estimated 8 million women quit taking the hormone-replacement meds after that study, Tung says, so there’s a big potential market here for something perceived as less risky.

The deuterium itself is not a problem, because it’s cheap and widely available, derived from sea water. Concert’s chemists were able to synthesize it into the new drug so quickly that they zipped through animal tests and entered the clinic in two years, Tung says. Results from this early-stage trial will be available in the first half of 2009, which will give the company an idea about whether it can avoid bad drug-drug interactions.

Concert’s second candidate is a protease inhibitor for HIV, modified with deuterium, …Next Page »

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Hats off to Link Medicine, whose $40 million financing was a nice reminder that the economy still has a pulse. That, and the rest of the week’s Boston-area life sciences news, below.

—In case you missed our forum, How to Build a Life Sciences Company, Ryan did a great round up of the varied and creative strategies that some of the most interesting up-and-coming firms are employing in this difficult economic climate. Among them: The Ensemble Scientific Cast Model, The Big Pharma Checkbook Model, and The David (or Five Davids) Model.

—Natick, MA-based Boston Scientific (NYSE: BSX) won FDA clearance for its Taxus Express2 Atom Stent System, making it the only device approved for propping open clogged heart vessels as small as 2.25 millimeters in diameter.

—Concert Pharmaceuticals of Lexington, MA, launched its first clinical trial of a drug called CTP-347 that’s designed to prevent menopausal hot flashes without the dangerous side effects of hormone replacement therapy. The drug, like the others in Concert’s pipeline, is made by replacing a few hydrogen atoms on an existing drug with deuterium atoms.

—Luke took a quick look at EpiZyme, a stealthy year-old startup backed by MPM Capital and Kleiner Perkins Caufield & Byers. According to the firm’s founding CEO (MPM’s managing director) Kazumi Shiosaki, EpiZyme has hired a “dynamic duo” of executives from two big drugmakers to help lead its efforts to develop drugs based on epigenetics, biological system for turning genes on and off without altering their sequences.

—Lexington, MA-based GI Dynamics unveiled some promising results from a trial of its gut-lining sleeve device that’s designed to mimic the effect of gastric-bypass surgery but spare patients from actually going under the knife. Patients in the trial, which was presented at the International Federation for the Surgery of Obesity and Metabolic Disorders World Congress in Buenos Aires, lost an average of 30 pounds after three months, compared with about 10 pounds for those who dieting.

—Luke explored the strategy that Cambridge, MA-based Genzyme (NASDAQ: GENZ) is building around the cholesterol-lowering drug mipomersen, the co-marketing rights for which Genzyme paid $325 million to Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS). Genzyme typically goes after small patient populations (with very expensive drugs), and that’s where it’s starting with this one, seeking approval for mipomersen for people with an exceedingly rare genetic disorder that causes high cholesterol. But the firm also plans to tackle bigger and bigger markets with mipomersen, which raises a number of questions about how Genzyme will test and price the drug.

—Bermuda-based Covidien, a healthcare products company with a large presence in Massachusetts, announced a restructuring program that includes projects in all four of its business segments and in corporate. The firm says the program will save $50 million to $75 million a year.

—Clinical Data (NASDAQ:CLDA), a biotech firm in Newton, MA, said it will raise some $25 million in a private placement of stock and warrants.

—Luke painted a portrait of CombinatoRx (NASDAQ: CRXX), an eight-year-old firm in Cambridge, MA, that’s nearing an important juncture. CombinatoRx “will find out within the next four weeks whether its experimental combination drug for arthritis is likely to become a multi-billion dollar product, or a big, fat zero,” Luke wrote. If it makes it to market, the drug would be the first of CombinatoRx’s products, which are developed by putting existing drugs together in new combinations.

—Lexington, MA-based Indevus Pharmaceuticals (NASDAQ:IDEV) launched a Phase 3 clinical trial of an implant that delivers a drug to treat the rare condition acromegaly. If it makes it to market, the device could go head-to-head with Novartis’ injectable version of the drug, Sandostatin LAR, which had 2007 sales of $1.027 billion.

—Link Medicine, a Cambridge, MA-based startup developing treatments for Alzheimer’s Disease, ALS, and other neurodegenerative conditions, raised $40 million in a Series C venture round from Clarus Ventures and SV Life Sciences. The firm’s two earlier financing rounds brought in a combined $16.5 million.

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Concert Pharmaceuticals is moving ahead with a drug that it hopes will be the first of its kind to treat the hot flashes women get during menopause, without exposing them to the well-documented risks of hormone-replacement therapy.

The Lexington, MA-based company said today it has begun its first clinical trial with a drug candidate called CTP-347. The company combined the news with another announcement that clearly gave it confidence to move ahead: Animal tests reveal its drug can avoid bad drug-drug interactions with tamoxifen, a common breast cancer drug, according to research presented at the North American Menopause Society’s meeting in Orlando.

As we reported back in May, the drug is made by replacing a few hydrogen atoms on a drug called paroxetine with deuterium atoms. That chemical trick allows Concert to retain the action of paroxetine against hot flashes, while minimizing its ability to block a critical liver enzyme for drug metabolism, CYP2D6. Since tamoxifen—a drug taken by millions of menopausal women to combat breast cancer risk—is metabolized by that enzyme, interfering with it could cause problems. Basically, if you gave it in combination with paroxetine, it could cause a big-time traffic jam at that enzyme, causing the drugs to build up in the body and cause side effects.

“We believe our deuterium chemistry platform holds great promise in creating novel compounds with superior safety and efficacy as compared to existing therapies,” said Roger Tung, Concert’s CEO, in a statement.

Concert raised $37 million from a syndicate of investors in May, including new investors Adage Capital Management, SR One, Mediphase Venture Partners, and Westfield Capital Management, as well as existing investors including Three Arch Partners, TVM Capital, Skyline Ventures, Brookside Capital Partners Fund, Flagship Ventures, Greylock Partners, New Leaf Venture Partners, and QVT Fund.

Results from the Phase I clinical trial in hot flashes are expected in the first half of 2009, so those investors will start to get a read on whether the new drug has an ability to avoid toxic drug-drug interactions in people as well as animals. Since this candidate took less than two years to bring to clinical trials, if it demonstrates safety in Phase I, other modified drugs with deuterium may not be far behind.

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Is it Wednesday again already? Must be time for some life sciences news…

—Lexington, MA’s Concert Pharmaceuticals raised $37 million in one of this year’s biggest Series C rounds in New England biotech. The deal was led by an unnamed public equity investor and joined by Adage Capital Management, SR One, Mediphase Venture Partners, Westfield Capital Management, Three Arch Partners, TVM Capital, Skyline Ventures, Brookside Capital Partners Fund, Flagship Ventures, Greylock Partners, New Leaf Venture Partners, and QVT Fund.

—Centers for Medicare & Medicaid Services (CMS) decided to cover the cost of the AbioCor artificial heart and the surgery to implant it—reversing a 22-year-old policy against Medicare coverage for heart-replacement surgery. Shares of the device’s maker, Danvers, MA-based Abiomed (NASDAQ: ABMD) rose slightly in response.

—Flagship Ventures co-founder Noubar Afeyan, Harvard-Partners Center for Genetics and Genomics scientific director Raju Kucherlapati, and MIT Institute Professor and Nobel Laureate Phil Sharp led a lively discussion about the future of Boston-area life sciences at our latest Xconomy Forum. A good time was had by all—except maybe Kucherlapati’s stylist.

—InfraReDx of Burlington, MA, won FDA clearance for a catheter-based tool for analyzing the chemical makeup of plaques on the walls of coronary arteries. The FDA said the device was the first of its kind and could help doctors identify plaques that may be more likely to rupture and cause heart attacks.

—Critical Therapeutics of Lexington, MA, was bought in a stock-based transaction by Cornerstone BioPharma of Cary, NC, after promising investors late last year that it would seek a merger.

—Lexington, MA’s Epix Pharmaceuticals scored a $7.5 million milestone payment from partner GlaxoSmithKline for beginning Phase 2b clinical trials of an Alzheimer’s drug.

—Curis, of Cambridge, MA, started a Phase 2 trial of a new treatment for colorectal cancer, earning a $3 million milestone payment from collaborator Genentech in the process.

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Last week saw several very large financing deals. Perhaps those depressing Q1 numbers gave investors a little kick in the rear?

—Concert Pharmaceuticals of Lexington, MA, raised a hefty $37 million to support its work on drugs incorporating deuterium, a heavier form of hydrogen. The Series C round was led by a “leading public equity investor,” and joined by Adage Capital Management, SR One, Mediphase Venture Partners, Westfield Capital Management, Three Arch Partners, TVM Capital, Skyline Ventures, Brookside Capital Partners Fund, Flagship Ventures, Greylock Partners, New Leaf Venture Partners, QVT Fund, and others.

—The unfortunately named Moldflow (NASDAQ:MFLO)—a software maker in Framingham, MA, focusing on tools for the design and manufacturing of plastic components—was acquired by California’s Autodesk for roughly $297 million.

—Online role playing game publisher Turbine of Westwood, MA, reportedly inked a $40 million Series C financing deal with Granite Global Ventures, Highland Capital Partners, Polaris Venture Partners, Tudor Ventures, and Columbia Capital—brining to $90 million the total amount to VC funding pledged to the company. Evidently, Turbine has so far called down only $25 million of the new round.

—Constellation Pharmaceuticals, a drug-discovery startup in Cambridge, MA, raised $32 million in Series A financing. The deal was co-led by The Column Group, Venrock, and Third Rock Ventures—the Boston-based VC firm launched last year by former Millennium CEO Mark Levin and others to invest in very new life science firms. Levin will serve as Constellation’s interim CEO.

—Quincy, MA’s Cortera, which scores companies’ creditworthiness, raised $8 million from CIBC Capital Partners, Battery Ventures, and majority stockholder Fidelity Ventures.

—Black Duck Software of Waltham, MA, acquired Santa Monica, CA-based Koders—which runs an open-source code search engine—for an undisclosed sum. Koders’ employees (all three of them) will continue to work from their Santa Monica digs on a consulting basis.

—Boston-based Mascoma, which is working cellulosic-ethanol production methods, entered a strategic relationship with GM. The carmaker gets a stake in Mascoma as part of the deal, though exact terms were not revealed

—Critical Therapeutics of Lexington, MA, announced it will be acquired by Cary, NC-based Cornerstone BioPharma in a stock-based transaction that will leave its shareholders with only 30 percent of the resulting company.

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