Cambridge, MA-based Verastem has big names and big science on its side, which a lot of startups have, but now it’s doing something quite unconventional for a company that’s just 15 months old—it’s trying to go public.

Verastem, the company led by former Sirtris Pharmaceuticals CEO Christoph Westphal and founded on science from MIT luminaries Bob Weinberg and Eric Lander, most recently made news in July when it raised $32 million in venture capital. But today it looked to raise even more more, filing a prospectus for an initial public offering to raise as much as $50 million. The proposed deal is being underwritten by UBS, Leerink Swann, Lazard Capital Markets, Oppenheimer & Co., and Rodman & Renshaw.

Unlike most biotech companies seeking to go public, Verastem doesn’t have any drugs yet in clinical trials, which are easier for public investors to evaluate. Instead, the company’s IPO prospectus says it has drug discovery technology that seeks “to create a stable population of cancer stem cells to screen for and identify small molecule compounds that target cancer stem cells.” These cancer stem cells, sometimes called tumor-initiating cells, are thought to be one of the reasons why cancers often develop resistance to existing therapies and enable cancer cells to spread.

Scientists have long struggled to isolate enough of these elusive cells in the lab, and have found it difficult to keep them stable for experiments, and there has been great debate in academia about their ultimate value to cancer treatment. Verastem says it will seek to prove its concept with a lead drug known as VS-507, which targets breast cancer stem cells. The drug is still in preclinical studies, Verastem says.

What Verastem lacks in clinical proof, it makes up for with scientific and drug development experience. The company’s scientific advisory board includes George Daley of Children’s Hospital Boston; Nobel laureate Phil Sharp of MIT; Jose Baselga of Massachusetts General Hospital; Roger Tung, the CEO of Concert Pharmaceuticals; and Julian Adams, the president of Infinity Pharmaceuticals. Former Genzyme CEO Henri Termeer is on the board of directors.

Christoph Westphal is chairman and CEO of Verastem

Verastem has raised about $48 million in a pair of venture financings since it was founded in August 2010, and had burned through about $8.5 million of its cash through the end of September, according to the prospectus.

Several venture investors stand to quickly get some liquidity in their ownership stakes if Verastem can entice public investors to bite on an IPO. The biggest holders in Verastem, according to the filing, are Longwood Founders Fund, with a 15.5 percent stake; CHP of Princeton, NJ with 13.5 percent; MPM Bioventures with 13.2 percent; Bessemer Venture Partners with 12.9 percent; Eastern Capital Limited with 7.8 percent; and Advanced Technology Ventures with 5.1 percent. Westphal, 43, personally has 1.76 million shares of common stock in his name, or about a 3.4 percent ownership stake, according to the filing.

Verastem isn’t the only company going after cancer stem cells. Redwood City, CA-based OncoMed Pharmaceuticals has partnerships to develop drugs that go after cancer stem cells with Bayer and GlaxoSmithKline. The Verastem IPO filing also lists divisions of Astellas Pharma, Sanofi, and Glaxo as competitors.

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We didn’t bring you a life sciences roundup last Friday due to some time constraints, but some of the weeks’ headlines were too important to skip altogether. So here are two weeks worth of biotech profiles, partnership announcements, personnel moves, financing news, and more.

—The American Chemical Society awarded its highest honor, the Priestley Medal, to MIT bioengineering professor Bob Langer, in a rare move, as the award typically goes to chemists. The ACE cited Langer’s prolific laboratory and droves of patents, pending patents, and dozens of companies started as the reason he got the award.

—Cambridge, MA-based Vertex Pharmaceuticals paid $60 million upfront to license a couple of new hepatitis C drug candidates from South San Francisco-based Alios Biopharma that it hopes to make part of an entirely oral drug regimen for the disease. Vertex (NASDAQ: VRTX) could pay up to $715 million in development milestone payments over time, and potentially $750 million in sales milestones.

—Tal Medical launched to commercialize technology developed at Belmont, MA-based McLean Hospital that aims to treat depression using a specific type of magnetic field found in some MRI imaging machines. The company has about $800,000 in seed funding from PureTech Ventures and other investors, and an Eli Lilly veteran as its chief scientific officer.

—Former Genzyme CEO Henri Termeer took a spot on the board of Verastem, a startup aiming to develop treatments against cancer stem cells.

—My colleague Luke caught up with Weston, MA-based Biogen Idec (NASDAQ: BIIB) CEO George Scangos in the biotech’s temporary office space in Kendall Square. Biogen is eyeing a move of its headquarters back into Cambridge to be closer to R&D operations there.

—Our New York editor Arlene wrote a profile on Constellation Pharmaceuticals, the Cambridge-based epigenetics startup that earlier this month announced it had raised another $15 million in its Series B venture financing—bringing … Next Page »

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Lexington, MA-based Concert Pharmaceuticals announced today that it has moved three novel drug candidates forward in its pipeline—one of which earned it a $4 million milestone payment from GlaxoSmithKline (NYSE: GSK). The European drug giant allied with Concert on an HIV program in 2009, and the molecule, called CTP-298, is now the lead compound in that program.

Glaxo has pledged up to $1 billion in equity and milestone payments to Concert based on the success of its program, which centers on making longer-acting versions of approved HIV treatments by swapping out certain hydrogen atoms in drugs with deuterium atoms. With this last milestone payment, Concert has reaped a total of $50 million from the deal so far.

Concert’s goal is to use its deuterium platform to modify atazanavir, one of the most widely used HIV treatments, which is in the drug class known as protease inhibitors. Currently, atazanavir is commonly given with a boosting agent called ritonavir, which prevents it from getting destroyed by enzymes in the body before it has a chance to be effective. Eliminating the need for ritonavir would simplify the HIV regimen for patients—a big selling point, says Concert CEO Roger Tung.

“Ritonavir is one more pill to remember,” Tung says. “And it’s not a totally benign agent. It causes some patients to get nauseous and it has cardiovascular risk factors. Our goal is to create a drug that can be dosed once a day, without a boosting agent.”

Originally, Concert and Glaxo were counting on a different molecule, CTP-518, to be the lead contender in the HIV program. But CTP-298 “stood out as being preferable” in early human trials, Tung says.

What’s more, Tung says, CTP-298 has the potential to be useful in combination with Glaxo’s experimental treatment called GSK-572, which is an integrase inhibitor that’s now in Phase 3 trials. “Our eventual goal is to have a fixed-dose combo,” Tung says. He adds that Concert and Glaxo have been inspired by the success … Next Page »

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The Boston biotech scene was abuzz about a year ago when news broke about three of the most influential figures in the sector—Rich Aldrich, Michelle Dipp, and Christoph Westphal—joining forces to form a new venture capital firm called Longwood Founders Fund. Yet this power trio has been mostly mum about what they are doing with the new fund, until I gathered more insight this week from Aldrich.

Last week Boston-based Longwood revealed that the London-based drug giant GlaxoSmithKline (NYSE:GSK) and Cambridge, MA-based Genzyme (NASDAQ:GENZ) helped the firm raise its first fund, which ultimately was worth $86.9 million, according to an SEC filing. This was the firm’s first announcement about its own fund-raising activities, even though its partners had been pretty vocal about its investments in Cambridge, MA-based biotech startups Alnara Pharmaceuticals and Verastem at different points last year.

Aldrich, who became a biotech industry star earlier in his career as the head dealmaker for Cambridge, MA-based Vertex Pharmaceuticals, has more recently allied himself with Dipp and Westphal on several biotech ventures. The biggie was Sirtris Pharmaceuticals, the Cambridge, MA-based developer of drugs for diseases of aging, which they sold to Glaxo for a sizable $720 million in 2008. Expectations are likely high among investors in Longwood that Aldrich and his partners can deliver more big wins. Impressively, the venture firm has already received returns from its investment in Alnara, which Eli Lilly (NYSE:LLY) agreed to buy the startup for $180 million in cash upfront and up to $200 million in earn-outs in July 2010.

Still, I had some questions for Longwood and its partners. For one, $87 million doesn’t sound like much money for a venture fund, and I wondered whether that total was below expectations. Aldrich provided some insights on that as well as what the fund means for Dipp and Westphal, both of whom appear to still have active executive roles at Glaxo—Dipp as senior vice president of Glaxo’s Center for Excellence in External Drug Discovery and Westphal as president of SR One, a venture arm of the drugmaker.

Xconomy: What is your strategy going to be for investing in biotech?

Rich Aldrich: Our strategy will essentially be a … Next Page »

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Careers can be made in the drug development business on a single drug like telaprevir, the hepatitis C treatment from Vertex Pharmaceuticals (NASDAQ:VRTX). If it gets approved, the drug has the potential to become a leading treatment for the chronic liver disease—and to make a multibillion-dollar fortune for Cambridge, MA-based Vertex—within the next few years.

So it’s a bit of shocker to people when they find out that the pharmaceutical powerhouse Eli Lilly (NYSE:LLY), which collaborated with Vertex to discover telaprevir, gave away almost its entire stake in the drug back in December 2002. Indianapolis-based Lilly began working with the smaller Vertex to discover drugs for hepatitis C virus in 1997, and telaprevir emerged as the two companies’ lead compound in the program in 2001.

Jump ahead to this spring. Vertex, which has West Coast operations in San Diego, reported in May that telaprevir passed a pivotal test, curing three out of four patients with the disease in a Phase III clinical trial, a major hurdle in its bid to gain FDA approval of the drug. The drug, known as a protease inhibitor, is considered by some a breakthrough because it has shown that it can cure patients at the twice the rate of existing therapies. Company executives say they hope to garner permission to begin sales of the drug in 2011.

While those results have helped Vertex build up a $7 billion market capitalization, hardly anybody remembers who could have been its early collaborator. Lilly played a key part in developing and funding early research of the drug, which analysts now project could become a $2 billion annual seller in the U.S. alone within two years of its potential launch. It’s a decision that Lilly has to regret, given that telaprevir’s potential has made Vertex the third most valuable biotech company based in Massachusetts, behind only Genzyme (NASDAQ:GENZ) and Biogen Idec (NASDAQ:BIIB).

“Telaprevir would not exist if Lilly hadn’t been … Next Page »

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This week we ran several meaty profiles spotlighting strategies of New England biotech companies powered by some big life sciences players.

—Lebanon, NH-based Adimab struck a research deal with Novartis, in which the startup will use its technology to discover antibodies that could potentially be used in drugs against two undisclosed diseases that Novartis chooses to target. Financial details of the deal weren’t released, but the announcement adds to Adimab’s arsenal of big drugmaker partners, which also include Merck, Roche, and Pfizer.

—Ryan took a look at Lexington, MA-based Synta’s moves to regain its footing after it halted a clinical trial for its drug for treating skin cancer in 2009, causing its stock value to fall more than 80 percent in a day. The company’s CEO sees promise in its mid-stage cancer drug, STA-9090, as well as the several years’ worth of cash it still has in the bank, Ryan wrote.

—Sylvia used her column this week to spotlight her conversation with Jeffrey Shuren, who leads the FDA’s Center for Devices and Radiological Health, and discussed subjects such as the agency’s moves to balance medical device safety with efficacy and a controversial new approval program.

—Life sciences entrepreneur and Boston University engineering professor Franco Cerrina was found dead in a lab at the school’s Photonics Center on Monday morning. The cause of death is not known, though police are not treating it as a criminal matter, according to the university. Cerrina co-founded five companies, including NimbleGen Systems, a Madison, WI-based developer of DNA microarray technology that sold to Swiss drug giant Roche for $272.5 million in 2007.

—Metamark Genetics, a Naples, FL-based startup in the process of relocating to Cambridge, grabbed a $22 million Series B funding round. The company is developing diagnostics to identify genetic markers and other indicators of tumor progression, using technology from the research lab of Harvard Medical School dermatology professor Lynda Chin.

—Concert Pharmaceuticals, a developer of technology to make drugs safer and longer lasting, inked a deal last year with GlaxoSmithKline that could have a payoff in the neighborhood of $1 billion. CEO Roger Tung talked to Ryan about how the company is exploring new ways to generate human data on its compounds, to nab as much of the potential $1 billion as possible.

—Ryan wrote about Tempero Pharmaceuticals, a biotech startup founded and funded by GlaxoSmithKline, and its work in a new slice of immunology research that’s exploring the forces behind autoimmune diseases such as multiple sclerosis. The company’s roster includes three top Harvard immunology experts as scientific co-founders, as well as Alnylam Pharmaceuticals CEO John Maraganore and life sciences investor Rich Aldrich as independent directors.

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Concert Pharmaceuticals climbed the charts of the Boston area’s hottest biotechs last year when it revealed an incentive-laden deal with the drug giant GlaxoSmithKline potentially worth more than $1 billion. Roger Tung, the CEO of Concert, met with me last week at the biotech startup’s Lexington, MA, headquarters and talked about the work his firm is doing to earn as much of that $1 billion from London-based Glaxo (NYSE:GSK) as it can.

Tung is a top drug chemist. He invented Concert’s core technology, which the firm has used to swap certain hydrogen atoms in approved drugs with deuterium atoms to make the drugs potentially last longer and be safer without changing the way they combat diseases. And while he was an executive at Cambridge, MA-based Vertex Pharmaceuticals (NASDAQ:VRTX), he helped invent the technology used to create telaprevir, Vertex’s experimental hepatitis C drug that many believe could become a blockbuster product.

Concert, founded in 2006, has reached a point where it needs to generate additional data on how its drugs impact humans. Tung says that the Big Pharma players tell his firm that they are more interested in clinical assets—meaning drugs that have entered human trials—than in broad technology platforms like deuterium chemistry alone. The challenge there for Concert is that Glaxo has locked up most of the startup’s lead compounds (though none of those in the Glaxo deal have advanced beyond Phase I). And potential partners haven’t been as interested in Concert’s Phase I compound called CTP-347, the only clinical asset in its pipeline that isn’t part of the Glaxo deal, as its other product candidates, Tung says.

So Concert is working on a new strategy to generate more human data on its experimental compounds. “One of the things that is a significant initiative for us is that we think there may be ways of accelerating getting initial human data with our compounds, perhaps in a … Next Page »

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Boston is probably the best place in the world to start a biotech company today, and, yes, I’ve been studying the San Francisco Bay Area a lot lately, as the Globe’s Scott Kirsner reported last week. Strong as Boston may be, the biotech industry still has a lot of systemic issues to deal with, like the rising cost of drug development, the abysmal success rate of clinical trials, and excessive hype that has turned a lot of friends on Wall Street into cynics over the years.

How can New England entrepreneurs navigate this minefield to create a more vibrant life sciences scene for years to come? We are gathering some of the savviest—and most successful—biotech players around to discuss that theme at the annual Xconomy Summit on Innovation, Technology & Entrepreneurship (XSITE) on June 17th at Babson College.

Biotech will take the center stage early in the day, in a keynote chat featuring the leaders of two billion-dollar publicly traded biotech companies—Alkermes CEO Richard Pops and Ironwood Pharmaceuticals CEO Peter Hecht.

Pops seems to be everywhere you look in biotech. He’s been at the helm of Waltham, MA-based Alkermes (NASDAQ: ALKS) for almost two decades, he’s on the board of the Biotechnology Industry Organization, and he advises a couple of hot local startups in Acceleron Pharma and Epizyme. The guy knows how to distill his observations into a colorful phrase. He’s even bold enough to have started a Twitter account (@popsalks) when it gave his corporate lawyers the shivers.

I haven’t yet found Hecht microblogging his thoughts anywhere, but he couldn’t even if he wanted to for a few months when he was in an SEC-mandated quiet period. All eyes in biotech were on him earlier this year when Cambridge, MA-based Ironwood (NASDAQ: IRWD) pulled off an IPO that established an initial market valuation of $1.1 billion. This wasn’t as high as the company forecasted, and the stock has traded down a bit since the IPO on February 3. But if you listen to Hecht, the IPO isn’t just some deal that will enable him to cash out, it’s just a step in a journey of building a great company.

The conversation between these two biotech leaders will be moderated by Jean-Francois Formela, a partner at Atlas Venture in Boston, and an astute observer of the world of life sciences startups. Formela, a partner with Atlas since 1993, has been involved in starting a number of successful biotech companies—Adnexus Therapeutics, ArQule, and Exelixis, for starters.

Richard Pops

Later in the afternoon, we’re planning to convene a breakout session titled “When One Product Won’t Cut it: The Return of Biotech Platforms.” This panel will include CEOs at companies that are built on the idea of an enabling technology that can act like an engine for producing a variety of products, not just a one-hit wonder.

“Platforms” were in style during the genomics boom of a decade ago, until investors realized most of these were really dressed-up science experiments that were a long way from generating valuable products, if they ever would. In response, the idea of in-licensing safer “late-stage product candidates” took hold for a while. But after a lot of boring, ho-hum returns, a lot of venture investors, particularly in New England, again are yearning for the home-run potential offered by an enabling platform technology.

Peter Hecht

The panel we’ve gathered to talk about the return of platforms includes Katrine Bosley of Avila Therapeutics, Roger Tung of Concert Pharmaceuticals, Dan Junius of ImmunoGen, and Julie Olson of Mersana Therapeutics. This conversation will be moderated by one of Big Pharma’s top local biotech scouts—Michelle Dipp, the vice president and head of the US Center for Excellence in External Drug Discovery at GlaxoSmithKline.

Now’s the part where you come in. We do not plan to just let these people sit up front and blah-blah from some script written by a committee. I am personally flying in from my home in Seattle to help you pose a few sharp inquiries of your own to these distinguished speakers.

Michelle Dipp

So come ready to think big about the long-term future for Boston biotech. Be sure to stick around for some refreshments and networking afterward to keep the conversation going. And if you’re a regular reader, new to Xconomy, or an entrepreneur with a great idea, I’d love to hear from you personally about what more we can do through our journalism and events to provide the connective tissue that the regional innovation community needs to thrive.

If you haven’t seen the full agenda for XSITE, here’s where you can take a look. If you have registered yet, here’s the place to buy a ticket. See you on the 17th.

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[Updated: 1 pm, 11/26/11] Vertex Pharmaceuticals was a pretty audacious place, even by biotech standards, when it was founded twenty years ago. It started when a senior chemist from Merck, Joshua Boger, quit that job and assembled a small band of chemists that aimed to beat the Big Pharma companies at their own game of making small-molecule drugs.

That grand ambition still hasn’t been fulfilled, but Vertex has certainly come a long way. Boger handed over the reins last year to a new CEO whose mission is to to transform Vertex into a big, stable, profitable anchor for biotech in Boston for years to come. Vertex (NASDAQ: VRTX) now has more than 1,100 employees in Massachusetts and 1,400 worldwide, a stock market capitalization of almost $8 billion, and a hepatitis C drug in the final phase of clinical trials that could become the elusive billion-dollar molecule. (The quest for such a drug was famously described in a 1994 book.)

While the early days of swagger, clashing egos, and intense late night lab sessions are in the past, quite a few people shaped by that experience have spread through Boston biotech. Many are still pursuing their own big dreams.

“Vertex attracted people who liked fresh ideas, and high-profile situations, and that weren’t afraid of risk,” says Roger Tung, an early chemist at Vertex who is now CEO of Lexington, MA-based Concert Pharmaceuticals.

Now as Vertex graduates from its development phase into a more mature, integrated commercial enterprise, it is also starting to take on some sure signs of age and experience. One of those is a growing network of alumni, like Tung, who gained valuable experience they took with them. I sought to track down many of them to get a better sense of the impact the Vertex network is having today.

The list includes 35 names at last count, and I expect it to grow over time. Thanks to Tung, Aldrich of RA Capital, Justine Koenigsberg of Concert Pharmaceuticals, and Kathryn Morris of The Yates Network for their help getting the ball rolling.

Now I’d like to ask you for some help. If you see any information below that’s out of date or incorrect, please let me know and I’ll fix it. If you are an alumnus yourself and would like to be added to the list, please send me a note or leave a comment at the bottom of the story. If you have any other questions, comments, or new information, ping me at ltimmerman@xconomy.com or editors@xconomy.com.

Rich Aldrich, co-founder RA Capital Management, chairman of the board, Concert Pharmaceuticals

Eva-Lotta Allan, chief business officer, Ablynx

David Armistead, executive-in-residence, Oxford Bioscience Partners … Next Page »

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From the moment GlaxoSmithKline acquired Cambridge, MA-based Sirtris Pharmaceuticals about two years ago for $720 million, the pharma giant said it wanted two of Sirtris’ principals, Christoph Westphal and Michelle Dipp, to help it connect with some of the best people and biotech ideas in Boston. That’s still true today, although the specific roles for Dipp and Westphal are shifting in a couple important ways.

Yesterday Xconomy broke the news that Westphal is ending his six-year tenure as CEO of Sirtris, the Cambridge, MA-based developer of drugs for diseases of aging, to take the helm at Glaxo’s venture capital firm, SR One. Yet Westphal is also resigning from his job as senior vice president of Glaxo’s Center of Excellence for External Drug Discovery (CEEDD). Dipp is now being promoted to take on that big job, which involves identifying and managing partnerships with biotechs who can help fill up Glaxo’s drug pipeline. Dipp, who had been the U.S. head of the center serving as a deputy to Westphal, is now in charge of the center’s U.S. and U.K. operations, as Westphal had been.

If you’re older than 30 and still living at home, don’t read the rest of this story. Dipp, who is in Theo Epstein-wunderkind territory at the age of 33, is now the youngest senior vice president at one of the the top 10 largest pharmaceutical companies in the world. She’s in charge of the external drug discovery unit that Glaxo created in 2005.The Glaxo business unit has gained more influence over biotech companies in recent years because of the limited availability of venture capital for young startups, making the cash the young firms can bring in from option-based deals with drug companies a viable way to stay afloat. A good example of one of these deals is the partnership Glaxo formed last year with Lexington, MA-based Concert Pharmaceuticals. Dipp says her group oversees about a dozen such partnerships in all.

Dipp, who has an MD and a PhD in pulmonary physiology from the University of Oxford, found her way into the business side of biotech quickly. She struck an important deal early in her career by becoming an early investor in Sirtris while she was a member of the investment team at the Wellcome Trust, a London-based nonprofit that is the world’s second-biggest funder of medical research. At the Wellcome Trust, she got to know Westphal, who recruited her to join then Sirtris as one of its founding employees in 2005.

But Dipp and Westphal have more on their plate than just what they are doing at GlaxoSmithKline. They, along with fellow Sirtris co-founder Rich Aldrich, are launching … Next Page »

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Christoph Westphal is leaving his CEO job at Sirtris Pharmaceuticals, the Cambridge, MA-based developer of drugs that target genes linked to the aging process, to get back into the venture capital game, according to an e-mail Westphal sent to friends and colleagues as well as Xconomy.

Westphal says in his note that he is taking over as head of SR One, Glaxo’s venture capital arm. He’s also working with fellow Sirtris alumni Michelle Dipp and Rich Aldrich on a new Boston venture firm, Longwood Founders Fund, according to the note. (Last week the Boston Globe reported that Glaxo is backing Longwood Founders Fund, which appeared on our radar back in February.)

Still, Westphal isn’t relinquishing all of his ties to Sirtris, which Glaxo bought in May 2008 for more than $700 million. He is going to be keeping a close eye on the advancement of Sirtris’s drugs for diseases of aging as co-chair of the Sirtris scientific advisory board. George Vlasuk, who was named president of Sirtris last year and has been in charge of its day-to-day operations, will replace Westphal as the firm’s CEO, according to Westphal’s e-mail.

Westphal’s career move could be viewed as a return to his roots in the life sciences industry. He first joined Sirtris as a co-founder and interim CEO in 2004, while he was a general partner at Polaris Venture Partners in Waltham, MA. (He eventually left Polaris to lead Sirtris full-time.) During his days as a venture capitalist at Polaris, he was a founder of other high-profile biotech firms in the Boston area such as Alnylam Pharmaceuticals (NASDAQ:ALNY), Momenta Pharmaceuticals (NASDAQ:MNTA), and Acceleron Pharma.

Glaxo is now giving Westphal the keys to its own corporate venture fund, at a moment of big change at SR One. Westphal is becoming president of the fund, taking over the responsibilities previously held by Russell Greig, a 30-year Glaxo veteran. Greig left SR One last month, according to this report by the In Vivo Blog. That departure created an opening at the exact moment when corporate VC arms are gaining prominence as traditional venture firms falter, In Vivo noted.

The SR One position can be one of the plum jobs in biotech venture investing. According to the SR One website, the firm operates as an independent unit of GSK and has invested $600 million since 1985. The fund invests in companies all over the world, and some of its portfolio companies in the Boston area include Aileron Therapeutics, Genocea Biosciences, and Concert Pharmaceuticals.

[Disclosure: Xconomy's brand new life sciences columnist, Sylvia Pagán Westphal, is married to Christoph Westphal. Sylvia had no involvement in this story, we swear!]

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Sometimes a company only raises a small sum of money, but it attracts our attention because it involves interesting people and a potentially big idea. That was true last week when I profiled Avelas Biosciences, the latest startup from UCSD Nobel laureate Roger Tsien, and it’s true this week of another small company in San Diego—Amplyx Pharmaceuticals.

Amplyx appeared on our radar a couple weeks ago when it raised $1.5 million from Golden Seeds, a national angel group that invests in companies led by women, with additional support from Life Science Angels and Tech Coast Angels. The CEO is Elaine Heron, the former CEO of LabCyte, a sales and marketing veteran at Applied Biosystems, and a board member at Novato, CA-based BioMarin Pharmaceuticals (NASDAQ: BMRN). Another prominent businesswoman, Mary Lake Polan of Stanford University School of Medicine, and a former director of Wyeth, joined Amplyx as a board observer.

This company is still in its early days, but the idea is a big one—take an existing small molecule that has been shown to be active against a certain disease like HIV, and improve it in a critically important way. About half of all drugs on the market today have some kind of Achilles heel—maybe it isn’t absorbed well enough, doesn’t get wide enough distribution in various tissues, gets metabolized too quickly to be truly effective, or isn’t excreted in an ideal way. Amplyx, through a trick of chemistry, attaches a small organic linker to the existing drug to create a new molecule with whatever new property is desired. The new drug ought to be safe, and, importantly, it is a new entity that can be patented, Heron says.

Elaine Heron

None of this work has yet advanced into clinical trials, so we have no way of knowing whether this will work in human beings. But one way of reducing the immense risks of drug development is by starting with an established drug that has already cleared the FDA’s safety hurdles.

“I think this is going to work,” Heron says. “I’ve seen a lot of drug development platforms, and I’ve been selling to people in the space for a long time. This made sense to me.”

Of course, there are some men in key roles at this company, too. I spoke to Heron along with Amplyx’s co-founder and chief scientific officer Mitchell Mutz. The Amplyx technology has its origins with work done by Mutz and a pair of pathologists—Gerald Crabtree of Stanford University and Jason Gestwicki of the University of Michigan.

Amplyx’s lead project, as hinted above, is to create a better drug for HIV. There are some very effective protease inhibitor drugs on the market that have made HIV a chronic disease for many people in the U.S. But one of the drawbacks is that such drugs don’t last long enough in the bloodstream, and need to be taken in combination with a booster compound from Abbott Laboratories called ritonavir. That extra drug adds cost, complexity, and can cause some nausea.

If Amplyx has done its early chemistry correctly, it may be able to help patients ditch the ritonavir. The scientists have modified a protease inhibitor drug so that … Next Page »

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The people who built Cambridge, MA-based Sirtris Pharmaceuticals on the idea of treating diseases of aging, and sold it to GlaxoSmithKline for more than $700 million two years ago, are apparently busy building a new venture capital fund.

Christoph Westphal, Michelle Dipp, and Rich Aldrich are listed as co-managers of Longwood Founders Fund, on a regulatory filing dated yesterday. The filing lists an office in Boston at the financial planning firm of JDJ Resources, as the venture capital fund’s address. The fund has raised $50.7 million so far, from 24 undisclosed investors. The news was first reported by Mass High Tech.

Dipp called to say she couldn’t comment at this point because Longwood is in the midst of ongoing fundraising, and is bound by an SEC mandated quiet period. But given their track records, whatever this fund aims to accomplish will certainly be of interest to the life sciences industry in Boston and beyond. Westphal currently has the dual role of CEO of Sirtris and senior vice president of Glaxo’s Center of Excellence in External Drug Discovery. Before that he co-founded Alnylam Pharmaceuticals, Momenta Pharmaceuticals, Acceleron Pharma, and Concert Pharmaceuticals, and was a general partner at Polaris Venture Partners. Aldrich is a co-founder of Vertex Pharmaceuticals, and a Boston hedge fund, RA Capital. Dipp, on her LinkedIn page, says that her Sirtris experience ended in 2009, and that she remains vice president and head of the Center of Excellence for External Drug Discovery at Glaxo.

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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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