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

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

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

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

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

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

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

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In 2004, I was an enthusiastic postdoctoral researcher in Eric Lander’s lab at the Broad Institute, with the job I had dreamed of since I was 10 years old. Growing up in Paducah, KY, I read Isaac Asimov’s The Genetic Code. And while I understood nothing of its meaning, I fell in love with the idea of being a human geneticist when I grew up.

I had a particular disease passion that had also been part of the plan since that time: autoimmune genetics. You see, I have a remarkable family. Nearly one-third of my relatives within 3 degrees have an autoimmune disorder. Even at my young age, I somehow knew those weren’t good odds. I knew that “things run in families” and that my family seemed to have autoimmunity in spades. You can imagine my surprise when 20 years afterwards, I realized I was, in fact, a human geneticist in the most renowned tank of genomic thinkers around studying autoimmune disease.

It was a thrilling time to be a geneticist. The human genome sequence was complete. The first thorough map of variation in the genome (single nucleotide polymorphisms or SNPs) was nearly complete. Unconstrained by data to the contrary, it felt like we were turning a corner to truly identify the variation that conferred risk to disease.

But in May of 2004, I began to get very nervous because of an unexpected result we found with one of the most talented teams of autoimmune geneticists in existence: the International Multiple Sclerosis Genetics Consortium. Parenthetically, these folks are absolutely who you want at the front lines of genomic inquiry. They are dogged, thoughtful, and careful about the research they do.

At that time, we were following up on one of the key variants that conferred risk to multiple sclerosis or MS: HLA-DRB1-0201 (or “DR2″). As background, about 40 percent of all patients with MS have the DR2 variation in their genome. By comparison, only 20 percent of the general population has this variant. When you run the statistics, it turns out that this is probably one of the strongest associations in all of autoimmune genetics. So it seemed very reasonable to all of us involved that if we gathered enough patients who had MS and looked separately at the patients with and without DR2, we would expect that we might uncover that there were two types of MS.

To imagine this hypothesis, I visualize genetic “skylines.” While MS may appear to be a “single” disease population based on clinical measures, we hypothesized that the disease resulted from two different genetic skylines. Our experiment was to determine whether … Next Page »

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As early stage biotech startups advance their drug candidates into pre-clinical development, many must decide at some point whether to start working with a big pharmaceutical or biotech partner to continue to pursue their program through clinical trials.

It’s no small decision, and a topic of increasing industry interest, especially since initial public offerings (IPOs) by life sciences companies have fared poorly in recent years, curtailing their ability to raise cash and develop new drugs on their own. Of the 12 biotechs that went public in 2011, for example, 10 raised substantially less cash than they wanted to, according to the BIO industry group.

The IPO class of 2010 also was schooled in terms of post-IPO performance, with shares in just four of the 12 biotechs trading higher at the end of 2011 than when the companies began trading. Small wonder, then, if Wall Street traders are asking, “Why buy biotech shares at the IPO when we can get them cheaper later?”

So joining forces with larger drug companies offers a wise alternative strategy, which was evident in a new conference that Biocom organized last year to focus on the nitty-gritty of biotech-pharma partnerships. (The Second Annual Global Life Science Partnering Conference convenes in San Diego on Feb. 1, with an agenda that includes VIP speakers from GlaxoSmithKline, Merck, Vertex, Novartis, Pfizer, Roche, and Bristol-Myers Squibb.)

Under the circumstances, you’d think these times would be ideal for partnership deals. After all, big pharmas are prospecting for new drug candidates outside their own R&D programs, and late-stage venture financing remains tenuous for today’s startups. But to borrow a pop psychology concept, pharmas and biotechs are from different planets. Startups are almost invariably motivated by a need for capital to advance their drug development program. Hooking up with a particular pharma may or may not align with their true strategic desires. Big pharmas, on the other hand, are looking to fill their pipeline with new products, but they have trust issues. The pharmas ask themselves, “Does that biotech want a true drug development partner, or just some tawdry substitute for venture financing?”

Of course, this isn’t something that happens on Match.com. The process of choosing the right partner and negotiating a … Next Page »

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After the stock market closed last night, New York-based Bristol-Myers Squibb (NYSE: BMY) announced that a cocktail containing two of its experimental drugs to treat hepatitis C obliterated the virus in some patients in a Phase 2 study. The results were so compelling the company used the “C” word in a press release, declaring, “This study was the first study to demonstrate the possibility that hepatitis C can be cured,” without interferon, which has to be injected and can cause side effects.

But the good news was quickly overshadowed by bad news from the FDA on another Bristol drug, dapagliflozin, which the company and its development partner, AstraZeneca (NYSE: AZN), had submitted for approval in Type 2 diabetes. At about 2 a.m., the companies announced that the FDA had issued a dreaded “complete response letter,” requesting additional data to help better assess the risk/benefit profile of the drug.

The FDA’s response was no surprise. In July, an advisory panel to the FDA voted nine-to-six against approving dapagliflozin. Although the agency doesn’t have to follow the recommendations of its advisory panels, it usually does. Dapagliflozin is part of a new class of drugs designed to inhibit SGLT2, a protein that promotes glucose absorption. The July assessment of Bristol’s drug was so harsh some Wall Street analysts declared the death of the entire SGLT2 class. In today’s statement, though, Bristol and AstraZeneca said they “remain committed to dapagliflozin and its development.”

Investors will be more likely to find something to cheer about in Bristol’s experimental hepatitis treatments, daclatasvir and asunaprevir. Both drugs target a subset of patients who have a particular genotype and who haven’t responded to the commonly used treatments interferon and ribavirin. With this recent study, the company reached its goal of proving that the combination would render the virus undetectable in some patients. A Phase 3 study of the dual treatment is now underway, meaning investors looking for some indication of how it works in a large patient population will have to wait a while.

Not surprisingly, Wall Street is focusing today on the bad news in diabetes. Shares of Bristol dipped about 1 percent to $33.42 in pre-market trading, and shares of AstraZeneca were down nearly 2 percent to $47.30.

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Today a new company called Warp Drive Bio is starting up in Cambridge, MA, with a simple and powerful premise: Mother Nature may be the best source of blockbuster drugs—if only we can find new methods for unlocking her secrets. Warp Drive’s plan is to use genomics technology incubated at Boston-based Third Rock Ventures to discover new “natural products,” which are therapies derived from plants, animals, and other wild organisms.

Warp Drive is being launched with $125 million in funding from Third Rock and French pharmaceutical giant Sanofi (NYSE: SNY). Greylock Partners also participated in the financing. Warp Drive was co-founded by Greg Verdine, a Harvard University chemical biologist and venture partner at Third Rock, along with Harvard University genomics expert George Church, and biolochemist James Wells of the University of California at San Francisco.

The startup’s business model is distinctive in that Warp Drive will remain fully independent. It will retain rights to many of the assets it develops, and even have the freedom to pursue other partnerships beyond its Sanofi alliance. The funding is tranched, and contingent upon Warp Drive reaching milestones in developing the technology and proving it works.

Perhaps what’s most unusual about the deal is that it’s set up to ensure that Sanofi will acquire Warp Drive if certain milestones are reached. “Sanofi doesn’t just have the option to buy, they have the obligation,” says Alexis Borisy, a Third Rock partner (pictured at right) who is serving as interim chief executive officer of Warp Drive. “That decreases the financing risk for Warp Drive, and it decreases the liquidity risk for the VCs. We’re not at the whim of the IPO market.”

Warp Drive refers to its core platform as a “genomic search engine.” The company’s ultimate goal is to develop the technology to the point where it will be able to comb through naturally derived substances—such as plants and soil—and sequence the genomes … Next Page »

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When New York hedge fund manager John Taylor co-founded Inspiration Biopharmaceuticals in 2004, his main goal was to help his son, who suffers from the blood-clotting disorder hemophilia. So he and co-founder Scott Martin—a Texan who also has a child with hemophilia—set up a virtual biotech company and began pursuing new treatments for the disease. They were a far-flung group: Their chief scientist, for example, was based in Laguna Niguel, CA. “When you’re 12 people in 18 different labs and universities, the lines of communication get difficult,” says Taylor, who is the CEO and founder of FX Concepts, a New York-based hedge fund and foreign exchange management company. “I used to joke that we were a biotech company with no running water.”

As of January 1, Inspiration has gone non-virtual, and yes, it has plenty of running water. The company has moved into its new home at One Kendall Square in Cambridge, MA, where it’s under the tutelage of former Genzyme executive John Butler, who became CEO of Inspiration in October. The company expects to expand its staff from 60 to 100 by the end of 2012 and to file for FDA approval of its lead hemophilia compound in the first half of the year. On December 22, Inspiration announced four new executives had joined the company, two of whom also came from Genzyme.

The access to so much biotech expertise was key for Inspiration, Taylor says. “Massachusetts is a spectacular place to be when you’re in the hemophilia business,” he says.

Inspiration’s lead compound, IB1001, is a form of “recombinant factor IX,” a bioengineered protein that helps blood to clot properly. It is not the only version of the protein to be developed: Pfizer (NYSE: PFE) markets factor IX under the brand name BeneFIX. But, says Inspiration CEO Butler, that product has sometimes been in short supply, and its cost can be prohibitive to … Next Page »

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Ever since Xconomy added New York to its stable of cities on April 1, we have found plenty of companies to write about that are making waves in tech, biotech, and cleantech. We’ve met tech entrepreneurs who’ve caught the fancy of New York’s thriving venture capital scene, and scientists in the bowels of Big Pharma laboring to invent the next blockbuster drugs. We’ve visited with CEOs in the rapidly growing biotech sector in and around NYC, and profiled so many new startup incubators we’ve lost count of them all.

To wrap up our first (partial) year in the Big Apple, we’re counting down the top 10 Xconomy topics, as measured by traffic. Why topics as opposed to stories? You’ll have to read all the way to the end to find out.

Our most popular topics of the year were….

10. Arno Therapeutics
Arno (OTCBB: ARNI), based in Parsippany, NJ, is what’s known as a “virtual biotech,” because it’s developing three drugs with just a handful of full-time employees who outsource almost every step of the research and development process. But it’s a mighty qualified handful—Arno is staffed by veterans of Johnson & Johnson, Pfizer, and Medimmune.

9. IncubateNYC
When New York’s leaders put out a request for proposals for a tech incubator in Harlem, entrepreneurs Marcus Mayo and Brian Shields responded with IncubateNYC, a multifaceted plan to bring technology startups to an area of the city that could use an economic revival.

8. BioLeap
The pharmaceutical industry is desperate for new technology to improve drug discovery. Pennington, NJ-based BioLeap believes it has a solution in a tech platform designed to predict how tightly experimental drugs will bind to their disease targets.

7. Lenddo
What do you get when you combine social media with financial services? Lenddo believes you get a great way to market small loans to the developing world’s emerging middle class.

6. Delcath
NYC-based medical device maker Delcath Systems (NASDAQ: DCTH) has endured endless hassles from the FDA over its drug-device combo to treat liver cancer, and investors have been bailing out … Next Page »

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The sale of Amira Pharmaceuticals will likely go down as one of the standout life sciences deals of 2011—it certainly ranks as one of the biggest payouts in San Diego, where Amira was founded in 2005.

But what may be more significant than hitting the bell in the strongman game at the biotech carnival is the way Amira approached the deal—and how the buyout has opened the way to an intriguing new business model for life sciences startups.

Luke already has explained how Amira beat the odds when New York’s Bristol-Myers Squibb (NYSE: BMY) agreed in July to pay $325 million in upfront cash, and another $150 million in anticipated milestone payments. It’s unusual these days when a big pharmaceutical writes a check that big for a six-year-old startup whose lead drug candidate has barely completed early stage trials.

Amira also kept some other drug candidates out of the deal. Some went to a new San Diego biotech called Panmira Pharmaceuticals, which is continuing the development work under CEO Hari Kumar, who was previously Amira’s chief business officer. Another important program, which was the focus of a partnership Amira had with GlaxoSmithKline (GSK), was spun into a new standalone company.

In other words, Amira worked to find a good home for every important drug in its pipeline. This doesn’t happen in many buyouts, as the acquiring pharmaceutical company is often interested in one or two drugs in development, and the rest get relegated to the “no more resources” pile.

Peppi Prasit

Since then, Amira co-founder (and San Diego Xconomist) Peppi Prasit has raised the curtain on another life sciences startup, Inception Sciences, which was conceived as a kind of mothership for spinning out new drugs. The idea was to create an incubator-type holding company that would enable Amira’s drug discovery group to hatch new drug development programs. Prasit, Jilly Evans, and John Hutchinson, who were the scientific founders of Amira, would lead the effort to identify new pathways as well as potential drug compounds for these new targets.

Under this new business model, each group of new drug candidates would be organized as a separate development program within different business entities. For venture firms, investing would be like ordering from the à la carte menu, giving investors an equity stake in a specific drug program—without the general and administrative baggage that typically goes with a biotech acquisition. As the drug candidates of each program advance to … Next Page »

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The standard marketing value equation taught in business school states value equals utility or benefits less costs. Because the relationship between the price of medicines and the value they deliver isn’t always clear, there are those who would argue that the established marketing value equation has not been universally applied by the pharmaceutical industry.

The relationship between value and price in medical treatments is changing in Europe and the United States. Up to now, economic evaluation of drugs in the European Union has been used primarily to determine whether or not to reimburse—not to determine price. Prices usually are set by the manufacturer, sometimes with some negotiation, or are based on international reference pricing. In the U.S., prices continue to be set by manufacturers.

Much of the impetus for change comes from mounting pressure to limit health care costs amid the global financial crisis. Another factor leading to change is the continued escalation in the cost of healthcare technology and new medicines. Value-based pricing—where the maximum price allowed for reimbursement of a drug is linked to the value that the drugs adds, over and above existing care—is here in a number of forms, from payer limits in the U.S. to new value-based pricing plans in two of Europe’s most-influential drug markets; the United Kingdom and Germany.

Drug prices in the U.K. and Germany are some of the most-referenced in the world, used by approximately 50 other countries. Germany is the largest drug market in Europe and the third-largest in the world, behind the U.S. and Japan. In the past, Germany and the U.K. had fairly “free” pricing, with limited controls. Reform legislation passed in both countries now puts the emphasis on establishing a “value-based price.” While there are some differences between the two new value-based pricing systems, in both Germany and the U.K., companies now will have to provide details of how they arrive at fair prices for their innovations, while also more clearly demonstrating the value to patients.

Effective this year, Germany now imposes price controls on newly licensed medicines tied to a preliminary assessment of the medicine’s benefits. The new rules require pharmaceutical companies to negotiate prices for new drugs with health insurers, severely limiting companies’ previous freedom to set prices. Germany had no previous pricing controls over new medicines, leading to some of the highest drug prices in the world.

If the new treatment has no extra therapeutic benefit, reimbursement will be set at a level no greater than the comparable medicine already on the market.

These new rules in Germany require a quick decision be made on each new drug’s value-based price, followed by post-launch research and/or negotiations, if needed. New products will enter the market at the company’s established price. Then, within three months, … Next Page »

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Cambridge, MA-based Cerulean Pharma announced today that it has raised $15 million in a Series D financing round, which included one new investor: CVF, an affiliate of Henry Crown and Company. Also participating in this round were existing investors Polaris Venture Partners, Venrock, Lilly Ventures, Lux Capital, and Bessemer Venture Partners.

Cerulean’s lead drug candidate, CRLX101, is a “nanoparticle”—a tiny chemical package designed to burrow its way into cancer cells and kill them. In July, the company began a new Phase 2 trial of the drug in non-small cell lung cancer. The company plans to release top-line results from that trial next year.

Cerulean says it will use the new money to support the completion of that trial, as well as several others that will take place at academic medical centers. The company also plans to expand its platform to other opportunities, including RNA-based therapeutics.

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At an R&D and business briefing meeting that Merck (NYSE: MRK) held for Wall Street analysts at its Whitehouse Station, NJ, headquarters in November, the drug giant generated quite a bit of buzz for a drug that’s still several years away from market. That’s because the drug, called MK-8931, may offer a completely new way to attack Alzheimer’s disease—one of the hottest and most challenging targets in drug development. “We think this is the molecule that will provide the best option for Alzheimer’s patients,” declared Peter Kim, president of Merck Research Laboratories, during a Q&A with analysts towards the end of the meeting. It was a bold statement, considering the fact that the drug has so far only been tested in healthy volunteers.

But the results seen in that one small trial were enough to persuade Merck’s scientists to forge ahead and test MK-8931 in Alzheimer’s patients. The drug targets an enzyme known as BACE (beta-site APP cleaving enzyme), which generates proteins that in turn lead to the formation of amyloid plaques—the brain deposits thought to cause the cognitive impairments that are the hallmark of Alzheimer’s. In the trial, a once-daily dose of MK-8931 taken by mouth lowered levels of the amyloid-forming protein by more than 90 percent, with no significant side effects.

Scientists at universities and drug companies around the world have spent much of the last decade trying different methods for blocking BACE—to little avail. When Merck bought Schering-Plough in 2009, the two companies merged their BACE efforts, embarking on a multifaceted plan that resulted in MK-8931 and several back-up compounds. It was no small feat, Kim said during the R&D briefing. “If you look at what our chemists had to do, it’s an unbelievably impressive story,” he said.

During a recent phone interview with Xconomy, one of the scientists who managed Merck’s BACE program provided a taste of the hurdles the team faced, and the technology they used to come up with new approaches to targeting BACE. Eric Parker, senior director and neuroscience site lead for Merck, says the basic challenge lies in the very structure of BACE. The enzyme is so complex, he says, “you need a large molecule to make many different points of contact with it.” With any drug, he adds, “it’s difficult to make it stick—to make it bind with high affinity for the enzyme.”

One problem with large molecules, Parker says, is that it’s difficult to make them into pills that can travel through the stomach without getting destroyed. What’s more, large molecules can’t easily cross the blood-brain barrier or … Next Page »

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[Updated 12/12/11 11:20 am to clarify terms for startups. See below.] After spending much of her career in the tech sector, Melinda Richter has been pondering a provocative question for the life sciences industry.

“Billionaires are a dime a dozen in tech,” she says, “but it’s hard to find an entrepreneur in the life sciences who is a billionaire. I can’t think of a single small biotech company CEO who became a billionaire.”

Richter says she founded San Francisco-based Prescience International at least partly with the hope of addressing such inequities. Prescience helps start and manage life sciences incubators, institutes, and other research centers.

Melinda Richter

Mostly, though, Richter says she wants to make it possible for life sciences entrepreneurs to take advantage of the sort of low operating costs that make it so easy for a handful of tech entrepreneurs to start a Web 2.0 company with a few hundred thousand bucks. It’s that kind of minimal capital requirement that can enable biotech entrepreneurs to prove their concept, giving them something more than a business plan when they seek venture funding. The low-cost model might even help entrepreneurs hold onto a bigger ownership stake in their startups.

“You look at these IT companies,” she says. “You give a couple of guys a couple hundred thousand, and after a couple of months they’ve got a new iPhone app and they’re ready for business. But it’s not curing cancer or HIV.”

So Richter was on the ground floor, so to speak, as executive director when the San Jose Redevelopment Agency spent $6.5 million to start the San Jose BioCenter, a life sciences incubator that opened in 2004. The BioCenter officially hired Prescience to manage the facility in 2005, and Prescience took over management of a cleantech incubator, the San Jose Environmental Business Cluster, in 2009.

Now Prescience is in San Diego. Johnson & Johnson has hired Richter’s firm to manage the incubator it has been creating at its San Diego R&D facility, now known as the Janssen Labs at San Diego. Under a plan unveiled in October, J&J plans to host 18 to 20 startups at its new innovation center, which has various size wet labs and offices for individual companies, and common areas for shared use. Janssen Labs has emphasized that space in its innovation center comes with no strings attached. The startups that enroll will not be required to give up an equity stake or intellectual property rights. They simply have to pay a monthly fee under a 90-day lease agreement.

When we met recently, Richter told me she got into the business partly for personal reasons.

After graduating from the University of Saskatchewan (she is a Canadian), Richter joined Nortel Networks, where she says she spent more than eight years on a fast-track executive program that took her to corporate posts in the United States, Europe (she got her MBA in France), Latin America, and China.

While in China, however, Richter had what you might call a life-altering experience. She says she got very sick and was … Next Page »

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San Diego’s Lpath (OTC: LPTN), a biotech developing specialized monoclonal antibodies for cancer and other diseases, intends to raise about $10 million through a secondary offering of stock and warrants, according to a recent regulatory filing.

The company is working to advance two related drug candidates within an emerging field of medical science that targets bioactive signaling lipids, and could be used to treat a wide range of human diseases. One is a specialized formulation of the humanized monoclonal antibody sonepcizumab, which has shown promise in treating the wet form of age-related macular degeneration and other types of eye disease. The other drug candidate is a systemic formulation of sonepcizumab that Lpath was developing with Merck Serono as a potential late-stage cancer therapeutic. A third related drug candidate is in pre-clinical development.

Lpath and Merck ended their partnership in mid-2010, and Lpath says Merck has relinquished all rights to the drug. The biotech began working with Pfizer on the compound for diseases of the eye in early 2010, and Lpath later granted Pfizer a time-limited right of first refusal for its cancer drug candidate.

Lpath says it has financed its operations mostly through the private placement of equity and debt securities, and funding from corporate partners pursuant to research and development collaboration agreements. The company says it intends to use the net proceeds of the $10 million offering for general corporate purposes.

At the end of September, Lpath had an accumulated deficit of just over $36 million. The company says its costs for continuing research and development, including general operations, should be about $20 million to $30 million through the end of next year.

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Watertown, MA-based EnVivo Pharmaceuticals presented results from a Phase 2b study of its schizophrenia compound, EVP-6124, today at the American College of Neuropsychopharmacology meeting in Hawaii. The drug demonstrated statistically significant improvements in cognitive function—the study’s main endpoint—the company said in a statement. Improvements were also observed in so-called negative symptoms of the disease—the inability to experience pleasure , to carry on normal social interactions, and so forth.

EVP-6124 is in a class of drugs known as alpha-7 nicotinic agonists. It was inspired by data showing that nicotine enhances cognitive functions such as learning, memory, and retention by activating certain receptors in the brain. EVP-6124 is EnVivo’s lead compound, and the company is also testing the drug in Alzheimer’s disease.

EnVivo was founded in 2001 and is funded by Fidelity Biosciences.

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Last year’s blockbuster film “Inception,” was about a dream within a dream within a dream, which made it a little hard to follow.

Likewise with “Inception,” the San Diego life sciences startup that was founded earlier this year by Versant Ventures’ Brad Bolzon and Peppi Prasit, the former co-founder and chief scientific officer at San Diego’s Amira Biosciences. With Inception, the founders apparently have set out to duplicate their success at Amira, which was acquired in July by Bristol-Myers Squibb in a deal valued at $475 million.

But it can get a little hard to follow.

As we reported this summer, “Inception 1″ disclosed in a regulatory filing that it had raised $5 million in an initial round of funding that targeted $10 million. At that time, Prasit (who is also a San Diego Xconomist) responded to my request for more details with a short e-mail: “It’s an incubator for ideas right now. I would like to keep it stealth for a little while.”

Now, according to another regulatory filing completed before Thanksgiving, “Inception 2,” a different entity created by Bolzon and Prasit, says it also has raised $5 million of a planned $10 million round.

Versant’s Bolzon told VentureWire reporter Brian Gormley a few months ago that the startup officially known as Inception Sciences is intended to serve as a holding company for spinning out individual drug development programs as separate corporate entities. The idea represents a new life sciences business model that makes it easier for Big Pharma companies to acquire a set of potential drug compounds without the “non-strategic assets” that come with a biotech acquisition.

Hmmmm. Since these would not be conventional M&A deals, would this business model also dispense with the need to involve investment bankers in an acquisition?

Another advantage to Inception Sciences’ model is that it allows investors to provide funding “a la carte” into specific drug development programs, according to Alex Lash of The In Vivo Blog. Lash also says it provides a way to provide investors a return on their capital without selling the underlying science, which would remain with the holding company.

VentureWire says Versant provided seed funding for Inception 1 to discover drugs for treating neurodegenerative diseases. Inception 2 is focusing on metabolically targeted drugs designed to cut off a tumor’s fuel supply.

The holding company, which has 25 employees, anticipates forming Inception 3 in mid-2012 or early 2013.

I sent Prasit another query about Inception this morning, with no response yet. But I’m still hoping.

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New Haven, CT-based Rib-X Pharmaceuticals announced today that it has filed a registration statement with the SEC for an initial public offering. The company, which is developing antibiotics, has yet to determine the number of shares it will offer or the price range. Deutsche Bank Securities will manage the offering, with assistance from William Blair & Company, Lazard Capital Markets, and Needham & Company.

Rib-X developed a drug-discovery platform based around an atomic, three-dimensional picture of the interactions between drug candidates and the bacteria they are targeting. The company has two antibiotics in clinical trials, one to treat skin infections and the other to treat drug-resistant infections. It has also partnered with French drug giant Sanofi to develop a new class of antibiotics—a deal that could be worth as much as $772 million to Rib-X.

Since its inception in October 2000, Rib-X has raised a total of $208.4 million in private funding. Its investors include Warburg Pincus, MedImmune Ventures, and Oxford Bioscience Partners.

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Yesterday’s announcement by Scale Venture Partners that it will make no new investments in healthcare companies may not have come as a huge surprise to some insiders. Kate Mitchell, a founder and managing director at the firm, says ScaleVP has been pondering the shift for two or three years, and that it effectively stopped investing in the life sciences a while ago. “It was known to people who know us,” Mitchell says. But now that the shift is public, she says, the firm and its life sciences partners Lou Bock and Mark Brooks will have an easier time taking part in discussions about what ails the biotech industry.

The ailments are many, but if they had a single name, it would be the Food and Drug Administration, in Mitchell’s view. When I reached her by phone yesterday and asked her to elaborate on yesterday’s announcement, Mitchell returned over and over to what she called the FDA’s “capriciousness” when it comes to reviewing clinical trial results. In the post-Vioxx years, she says, the FDA’s approval process for new drugs has grown so drawn-out and unpredictable that ScaleVP can no longer, in good conscience, ask its limited partners to risk new money on drug development deals. (She says the company will fully back the healthcare firms already in its portfolio, however.)

ScaleVP’s announcement did not go unnoticed in Washington. Mitchell (an Xconomist) says several members of Congress called her for more information yesterday after the announcement appeared—and she was happy to share a piece of her mind with them. “I hate to have ScaleVP be the sacrificial lamb, because I believe in this sector,” she says. “But if we can use this, we are going to.”

An edited version of our phone chat follows.

Xconomy: This must have been a difficult decision. Can you tell me how it came about?

Kate Mitchell: We have a very open and close-knit group. We think of venture as a team sport, not an individual sport here. We talk about these things as a group over time, and sometimes we go off-site and think about the sectors we want to focus on and the challenges and opportunities of each. So we have been talking about this, really, since the 2008 or 2009 time frame.

Our strategy in technology is that we like to invest after the pure science experiment is over and a company has a product that’s complete, and they are usually hiring sales and building out their commercial capability. In healthcare, our strategy had been to look for drugs that had some preliminary data in humans. One of our companies, Prestwick Pharmaceuticals, was going after a drug for Huntington’s disease. It was already approved and selling in Europe and Canada. Therefore it should have been a six- to 10-month process with the FDA. Well, it took us three years to get it approved.

There is such turn over at the FDA that there are a lot of people who are former insiders, so we have had some of these folks come in and talk to us about [the regulatory process]. As a result, we evolved our emphasis further to look at repurposed drugs. Orexigen is in our portfolio now; they make a version of wellbutrin, which is available generically and is one of the most widely available antidepressants. Early this year, the FDA said, ‘We can’t approve it and we aren’t even going to tell you what we need…We are going to wait for a year to even tell you what you need to go forward.’ They got some pressure from Congress, and now they have agreed that there should be another trial—after we had already done a successful Phase III trial. So, starting in 2008 through this year, we have had a continual series of problems with the FDA.

Our very first investment after we founded the fund was Seattle Genetics, which was a very successful investment for us. So our question to ourselves was, … Next Page »

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Late Friday, the FDA approved rivaroxaban (Xarelto), a blood-thinning drug made by New Brunswick, NJ-based Johnson & Johnson (NYSE: JNJ) and Bayer. The approval came just two months after an advisory panel to the FDA posted a negative review of the drug, which suggested the companies should have to perform new trials to gain approval for reducing stroke risk in patients with atrial fibrillation. The agency didn’t go so far as to mandate that trial, but it did slap the drug with a “black box”—a prominent warning saying that patients who stop taking it may face an increased risk of stroke. The label also says there is little evidence that rivaroxaban works better than the well-known (and inexpensive) blood thinner warfarin.

The J&J/Bayer product—which is already on the market to reduce the risk of blood clots, deep vein thrombosis, and pulmonary embolism following knee or hip-replacement surgery—will have a significant head start in the atrial fibrillation market over a competing product being developed by New York based drug giants Pfizer (NYSE: PFE) and Bristol-Myers Squibb (NYSE: BMY). That drug, called apixaban (Eliquis) charted positive Phase 3 trial results in August. Bristol and Pfizer plan to apply for FDA approval by the end of this year.

Apixaban and rivaroxaban are in a new class of drugs called “factor Xa inhibitors.” Factor X is an enzyme that promotes clotting, so blocking it helps to prevent strokes or embolisms. Both drugs were developed with the goal of offering alternatives to warfarin, a 60-year-old drug that can cause side effects such as severe bleeding.

No doubt there will be a marketing war among all these New York area companies—and Wall Street analysts are already making bets on how it will shake out. Today Barclays Capital analyst C. Anthony Butler put out a report predicting that Pfizer and Bristol-Myers’ drug would outperform the J&J/Bayer contender despite being late to the market. Apixaban, he wrote, “is the only novel anticoagulant thus far that has demonstrated a significant mortality benefit as compared to warfarin in a clinical trial setting.”

Shares of J&J dropped 1 percent today to $63.56.

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NPS Pharmaceuticals’ (NASDAQ: NPSP) wild week continues today with the release of Phase 3 trial results on NPSP558, its experimental drug to treat hypoparathyroidism, a rare endocrine disorder characterized by insufficient levels of parathyroid hormone. The study shows that in 53 percent of patients, the drug achieved its treatment endpoint, namely that patients were able to halve their intake of Vitamin D and calcium supplements—which must be taken in dangerously high doses to control the symptoms of the disease.

Shares were up 11 percent in pre-market trading to $6.25.

Just one week ago, NPS’s stock took a 33 percent hit on news that three patients in a trial of its other lead drug candidate, teduglutide (Gattex), had developed cancer and two of them died. NPS CEO Francois Nader and other top executives spent much of last week on the phone with Wall Street analysts explaining why they were certain there was no evidence of a link between the drug—which is being developed to treat a rare disorder called short bowel syndrome—and the cancer cases. The company’s earnings report on Thursday contained no big surprises. Nevertheless, NPS’s stock closed Friday at $5.61, well below its October 31 opening price of $6.91.

Based on the results of the NPSP558 trial, the company says it will file for FDA approval in 2012. NPS is still on track to file for FDA approval of teduglutide by the end of this year.

If all goes well, estimates Leerink Swann analyst Joshua Schimmer, NPS could be bringing in annual sales of $58 million on NPSP558 and $109 million on teduglutide by the end of 2014.

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Today marked the official launch of the New York Genome Center, a collaboration among 11 top academic institutions that’s designed to accelerate genomic research. The initiative—supported by the City of New York and private and public institutions—is being guided by two of our Xconomists: Rockefeller University’s Marc Tessier-Lavigne, who will serve on the center’s board of directors, and Columbia University’s Tom Maniatis, who will chair its scientific advisory board.

Tessier-Lavigne and Maniatis both spoke at today’s opening event, and emphasized the importance of the center’s mission to foster cooperation between academic institutions that might normally consider themselves to be rivals. Columbia and Rockefeller University are both participating, along with such big-name institutions as Memorial Sloan-Kettering Cancer Center, Cold Spring Harbor Laboratory, and New York University. Representatives from all the participants began working together to plan the initiative in mid-2010. “If we can maintain this level of team effort, the New York Genome Center will be a huge success,” Maniatis said at the beginning of his remarks today.

The idea behind the Genome Center is for the participating institutions to share discoveries, so scientists can identify the molecular causes of disease and, in so doing, accelerate the development of drugs that can be targeted to specific patient populations. It will include … Next Page »

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