If you’ve turned on your TV anytime in the last, oh, decade or so, you’ve no doubt been bombarded by ads imploring you to “ask your doctor” about Drug X. And you’re well familiar with the routine: You get treated to happy images of folks dancing, perhaps, or walking their dogs in pretty green meadows, while a soothing voice in the background tells you that Drug X may cause you to lose your ability to drive safely, lose your vision, or lose your mind.

Forgive the exaggeration but you get the picture.

Well, the FDA isn’t pleased with the pharmaceutical industry’s advertising practices. So it’s proposing a new set of rules that would not only limit the ability of drug advertisers to use so many cheerful images, but may indeed force them to place more emphasis on their products’ potential side effects.

The FDA actually proposed the new rules back in 2010. But it re-opened the matter to public comment on January 27, after it published the results from an experiment it sponsored to measure the impact of distraction on consumers’ ability to understand the risks and benefits of drugs being advertised. The rules would pertain to direct-to-consumer (DTC) ads for prescription drugs on television or radio.

The original proposal is rather bulky. But here are the basics of what the FDA is suggesting: The agency wants to amend the rules for DTC advertising to more clearly define the standards for determining whether side effects are presented in a “clear, conspicuous, and neutral manner.” For example, the new guidelines would dictate that the adds cannot include “distracting representations,” such as statements, images, or sounds that might draw the audience’s attention away from those laundry lists of potentially adverse events.

So what exactly makes an ad distracting? The FDA’s proposal doesn’t really spell it out clearly, but you can get a hint of what the agency was thinking in the newly released report on its study, which it titled, “Experimental Evaluation of the Impact of Distraction on Consumer Understanding of Risk and Benefit Information in Direct-to-Consumer Prescription Drug Television Advertisements.” The FDA planned the study to answer a number of questions. Among them: Do visual images that are positive in tone affect viewers’ ability to comprehend the risks inherent in a product? Do positive images influence how people feel about the product? And if the advertiser super-imposes text onto the images—spelling out the side effects—does that change how viewers perceive the product?

All good questions, to be sure. To answer them, the FDA asked 2,000 consumers to go online and watch an ad for a fake blood-pressure drug called Zintria. But the participants didn’t all see the same ad. Some heard the side effects cited while watching “mildly” positive images (rocks, chairs, metal arches), while others saw “strongly” positive images (babies, puppies, girls jumping with beach balls). Some viewers saw the side effects spelled out in superimposed text, while others didn’t.

Not surprisingly, those who watched cute babies and puppies while hearing about the side effects felt better overall about the product than those who watched the more boring images. Both groups, however, understood Zintria’s risks just fine—and they really got it when the side effects were displayed on the screen in clear text, too.

The FDA has published the study on the Web and re-opened the proposed rules to comments, which the public can submit up until February 27 (instructions below).

We here at Xconomy are plenty distracted by the plethora of peppiness in drug advertising. Here are our votes for … Next Page »

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[[Correction: 11:20 am ET]] It’s never been easy to make a buck in biotech venture capital, but there used to be more predictability and logic to it, according to Clarus Ventures’ Nick Galakatos.

You’d invest a few million, or tens of millions, and push a new drug or device toward some scientific validation in a few years. The world would recognize the value, you’d cash out, and repeat the process.

But in the strange way the market has worked for biotech since the financial crisis of 2008, that’s not always how it is anymore.

“For any VC firm to be in business, you have to raise another fund, and to raise another fund, you have to have exits,” says Galakatos, the co-founder and managing director of Clarus. “When you think about exits, there are traditional ones, like IPOs and M&A. But the IPO market is not a healthy market, and the M&A market is idiosyncratic. And idiosyncratic is really the right word. You can’t predict the M&A market very well, you can’t probabilize that. Five years ago, you could say ‘I’ll create a company, and do X, and there will be five buyers.’ You can’t say that anymore.”

Galakatos, a 20-year veteran of biotech ventures, spoke philosophically at times about the state of biotech venture capital during an interview last week at the JP Morgan Healthcare Conference. Clarus, a firm with $1.2 billion under management in biopharmaceutical and medical technology companies, is feeling the same heat others have in this industry. Biotech VCs have all been pushed to show returns to their investors that justify their high-risk endeavors, especially when investors have plenty of other ways to put capital to work.

This will be an important year for Clarus, which will go a long way toward determining what its future looks like for the next five. The firm raised its last fund, worth a reported $660 million, in February 2008 just before the financial collapse. Clarus was “exceptionally fortunate” to raise the fund (now worth $700 million, Galakatos says) when it did. But now that four years have gone by, it will probably be just a few more months before Clarus hits the fundraising trail again, Galakatos says. “Probably in the latter part of this year, we’ll go out and raise a new fund,” he says.

[[Correction: the returns cited below are for current partners at Clarus, but their investments were made previously at MPM Capital, not Clarus.]] The partners at Clarus have had a strong run of returns. Before the financial crisis struck in 2008, the partners at Clarus were able to claim success when Rinat Neuroscience was bought by Pfizer for $500 million, Syrrx was acquired by Takeda Pharmaceuticals for $270 million, Tercica was bought by Ipsen for $373 million, and CoTherix was snapped up by Actelion for $420 million.

In the post-financial crisis era, Clarus has pulled out a few wins, but not as many. ESBAtech was sold … Next Page »

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Bayer and Onyx Pharmaceuticals looked like they hit gold last fall, when a study of 760 patients showed that one of their new cancer drugs was able to help patients with colorectal cancer live longer.

Today, researchers got the first glimpse at the detailed results, and while it’s encouraging news for the companies and for patients, it’s not exactly something to shout about from the rooftops.

The new drug from Bayer and South San Francisco-based Onyx (NASDAQ: ONXX) showed that it helped patients live a median time of 6.4 months with colorectal cancer that had spread through the body, compared with a median of five months for those in the placebo group. The new drug, regorafenib, had significant side effects like almost all cancer drugs. About 17 percent of patients had moderate to severe skin reactions on their hands and feet, while 15 percent had significant fatigue, and 8 percent had significant diarrhea, researchers said today at the American Society of Clinical Oncology’s gastrointestinal cancer symposium in San Francisco. There was nothing new or unexpected in the drug’s safety profile, scientists said.

Onyx and Bayer have long worked together to co-market sorafenib (Nexavar) as a treatment for kidney and liver cancers, but the relationship was frayed recently by litigation over who owns the second, related compound. The companies settled that dispute in October, in an arrangement where Onyx got a $160 million one-time payment and will get a 20 percent royalty on worldwide sales of the new drug. That royalty stream suddenly looked valuable two weeks later when an independent monitoring committee looked at the data of the ongoing study known as Correct, saw the survival edge, and recommended the study be halted earlier than planned so all patients could get the experimental medicine.

Onyx Pharmaceuticals CEO Tony Coles

Analysts are now projecting regorafenib will be a billion-dollar seller, which could throw off hundreds of millions in annual revenue to Onyx. If the drug wins regulatory approval, it could offer colorectal cancer patients a new option beyond existing drugs like Eli Lilly’s cetuximab (Erbitux), Roche’s bevacizumab (Avastin), and Amgen’s panitumumab (Vectibix). About 52,000 patients in the U.S. are expected to die this year from colorectal cancer, according to the American Cancer Society.

“We’ve shown an improvement in overall survival, which we think is really terrific because these are third and fourth-line metastatic patients who have gone through almost all other available options,” Onyx CEO Tony Coles said in an interview last week at the JP Morgan Healthcare Conference, before the details were released.

Bayer said in a statement today that it plans to seek regulatory approval later this year for clearance to start selling the drug for patients with colorectal cancer that has spread.

Colorectal cancer isn’t the only place where Bayer and Onyx see the new drug potentially being used. The companies are expecting to see results from a pivotal study of 350 patients with gastrointestinal stromal tumors (GIST) before the end of March, Coles says. “Between the colorectal cancer data, and the GIST data to come, regorafenib is clearly on the scene,” Coles says. “The two companies are working together to pursue other indications.”

Few analysts last fall were counting on any revenue at all from regorafenib, so it was a surprising and transforming piece of news for the company. As Coles put it, “we are in position to go from one product for two tumors (Nexavar) to potentially three products with strong data or [an FDA clearance] for seven different cancers by the end of this year,” Coles says. The other drug besides Nexavar and regorafenib is known as carfilzomib, which is being reviewed by the FDA as a new treatment for multiple myeloma.

“When you see that kind of momentum in the business in such a short period of time, it’s unrivaled,” Coles says. “We think the future is very bright.”

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Chelsea, MA-based Civitas Therapeutics announced today that its inhaled form of L-dopa—the drug that many Parkinson’s disease patients take to relieve shaking and other debilitating symptoms—performed well in a Phase 1 clinical trial. The trial was designed to test whether the drug, called CVT-301, is safe, and whether delivering it to the lungs gets it into the bloodstream at levels that are likely to produce a therapeutic outcome. So far, so good, the company says. Civitas will present comprehensive data from the study at a future scientific gathering.

Civitas seems to have passed a small, but important, first test for CVT-301. In 2011, Civitas was spun out from Waltham, MA-based Alkermes (NASDAQ: ALKS), which had recently abandoned plans to develop an inhaled insulin product for diabetes. Civitas started up with $20 million in financing from Canaan Partners and Longitude Capital, and a state-of-the-art, 90,000 square foot manufacturing and R&D facility that it inherited from Alkermes. “Right when we walked in, we were in brand spanking new labs,” says Glenn Batchelder, co-founder and CEO of Civitas.

The idea behind Civitas was, in the most basic terms, to find a better use for the technology that Alkermes and its development partner Eli Lilly (NYSE: LLY) spent millions to develop. Inhaled insulin didn’t gain traction in the diabetes market, Batchelder says, because the devices that were initially developed were large and clunky, and therefore not very convenient for patients to carry around. More importantly, he says, inhaled insulin “didn’t have a clinical benefit” over injected insulin. “That was a learning.”

Civitas pursued L-Dopa because of the potential for an inhaled form of the drug to surpass the pill form in both convenience and performance, Batchelder told Xconomy during a December tour of the company’s headquarters. The pill form of L-dopa works, but some patients have to take it several times a day to see any impact, and it can be difficult to control how much of the drug gets into the bloodstream. “Food affects the variability,” Batchelder says. “They never know how much of the drug is getting to the blood. There’s also variability in how long it takes for the drug to produce an effect. Some people stop living their lives because the pills don’t solve the problem.”

CVT-301 is a fine powder that’s delivered via a small, plastic inhaler similar to an asthma inhaler. Civitas only had to make a few small adjustments to the diabetes inhaler to ensure the device would be easy enough for Parkinson’s patients to handle, Batchelder says. ”You just breathe in, and the powder goes into the lungs,” he says. “No matter how hard you breathe, you get the same exact dose.” The device, unlike some of the early insulin inhalers that were developed, is small and discreet. “It’s five plastic parts, two springs, and a staple,” Batchelder says. According to the company’s statement, CVT-301 delivered consistently precise doses during the Phase 1 trial, and the drug was immediately absorbed into the body.

Civitas is developing CVT-301 with the help of New York-based Michael J. Fox Foundation for Parkinson’s Research, which announced on November 29 that it had awarded a grant of undisclosed size to the company. And Civitas inherited most of the manufacturing equipment it needs—not to mention tons of supplies—from Alkermes. During the recent tour, Batchelder and Civitas’ chief scientific officer Rick Batycky pointed out a cavernous room on the ground floor, which is serving as a holding pen for fillers, solvents, and other lab supplies, until it’s needed for commercial manufacturing. “The labs are outfitted with everything they need,” Batycky says. “When they run out, they just come here. It’s like going to Wal-Mart. It’s very valuable. We haven’t needed to buy a lot.”

If all goes well in future trials, Civitas hopes to file for approval in 2015, Batchelder says. With so much of the manufacturing infrastructure already in place, it won’t be hard to get up and running fast, he says. “That’s the beauty of having this facility,” he says. “It gives us the ability to scale this up and commercialize the drug. We wouldn’t have been able to create that as a small company.”

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This was a great year for Seattle biotech if you measure success through sheer number of acquisitions. But if you prefer to measure the health of an innovation community by the number of exciting new startups it hatches, then this was most certainly a down year.

That’s the mixed bag of returns that I saw when looking back at the news of 2011 from the Seattle life sciences scene. This was the year of the acquisition for Calistoga Pharmaceuticals, Pathway Medical Technologies, Calypso Medical Technologies, SonoSite (NASDAQ: SONO), Amnis, Geospiza, and Pacific Biosciences Labs (the maker of the Clarisonic skin brush.)

While those companies got harvested, not a whole lot of new seeds got planted. The list of notable Seattle biotech startups this year includes Cardeas Pharma, Oncofactor, Blaze Bioscience, Aquedect Neuroscience and Cardiac Insight.

Who else made headlines in Seattle biotech in 2011? Seattle Genetics emerged. Dendreon crashed. Marina Biotech, Omeros, and AVI Biopharma all had years they’d like to forget. Cell Therapeutics somehow managed to stay in business. New leaders emerged at the global health nonprofits, as Alan Aderem moved in to run the Seattle Biomedical Research Institute, Stewart Parker took over at the Infectious Disease Research Institute, and Chris Elias created a vacancy at the top of PATH by leaving for a new gig at the Bill & Melinda Gates Foundation. The foundation’s head of global health, Tachi Yamada, left for a new venture capital gig, and was replaced by a former Novartis executive, Trevor Mundel.

Here’s a company-by-company rundown of the major events at Seattle biopharmaceutical and global health organizations we keep tabs on here at Xconomy. Tomorrow, I’ll follow up with the rundown of rundown of medical device, diagnostic, and others in fields like Bio-IT or Health IT.

Seattle Genetics (NASDAQ: SGEN). This was a transformative year for Seattle Genetics. The company broke through in August by winning FDA approval of its first product, a souped-up antibody for rare lymphomas. The drug validated a new target on the surface of cancer cells, CD30, and provided hard proof that Seattle Genetics’ proprietary chemistry can successfully link toxins to antibodies—a feat that has eluded scientists for 30 years. Big Pharma companies have beaten a path to Bothell to get licenses to the antibody-drug linking technology, and Seattle Genetics has exceeded Wall Street expectations in the early days of its drug rollout.

Dendreon (NASDAQ: DNDN). Dendreon was the star of local biotech in 2010, and this year it fell flat on its face. The company failed to live up to its first full year sales forecast with its immune-boosting drug for prostate cancer, and burned its shareholder base in the process. The company lost more than $3.5 billion in market valuation, and had to cut 500 jobs, largely because it sparked controversy and confusion by pricing its cancer drug too high—at $93,000 per patient. It remains to be seen this year whether Dendreon can pick up the pieces, as the disastrous screw-up of 2011 has created a gaping opportunity for emerging competitors like Johnson & Johnson’s abiraterone (Zytiga) and Medivation’s MDV-3100.

Amgen (NASDAQ: AMGN). The Thousand Oaks, CA-based biotech company, which has significant R&D in Seattle, said at the end of the year that longtime CEO Kevin Sharer … Next Page »

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In the news since the Thanksgiving holiday, we’ve had a fascinating bit of biomedical research from Internet guru Larry Smarr, a criminal conviction, and an extended Q&A with Eli Lilly CEO John Lechleiter. Your life sciences briefing begins now.

—Under fierce competition in the market for gene expression microarray tests, Santa Clara-based Affymetrix (NASDAQ: AFFX) agreed to pay $330 million to acquire San Diego-based eBioscience, a maker of flow cytometer instruments and chemical reagents used in biomedical diagnostics. Affymetrix said it plans to keep eBioscience’s management team and operations in San Diego.

—Pfizer (NYSE: PFE), the New York pharmaceutical giant, agreed to buy Excaliard Pharmaceuticals, a Carlsbad, CA-spinoff from Isis Pharmaceuticals (NASDAQ: ISIS). Isis said it’s getting $4.4 million upfront, and as much as $14 million over time for its stake in Excaliard, plus additional milestone and royalty payments. Excaliard was founded in 2006 to use Isis’ gene-silencing technology, known as antisense, to curb the activity of certain genes implicated in excessive skin scarring.

—A 23-page article offers an insightful glimpse into the converging future of personalized medicine, health IT, and wireless health. It is titled, “Quantified Health: Toward Digitally Enabled Genomic Medicine: A 10-Year Detective Story of Quantifying My Body.” I’m curious what other experts in these fields think about this bit of scientific research from Larry Smarr, founding director of the UC system’s California Institute for Telecommunications and Information Technology (CalIT2). I posted my question-and-answer session with Larry here.

—A San Diego jury convicted Kent Thomas Keigwin, a 61-year-old financial advisor, in the first-degree murder of John G. Watson, a retired life sciences CEO and local angel investor. Prosecutors argued that Keigwin killed Watson to steal millions of dollars from Watson’s accounts, by using Watson’s personal information to impersonate him. Keigwin is scheduled to be sentenced on Jan. 20.

—Amid the celebration of their success with Amira Biosciences (purchased earlier this year for $475 million by Bristol-Myers Squibb), Versant Ventures’ Brad Bolzon and Amira co-founder and CTO Peppi Prasit started a new company, Inception Sciences. Prasit and Bolzon plan to operate Inception Sciences as a holding company for spinning out individual drug development programs as separate corporate entities. I hope to get more details about the venture next week.

—In a ruling issued before Thanksgiving, a federal judge in San Diego declared that San Diego-based Histogen and its Histogen Aesthetics subsidiary are not infringing on a couple of key patents held by Carlsbad, CA-based SkinMedica. In a lawsuit filed in early 2009, SkinMedica alleged that Histogen was infringing on its proprietary “NouriCel” technology for culturing certain types of skin cells in growth media. Both companies use growth factors and other proteins derived from the cells to make skin care products.

—Luke devoted a two-part BioBeat column to his conversation with Eli Lilly CEO John Lechleiter about the pharma business generally, and Lilly (NYSE: LLY) in particular. In part 1, Luke talked mostly with Lechleiter about ways to get pharma out of its current rut. In part 2, Luke featured the Lilly CEO’s responses to questions that readers relayed to him via Twitter.

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Idera Pharmaceuticals looked like it was in a pretty serious bind back in July when its partner, Germany-based Merck KGaA, terminated a collaboration to co-develop an experimental cancer drug. But now Idera is bouncing back a bit today, after saying it has regained global rights to the drug, and plans to continue developing it, even as Merck KGaA winds down its involvement.

Cambridge, MA-based Idera Pharmaceuticals (NASDAQ: IDRA) said today it has gotten back the global rights to IMO-2055 as a cancer drug that stimulates a key player in the innate immune system known as Toll-like receptor 9 (TLR9). Under the termination agreement, Merck KGaA will continue to conduct an ongoing mid-stage trial of the Idera treatment in combination with Eli Lilly’s cetuximab (Erbitux) in 104 patients with a form of head and neck cancer. The data from that trial, and other clinical studies that Merck KGaA helped conduct and finance, will belong to Idera.

The smaller company said it plans to reimburse Merck KGaA for about 1.8 million Euros of expenses associated with the mid-stage trial, spread over 12 months, starting in March.

Shares of Idera climbed 14 percent to $1.30 today after the news.

“We believe that regaining our rights to IMO-2055, as well as the rights to the clinical data, will provide us greater flexibility and control in the clinical development of IMO-2055 and the opportunity to pursue new business collaborations,” said Sudhir Agrawal, Idera’s chairman and CEO, in a statement. “We appreciate the efforts made by the Merck KGaA team members in significantly advancing this program.”

Back in July, Idera said that Merck KGaA scrapped its collaboration after seeing patients suffer neutropenia, an excessive drop of infection-fighting white blood cells, when the Idera drug was given in combination with a couple of chemotherapy agents and Erbitux. Idera didn’t say whether that issue was resolved in today’s statement, but the ongoing mid-stage trial is designed to compare the Idera drug plus Erbitux to Erbitux alone, without any chemotherapy combination.

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For decades, people with Parkinson’s disease have been taking L-dopa pills to keep symptoms of the neurodegenerative disease under control. But now the Michael J. Fox Foundation is betting that a new form of the drug can be inhaled into the lungs to provide fast relief when the old standby isn’t getting the job done.

The New York-based Michael J. Fox Foundation for Parkinson’s Research is announcing today it is providing an undisclosed grant award to help Chelsea, MA-based Civitas Therapeutics develop an inhaled form of levodopa (L-dopa) for Parkinson’s disease. Civitas plans to use the Fox Foundation support, along with its $20 million Series A investment from earlier this year, to run a pair of clinical trials over the next year that will seek to prove that an inhalable L-dopa can be a viable alternative to the pill form. The first clinical trial of the drug, CVT-301, is set to begin before year’s end, says Civitas CEO Glenn Batchelder.

Patients with Parkinson’s tend to take L-dopa pill about three times a day, to try to keep a steady amount of the drug in the bloodstream. Take too much, and it won’t do much good, and it can cause side effects. Too little means that the telltale symptoms like tremors and stiffness start to appear. Various companies have tried other ways to deliver steady doses of the drug, through skin patches or infusion-based medicines, with little to show for it. If Civitas, a spinoff from Waltham, MA-based Alkermes (NASDAQ: ALKS), can create an inhalable form, it could end up providing a quick and steady dose for those instances when the pills don’t work. The demand for such a treatment could be big, since about 1 million people in the U.S. suffer from Parkinson’s.

“People have been trying to deliver L-dopa, the gold standard treatment, for 40 years,” says Batchelder. “We believe this is the technology that will really make a difference.” Todd Sherer, the CEO of the Michael J. Fox Foundation, added in a statement that L-dopa delivery challenges “represent a critical unmet need in Parkinson’s disease.”

Civitas CEO Glenn Batchelder

Civitas has a lot more resources than the typical venture-backed startup might have to pursue this kind of challenge. The company is housed in a Chelsea, MA, facility that represents more than $100 million of investment, which Alkermes built up years ago to make inhalable insulin for diabetics through a partnership with Eli Lilly (NYSE: LLY). Lilly scrapped that program in 2008, which got people thinking about what other inhalable drugs could be made there. By January, the assets were spun out into a new company, Civitas Therapeutics, which secured $20 million in a financing co-led by Canaan Partners and Longitude Capital.

The key challenge that Civitas is facing is with what you could call drug transportation. The existing L-dopa pills are swallowed and make their way into the intestines, where they get absorbed into the bloodstream. Sometimes the amount of drug concentration that actually gets into the blood can be erratic, however, because L-dopa can get blocked in the digestive tract when there are large protein molecules from food that get in the way, Batchelder says.

“Orally, it goes in, and it may get into your blood in 30 or 60 or 90 minutes, or maybe not much will get in at all,” Batchelder says. “Through the lungs, you can get precise dose.”

Civitas will have to prove … Next Page »

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Yesterday, we ran the first installment of an interview with Eli Lilly CEO John Lechleiter, in which he says the pharmaceutical industry is breaking out of its current rut, and is beginning to get more productive at pumping out more innovative new drugs.

Today, we follow up with the second half of the interview, which includes some interesting thoughts on “open innovation” that were prompted by a question from Twitter.

Xconomy: Is it possible to get too big as an organization to innovate? Is this partly why you’ve resisted the urge to do a mega-merger like some people have said they want to see?

John Lechleiter: We’ve done lots of studies, several huge studies in the late 1990s that date back to the pre-Prozac patent expiration. We fail to see a connection between size and innovativeness. I’m not smart enough to say that it’s best to be this size or that size, but obviously if you’re a $50 billion-a-year company or a $70 billion-a-year company, growing 10 percent a year means you have be a lot more innovative in an absolute sense than a company of Lilly’s size at $23 billion in revenue. We study this question of how to create a company that’s really innovative. I don’t think there’s an easy answer, otherwise the industry would have locked and loaded on it.

I do think there are things that matter. I think co-location is important. Hiring talented people and keeping them. There are cycle times of 10-15 years in this industry. I’ve been at Lilly for 32 years, and I’ve only been around the horn two or three times.

We still think we hire people for careers. That may sound corny to some people, and fly in the face of what we hear. I think we heard today (from University of Washington president Michael Young) that people can expect to have three different careers. But we aim to give people a reason to want to stay and want to be productive at Lilly, and that they can stay and realize their career ambitions. Obviously there are lots of other things that go into the equation. Things like what kind of leadership and management is most conducive to innovation. I can tell you when I talk about commitment to innovation, this is what our scientists want to hear. They want to know they have a CEO who is committed to what they do. I think it matters a lot. I’m betting on them, and they know it. And I think it’s a good bet.

Eli Lilly CEO John Lechleiter

X: You made a reference earlier today about the pharma industry’s need to better communicate what it does to the broader public. But I have to challenge that, and bring up some of the major ethics problems this industry has had over the years, and which the public hears a lot about. Whether it’s hiding bad data, or bribing clinical researchers overseas to get good data, or pay-to-delay agreements with generic companies, tax evasion, off-label marketing, and on and on and on. My question to you is what are one or two things that the industry can do, that are legitimate things, that could restore some public confidence?

JL: First of all, transparency. We were the first company, in 2004, to post our clinical trial results online, whether they are positive or negative. Now everybody does that. It’s interesting to me that you don’t hear much anymore about concerns over clinical trial data not being shared. Or about negative results not being shared. It doesn’t mean, Shazam!, the problem goes away. But I think most people are reasonably assured now, through clinicaltrials.gov, and through other disclosure mechanisms, that the light in the room is on, and there is widespread knowledge of what trials have been started, which ones are running, and what the results are.

It’s interesting to me to think back 10-15 years ago, about all the reasons we didn’t want to share that information, and most of that revolved around concerns about proprietary information. We have shareholders to think of, and competitive issues to manage. It turns out that wasn’t such a problem. Transparency around clinical trials is something we have been able to manage, and we’ve been able to maintain necessary protection around the intellectual property that we need.

Secondly, we have to show we can be trusted. We need to recognize that some people’s view of pharma is going to be colored by past transgressions. People can point to a failure here or there, but in the long run we have shown we can be trusted partners, based on our behavior. We put in a state-of-the-art, robust, and effective program within Lilly to ensure it’s more than words. We have an assurance that all 35,000 people across the company who work for us understand how it is we do business, and how the way we do business reflects on who we are, and how we are seen by the public.

The other thing I was talking about before (during the WBBA conference) is about doing a better job over time, putting in understandable terms, what we do, how we do it, and why we do it. Our business is very complex. It doesn’t lend itself to sound bites. When you say to people it takes $1 billion to bring a medicine to the market, can I explain that in 15 seconds? It’s very difficult to do. It’s hard to talk about why intellectual property is important. Some will say it keeps medicines from being widely available in countries where people can’t afford to pay for them. There’s a great discussion around that. The answer is IP doesn’t preclude that automatically. But having those debates, and being out in public as I was here today, and being willing to engage on tough and sensitive topics is something all of our leaders and all our companies frankly need to be more engaged in.

X: You also spoke earlier about the need to modernize the FDA to help improve innovation. What do you have in mind specifically? … Next Page »

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John Lechleiter has spent his entire 32-year career at Eli Lilly, and now he’s the CEO just as the company faces one of the bigger challenges in its history. Over a three-year stretch, Lilly will lose patent protection on five blockbuster drugs that generated $12.7 billion in sales last year—more than half of its revenues.

The pharma industry’s inability to produce a crop of innovative new medicines to replace the aging blockbusters is a well-worn narrative. But Lilly has taken heat for bucking a couple of popular coping strategies. One, it has resisted the urge to get tied up in a mega-merger like Pfizer/Wyeth, Merck/Schering-Plough, Roche/Genentech that often creates some kind of illusion of improved performance in the short term. Two, it has continued to ratchet up R&D spending to $4.9 billion last year even as other companies have turned to cost-cutting.

I met with Lechleiter to talk about the state of Lilly (NYSE: LLY) and the pharma business for about a half hour on Friday while he was in Seattle doing community outreach at the Washington Biotechnology & Biomedical Association’s annual meeting. We talked mostly about how pharma can get out of its current rut, and he was also willing to field a few questions that readers sent to me via Twitter.

It was a long conversation, so I’m breaking this into a special two-part edition of BioBeat. The second half of the chat will run tomorrow, featuring Lechleiter’s responses to the questions that readers relayed to me via Twitter.

Xconomy: You’ve made a decision to continue to invest in R&D at Lilly when a lot of other pharma companies are cutting back. Some on the Street are wondering why pharma companies are doing research at all, why not get out of that line of business? Give up, and in-license everything from biotech companies. Why continue doing research within Big Pharma?

Eli Lilly CEO John Lechleiter

John Lechleiter: I’ve been employed here 32 years, and we’ve been around 135 years as a company. Success has come, in general, from taking a long-term view. We invest in a steady and a patient way. We have a pipeline today of about 65 or so molecules, and most are coming from internal research. We work with partners, but it’s mainly driven by what I call our internal research engine. It’s the most exciting pipeline we’ve ever had. Many, but not all, of those pipeline molecules will mature into products. We’ve got to have the discipline and the courage to stay with that.

We can look back over the last 10 years and make a critique, whether it’s a Lilly critique or an industry-wide critique, which says we haven’t been as productive as we had hoped. But that doesn’t mean we should abandon ship. Industry always moves in cycles. Sometimes they are long cycles. Sometimes they are 10-year cycles. My own personal belief is that we are in a new era of higher research productivity. And that will be reflected in medicines that come out of our pipeline and other people’s pipelines.

The other thing is, new medicines just don’t grow on trees. There’s no universe of exciting molecules from “biotech” companies out there that are ready for the picking. If there was, you’d see even more deal activity than you currently see. Do we work with biotechs and academic institutions? Are we surveying that landscape? We are. But if I have to place a bet—and as a CEO you always have to place a bet—the bet I’m placing is that research efforts largely driven through our internal investment strategy, and working with partners around the world, is the best strategy for Lilly.

There’s no question we are focused on research productivity. I think we’ve achieved some pretty big gains. We are placing more than a dozen molecules a year, some years as high as 15-17 molecules, into clinical development. This is a huge step up from the kind of output we saw from our discovery efforts 10 years ago, and it augers well for the future.

X: But how many new FDA approved products have you introduced in the last, say, five years? Two?

JL: In the last five years, we haven’t had a lot. But in a period from 2002-2005, we … Next Page »

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Clinical data, startup financings, and collaborations, oh my. It’s been a busy New England life sciences news week.

—Cambridge, MA-based Genzyme revealed that its experimental multiple sclerosis treatment, alemtuzumab (Lemtrada), significantly reduced relapses and disability in a Phase 3 trial where it was tested head-to-head against Rebif, a form of interferon sold by EMD Serono and Pfizer. The drug from Sanofi’s Genzyme reduced relapse rates by 49 percent and reduced the risk of worsening disability by 42 percent.

—Lexington, MA-based Avaxia Biologics recently announced a $2.2 million investment led by Cherrystone Angels in Providence, RI, with participation from Boston Harbor Angels and undisclosed individual investors. Avaxia is developing an anti-inflammatory drug by inoculating pregnant cows and collecting antibodies from their milk.

—Third Rock Ventures, Frazier Healthcare Ventures, and Bessemer Venture Partners led a $15 million Series A investment in Allena Pharmaceuticals of Newton, MA. The startup, whose team comes from the now Eli Lilly-owned biotech Alnara, is working on enzyme-based oral treatments for kidney and urologic diseases.

–Agios Pharmaceuticals of Cambridge took in $78 million in an oversubscribed Series C financing. The money comes from existing investors Arch Venture Partners, Flagship Ventures, and Third Rock Ventures, and Celgene (NASDAQ: CELG), who Agios has been collaborating with on developing cancer-starving drugs.

—Speaking of drug collaborations, Cambridge-based Aileron Therapeutics expanded a partnership it first inked with Roche in 2010. The two companies had been working on turning Aileron’s “stapled peptide” technology into cancer treatments in two programs, and announced this week that they would add a third, focused on inflammatory diseases.

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Pharmaceutical giant Eli Lilly is increasing its bet on a small team of TB drug hunters in Seattle.

Indianapolis-based Lilly (NYSE: LLY) said today it has agreed to provide $4.2 million over the next four and a half years to the Seattle-based Infectious Disease Research Institute to continue its efforts to discover drugs for tuberculosis.

The research support is the latest step in Lilly’s efforts to support TB drug development, which started in 2007. That was when Lilly acquired Bothell, WA-based Icos for its hit erectile dysfunction drug, and found that it didn’t really want the scientists or cutting-edge drug discovery equipment that was at the core of the biotech company. So a team of former Icos scientists—Ed Kesicki, Allen Casey and Joshua Odingo—migrated to IDRI to pursue their interest in TB in collaboration with Tanya Parrish. Lilly donated $9 million worth of Icos’s drug screening equipment, joined Merck in donating hundreds of thousands of potential TB drug candidates from proprietary chemical libraries, and agreed to fork over $6 million in cash over five years to support the Lilly TB Drug Discovery Initiative.

Tuberculosis, an airborne infectious lung disease, has never been much of a priority of the pharmaceutical industry since it was largely eradicated from wealthy countries like the U.S. decades ago. But the World Health Organization estimates that 1.7 million died from TB in 2009, with most of the cases in Southeast Asia and Africa. Currently used TB drugs were developed more than 40 years ago, Lilly says, and about half a million people a year now develop cases that resist drugs that used to be effective.

The Lilly TB Drug Discovery Initiative, which includes philanthropies and government agencies as well as IDRI, doesn’t appear to have yet delivered a new TB drug candidate into clinical trials. Today’s statement didn’t say what the goals are for the next phase of the program.

As it so happens, Lilly CEO John Lechleiter will be in Bellevue, WA tomorrow to give a keynote talk at the Washington Biotechnology & Biomedical Association’s annual meeting. I plan to interview Lechleiter while he’s in town, and will ask about the local TB efforts. If you have other questions you’d like to pose to him, just send me a note at ltimmerman@xconomy.com.

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This week’s roundup of New England deals includes companies working on vocal cord repair, cancer stem cells, database software, IT services, and drug counterfeiting prevention.

—Prolific MIT professor and inventor Bob Langer is working on a new project with a Harvard University surgeon that’s aiming to repair damaged vocal cords. The vibrating gel they’re developing has attracted funding from The Who’s lead singer Roger Daltrey, Aerosmith’s Steven Tyler, and actress Julie Andrews, and could help treat aging singers as well as throat cancer patients.

—Verastem, a Cambridge, MA-based developer of treatments focused on cancer stem cells, has filed for an initial public offering after just 15 months in business. The startup—founded on the science of MIT’s Bob Weinberg and Eric Lander and led by biotech entrepreneur Christoph Westphal—is looking to raise $50 million in the IPO.

—Basho Technologies, a Cambridge-based database software maker, raised $5 million in new funding from its existing equity holders. And Waltham, MA-based Innocentive, whose collaboration software platform has roots at Eli Lilly, bumped its most recent funding round up to $5.1 million.

—Henri Termeer, former CEO of Cambridge-based Genzyme, joined the investor syndicate of Seattle-based NanoString Technologies, a startup developing a diagnostic tool to better enable personalized medicine. NanoString collected a $20 million Series D investment from Termeer, GE Healthcare, BioMed Ventures, Clarus Ventures, Draper Fisher Jurvetson, and OVP Venture Partners.

—MindShift Technologies, a Waltham-based provider of cloud, data center, and other IT services for businesses, was acquired for $167 million by Best Buy (NASDAQ: BBY). The retailer said the acquisition helps it expand its IT services offerings for small and mid-sized businesses. MindShift, meanwhile, will keep its name, leadership team, and all 500 employees.

—-Late last month, Lebanon, NH-based PharmaSecure raised $3.9 million in a round of funding led by Innovation Endeavors—the former Google CEO Eric Schmidt—with participation from Gray Ghost Ventures, Healthtech Capital and TEEC Angel Fund. My colleague Arlene took a closer look at the four-year-old startup, which is developing drug packaging technology to prevent counterfeiting in markets like India.

—Newton, MA-based Zeo, a maker of sleep management technology, raised $1 million of a debt-based offering that could hit $4 million, an SEC filing showed. This September the startup expanded its sleep coaching system to a mobile app.

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San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN)) and Eli Lilly today called a cease-fire to litigation that began earlier this year, and outlined an agreement to end the alliance they formed in 2002 to commercialize exenatide (Byetta), Amylin’s diabetes drug. A replay of Amylin’s conference call with analysts about the deal is available here.

Amylin sued Lilly in federal court in May, alleging that Lilly had violated their agreement to develop and market exenatide after Lilly agreed to work with a new partner, Boehringer Ingelhiem, to commercialize linagliptin (Tradjenta), a competing diabetes drug.

The deal reflects just how much a drug development partnership with a Big Pharma is worth to a small biotech. Amylin agreed to take over the development and commercialization of exenatide, beginning with the U.S. market on Nov. 30, and to make a one-time, upfront payment of $250 million to Indianapolis, IN-based Lilly. Amylin also agreed to share 15 percent of its worldwide exenatide revenue until Amylin has made aggregate payments of $1.2 billion, plus accrued interest.

The deal makes no mention of a third party in the drug development partnership, Waltham, MA-based Alkermes (NASDAQ: ALKS). In an e-mail this morning Amylin spokeswoman Anne Erickson says, “Our relationship with Alkermes does not change because of today’s announcement.  Alkermes has provided the microsphere drug delivery technology for Bydureon and will receive a royalty on global sales.”

Under their agreement, Amylin will gradually assume responsibility for marketing exenatide as well as a long-lasting version of exenatide (Bydureon) in foreign markets over the next two years. The former partners agreed to work together, market-by-market, to make the transition, and Amylin agreed to pay Lilly as much as $60 million to ensure that Lilly won’t lose money on “exenatide-related activities” during the transition period.

Dan Bradbury

Just over a year ago, the U.S. Food and Drug Administration said the once-weekly version of exenatide required additional data to determine what effect, if any, the drug might have on a particular heartbeat arhythmia in patients enrolled in the the clinical trials. That data was collected and the new drug application was re-submitted to the FDA in July. If the one-injection-weekly version of exenatide fails to win FDA approval by June 30, 2014, the companies agreed that Amylin’s global revenue-sharing obligations will end, and Amylin will continue to pay Lilly a flat 8 percent of global net sales of all exenatide products.

In their joint statement, Amylin CEO Dan Bradbury says, “We anticipate working with one or more partners outside the U.S. in order to maximize the global potential of this innovative molecule and achieve greater operational flexibility and efficiency. This clarity of focus will provide us with an enhanced opportunity to increase shareholder value.”

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Boston’s big data cluster recently got some attention at the MassTLC Innovation UnConference, and Basho Technologies, one of the companies in the space, followed up this week with a funding announcement. Check out that news and another IT financing below.

—Basho, a Cambridge, MA-based developer of data storage and management software, announced it had pulled in $5 million in new funding from existing equity investors. The money will go toward accelerate engineering and market development’s of Basho’s database product. In June, the company announced it had closed a $7.5 million financing and had hired new CEO Don Rippert. Check out this profile for a closer look at the types of markets and customers Basho is targeting.

—Innocentive, a Waltham, MA-based company started by Eli Lilly in 2001, has bumped a recent round of equity financing up to $5.1 million out of a potential $7.5 million. The money comes from 84 investors, an SEC filing shows. Innocentive, now an independent company, offers technology enabling organizations and its employees to collaborate on problem solving in processes like product research and development.

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As Pfizer’s vice president of venture capital, Barbara Dalton will bring two valuable perspectives to Xconomy’s Life Sciences 2031 panel discussion on October 13: that of a VC and that of a pharma executive. Dalton, who was trained in immunology and virology at the Medical College of Pennsylvania, began her career as a research scientist at SmithKline (now GlaxoSmithKline). While there, she was a founding member of EuclidSR Partners, a private New York-based VC firm where SmithKline was a leading limited partner.

Dalton joined Pfizer (NYSE: PFE) at the end of 2007, a few years after the drug giant started up a venture capital unit. At first, Pfizer’s fund was housed in its finance department, and most of its investments were in technologies and services that supported Pfizer’s already-marketed products. Then Pfizer moved the venture group into the worldwide business development organization, and gave it a mandate to invest in ways that support all of Pfizer’s pursuits—not just its marketed products.

Today, Pfizer devotes a $50-million-a-year budget to investing across a wide range of areas, including healthcare IT, health services, and medical devices. About one-third (32 percent) of the portfolio is invested in drug development, while one-fourth (24 percent) is in companies developing diagnostic and imaging products. Healthcare IT is also a big focus: 12 percent of Pfizer’s venture funds are supporting startups in that area.

Xconomy chatted recently with Dalton about Pfizer’s venture investments, and what she hopes comes out of the discussion at Xconomy’s Life Sciences 2031 event.

Xconomy: What’s the reasoning behind the diversity of Pfizer’s portfolio?
Barbara Dalton: They are all products and technologies that in some way or another support our future. Pfizer is a large organization with a diverse set of businesses, from nutritionals to animal health, to consumer brands, vaccines, biologics, and small molecules. I believe the venture capital group should mirror those businesses.

X: How does healthcare IT fit into that mission?
BD: Healthcare IT relates to all of our businesses, because it can be defined quite broadly. There are technologies that, for example, our sales force may use. There are technologies we may use to monitor clinical trials, monitor patients, track a drug product, or manage manufacturing processes. So healthcare IT in its broader definition—and I include pharmaceutical business IT—is part of that.

X: I imagine part of the mission is also to invest in early-stage drugs that Pfizer may someday be interested in developing. How much does that play into investing decisions?
BD: These are investments that are purely investments. We are ahead of the corporation in terms of their [research] interests. We like products that have been demonstrated in humans, but we may invest in a novel product a couple of years ahead of when the corporation would be interested in it. We look for opportunities in the five or six therapeutic areas that Pfizer is working in these days. But we’re also opportunistic, because … Next Page »

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There’s lots of interest in the protein drug engineering crowd to come up with new-and-improved forms of biotech drugs, and today we’re seeing another example in a new partnership between San Diego-based Ambrx, and New York-based Bristol-Myers Squibb (NYSE: BMY).

Under the deal, Ambrx said today it will get $24 million upfront, plus undisclosed milestone payments and royalties if any of its work materializes into marketed products. In return, Bristol-Myers is getting exclusive worldwide commercial rights to a couple of Ambrx’s research programs. One is the Fibroblast Growth Factor 21 (FGF-21) protein, which scientists think might be useful for treating type 2 diabetes, and the other is on the Relaxin hormone, which is being studied as a treatment for heart failure.

Ambrx has been around since 2003, working on some hard chemistry that seeks to make new amino acid building blocks to create new biotech drugs. These drugs are thought to have great versatility to swap in and out certain desirable properties, such as features that make them last longer in the body, or carry potent cell-killing agents. Ambrx has raised more than $100 million in venture capital in its history, and built a broad network of partners that includes Merck, Pfizer, Eli Lilly, and Merck KGaA of Germany.

Even while pharma research budgets have been tightening, there has been increasing interest in some of the new tools startups are developing for engineering protein drugs. South San Francisco-based CytomX Therapeutics, South San Francisco-based Sutro Biopharma, and Cambridge, MA-based Eleven Biotherapeutics are a few of the companies that have raised $30 million or more in venture capital in the past couple years, and Vancouver, BC-based Zymeworks struck a partnership earlier this month with Merck. And the seasoned hands of protein engineering at companies like Amgen, Roche’s Genentech unit, and Biogen Idec are working on all kinds of protein drug configurations, like those that can be engineered to hit two targets instead of just one. Seattle Genetics (NASDAQ: SGEN) recently won FDA approval for an engineered antibody linked to a toxin that makes it a far more potent drug for rare lymphomas, which has prompted multiple pharma companies to license the technology against other tumor types.

Ambrx has been pretty quiet on the news front for the past year, since CEO Steve Kaldor left. Ambrx still doesn’t list a new CEO on its website, although chief business officer Simon Allen was quoted on behalf of the company in today’s deal announcement.

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Lebanon, NH-based Adimab, a provider of human antibody discovery technology, announced today that it has formed discovery collaborations with Weston, MA-based Biogen Idec (NASDAQ: BIIB) and Danish firm Novo Nordisk. Each pharmaceutical company will use the Adimab technology to identify human antibodies against two targets. The specific targets and the dollar terms of the deals were not disclosed.

Adimab has signed previous collaboration deals with Genentech, Eli Lilly, Human Genome Sciences, Merck, Roche, Novartis, and Pfizer. Under the new agreements, both Novo Nordisk and Biogen have the option to commercialize antibodies discovered from the Adimab partnership. Adimab will receive upfront payments and preclinical milestones, and could be eligible for clinical development milestones and sales royalties.

“Our technology is simply faster, dramatically reduces the risk of development failures, and generates higher quality leads even against challenging targets; in fact many of our partners come to us with targets that have failed using traditional phage display approaches,” said Adimab CEO and co-founder Tillman Gerngross in the announcement of the deals.

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Merck has made plain that it needs to elevate its game in biotech drug development, and that means turning to partners for help. The latest chapter in this ongoing story is now unfolding at a little company called Zymeworks in Vancouver, BC.

Zymeworks is announcing today it has secured a partnership with Whitehouse Station, NJ-based Merck (NYSE: MRK) to develop new antibody drugs for cancer and autoimmune diseases that are engineered to hit two or more targets on cells instead of just one. In exchange for helping Merck create these so-called “bispecific” antibodies, Zymeworks is getting an undisclosed cash fee upfront, plus milestone payments, which could be worth as much as $187 million over time if drugs from the partnership reach certain goals. Merck will have exclusive worldwide rights to sell drugs from the partnership and Zymeworks will get tiered royalties on product sales if any materialize.

The deal is part of Merck’s long term plan to catch up in the business of biotech drug development. Estimates are that eight of the world’s 10 best-selling drugs in 2014 will be biologic medicines, leaving only two compounds made from chemical synthesis—Merck’s historic wheelhouse. The pharma giant has leaned on another startup, Lebanon, NH-based Adimab, as a source of antibody drug candidates, and it has spoken publicly about its growing ability to make antibodies at its GlycoFi facility and in facilities obtained through its Schering-Plough mega-merger of 2009. But the Zymeworks deal represents a chance for Merck to move into a hot area of protein drug engineering that biotech leaders like Genentech, Amgen, and Biogen Idec have been pursuing for years.

“We didn’t invent the field of rational protein engineering, but we have stepped up to take it to the next level,” says Zymeworks founder and CEO Ali Tehrani.

Zymeworks, founded in 2003, has developed a technology for creating lots of custom-designed protein drug candidates with properties drug developers want. The system can be used to make potent proteins that can last longer in the bloodstream, enabling patients to take fewer injections. Zymeworks can also engineer in specific structures that can make an antibody bind specifically and tightly with one or two different targets of interest on diseased cells. And it says the technology can be used to alter proteins to induce what’s known as “effector function,” which basically means that they can be made to trigger an immune system reaction which could give a cancer drug an extra potent boost.

Zymeworks CEO Ali Tehrani

The company spent its first four years trying to develop this technology to make industrial enzymes, until it saw bigger market potential in the pharmaceutical business, Tehrani says. “We could have been a mom and pop, coffee shop type of business,” he says.

Zymeworks now has ambitions to become a drug developer of its own, not just a technology provider to Merck and a few other partners, Tehrani says. The company still has a long way to go on that expensive journey. It has 37 employees, has raised less than $15 million through its history from Montreal-based CTI Life Sciences Fund, the Canadian government, and private investors. It hasn’t yet entered clinical trials with any drug candidates. But Tehrani, who got his microbiology and immunology doctorate from the University of British Columbia, says Zymeworks grabbed the attention of Merck and other prospective partners with “solid” data from experiments with its protein drugs in petri dishes.

Zymeworks certainly isn’t the only startup out there with visions of developing better versions of today’s protein drugs. Seattle-based Allozyne, San Diego-based Ambrx, South San Francisco-based Sutro Biopharma, and South San Francisco-based CytomX Therapeutics are just a few startups in that space along with many of the traditional biotech giants mentioned above. Zymeworks seeks to differentiate itself a couple different ways, Tehrani says. One is that it has software to better characterize the properties of the drug candidates, which ought to help researchers predict how they will perform in clinical trials. The other key feature is that Zymeworks can engineer its properties into immunoglobulin class-1 proteins, which Tehrani says offers an advantage over other techniques in manufacturing.

Zymeworks’ long-term goal, Tehrani says, is to grow up to be like Applied Molecular Evolution, a San Diego-based protein engineering company acquired by Eli Lilly for $400 million in 2004.

Zymeworks had interest from several partners in its technology, Tehrani says, but chose Merck for a few reasons. First, Merck provided enough validation of the technology, and upfront cash, to help stir up some more interest among investors in putting more capital into the company, Tehrani says. Plus, Merck’s development capabilities at its Palo Alto, CA-based biologics facility were a cut above facilities from other companies, he says.

“We are protein engineers. They are drug developers with a detailed understanding of biologics,” Tehrani says. “We see a long term strategic collaboration.”

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Seattle Genetics made waves both locally and nationally this week with an FDA approval that’s a historic step for the antibody drug business, and raises some interesting questions about the economics of cancer.

—Seattle Genetics (NASDAQ: SGEN) nailed down FDA approval of its first product on Friday. The drug, brentuximab vedotin (Adcetris) is designed to treat people with a couple of rare diseases, Hodgkin’s lymphoma and anaplastic large cell lymphoma. After 14 years in business and more than $500 million of R&D investment, Wall Street was betting this highly effective drug would command a premium price of about $110,000 per patient. And sure enough, Seattle Genetics came out with a high price of $13,500 per dose. It could end up costing anywhere between $108,000 per patient or $216,000 per patient, depending on how many doses patients get in the real world. CEO Clay Siegall did his best to defend the price when he was interviewed on Monday by CNBC. I argued in the BioBeat column this week that Seattle Genetics is in the rare position where it can justify a six-figure price tag. But if it really ends up costing $216,000 per patient … that might be worth another column.

—Seattle-based Dendreon (NASDAQ: DNDN), another cancer drug developer that knows all about the consternation surrounding high-priced therapies, had a small but noteworthy personnel announcement. Dendreon added John H. Johnson, the CEO of Savient Pharmaceuticals (NASDAQ: SVNT) and the former CEO of ImClone Systems, to its board of directors. Johnson was the CEO who turned ImClone around in the late 2000s, as its cancer drug became a $1 billion hit, and the company was acquired by Eli Lilly for $6.5 billion.

—Before all that news hit, I dug up an Xconomy exclusive on how Bayer’s Medrad unit has bid $125 million to acquire Kirkland, WA-based Pathway Medical Technologies. The deal still needs shareholder and regulatory approval before it can be finalized.

—Seattle-based Theraclone Sciences has been toiling away the past few years on broadly neutralizing antibodies against the HIV virus, and last week we saw some fruits from that labor. Theraclone, with support from the International AIDS Vaccine Initiative, was part of a national scientific collaboration that discovered 17 new broadly neutralizing antibodies which could become important new tools for AIDS vaccine R&D. The research was published in Nature.

—Seattle Children’s Hospital CEO Tom Hansen is deeply passionate about a simple, low-cost ventilator that he thinks can save the lives of premature infants around the world, and now he’s got some more support to take this idea through critical early tests. The Bill & Melinda Gates Foundation agreed to pump $2.3 million into the ventilator program.

—Lastly, we had an Xconomist Forum guest post from Steve Dickman at CBT Advisors in Boston, who argues that the latest social networking platform, Google+, has the potential to transform healthcare in ways that Google Health couldn’t. As always, your own trenchant observations about various biotech topics are welcome here. If you have an idea you’d like to write about for the Xconomist Forum that’s either local or national in scope, ping me at ltimmerman@xconomy.com.

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