Theraclone Sciences has been searching for more than a year for a new CEO, and it found one close to home in Cliff Stocks.

The Seattle-based biotech company is announcing today that Stocks, a veteran biotech dealmaker with experience at Icos and Calistoga Pharmaceuticals, is taking over as CEO at Theraclone. Stocks is replacing Steve Gillis, the company’s chairman, who had been interim CEO since Dave Fanning died suddenly in June 2010.

Even without a full-time CEO, Theraclone has made significant strides this year. It raised a little more than $10 million in venture capital, made a splash with the discovery of some broadly neutralizing antibodies for HIV, formed a sizable partnership with Pfizer, and moved its first new drug candidate into clinical trials against the flu. Now the company is looking to continue its growth, partly by leveraging its technology through working with partners that Stocks surely knows well from his many years in business development.

“The idea is to do some select collaborations,” Stocks says. “We’re not going to do a lot and become a service entity. We’re going to have a few partnerships with strong partners, and structure them to allow Theraclone to maintain or keep a substantial portion of the value we develop with our partner.”

Theraclone, founded in 2005 at the Seattle-based Accelerator, specializes in the discovery of novel antibodies. The company works by starting with blood or tissue samples from patients, and identifying antibodies that are made by people’s immune systems against foreign invaders like viruses, bacteria, or cancer cells. Mother Nature has evolved pretty efficient defense mechanisms against these rogue cell types, so Theraclone’s scientists figured it was a good idea to listen to what nature is saying, and then make genetically engineered copies of these antibodies as drugs.

Besides the flu antibody program, Theraclone is moving ahead toward its first clinical trial with an antibody for another infectious disease—cytomegalovirus. And further in the future, the company has its sights on the most lucrative market for today’s antibody drugs—cancer.

Stocks, 53, was previously … Next Page »

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We had an unusual mix of headlines this week on RNA interference, biofuels, and a quiet little startup in Bothell with Icos pedigree.

—There weren’t any major life science company financings to report this week, but the state’s academic centers had something to crow about with $80 million in new federal grants going to the University of Washington and Washington State University. The money is intended to help scientists find ways to turn lots of our regional biomass into renewable fuels, and hopefully create a few jobs along the way.

—I’m trying an experiment next week with a “Tweetchat” with one of the industry leaders in the field of RNA interference—John Maraganore of Cambridge, MA-based Alnylam Pharmaceuticals. For those of you interested in RNAi, and who have Twitter accounts, this will be a good opportunity. It will start at 10 am Pacific on October 4th, and go for about 30 minutes. The idea is to have an open conversation about where this whole gene-silencing business is going after a series of well-documented setbacks. For those of you not on Twitter, but interested in sending a question in to Maraganore, shoot me an e-mail. There is no shortage of interest in RNAi here in the Northwest, with Seattle-based PhaseRx, Bothell, WA-based Marina Biotech, Vancouver, BC-based Tekmira Pharmaceuticals, Vancouver, BC-based Alcana Therapeutics, and Seattle-based Groove Biopharma all working on various pieces of the puzzle.

—Cocrystal Discovery, led by a couple former Icosahedrons in Gary Wilcox and Sam Lee, has kept a pretty low profile its first three years in business. But that’s starting to change now that this company struck a new partnership with Israel-based Teva Pharmaceutical, and Wilcox gave me the inside scoop on what this team is setting out to do with antiviral drugs against hepatitis C, flu, and more.

—Adaptive TCR, a spinoff from the Fred Hutchinson Cancer Research Center, named a few familiar local biotech names to its roster of various advisors. Lee Huntsman of the Life Sciences Discovery Fund has joined Adaptive’s board of directors; Cassian Yee of the Hutch has been added to the scientific advisory board; and Carol Gallagher (formerly of Calistoga Pharmaceuticals) and Stewart Parker of the Infectious Disease Research Institute have been named to the startup’s corporate advisory board. Adaptive, for those just tuning in to this story, is using the tools of modern DNA sequencing and computing to help scientists better understand how DNA get shuffled around in B and T cells that make up our adaptive immune systems.

—We had a lot of perspective this week on what it’s like for women in biotech—not something I’ve written much about here the past three years. This week in BioBeat I talked about what looks like a potent new force for closing the gender gap in biotech—a new all-female networking group called Women in Bio. Coincidentally, we also had a guest post from Lisa Suennen, a venture capitalist in San Francisco, who talked about another women-dominated biotech event she recently attended in the Bay Area.

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This week we had a so-small-it’s-scary acquisition of a local medical device company, along with some more encouraging news of a local biotech company entering its first clinical trial.

—Seattle-based Calypso Medical Technologies agreed to be acquired by Palo Alto, CA-based Varian Medical Systems this week for $10 million upfront, plus undisclosed future milestone payments. This will amount to a big write-off for Calypso investors, including Seattle-based Frazier Healthcare Ventures, who have poured more than $150 million into the company since its founding in 1999. The Calypso system, which enables medical pros to deliver prostate cancer radiation therapy with pinpoint accuracy, generates $15 million in annual sales, the company says.

—Theraclone Sciences, a Seattle biotech company that has pulled in the more modest sum of $41 million since its founding in 2005, reached a key milestone. Theraclone said it has started its first clinical trial of an experimental antibody it believes has potential to treat or prevent a wide variety of types of influenza. This first trial will assess safety at a variety of doses, and future trials will have to sort out whether it’s more useful as a hospital-based treatment for severe flu patients, or whether it can help protect first-responders in the event of a flu pandemic.

—I announced our next big Seattle biotech event this past week, called “The Immunex Impact.” This event, timed for the 10th anniversary of Amgen’s acquisition of Immunex, will bring together a number of prominent Immunoids still doing their thing in Seattle. Steve Gillis, Chris Henney, Doug Williams, Stewart Parker, and Dave Urdal will all be there, among others. Tickets are going super-fast for this one, and I’m really looking forward to seeing a lot of readers there at the Institute for Systems Biology on December 1. For info on how to register, click here.

—Cocrystal Discovery, the Bothell, WA-based startup led by Icos veterans Gary Wilcox and Sam Lee, pulled in $7.5 million last week through an investment from Israel-based Teva Pharmaceutical. Teva, the generics company seeking to invent new drugs, is betting on Cocrystal’s experimental polymerase inhibitor against hepatitis C, as well as other antiviral programs.

—This week in the BioBeat column, I chose to stir the pot about how more biotech industry leaders should stir the pot. Essentially, an industry like biotech that relies on broad support from the public and investors needs to work hard to keep people engaged. And being outspoken every once in a while about industry issues is definitely one way to do it.

—This week, I had the good fortune of being one of about five guys who attended a networking event with 200 professional biotech women. It was the kickoff event for the Seattle chapter of Women in Bio, which seeks to help women advance their careers in biotech. There was a lot of enthusiasm in the room, and for proof, check the handful of photos I snapped there.

—Lastly, I had some national news about how pharma giant Merck has decided to join the long list of Big Pharma companies that are now investing in biotech companies. Merck is getting its start with a $250 million fund for biotech startups, and another $250 million fund for global health innovations.

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Theraclone Sciences has made a lot of news lately with its antibody discovery prowess, but now it’s getting to the point where the rubber hits the road in biotech—clinical trials.

The Seattle-based biotech company, founded in 2005, is announcing today that it has started its first clinical trial. This study will look at an experimental antibody, TCN-032, designed to fight various strains of the flu. The trial will enroll 40 healthy volunteers in the U.S. who will get randomly assigned to the drug or a placebo, the company says. Theraclone will be looking to see if the drug is safe at a variety of doses, and it expects to see results in the first half of 2012, says Eleanor Ramos, the company’s new chief medical officer. The antibody is one that emerged from a collaboration with Japan-based Zenyaku Kogyo that was formed two years ago.

Theraclone doesn’t yet know, and won’t learn from this study alone, exactly how a new anti-flu antibody might be used in the real world. Since it’s delivered intravenously, the antibody could be reserved as another line of treatment for serious cases of flu in hospitalized patients. Or it might be used as a protective agent for first-responders at risk of getting infected during a flu pandemic, Ramos says. What Theraclone’s scientists know so far is that this engineered antibody has shown potent ability to attack vulnerable regions on a variety of flu strains in animals. That versatility in a pinch, if proven out in humans, might make it an attractive agent for government stockpiling in case a pandemic arises of a new mutant flu strain that can resist current treatments like Roche’s oseltamivir phosphate (Tamiflu) or GlaxoSmithKline’s zanamivir (Relenza).

Theraclone has one more experimental antibody, for what’s known as cytomegalovirus (CMV) infections, teed up to enter the clinic next year, Ramos says.

It’s all been part of a very busy period at Theraclone. The company pulled in $10.6 million in additional venture capital last week. A few weeks before that, Theraclone and its collaborators had a publication in Nature that described the discovery of 17 new broadly neutralizing antibodies against the HIV virus. And it got some national recognition when it was named one of the Fierce15 emerging biotech companies by FierceBiotech, an industry publication.

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Vivaldi Biosciences is a rare and highly sought after property in New York City: a promising biotech startup. Why rare? Because office space is so expensive, and wet-lab space so hard to find, that most biotech companies that originate in NYC end up fleeing for some other city that has more to offer them. But Vivaldi’s far-flung startup team—which includes folks from NYC, Boston, and San Francisco—went to great lengths to keep the four-year-old company in the Big Apple.

Now Vivaldi is making strides towards reaching its first big milestone. Next quarter, the company hopes to get an application into the FDA to begin human trials of a novel flu vaccine—a product that Vivaldi executives believe could be the first truly effective vaccine in elderly people, who are most likely to suffer deadly complications from the virus. “Current vaccines leave 30 percent [of elderly people] unprotected,” says Elliott Kieff, a professor of medicine at Harvard who co-founded Vivaldi and now serves as chairman of its scientific advisory board. “What’s wonderful about this concept is it’s an entirely new strategy for attenuating the virus.”

Vivaldi’s technology originated at Mount Sinai School of Medicine in New York. Scientists Peter Palese and Adolfo García-Sastre discovered that a protein produced by a gene called Influenza NS1 prevents flu-infected cells from producing interferon. That’s a problem, because interferon really helps the human body fight off the flu, by blocking the virus from replicating.

The scientists went on to discover that deleting part of the NS1 gene essentially immobilized the flu virus, because it stimulated the cells’ interferon response, which then prevented the virus from reproducing. Studies in animals suggest that administering this mutant virus as a vaccine provides cross protection against multiple strains of the flu.

The technology could greatly streamline the annual flu-vaccine production process. Today’s vaccines are “trivalent,” meaning they raise immunity against the three influenza strains (two type A strains and one type B strain) that are expected to be dominant in the upcoming flu season. Vivaldi has generated a master truncated NS1 vaccine for all influenza A strains, and second one for all influenza B strains. The company is also developing rapid-production techniques that could make the vaccine useful in a pandemic, when huge quantities need to be produced and delivered to vaccination centers in a hurry.

The effort to turn Mount Sinai’s flu discoveries into a company started 3,000 miles away, in the office of Douglass Given (pictured above), a partner at Bay City Capital in San Francisco. Given, a scientist and physician trained in infectious diseases, had received his Ph.D. in Kieff’s lab. “I wanted to do something … Next Page »

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Expect to hear more about the vaccine developer VBI this year. The company has made some progress in addressing a major bugaboo in the vaccine field—the need to keep the vast majority of them at cool or freezing temperatures or risk spoilage.

VBI (formerly called Variation Biotechnologies), which moved its headquarters from Canada to offices closer to its venture backers in Cambridge, MA, in 2009, has been in potential partnership talks with large vaccine manufacturers and also expects to raise an additional round of venture capital this year, chief executive Jeff Baxter tells me. Recent interest in the company might stem from preclinical data on its lead vaccine for influenza, which showed that it could remain effective after enduring a year of storage in a hot environment. Today’s flu vaccines would become worthless if stored in such conditions.

Global health advocates have been calling for the development of thermostable vaccines (which are those that don’t require refrigeration) for years, and organizations such as the Seattle-based Bill & Melinda Gates Foundation have poured millions of dollars into research that could lead to such treatments. But the scientists and industry haven’t been able to bring to market thermostable vaccines for many of the world’s most devastating infections. In a December interview with the New York Times, Bill Gates said: “Back then (five years ago), I thought: ‘Wow – we’ll have a bunch of thermostable vaccines by 2010.’ But we’re not even close to that. I’d be surprised if we have even one by 2015.”

Earlier this month, Gates’s foundation, which typically provides grant funding, said it made an unprecedented equity investment of $10 million of in Research Triangle Park, NC-based Liquidia Technologies, after showing particular interest in the company’s way of manufacturing nanoparticle vaccines.

To hear VBI’s Baxter tell it, the need for thermostable vaccines exists in both the developing world, where cold storage in many areas can be difficult, and in established markets in North America and Europe. Many remote parts of Africa, for example, lack stable sources of electricity to keep refrigerators and freezers running around the clock. The problems with cold vaccine storage aren’t entirely limited to Africa, either. Vaccines spoil in the States too, sometimes leading to outbreaks.

Now VBI appears to have a shot at delivering on the promise of thermostable vaccines. Its thermostable vaccine for flu virus is expected to be ready for human trials in less than a year. At the same time, the company says that its proprietary way of formulating vaccines to keep them thermostable can be applied to both existing and developmental vaccines. And Baxter says that, unlike some of his competitors, his firm’s technology requires an extra step at the end of current processes for manufacturing vaccines and doesn’t require any changes at earlier stages of production.

“This will be one of those things where once thermostable vaccines start extending the current market, then very quickly you will see thermostable vaccines becoming the norm,” Baxter said. “Because it is such a competitive advantage to take vaccines out of the cold chain and to reduce the risk of spoilage.”

Heat alters the molecular structure of traditional vaccines and protein drugs, which are reliant on the shape of the molecules to … Next Page »

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Global health innovators have a rich new venture capitalist to turn to—the Bill & Melinda Gates Foundation.

The Seattle-based nonprofit, the world’s largest philanthropy with $36.4 billion in assets, made its first direct equity investment in a for-profit biotech company last week when it pumped $10 million into Research Triangle Park, NC-based Liquidia Technologies. While the foundation has made grants to companies for years, and has linked its support to specific programs with clear global health goals, this is the first time the foundation has structured a deal to take equity ownership, and have board-level oversight of a startup’s work, much like a venture capital firm.

It took more than a year to sort through the technical, financial and legal issues before the Gates Foundation was comfortable enough to make the Liquidia investment a reality. But it could provide a template for a new financing approach, which seeks to balance the focus and discipline of a venture investment with the nonprofit mission of fostering global health innovation, says Doug Holtzman, a deputy director on the infectious diseases team at the Gates Foundation.

“This was not a decision made with the snap of a finger,” Holtzman says. “We explained our charitable intent, as a slightly different kind of investor in the company. We don’t want to interfere with their ability to make money, but we do have an expectation they’ll make this technology available for (global health) product development.”

The Gates Foundation has been thinking about new ways to structure its support for innovation in global health for quite some time. Tachi Yamada, the executive director of global health at the foundation, has spoken about how venture capitalists and biotech entrepreneurs haven’t done enough to support the cause.

The foundation’s interest in Liquidia emerged about a year ago when Holtzman saw the company’s chief medical officer, Frank Malinoski, at a meeting of the President’s Council of Advisors on Science and Technology. Holtzman—a scientist with experience working at biotechs like Icos, Millennium Pharmaceuticals, and Microbia (now Ironwood Pharmaceuticals)—says he was intrigued by what Malinoski had to say about Liquidia’s potential for new vaccine development.

Doug Holtzman

The Gates Foundation certainly isn’t the first group to see potential in Liquidia’s work. The company already had significant venture backing, including a $25 million Series C venture round last April from Canaan Partners, Pappas Ventures, Morningside Venture Investments, New Enterprise Associates, PPD, and Firelake Capital.

Liquidia has attracted the interest in a technology for creating specific 3-D shaped particles that can be made to look like an invading virus does to the human immune system. Getting the proper shape is critically important, because it could coax the immune system to mount a defense against a particular invader. Even more importantly, Liquidia’s technique can be used to make these precise shapes, make them consistently, and do it in a scalable fashion, Holtzman says. Those are essential factors any company must figure out to make … Next Page »

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[Correction: 6:38 pm] Theraclone Sciences just got a very big break. The Seattle-based biotech company has enticed Pfizer, the world’s largest drugmaker, to pay as much as $632 million over time for the right to co-develop antibody drugs based on Theraclone’s technology.

Pfizer (NYSE: PFE) is getting access to the Theraclone technology to hunt for antibody drugs against cancer and infectious diseases, according to news first reported today by The New York Times. Theraclone will work to develop antibodies against two biological targets related to infectious diseases, and two more related to cancer, says Theraclone’s vice president of finance, Russ Hawkinson. [Correction: An earlier version said Pfizer is getting exclusive access to Theraclone's technology against cancer and infectious diseases. It's only getting exclusive access to make drugs against the four designated targets for cancer and infectious diseases.]

Steve Gillis, the acting president of Theraclone and a managing director with Arch Venture Partners, told the Times that about 30 to 40 percent of the deal’s total value—or $189 million to $252 million—represents “near-term” money that Theraclone can receive if it hits milestones before mid-stage clinical trials. That’s opposed to so-called “bio-dollars” which might sound huge in a headline, but can be misleading because they often never materialize years later as drugs fail in development.

“The fact that Pfizer selected our antibody discovery technology is, I think, a great endorsement of our science and the speed with which we can make discoveries,” Gillis told the Times. Pfizer’s senior vice president and head of biotherapeutics research, Jose-Carlos Gutiérrez-Ramos, told the newspaper: “This fits in the big picture of us wanting to be on the leading edge of biotherapeutics and antibody discovery, and this is one company we are very excited to work with.”

The Pfizer deal truly represents a coup for Theraclone, which has had some wrenching ups and downs. CEO Dave Fanning died suddenly in June. Fanning had spent much of his time scouring the globe for partners to help push forward Theraclone’s antibody drug discovery programs at a time when traditional venture capital was increasingly hard to come by.

This deal does more than just provide validation of the Theraclone technology—it provides some vitally important cash. Theraclone isn’t disclosing how much cash it had left at the time of this new Pfizer deal, but the partnership means Theraclone won’t have to seek out new venture financing this year, Hawkinson says. And based on the new capital infusion, Theraclone plans to hire … Next Page »

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NanoBio has its sights set on developing a new generation of vaccines against the flu and other pathogens, and this past week the Ann Arbor, MI-based company showed the first real evidence in human beings that its approach might work.

An initial study of 199 healthy adults, presented over the weekend at the Interscience Conference on Antimicrobial Agents and Chemotherapy, showed first off that NanoBio’s nanoparticle flu vaccine candidate, NB-1008, was safe. But importantly, this formulation didn’t require any injection. And even more significantly, the formulation was able to trigger an immune response against the virus in the bloodstream and also in the mucosal membranes like those that line the nose, where people usually first breath in pathogens. This two-pronged form of immunity hasn’t been shown before in conventional flu vaccines that are injected into a muscle, or with the currently available nasal spray flu vaccine (FluMist).

“We did extensive testing, mice, ferrets, rabbits, so this study was a really a proof of concept for us in man,” says David Peralta, NanoBio’s chief operating officer.

NanoBio, founded in 2000 by Jim Baker Jr. at the University of Michigan, has pulled together more than $90 million in government and private financing over the years for its various nanotech projects. I wrote about one of those, a new preventive treatment for cold sores, back in July. But one of NanoBio’s other high priority projects has been to create a flu vaccine that can trigger strong protection against the virus for people who would rather avoid getting stuck with a needle.

What NanoBio did in this case was take a commercially available flu vaccine, and combine it with a nanoparticle designed to interact with so-called antigen presenting cells in the mucosal lining. These cells are known to process bits of a foreign invader, like flu, and present them to other cells to spark a vigorous immune defense. NanoBio made this formulation into a liquid that was delivered by a health care professional to adults in five drops, and researchers followed up … Next Page »

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Seattle biotech is still buzzing more than a week later about Bristol-Myers Squibb’s acquisition of ZymoGenetics (NASDAQ: ZGEN) and whether it means we live in some dead-end biotech loserville. If you have some thoughts on this, please shoot me a note, because the last words haven’t yet been written on the Zymo deal.

—Everyone wants to know what will happen to the 320 ZymoGenetics employees when Bristol takes over, and for now, mum’s the word. The company also isn’t ready to talk about what will happen to its landmark headquarters, the renovated City Light Steam Plant on Eastlake Avenue. Chances are good, according to a couple veterans of the local biotech real estate scene, that this space will likely remain a center for biotech R&D even when Zymo exits the scene.

—One of the region’s other most important biotech companies, Seattle Genetics (NASDAQ: SGEN) suffered a setback this week when it said an experimental antibody for acute myeloid leukemia failed in a clinical trial of 210 patients. While a clinical failure is never good, this wasn’t exactly a disaster for Seattle Genetics because it was considered such a long shot. The more important news will come in the next weeks, when Seattle Genetics gets results from its lead “empowered antibody” in development for Hodgkin’s disease. If that fails, then Seattle Genetics will probably have to make some very hard decisions.

—One of the Seattle companies that got away, University of Washington spinoff Bio Architecture Lab, scored some crucial validation this week. The company, now based in Berkeley, CA, struck a partnership with Norway-based Statoil, the world’s largest offshore oil and gas producer. This 3-year deal will enable Bio Architecture Lab to take process for making ethanol from seaweed into the Norwegian coastal waters, in addition to its existing work off the coast of Chile. Bio Architecture Lab has now secured more than $33 million in support from from venture capitalists, governments, and strategic partners.

—PATH, the Seattle-based global health hothouse, has snagged an important new contract from Uncle Sam to help develop flu vaccines that can be stockpiled for years in case of a global flu pandemic. This deal, worth $5.2 million, will be used to further test work that PATH has been doing for years to make vaccines that don’t need to be refrigerated, even in hot parts of the world that lack reliable electricity and fridge space.

—Seattle Genetics, a day after its leukemia drug disappointment, had a minor positive bit of news. The company licensed its technology to make potent antibodies to Denmark-based Genmab. If Seattle Genetics likes the cancer drug that Genmab comes up with after the first phase of clinical trials, it will have the option to go into a 50-50 co-development arrangement.

—Down the road from Seattle Genetics in Bothell, WA, Alder Biopharmaceuticals was honored as one of the nation’s top 15 biotech companies by FierceBiotech, an online industry publication. Alder, which rose from the ashes of Celltech R&D’s shutdown in 2003, burst on the national scene last year when it struck a billion-dollar partnership with Bristol-Myers Squibb. Alder was the only Seattle-area company to make the FierceBiotech list this year, although Seattle’s Calistoga Pharmaceuticals earned the distinction last year.

—This whole bit about ZymoGenetics and what it means for the future of Seattle biotech was certainly a hot topic of conversation this week at the inaugural “Xconomy Meetup.” This was an informal get-together at the Streamline Tavern, in which I invited Accelerator CEO Carl Weissman to be the special guest for our readers to mingle with over a beer. This event was a big hit, with more than two dozen people coming out for some great networking. We’ll do it again. And if you missed a chance to hear Carl’s thoughts on acquisitions in Seattle biotech, he wrote a guest editorial which sums up his thinking on the issue.

—Just before we put together the informal meetup at the Streamline, we announced one of Xconomy Seattle’s showcase events, coming up Oct. 28. This event, called “VC Crossfire” will bring together some of the region’s top venture capitalists and entrepreneurs for a conversation about how innovation will be financed in the future as traditional VC faces an uncertain future after a decade of lackluster returns. For more information, check out the “VC Crossfire” registration page.

—Last, but not least, we couldn’t have a big news week around here without a little drama from Seattle-based Dendreon (NASDAQ: DNDN). The maker of the first FDA-approved treatment to actively stimulate the immune system against cancer said this week that one of its high-profile board members, Genentech CEO Ian Clark, is resigning from the board. Clark, who oversees a portfolio of the world’s best-selling cancer drugs, said in a statement that he doesn’t have enough time to serve on the board anymore.

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One of the big ideas PATH is pursuing to make vaccines more useful just got a strong vote of confidence. The Seattle-based global health nonprofit is announcing today it has secured a $5.2 million contract from the U.S. government to develop flu vaccines that can remain effective for years when they are stashed away in a stockpile, in case officials ever need it to perform mass vaccinations during a global flu pandemic.

The contract, which can be extended to be worth $9.4 million over time, is coming from the Biomedical Advanced Research and Development (BARDA) group within the U.S. Department of Health and Human Services. PATH is also setting out to ensure the flu vaccine will remain effective even if it’s not refrigerated during the critical days it would take to disseminate vaccines widely in a pandemic situation.

The U.S. government has become increasingly interested in ways to protect the homefront in case of a flu pandemic, especially since last year’s alarm bells went off about the H1N1 virus, which didn’t turn out nearly as bad as first feared. The U.S. and other countries don’t have enough existing manufacturing capacity to make enough flu vaccine every year for everyone around the world. Biotechs like Seattle-based Immune Design have gotten U.S. government support to develop immune-boosting compounds called adjuvants that make vaccines more potent, which would help extend the existing supply. Another Seattle biotech, Theraclone Sciences, has a partnership with a Japanese company to develop an antibody with broad neutralizing capability against flu, which governments could stockpile in case of emergency.

PATH snapped up this contract based on about seven years of R&D. PATH (formerly known as the Program for Appropriate Technology in Health) has been working all those years to find vaccine additives that are cheap and easily available, and which could make it possible to deliver vaccines in remote regions of Africa that don’t have the reliable electricity needed to keep enough vaccines in cold storage. Back in August 2009, PATH published some intriguing findings with collaborators that suggested it may have found a way to keep critical vaccines stable at temperatures of nearly 100 degrees Fahrenheit.

Even though flu isn’t usually perceived as one of the main diseases that PATH usually works to combat in the developing world, it is by definition one of those contagious pathogens that can cross all geographic borders. And helping developing countries manage flu vaccines is something PATH has been pursuing in a variety of ways, beyond just vaccine stabilization.

“The developing world is just really starting to use flu vaccine, and the H1N1 really got people’s attention,” says Dexiang Chen, PATH’s senior technical officer on the vaccine stabilization project. “In many countries they are starting from scratch to address the problem.”

Shelf life is one of the problems with flu vaccines today. Once vaccines are produced, they generally are able to last for one fall-to-spring flu season, then get tossed out, Chen says. For governments to stockpile flu vaccines, the vaccine ideally ought to be stored for five years or more, he says.

If the stockpiled vaccine needs to be used, PATH is hoping that the same ingredients that kept it stable in a refrigerated environment will help it remain stable at room temperature, or high temperatures, for weeks as it is getting distributed, Chen says. That’s the key piece that would make a flu vaccine most valuable in the developing world. It might also be translatable over to other vaccines, Chen says.

Years of work, and lots of dollars, will be needed to prove that the modified vaccines maintain the same safety and efficacy properties as the original refrigerated versions. A project of this magnitude will definitely require academic and industry collaborators if it’s ever going to be implemented in a big way. But the folks at PATH are clearly pumped about the potential. “We all feel passionate about this,” says Ray Cummings, a commercialization officer at PATH.

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A former pharmaceutical chief has taken the top job at Watertown, MA-based biotech startup Selecta Biosciences, a developer of nanoparticle vaccine technology. Werner Cautreels began work as chief executive of the startup in recent weeks, just months after leading one of the larger acquisition deals in the pharma industry this year.

At the same time, Selecta says it won a $3 million grant from the NIH’s National Institute of Drug Abuse to research an advanced nicotine vaccine for people addicted to cigarettes (more on that below). The grant builds on the $33 million the two-year-old startup has raised from such venture investors as Flagship Ventures, Leukon Investments, NanoDimension, OrbiMed Advisors, and Polaris Venture Partners.

Cautreels, 57, was previously the CEO of Belgium-based Solvay Pharmaceuticals, until shortly after health products giant Abbott Laboratories (NYSE:ABT) bought his company for $6.6 billion in February. His new job is a switch from a big company with lots of products and resources to a 25-employee outfit in pre-clinical development. But the startup’s new chief says there are perks to being at a young company versus an older one.

“The change is rather positive,” Cautreels says. It’s “more dynamic, less red tape, more direct contact with people.”

Bob Bratzler, who had served as executive chairman of Selecta since its founding in 2008, resigned from that post several months ago, according to the company. The firm did not have a … Next Page »

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Steve Reed is following a tried-and-true road map for building a biotech company. First year, build the team. Second year, gather some data to support the founding idea. Third year, prove it in clinical trials. Then start coaxing Big Pharma to open up its checkbook and do deals.

“This is when it gets exciting,” Reed says. “That’s just what happened at Corixa.”

Reed was talking about the growth strategy at his latest startup, Seattle-based Immune Design. The company made news yesterday when it raised $32 million in its second round of venture financing, from a big name crew of investors outside the Northwest—ProQuest Investments, The Column Group, Alta Partners, and Versant Ventures.

Immune Design was founded with an $18 million venture round from the last three investors a little more than two years ago, in June 2008. The company’s vision is to create a new generation of more specific, potent vaccines. In theory, these vaccines could provide lasting protection against infectious diseases with a single shot, or could be used to re-direct the power of the immune system toward an internal invader like cancer cells.

The technology builds on research from the Caltech lab of Nobel Laureate David Baltimore, who created a viral vector that makes it possible to specifically stimulate dendritic cells of the immune systemare known for sending sentinel warning signals about pathogens throughout the immune system. That targeting ability is being combined with synthetic chemical compounds called adjuvants, which boost the effectiveness of vaccines. These adjuvants from Reed’s lab at the Infectious Disease Research Institute (IDRI), when combined with Baltimore’s precise delivery system, offer an opportunity to trigger highly potent and specific immune responses in the body, as I described in yesterday’s breaking news story.

Steve Reed

Immune Design plays its cards very close to the vest, so I was eager to stop by Reed’s office yesterday for a download on the company’s progress the past couple years, and what enabled them to raise a healthy sum like $32 million.

Reed, of course, has been here before. He founded the nonprofit IDRI in 1993 to pursue his dreams of fighting global health scourges. Soon thereafter, he connected with Immunex co-founder Steve Gillis to start a for-profit venture, Corixa, with the idea of raising private money and bringing business discipline to some of his vaccine work. Corixa struggled to market its lone cancer drug, although it successfully developed adjuvants that are now incorporated into GlaxoSmithKline’s vaccine for cervical cancer, marketed as Cervarix. Corixa was ultimately sold to pharmaceutical giant GlaxoSmithKline for about $300 million in 2005.

While Corixa went away, Reed went back to innovating in the adjuvant world with his team at IDRI. The earlier generation of adjuvants, known as MPL, were made from natural products, which made them a little more tricky and expensive to manufacture. The next step was to isolate the specific component of the MPL compounds that appeared to be closely related to sparking an immune response, and then make that component through a synthetic chemical process that would be cheaper, consistently reproducible, and scalable. That technology was went into Immune Design, through what it now calls GLA.

Like in the early days of Corixa, Reed sensed … Next Page »

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Visterra, a Cambridge, MA-based developer of therapies and diagnostics for flu and other viruses, has raised a $6 million round of venture funding from Flagship Ventures, Lux Capital, and Polaris Venture Partners. The news was reported earlier by PE Hub and Mass High Tech. Visterra, formerly called Parasol Therapeutics, was spun out of the MIT lab of bioengineer Ram Sasisekharan and incubated at Polaris, as Ryan reported in April 2009. The company previously raised $3.25 million in seed funding. The new money is being used in part to help Visterra expand to Singapore, where it plans to extend its R&D capabilities.

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Xconomy has some tragic news to report. David Fanning, the president and CEO of one of Seattle’s more promising biotech startups, Theraclone Sciences, died suddenly this morning, according to an e-mailed statement from its board of directors. The cause of death wasn’t immediately known.

“We are heartbroken by this sudden, tragic loss, and our thoughts go out to David’s family and colleagues,” Theraclone said in a statement from its board of directors. “At this time we ask only that you join with so many in mourning the loss of our colleague and friend. We remain dedicated to the science, the employees and the promise of the company’s world class technology.”

Fanning was less than 50 years old.

“This is just devastating,” says Johnny Stine, the founder of Theraclone.

Fanning got his bachelor’s degree from Harvard University, and his business degree from MIT’s Sloan School of Management. His career in biotech brought him to Seattle in 1997 to work for Steve Gillis at Corixa. Fanning was vice president of business development and marketing there for three years, had a brief stint as chief business officer for CoPharma in the Boston area, and then returned to Seattle to work for Gillis again as Corixa’s chief operating officer, from 2001 until the company was sold to GlaxoSmithKline in 2005.

The merger left a lot of the talented people from Corixa looking for a new challenge, and Fanning found it again through his contact with Gillis. This time, Gillis was a venture capitalist with Arch Venture Partners, an investor in the Seattle-based Accelerator, which in those days was incubating a startup then called Spaltudaq.

Spaltudaq was built on a new idea for discovering antibody drugs. Scientists there look at blood or tissue samples from patients, and identify antibodies that are made by people’s immune systems against foreign invaders like viruses, bacteria, or cancer cells. Mother Nature has evolved pretty efficient defense mechanisms against these troublemakers, so the company’s scientists sought to copy some of the best natural antibodies and use them as drugs. The company hit its early scientific goals inside Accelerator, and went on to raise $29 million in March 2007 from Arch Venture Partners, Canaan Partners, HealthCare Ventures, Amgen Ventures, MPM Capital, and Alexandria Real Estate Equities.

The company, which has since changed its name to Theraclone Sciences, has had its challenges raising money in recent years, like a lot of startups. Theraclone hasn’t been able to push any of its drug candidates along into the serious proving ground of clinical trials, making it difficult for Fanning to generate a lot of interest from investors during a downturn.

But Theraclone, under Fanning’s leadership, had a few victories in the last year that allowed it to forge ahead. Its scientists, along with collaborators at The Scripps Research Institute in San Diego, published a blockbuster paper last September in Science. By studying rare blood samples from HIV-resistant people in the lab, scientists at Theraclone and their collaborators found two weak spots on the virus, and were able to genetically engineer two new antibodies that broadly neutralize many variations of the virus circulating around the world. It was the first time in more than a decade that scientists discovered antibodies with broad neutralizing capability that can fight multiple strains of the virus in the lab.

Almost exactly one month later, in October 2009, Fanning and Theraclone struck an important partnership to keep the science moving forward. Japan-based Zenyaku Kogyo agreed to pay Theraclone as much as $18 million over time to help it develop broadly neutralizing antibodies against flu viruses, which could be useful to stockpile in case of a future pandemic.

The timing of the paper in Science, which put Theraclone in the international news, couldn’t have been better. The day in September when the HIV paper was published, Fanning was in Japan, negotiating with the people from Zenyaku.

Fanning’s death has a personal affect on me. My office is an adjoining building next to his on First Hill, and I would occasionally see him on my way to my usual coffee shop, often walking and talking with his cell phone, but never too busy to wave and smile. I sat next to him at dinner a couple months ago at an event organized by the Washington Biotechnology & Biomedical Association, and I remember him raving about the emerging prowess of China in the field of contract research. Just last Friday, he called me to brainstorm about a WBBA event in which he was hoping to showcase Seattle as a hotbed of innovation in antibody drug development.

Fanning is survived by his wife and young daughter. Once I know more about the cause of death, I’ll update this story. But if you have any memories of David that you’d like to share with the Seattle innovation community, please feel free to add a comment at the bottom of this story or send me a note directly at ltimmerman@xconomy.com and I’ll add it as an update.

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This was a big biotech news week with the annual extravaganza for cancer drug developers, the American Society of Clinical Oncology (ASCO). Nobody from Seattle stood out on the world stage this year, although we heard about some people laying important groundwork for future ASCOs.

—ZymoGenetics, the granddaddy of Seattle biotech, has had some bad luck the last couple years, and this year’s ASCO meeting was no exception. The company (NASDAQ: ZGEN) presented some promising data on a new treatment for melanoma that has spread through the body, although it was upstaged by a rival drug from Bristol-Myers Squibb.

—Calistoga Pharmaceuticals, one of the relative whippersnappers of Seattle biotech, presented some important data that shows its lead drug candidate is standing up to more rigorous clinical testing. Calistoga showed some intriguing results from the first dozen patients at last year’s ASCO, but this year, the same trend was apparent in a database of more than 100 patients.

—Seattle Genetics (NASDAQ: SGEN) has been on a roll with its “empowered antibody” for Hodgkin’s disease, although the company didn’t really have any groundbreaking scoops at ASCO this year. It presented some preliminary data that suggests its lead candidate might work when used in re-treatment cycles, which is an important thing for doctors who want to know they have options when a patient relapses.

—One of the interesting stories in medical devices this year has been the emergence of a Northwest angel investing network, supported by the Washington Biotechnology & Biomedical Association, called Wings. The mostly volunteer effort was led by EndoGastric Solutions founder Stefan Kraemer, who is leaving the Northwest for a job at C.R. Bard on the East Coast. But enough pieces were in place in the organization that a seasoned pair of medical device entrepreneurs—Kirby Cramer and Wayne Wager—have stepped in to fill the leadership void.

—Asemblon, a Redmond, WA-based developer of organic carrier molecules designed to make hydrogen fuel practical for the trucking industry, has picked up some renewed focus with its new CEO Michael Ramage and a partnership with Los Angeles-based Vision Industries, a hydrogen-powered truckmaker that has caught the eye of California Gov. Arnold Schwarzenegger.

—Bothell, WA-based Alder Biopharmaceuticals presented data at the ASCO meeting on its novel idea of treating cancer patients not by fighting the tumors, but by tamping down the excess inflammation that makes them feel so miserable. I offered an in-depth profile of this drug in a preview story before the big medical meeting.

—AVI Biopharma (NASDAQ: AVII), the Bothell, WA-based developer of RNA-based therapies, said it had lined up another contract from Uncle Sam potentially worth $18 million to develop a treatment for pandemic flu.

—Bothell, WA-based Ekos, the developer of ultrasound-based therapies, said it has received a $2.7 million grant from the National Institutes of Health to study its treatment for hemorrhagic strokes.

—Xconomy’s life sciences columnist, Sylvia Pagan Westphal, pointed out that in the decade since the genomics bubble burst, a lot of really interesting things are starting to happen again based on our deepening understanding of the genome. It may not show up on a quarterly earnings report yet, but genomics is on the comeback trail, Westphal writes.

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AVI Biopharma (NASDAQ: AVII), the Bothell, WA-based developer of RNA-based therapies, said today it has been awarded a U.S. defense contract that could be worth as much as $18 million to develop a treatment against pandemic H1N1 flu. The money is supposed to support development of AVI-7100 as a nasal spray formulation, and to pay for initial human trials to demonstrate safety.

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IntelligentMDx, a Cambridge, MA-based maker of molecular diagnostic tests, has garnered FDA emergency use authorization for its product for detecting the H1N1 virus, the company announced today. No test has been approved for identifying H1N1, but the emergency use authorization allows the IntelligentMDx diagnostic assay to be used while the flu outbreak is still in emergency status, a state that is set to expire on April 26 of this year, the company said.

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AVI Biopharma doled out an interesting little morsel of news on its muscular dystrophy drug right before Christmas that showed encouraging results in three boys. This year, the Bothell, WA-based biotech company is eagerly awaiting more meaningful follow-up data that could show it is on track with what could be the first treatment to fix the underlying molecular abnormality in boys with Duchenne Muscular Dystrophy.

I got the update on AVI’s game plan for 2010 when I met with a few senior executives, including chief financial officer David Boyle and chief medical officer Steve Shrewsbury, a couple of weeks ago in San Francisco. We talked a little bit about the company’s RNA-based treatments for hemorrhagic viruses like Ebola, as well as a new government-funded flu program. But there’s no doubt the main event this year will be what happens with the company’s treatment for Duchenne Muscular Dystrophy.

AVI Biopharma (NASDAQ: AVII) wants to be the first company to make a drug that silences a specific strand of RNA, and enables the body to produce a protein called dystrophin. This is a protein that’s essential for enabling muscles to rebuild themselves, and is lacking in boys with a birth defect known as Duchenne Muscular Dystrophy. This is a crippling disorder that affects about one out of every 3,500 boys born worldwide.

“Duchenne Muscular Dystrophy is certainly our lead program, and we think it has significant value,” Boyle says.

The AVI approach made some medical news in The Lancet last year, when the company showed that its RNA-based treatment was able to restore production of dystrophin proteins when injected directly into a foot muscle. That prompted the next step, in which AVI developed a version of the drug that could be delivered intravenously, and circulate throughout the body, where it could presumably have a much broader impact on muscles.

The first peek at data from this trial of the intravenous version came out in December. This initial slice of data was from the first nine patients who were enrolled in the four lowest dose groups. Researchers found that in three patients who got doses on the high end of that range, the molecular abnormalities dissipated. One boy was able to produce five-fold higher amounts of dystrophin. “These results suggest that we are on the right path,” said Francesco Muntoni, the trial’s lead investigator at University College London, in a statement.

I wanted to know about the next steps to watch for in the clinical development of this drug, called AVI-4658. It turns out that AVI has two major data releases planned for 2010, and both will be closely watched by parents, researchers, and shareholders.

The first release will be before the end of June. The trial, for those unfamiliar … Next Page »

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[Editor's Note: As the decade comes to an end, we've asked a number of Xconomists around the country to weigh in with the Top 5 innovations they've seen in their respective fields the past 10 years, or the Top 5 disruptive technologies that will impact the next decade. Here's the first installment.]

Here are the 5 biotech innovations from this decade that are currently (or will be shortly) making a big difference for patients with a variety of diseases.

1) Cancer therapies such as Roche/Genentech’s trastuzumab (Herceptin) and Celgene’s lenalidomide (Revlimid).

2) HIV therapies such as Gilead Sciences’ combination of efavirenz, emtricitabine, and tenofovir (Atripla).

3) Improved flu vaccines.

4) Therapies for hepatitis C such as Vertex Pharmaceuticals’ telaprevir.

5) Tumor vaccines such as Dendreon’s sipuleucel-T (Provenge).

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