Drug development programs got extended at two San Diego life sciences companies, while others had some good news on the fund-raising front. We wrap it all up for you here.

—Fate Therapeutics, a startup working to supply “industrialized” stem cells for the pharmaceutical industry without using embryos, said it raised $30 million in venture capital. That brings the total amount raised by the San Diego-based company to about $50 million since its inception two years ago.

—Cadence Pharmaceuticals (NASDAQ: CADX) said the FDA has delayed its review of the San Diego company’s intravenous pain reliever by three months, to Feb. 12. Cadence provided additional data to the FDA after an advisory panel raised concerns about liver damage from excessive doses of acetaminophen. But Cadence said it remains confident it will win FDA approval of its drug, which contains acetaminophen.

—Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) and its Big Pharma partner, Genzyme (NASDAQ: GENZ), have extended the timeline for their much-anticipated cholesterol-lowering drug by nearly a year. The companies reported encouraging results from a clinical trial, but noted that four out of 34 patients saw their liver enzymes increase to three times normal, a sign of potential liver damage. The companies plan to tinker with the dose of the injectible drug in future trials.

—San Diego-based NextImage Medical, a developer of a Web-based system for scheduling and managing diagnostic imaging services, reporting raising $5 million in a venture round led by Chrysalis Ventures of Louisville, KY.

—San Diego-based Altair Therapeutics, a company developing inhalable drugs to block inflammatory proteins involved in asthma and other respiratory diseases, has closed on the second part of a Series A venture financing, bringing the total amount raises this year to $17 million.

—San Diego-based Cyntellect, which makes work stations used by biotechs for cell analysis, purification, and processing, raised $15.5 million so far in a secondary round that aims to raise a total of $18.6 million, according to a recent regulatory filing.

—GenVault, a Carlsbad, CA-based company that markets dry-storage technologies that allow scientists to store biological samples at room temperature, said it expects to break even by the end of next year. The startup has raised about $32 million so far.

Comments | Reprints | Share:        

Believe it or not, the troubles besetting Genzyme (NASDAQ: GENZ) were not the only life science stories coming out of the Boston area this week, although they sure grabbed most of the attention. So let’s get them all out of the way first:

—On Friday the 13th, the FDA said bits of steel, rubber, and fiber had been detected in vials of five major enzyme replacement drugs made by Genzyme, all manufactured at the company’s troubled Allston Landing plant in Boston. But the agency said that the problem affected only about 1 percent of Genzyme’s products, and that no serious side effects have been reported. In a statement, Genzyme said a review of its safety database “has not identified any safety concerns to suggest that patients treated with Genzyme products have been exposed to foreign particles.”

—On Monday the 16th, Genzyme got word that the FDA won’t approve its application to market its drug alglucosidase alfa (Lumizyme), a proposed treatment for Pompe disease, until the company fixes deficiencies at the Allston Landing facility, where it wants to mass-produce the drug in large batches. But Genzyme continues to make the drug in smaller batches and sell it under the name Myozyme.

—On Tuesday the 17th, shares in Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) fell 16 percent after Isis and Genzyme released the full details of joint clinical trials of mipomersen, a cholesterol-lowering drug that the two companies see as a potential successor to Pfizer’s blockbuster atorvastatin (Lipitor). The drug lowered “bad” LDL cholesterol levels by 25 percent on average, but in several patients it raised liver enzymes to triple their normal levels, indicating potential liver damage. In new trials, Genzyme and Isis say they’re going to study what side effects, if any, mipomersen causes at different doses.

—On Wednesday the 18th, Genzyme said it had decided to scrap an experimental kidney disease drug, an “advanced phosphate binder,” after a clinical trial of 349 patients showed that it was no better at ridding phosphorus from the blood of dialysis patients than Genzyme’s existing drug sevelamer carbonate (Renvela). Genzyme’s two existing phosphate binders, which generate $850 million per year in sales, go off-patent in 2014, and the company is anxious to find a next-generation treatment.

—In non-Genzyme news, Chelmsford, MA-based Zoll Medical (NASDAQ: ZOLL), which makes cardiac defibrillators and other emergency medical devices, released a CPR training app for the Apple iPhone and iPod Touch that Ryan called the “most advanced” he’s seen. The “PocketCPR” app, which provides visual and audio instructions on proper CPR technique, could help lower the death toll from sudden cardiac arrest, which kills 300,000 Americans each year.

—Alkermes (NASDAQ: ALKS) of Cambridge, MA, said a 250-patient clinical trial showed that its drug naltrexone (Vivitrol), which is already used as a treatment for alcoholism, was more effective than a placebo at treating dependence on opioids such as heroin. The company plans to ask the FDA to approve this new use of the drug next year.

—Waltham, MA-based Polaris Venture Partners contributed to a $30 million Series B venture financing round for San Diego-based stem cell startup Fate Therapeutics. Kirkland, WA-based OVP Venture Partners led the deal, which also involved Arch Venture Partners, Venrock Associates, Astellas Venture Management, and Genzyme Ventures. Fate has collected about $50 million in venture funding all told.

Comments (1) | Reprints | Share:        

Another day, another piece of bad news from Genzyme. The Cambridge, MA-based biotech giant (NASDAQ: GENZ) said today it is scrapping development of a next-generation drug for kidney disease after it was unable to beat its existing treatment on the market.

Genzyme’s experimental drug, called an advanced phosphate binder, didn’t appear any better at getting rid of excess phosphorus from the blood of kidney dialysis patients than Genzyme’s sevelamer carbonate (Renvela) in a clinical trial of 349 patients, the company said in a statement. Genzyme had been hoping that the new drug would be more potent.

Those following the Genzyme story know about what’s become a brutal year. Some of the big setbacks were the viral contamination at its Allston, MA factory in June that created shortages of its top-selling products, the failure to win FDA approval of large-scale manufacturing for a Pompe drug, and the rejection of a leukemia drug for elderly patients.

But this kidney drug failure is another serious body blow. The company generates $850 million a year in sales from its two phosphate binder treatments. Patents that protect that franchise from competition from cheaper generics will expire in September 2014, according to Christopher Raymond, an analyst with market research firm Robert W. Baird. The next-generation kidney drug was supposed to help the company extend the patent life of its kidney drug market, Raymond said.

The failure is “a very significant negative in our view,” Raymond said in a note to clients today. He added that he had been starting to warm up to the company, as it has been inching closer to resolving the Allston manufacturing problems, but he called today’s halting of the kidney program a “game-changer.” Raymond has a $54 price target for the stock.

Shares of Genzyme dropped 1.3 percent to $49.65 at 9:39 am Eastern time today after the news was announced. The stock has dropped 25 percent this year.

Comments | Reprints | Share:        

The big new cholesterol-lowering drug from Genzyme and Isis Pharmaceuticals, which both companies are counting on as a future profit driver, passed its first major clinical trial, but investors didn’t like what they saw when full details were released this morning at a major medical meeting.

Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) fell 16 percent to $11.17 at 1:30 pm Eastern time after details from the trial of the drug, mipomersen, were released at the American Heart Association’s scientific sessions in Orlando, FL. Cambridge, MA-based Genzyme (NASDAQ: GENZ), which isn’t nearly as dependent on the drug, saw its shares climb 2.6 percent.

Expectations have been running high for this drug for years, with many seeing it as the next big thing for cholesterol after the invention of multi-billion dollar statin drugs such as Pfizer’s atorvastatin (Lipitor). Isis’ very bullish CEO Stanley Crooke told me last month that the drug represents an historic advance. The drug is thought to have promise because it is the first of its class that’s made of specially engineered strands of RNA drugs to block a problematic protein in the body, which often can’t be hit by conventional small-molecule drugs. In this case, mipomersen is engineered to block the production of a protein called apoB that carries the so-called “bad” LDL cholesterol in the bloodstream. The drug is originally being tested among patients with a one-in-a-million genetic condition that causes them to die young from their extremely high cholesterol, although Genzyme and Isis envision this drug becoming more widely used among wider populations of people with extremely high cholesterol that can’t be controlled by existing meds.

“Mipomersen may well be a valuable addition to the therapeutic armamentarium,” said Frederick Raal, the primary investigator of the pivotal study of mipomersen, during a webcast from today’s scientific meeting. Raal is the director of the Carbohydrate and Lipid Metabolism Research Unit at the University of the Witwatersrand in South Africa.

So what was in the data that made Isis investors, at least, skittish? First off, it should be noted that the headline results were released back in May, when Isis and Genzyme said that mipomersen reached its goal of lowering “bad” LDL cholesterol by 25 percent, compared with a 3 percent reduction on placebo, in a study of 51 patients with homozygous familial hypercholesterolemia. This meant that patients had a 100 milligram per deciliter drop in their LDL scores, which significantly lowers their risk of dangerous cardiovascular events like heart disease and stroke, Raal said. Isis and Genzyme added further detail on the effect at today’s meeting, essentially showing that secondary goals, such as lowering total cholesterol and triglycerides, also were achieved among patients on the drug.

But the treatment, which was given in a once-weekly 200 milligram injection, had some side effects worth noting. Four of the 34 patients $12 percent) who were treated with mipomersen had …Next Page »

Comments | Reprints | Share:        

Even more bad news from Genzyme (NASDAQ:GENZ). Following the news on Friday about new contamination found in treatments made at the Cambridge, MA-based biotech firm’s Allston, MA, plant, the company says today the FDA informed it that the agency won’t approve its application to market Pompe disease drug alglucosidase alfa (Lumizyme) made in large-scale batches until it addresses deficiencies at the facility.

Genzyme, which already has approval to make the drug in smaller bioreactors, said that it plans to request a meeting with the FDA to discuss what needs to be done to garner approval of the product made in larger containers. Meantime, the firm is making the drug in smaller batches under the name Myozyme. Genzyme plans to hold a conference call at 12 pm ET to discuss the FDA’s response.

The FDA is forcing Genzyme to get an additional approval of alglucosidase alfa—an enzyme replacement therapy for patients with rare lysosomal storage disorder—made in larger bioreactors because slight changes in manufacturing process such as the batch size can have an impact on the finished product. Back in April 2006, the treatment was the first of its kind approved for Pompe disease in the U.S., and it’s been one of Genzyme’s fastest-growing sellers. The company says that it needs approval of the treatment made in 4,000-liter batches at a factory in Belgium to meet global demand for the treatment. And this isn’t the only Genzyme drug in short supply. The company has experienced shortages of its top sellers, Cerezyme and Fabrazyme, after a viral contamination struck its Allston factory in June.

“We have made significant progress in bringing the Allston plant back in operation, and we will continue to work closely with the FDA to resolve these issues,” said Henri Termeer, Genzyme’s chairman and CEO, in a statement.

Comments | Reprints | Share:        

[Update: 6:22 pm Eastern, 11/13/09] Just when you thought it couldn’t get worse for Genzyme, it did. The FDA reported today that it has found tiny bits of garbage—steel, rubber, and fiber—in vials of five of the major drugs produced by the Cambridge, MA-based biotech company.

Genzyme (NASDAQ: GENZ) shares fell $3.89, or about 7 percent, to $49.28 at the close of trading today after the FDA made its disclosure on its website.

The agency said it found the new contamination in five of Genzyme’s top-selling products—imiglucerase (marketed as Cerezyme), agalsidase beta (Fabrazyme), alglucosidase alfa (Myozyme), laronidase (Aldurazyme), and thyrotropin alfa (Thyrogen), according to a report from the Associated Press. The FDA estimates the contamination only affects about 1 percent of Genzyme’s products, and the agency says that no serious side effects have been reported related to the latest contamination, according to the AP.

This is the latest major setback for Genzyme’s manufacturing operation, which was hit by a viral contamination in June that forced it to shut down production at its Allston Landing plant over the summer. That earlier contamination caused Genzyme to slash its sales estimates for the year, and created a new opportunity for competitors like Shire and Protalix Biotherapeutics.

Christopher Raymond, an analyst with private equity firm Robert W. Baird who covers Genzyme, said in a note to clients today that the latest contamination shouldn’t affect the company’s ability to start shipping new batches of imiglucerase and agalsidase beta to patients, but noted that “continued issues at Allston, and the fact that FDA inspection of Allston remains ongoing is not encouraging.” Fellow Baird analyst Tom Russo noted that “underscores the upside potential” of Shire to gain new market for its products.

[Updated comment from Genzyme, 6:22 pm Eastern, 11/13/09]

Genzyme issued a statement later Friday about the situation. The company says a global review of its safety database “has not identified any safety concerns to suggest that patients treated with Genzyme products have been exposed to foreign particles. However, a theoretical safety risk remains should a particle enter the bloodstream.”

The company added that doctors are being reminded to visually inspect vials for foreign particles before patients are injected. It says the rate of foreign particles in vials has not increased over time, although the company “remains committed to reducing the frequency of foreign particles in all of our products.”

Comments (1) | Reprints | Share:        

Waltham, MA-based diagnostics firm On-Q-ity has found $21 million in a Series A round of venture capital, according to a story this morning in peHUB. The developer of cancer tests was formed through the combination of CELLective Diagnostics and The DNA Repair Company, both portfolio companies of Mohr Davidow Ventures that had been unable to raise Series B rounds of financing individually.

Investors in the first-round financing included Mohr Davidow, Bessemer Venture Partners, Physic Ventures and Northgate Capital, peHUB reports. On-Q-ity is developing tests for breast and thoracic cancer, and the firm plans to focus later on diagnostics for prostate cancer.

The firm is developing tests that enable doctors to personalize cancer treatments for individual patients, according to its website. Its technologies include DNA repair biomarkers that can show whether a patient is likely to form resistance against certain drugs as well as microfludics chips used to capture and identify tumor cells in the bloodstream. Together the two key technologies could provide the ability to diagnose cancer, predict response to therapies, and track the progress of treatments, the company says.

Mara Aspinall, a former president of the Genzyme Genetics unit of Cambridge, MA-based biotech powerhouse Genzyme (NASDAQ:GENZ), is president and CEO of On-Q-ity.

Comments | Reprints | Share:        

Seattle has more than its share of brilliant biologists for a medium-sized American city. But if people and ideas are going to properly mix to create a thriving local biotech industry over the next two decades, we could use a few more common places with intellectual sparks—like bars. At least according to one of the region’s top life sciences entrepreneurs.

When in Boston and San Francisco, Stephen Friend says he gets most of his work done by socializing with scientific colleagues he meets for coffee or a drink. Not so here.

“The way Seattle is currently set up, I don’t have a place I go for a coffee or a drink. A place where I run into the people who are ready to try a new idea. That’s an important anchoring ingredient that we’re missing, and should be happening,” says Friend, the former senior vice president of cancer research at Merck, and co-founder of Seattle’s Rosetta Inpharmatics.

(Coffee itself is certainly easy to find, but Stephen may want to check out Xconomy’s handy Greater Seattle Coffee Cluster guide for the spots that are best known as innovation mixing pots.)

That was one of the many insights that emerged during Seattle Life Sciences 2029, a sold-out event Xconomy organized on Monday night at Seattle Biomedical Research Institute (see the photo gallery here). This event brought together a group of industry visionaries who have rarely, if ever, appeared on the same stage in front of a local audience: Ben Shapiro, the former executive vice president of basic research at Merck; Steve Gillis, the managing director of Arch Venture Partners who co-founded Immunex and Corixa; and Friend. The panel was moderated by Carl Weissman of Accelerator and OVP Venture Partners, and biotech pioneer Leroy Hood offered his thoughts in a video message on how Seattle can make strides to get bigger and better at biotech over the coming two decades.

This came up during a freewheeling audience Q&A, which covered a lot of ground. I’m not going to recap everything here—I think with some of the jokes, you probably just had to be there—but here were some of the best little acorns that that I squirreled away with my digital recorder, which are edited as always for length and clarity:

Steve Gillis

Steve Gillis on what entrepreneurs need to do to adapt in today’s financial climate: “Entrepreneurs need to be open to combining their ideas with existing organizations. Or combining those ideas with like-minded new proposals from other folks, as opposed to always wanting to have what I call their own pie. In the world in which we live, in which money is quite tight, people have to be open to joining forces earlier in evolution. That will result in everyone having a smaller slice of the pie, but it will also result in the possibility of someday eating pie. Instead of just dreaming about it. It’s a fundamental mind-set that needs to change.”

Stephen Friend on how universities need to relax rules on how inventive faculty spend their time: “The concept that you are either inside or outside of the university, and that some fraction of your time has to be spent inside the university, and that some percentage of your time has to be spent in your role as a tenured professor at the university, that has to go away. It’s the concept that someone could teach courses, and can be a role model for education, has to be kept separate from someone who’s actually running a company. The best example I know of is what MIT is trying to do. That organization, the person who leads it, she [Susan Hockfield] feels the university has to become, in a broad sense, the incubator. I don’t think many people, particularly at some universities in this town, are ready to think that creatively. It’s a mistake.”

Ben Shapiro on how Seattle ranks as a hub for life sciences innovation: “It’s worth …Next Page »

Comments | Reprints | Share:        

Isis Pharmaceuticals CEO Stanley Crooke is a man who knows how to make a grand gesture. The market may have been underwhelmed by what Isis and its partner, Genzyme, had to say about their first-of-a-kind cholesterol-lowering drug back in May, but to him that just means they’re missing the point.

When I stopped by to visit Crooke at the company’s (NASDAQ: ISIS) Carlsbad, CA, headquarters a few weeks ago to ask about his lead drug in development, mipomersen, he didn’t just offer up the usual optimistic platitudes. He said it’s going to be historic.

“In 30-plus years in drug discovery and development, I’ve been involved with 19 drugs that have made it to the market and 200 to 300 that haven’t,” Crooke says. “I’ve encountered two in my career that were amazing.”

One was cisplatinum chemotherapy for cancer. The other was cimetidine (Tagamet) for heartburn, Crooke says. “Mipomersen is the third one that’s remarkable.”

That’s a strong statement given that investors drove down Isis shares by 10 percent on heavy volume on May 20, after seeing their first glimpse of data from a pivotal trial of mipomersen. Expectations have been sky-high for this drug for a couple years now, as the next big thing for cholesterol after the invention of multi-billion dollar statin drugs such as Pfizer’s atorvastatin (Lipitor). Cambridge, MA based Genzyme (NASDAQ: GENZ) was said to outmaneuver more than a dozen rivals that wanted to co-develop mipomersen. In January 2008 Genyzme paid the princely sum of $325 million in upfront cash, plus $1.9 billion in potential milestone payments, (and potentially much more in future profit-sharing), to get a piece of ownership in this drug.

Stanley Crooke

Mipomersen has generated so much interest for at least a couple big reasons—the need for more powerful cholesterol-lowering drugs for patients who can’t get those levels under control with conventional statins, and because it represents a potential standard-bearer for Isis’ antisense technology. It’s designed to use specially engineered strands of RNA drugs to block a problematic protein in the body, which often can’t be hit by conventional small-molecule drugs. In this case, mipomersen is engineered to block the production of a protein called apoB that carries the so-called “bad” LDL cholesterol in the bloodstream.

In May, Isis and Genzyme declared victory in a press release that announced the first pivotal clinical trial of mipomersen. The companies said that of 51 patients with a rare genetic abnormality called homozygous familial hypercholesterolemia that causes high cholesterol, the drug was a success. Patients on mipomersen had a 25 percent reduction in their LDL cholesterol counts, compared with a 3 percent drop for those on a placebo. The drug also reached its secondary goals, including showing an apoB protein reduction which correlated with the cholesterol-lowering—an important point for scientists and physicians.

But the market didn’t see it as reason to cheer. Patients with this genetic abnormality are seriously ill, with LDL cholesterol scores at an eye-popping 400 milligrams per deciliter of blood when they entered the study. (Anything below 200 is considered desirable, according to the Mayo Clinic).

So simple math says that a 25 percent reduction from 400 takes those patients down to about 300, which might be good, even unprecedented for such sick patients, but it’s still not what most patients and doctors would consider healthy. Plus, there were six patients who didn’t complete their course of treatment after they were enrolled in the study, which certainly didn’t help.

So why was Crooke so enthused? He walked me through some of the context around the data that will be presented next month at the American Heart Association’s scientific sessions in Orlando, FL.

What’s remarkable, Crooke says, is that mipomersen works in every animal, and in every …Next Page »

Comments (10) | Reprints | Share:        

Investing in biotech can be scary. Only one out of 10 new drug candidates ever makes it through the gauntlet of clinical trials to become an FDA approved product, and it usually takes hundreds of millions of dollars and a decade or more of research to separate the winners from the losers. Investors usually can’t bother asking serious questions about profit-and-loss statements, or price-to-earnings ratios, until a company is 15 years old or more. And the hype—from gene therapy, to stem cells, to you fill in the blank—can be quite distracting.

So Christopher Henney, 68, who has seen it all in a 30-year career in biotech as co-founder of Immunex, Icos, and Dendreon, knew he had his work cut out yesterday. He was trying to convince a crowd of 100 financial pros at the CFA Society meeting in Seattle that biotech, the classic boom-or-bust industry, is really a good place to invest.

“I want to de-mythologize the scariness,” Henney said at the outset.

Henney started off his talk by reminding the audience how he and Steve Gillis, a pair of immunologists at the Fred Hutchinson Cancer Research Center, went on to start Seattle-based Immunex, one of the members of what he called “the class of 1983.” These were the second-generation companies, following industry pioneer Genentech, that all went public back in a great wave of enthusiasm for biotechnology. The class included Amgen, Biogen, Cetus, Chiron, Genzyme, and Immunex. Seven of the 10 to 12 biotech companies (Henney didn’t name the losers) that went public in that early wave went on to create market valuations that exceeded $1 billion, Henney said.

But even during that great wave of optimism about the power of new genetic engineering technologies for creating new drugs, there were prominent skeptics. Henney told the story of how he and Gillis had a meeting in the early days of Immunex with “one of the doyennes” of the Seattle investment community, whom he didn’t name. Henney and Gillis told their story with great enthusiasm, and got a rude awakening.

“At the end, I remember him saying, ‘I don’t think it’s a scam, but I won’t introduce you to anybody, either,’” Henney recalled.

Both of them were academic scientists who “had a fair amount of hubris about our self-worth. To be told that what we’re doing was a scam, it wasn’t something I wanted to tell my Mom about,” Henney said.

He added, “It was our welcome-to-the-NFL moment.”

Still, the investor taking that position would have been right for the first 15 years or so. It took 17 years from Immunex’s founding before it struck gold with etanercept (Enbrel), a drug for autoimmune diseases that now generates more than $7 billion a year in worldwide sales for Amgen and Wyeth. It took much longer, and hundreds of millions of dollars more than industry pioneers like Henney thought it would, to create blockbuster drugs like that. “If you had thought about that beforehand, nobody would have given us any money at all,” Henney said.

But they got the money, and learned a lot of lessons along the way. In his talk last week, Henney distilled them into six hallmarks of a successful biotech that investors should look for, along with five red flags to watch out for as well (which I’m going to save for another story).

So, here are the six hallmarks to look for in a successful biotech …Next Page »

Comments (1) | Reprints | Share:        

It was a busy week in the land of New England life sciences. Let’s dive in.

—Luke did a massive analysis of the financial health of all the public biotech companies we follow the Boston area and the news… Well, it wasn’t good.

—Cambridge, MA-based Vertex Pharmaceuticals (NASDAQ:VRTX) brought in $155 million in cash by selling $120 million in debt and $35 million for the rights to potential milestone payments. Both deals were related to the potential European commercialization of telaprevir, Vertex’s experimental drug for hepatitis C.

—Adimab, a Lebanon, NH-based biotech startup developing a new platform for discovering antibody drugs, raised $8.2 million in a Series D round of venture financing. Google Ventures led the financing and Polaris Venture Partners, SV Life Sciences OrbiMed Advisors, and Borealis Ventures participated as well.

—Merrimack Pharmaceuticals of Cambridge forged a co-development and co-marketing deal with French pharmaceutical firm Sanofi-Aventis. The partnership, focused on Merrimack’s antibody cancer drug MM-121, will bring the Cambridge firm $60 million upfront and as much as $470 million more in milestone payments, not to mention double-digit percentage royalties, should the drug reach the market.

—Luke chatted with Peter Hecht, CEO of Cambridge -based Ironwood Pharmaceuticals, which recently recruited former Genentech CFO David Ebersman to its board. Does the move signal that Ironwood—whose lead, potential blockbuster, drug is in late-stage clinical trials—is preparing to go public? Hecht wouldn’t say so, but Luke explains why Ironwood might fare well on Wall Street.

—The FDA followed an earlier advisory panel recommendation that clofarabine (Clolar), a leukemia drug from Genzyme (NASDAQ: GENZ), not be approved for use in a broader population of patients. The agency said that Cambridge-based Genzyme should conduct another trial of the drug in patients over age 60; it’s currently approved just for children with leukemia.

—Ryan spent the day at the MassBio Investors Forum in Boston, checking in with folks from Cambridge-based RNAi-drug developer Alnylam Pharmaceuticals (NASDAQ:ALNY), (which referenced a potential spin-off company perhaps in the works); Waltham, MA-based EyeGate Pharma (which has rounded up $12 million of a planned $20 million to $25 million financing); Cequent Pharmaceuticals, another Cambridge-based RNAi-drug developer (which is moving its first drug into clinical trials); and Pathogenica (a brand-new diagnostics firm spun out of George Church’s lab at Harvard Medical School). He also gleaned some insights (and arguments) about the future of biotechnology from Harvard Business School professor Gary Pisano and life sciences investment firm CEO Steven Burrill.

—Epizyme, a Cambridge startups out to turn the science of epigenetics into new drugs that work by turning genes on and off, raised $32 million in a Series B venture round led by Bay City Capital. Amgen Ventures, Astellas Venture Partners, MPM Capital, and Kleiner Perkins Caufield & Byers participated as well.

—Boston-based antibiotic developer Paratek Pharmaceuticals struck an exclusive development and commercialization deal with Swiss drug giant Novartis. The deal, which could be worth as much as $485 million in initial milestone payments, focuses on Paratek’s PTK 0796, which is in late-stage clinical development for treating complicated skin and skin structure infections as well as certain cases of pneumonia.

—Immuneering, which is developing computer models to predict patients’ responses to cancer drugs, became the first life sciences startup to join Polaris Venture Partners’ new Dog Patch Labs startup incubator in Cambridge. The move will take the company out of CEO Ben Zeskind’s apartment in Boston’s Back Bay.

Comments | Reprints | Share:        

Immuneering, the Cambridge, MA-based developer of computer models that aim to predict which patients are likely to respond to certain cancer drugs, has found a new home as the first life sciences startup to join Polaris Venture Partners‘ new Dog Patch Labs startup incubator in Cambridge.

Immuneering is the brainchild of CEO Ben Zeskind, a 28-year-old entrepreneur with a PhD in bioengineering from the Whitehead Institute and an MBA from Harvard Business School. He’s been getting help lately from chairman Bob Carpenter, a biotech entrepreneur who has served on the board of Cambridge, MA-based Genzyme (NASDAQ: GENZ) for 15 years.

Setting up shop at Dog Patch Labs Cambridge, which Xconomy featured last month, means that Zeskind won’t have to keep working in his apartment in Boston’s Back Bay, Carpenter’s house in Brookline, or relying on conference rooms at law offices for meetings, he says. More importantly, it will give the fledgling company some free space for two to three months, and the chance to network with other bright entrepreneurs from a variety of disciplines, largely with computing backgrounds, Zeskind says.

The original Dog Patch Labs, as Bob described, set up at Pier 38 along San Francisco’s Embarcadero to house promising consumer and Internet companies, while the new office near Kendall Square is looking to bring together a wide range of ideas from computing, life sciences, and energy.

“It’s a really great environment. It’s also an opportunity to get to know the folks at Polaris, and it’s an indication of their interest in getting to know us better,” Zeskind says.

Polaris partner Mike Hirshland didn’t immediately respond to an e-mail request for comment. But Zeskind said he figures Polaris may be interested because Immuneering isn’t a classic biotech looking to develop drugs, but rather is more about combining computer models with knowledge of biology. The company uses mathematical models to see if they can predict which patients are likely to respond to Interleukin-2 therapy. The drug can be highly effective in a small percentage of patients, but also is expensive and causes significant side effects that doctors could prevent if they knew the drug won’t work.

Comments | Reprints | Share:        

New England has a deep pond with many of the very biggest fish in the global life sciences industry, but it also has its share of minnows, and they are getting eaten alive in the downturn.

That finding leaped out at me after I scoured through financial data on 85 publicly traded life sciences companies in greater Boston, Seattle, and San Diego as part of our regular Biotech Survival Index feature. The final numbers aren’t pretty for Boston. Just 15 of the 46 public life sciences companies we follow in Massachusetts had more cash on their balance sheet at the end of June 2009 than they did on New Year’s Day, based on a review of the most recent round of quarterly financial filings with the Securities and Exchange Commission. (Companies were included if they were listed on the NASDAQ or NYSE, and had market capitalization of at least $100 million).

Even though jobs have been cut, drug candidates have been shelved, and some last-ditch partnerships have been struck, all that frenzied activity didn’t really add up to a strengthened financial future for a majority of the region’s money-losing companies. The cash crunch has prompted a couple of Massachusetts companies to fold this year (Altus Pharmaceuticals and Epix Pharmaceuticals), a couple more to sell out for a pittance (Targanta Therapeutics and NitroMed), and one company that actually improved its financial position to move to Wisconsin (Exact Sciences).

While those companies were vanishing, there was some good news to be found in the filings. Some of Boston’s anchor tenants took advantage of their financial strength to beef up their cash balances, pay down debt, or otherwise tidy up financial matters. Essentially, the rich (Biogen Idec, Genzyme, Thermo Fisher Scientific, and Millipore, to name a few) got richer.

But what really shocked me the most was how poorly Boston’s life sciences companies have coped with the downturn compared with peers in the two other cities where Xconomy follows life sciences—Seattle and San Diego. Granted, neither of those cities has anywhere near the number of profitable life sciences companies that Boston does (18). And many of the little biotechs in those cities were backed into a corner in the first half of 2009, and either had to do or die—and things don’t appear quite that dire yet at many companies in Boston. But a majority of companies in Seattle (7 of 12) actually strengthened their balance sheets during the first half of the year. The same pattern emerged in San Diego, where 15 of the 27 companies built up their cash reserves in the same period.

If you combine those two hubs into a West Coast cluster that has a sample size similar to Boston’s (39 companies versus 46), the Bay State doesn’t look so resilient in comparison. About 56 percent of companies on the West Coast (22 of 39) strengthened their financial position in the first half of the year, while just 33 percent of the companies in Boston (15 of 46) did that well.

Read on for a complete rundown of the financial position for all 46 Massachusetts companies, listed in alphabetical order. To purchase a much expanded version of this report, in PDF format, click the “Add to Cart” button below. The expanded version, available for $95,* includes an assessment of each company’s financial position at the end of June compared to six months earlier, the projected length of time it can survive on its existing cash reserves, and an analysis of the strategic moves it has made to stay afloat in the current environment. Click here to see a sample entry. *Price is subject to change without notice.

We intend to repeat this analysis regularly to monitor the financial health of the life sciences companies we follow in San Diego, Seattle, and Boston. Please send feedback to editors@xconomy.com.

Abiomed (NASDAQ: ABMD)
Cash on hand: $54.5 million
Related Xconomy coverage:
“Abiomed Wins FDA Approval of Heart Pump”

Alkermes (NASDAQ: ALKS)
Cash on hand: $380.4 million
Related Xconomy coverage:
“Alkermes Knocks on Door of Biotech Big Leagues, Aims to Make Drugs of its Own”
“Alkermes, Swinging for the Fence, Touts New Anti-Addiction Drug”
“Alkermes’ Ambitious Builder, Richard Pops, Grabs Reins to Re-Ignite Growth Phase”

Alnylam Pharmaceuticals (NASDAQ: ALNY)
Cash on hand: $473.8 million
Related Xconomy coverage:
“Alnylam Takes Time to Mull Over RSV Game Plan”
“Alnylam, With Tekmira and New Northwest Firm Alcana, Look to Push Borders of RNAi Delivery”
“Alnylam Pushes First RNAi Drug That Circulates Through Body Into Human Test”
“Alnylam’s In the Money, Expects $500 Million in Bank At Year End”
“Alnylam Looks to Spinoffs to Unleash RNAi Technologies for Stem Cells, Vaccines“ …Next Page »

Comments | Reprints | Share:        

Biotechnology companies who’ve taken time to focus on politics over the last few years have focused most of their attention on national-level issues. That’s understandable given the renewal of the Prescription Drug User Fee Act that controls FDA deadlines for reviewing new drug applications, legislation that would make it possible for makers of cheaper “biosimilar” drugs to compete with innovative companies, and now proposals to extend healthcare coverage to all Americans.

Each of these issues has an obvious impact on future business and biotech executives have significant lobbying support on these issues. National and state-level business organizations like the Biotechnology Industry Organization (BIO) have identified key issues, provided access to key lawmakers, and created plug-and-play messaging suitable to their respective issues.

That sort of assistance crumbles when the focus shifts closer to home, at the city level. Most biotech executives don’t spend any significant time concentrating on local issues, and I happen to think this is a dangerous trend that must be reversed.

Here in Seattle, city leaders have extolled the virtues of biotech. Seattle’s South Lake Union neighborhood has been given particular attention, with goals of creating a hub for scientific research, biotech companies, and global health to compete with other such clusters across the country.

That sounds great, until you look at the specifics. Local developers have done a good job of building and/or planning buildings for this purpose. However, the city is behind on infrastructure spending and there is not enough electrical power infrastructure in place to support all the lab space being created. That’s an obvious operational problem that Seattle’s city hall missed, but not all local issues so clearly affect biotech companies.

Here in the greater Seattle area we haven’t figured out how to fund and operate convenient transit service, even within the city limits. Traffic in the main east/west arterial (Mercer Street) in our future biotech center is miserable and has been miserable for decades. The current plan to address this will make the streetscape more attractive, which is a good thing since drivers will be spending more time looking at it. The current plan actually increases east/west traffic time on the corridor. Seattle schools perhaps can no longer be termed in “disarray,” but nobody is satisfied with the quality of education, particularly science education, across the system.

These issues are important because if biotech executives want their companies to grow, they have to be able to attract and retain great people. Seattle already has a recruiting handicap …Next Page »

Comments | Reprints | Share:        

The FDA turned down Genzyme’s application to market clofarabine (Clolar) for patients over age 60 with acute myeloid leukemia, saying the Cambridge, MA-based company should conduct another randomized, controlled clinical trial. The agency’s decision comes about a month after one of its advisory panels recommended the drug not be cleared for the new group of patients, saying Genzyme (NASDAQ: GENZ) lacked data. The product is already approved for a smaller population of children with leukemia.

Comments | Reprints | Share:        

Brown University says it has hired Katherine Gordon, a veteran of Harvard University’s technology transfer office, to help the Providence, RI-based university commercialize more of its research. Brown’s tech transfer efforts have lagged some of its Ivy League counterparts in the past, but Gordon says she has the industry experience and contacts to expand commercial activity at the university.

Gordon started work at Brown in early September, after spending the previous five years at Harvard, most recently as a director of business development in Harvard’s Office of Technology Development. At Harvard she worked under tech transfer legend Isaac Kohlberg, who earlier in his career grew New York University into a national leader in commercializing academic research. Now Gordon, as managing director of Brown’s Technology Ventures Office, is planning to apply what she learned from Kohlberg and her own experience as a former biotech executive and employee of Cambridge, MA-based biotech firm Genzyme (NASDAQ:GENZ) to take Brown’s tech transfer to the next level.

Brown researchers’ ties with industry appear to be in need of a boost. The university has spun off a modest number of startups in recent years, including genetic sequencing firm NABsys and optimization software developer Dynadec. But the university’s commercialization rate pales in comparison to those of nearby research institutions like Harvard and MIT. (Brown hasn’t published the amount of licensing revenue it receives, as some of its counterparts do, so it’s tough to pin down exactly how the university stacks up with its peers.) To be fair, Brown has a smaller research budget than those two research powerhouses. Yet there are some at Brown who believe the university and its medical school could be doing more to transfer discoveries into the commercial realm.

“I view the whole [Brown research] community as under-tapped potential,” Gordon said. “I think there’s a lot more opportunity to commercialize research than historically has been developed.”

Gordon has the background to change the direction of tech transfer at Brown. She founded and raised money for a Cambridge, MA, startup called …Next Page »

Comments | Reprints | Share:        

There were a wide variety of developments in the Boston-area life sciences sector over the past week. Companies in the headlines included big ones like Genzyme and Covidien as well as smaller startups such as Humedica and Tetraphase Pharmaceuticals. Here are some highlights:

—We got an early look at Cambridge, MA-based Humedica’s strategy for developing next-generation clinical analytics systems, as well as some insights into why Bain Capital Ventures, General Catalyst Ventures, North Bridge Venture Partners, and Leerink Swann have pumped $30 million into the young company. Company CEO Michael Weintraub talked about how the firm could become a U.S. Census of sorts for healthcare.

—Genzyme faced more setbacks due to previously tainted bioreactors at its Allston, MA, plant. The Cambridge -based biotech powerhouse (NASDAQ:GENZ) revealed that it’s going to take longer than expected to resume full production of its enzyme-replacement drug agalsidase beta (Fabrazyme) for Fabry disease. Also, the company is anticipating lower sales than previously estimated for both agalsidase beta and imiglucerase (Cerezyme).

—Sirtris CEO Christoph Westphal gave Xconomy the first media interview about a new nonprofit group that he and his colleagues are launching in the Boston area to promote longer healthy lives. Can the red wine chemical resveratrol really help people live longer? Westphal talked about how his new group, the Healthy Lifespan Institute, plans to answer that big question and more.

—After a period of poor stock performance for Cambridge-based biotech Alkermes (NASDAQ:ALKS), company Chairman Richard Pops has jumped back into everyday operations as CEO—a post he left in …Next Page »

Comments | Reprints | Share:        

Richard Pops is not the sort of guy to sit still and patiently wait for good things to happen. He took the CEO job at Cambridge, MA-based Alkermes when he was just 28 years old, built it from 20 employees to more than 400, and made it profitable by the end of his 16-year run at the helm in 2007. But when we had breakfast earlier this year at the JP Morgan Healthcare conference in San Francisco, he made it clear he wouldn’t be satisfied until Alkermes cracked the top tier of biotech companies with multi-billion dollar valuations, like Amgen, Genzyme, and Biogen Idec.

So when Alkermes’ stock (NASDAQ: ALKS) turned in an anemic performance this year, sliding down 11 percent in the first nine months, it shouldn’t have come as a surprise that a shakeup was coming. Pops—a still youthful and energetic age 47—swooped back in from the chairman’s role on Sept. 10 and replaced his onetime operations deputy, David Broecker, as CEO. When I spoke with Pops by phone a few days later to ask him why he did that, he essentially said the company needed an operations guy two years ago to manage global supplies and manufacturing for partners, but now it needs to get back to its roots and build itself up some more.

“David was well-suited to the strategy of the company at the time,” Pops says. “Now we’re going back into building mode again.” At the Morgan Stanley healthcare conference a few days after he took over, Pops elaborated a bit, telling investors, “you’ll see more energy around building our proprietary platform and doing business deals, and action around building the company.”

Alkermes (ALK-er-meez) was founded in 1987, and like the usual biotech company, it lost money for its first 20 years. The company’s forte has always been its expertise in making existing drugs more stable and longer-lasting in the bloodstream, allowing for less frequent dosing. Instead of betting the company on one in-house compound, a common boom-or-bust strategy in biotech, Pops struck deals with various partners who could help pay the R&D bills along the way, and mitigate the company’s risk.

Richard Pops

That strategy had its benefits in making Alkermes profitable by 2006, but all those partnerships mean that Alkermes today isn’t as independent as some of its biotech peers. Alkermes’ biggest cash cow, risperidone (Risperdal Consta), is marketed by a partner, Johnson & Johnson. The next big thing in the pipeline, which Pops calls “maybe the most important diabetes drug ever developed,” is an injectable treatment for diabetes called exenatide once-weekly. Alkermes provided key enabling technology, and stands to collect a 7 percent sales royalty on the drug. But how much cash that generates for Alkermes will depend on marketing decisions made by Eli Lilly and Amylin Pharmaceuticals—if those companies can win FDA approval.

Alkermes has the full commercial rights to a treatment to help people kick alcoholism, naltrexone (Vivitrol), but it has never become a big seller. The company is hoping to re-ignite Wall Street enthusiasm for that drug by proving it works to help people kick addictions to opioid-based narcotics.

Alkermes was put on the defensive by Wall Street on Aug. 26, and it was partly due to a decision by one of its partners. That was when Alkermes disclosed in a regulatory filing that Johnson & Johnson decided to quit developing a once-monthly version of risperidone, which could potentially offer even greater convenience than the existing Risperdal Consta, which patients take twice a month. J&J made the decision to drop the less frequently dosed Alkermes drug after it won FDA approval in July for a different treatment, paliperidone palmitate (Invega Sustenna), that is also dosed once a month. JP Morgan analyst Cory Kasimov, who has an “overweight” rating on Alkermes stock, called J&J’s termination decision”disappointing” …Next Page »

Comments | Reprints | Share:        

When Cambridge, MA-based Genzyme (NASDAQ: GENZ) shut down its Allston, MA, bioreactor plant in June after discovering viral contamination, it was clear that there would be worldwide shortages of its best-selling enzyme replacement therapies, agalsidase beta (Fabrazyme) and imiglucerase (Cerezyme), and that there would be a hit to the company’s bottom line. The company got more specific about those matters today, saying in a press release that it’s taking longer than expected to restore full production of agalsidase beta, and that sales of both drugs this year will be below previously anticipated levels.

Revenue from agalsidase beta, a treatment for Fabry disease, is expected to be roughly $450 million in 2009, about $60 to $70 million less than the company had predicted in previous guidance. Revenue from the Gaucher disease treatment imiglucerase is expected to reach $800 million, which is at the low end of the previously predicted range of $750 million to $1 billion. Genzyme’s stock price was roughly flat this morning.

After sanitizing the Allston plant, Genzyme resumed production of both drugs in July, and it said today that it expects to begin shipping newly produced batches of the Gaucher drug in November, as planned.

But the news for Fabry disease patients is not as encouraging. New shipments of agalsidase beta won’t go out until mid-December, the company says, and there will be less of it to go around than previously thought. The problems: Genzyme took some extra time to do preventive maintenance before restarting the bioreactors that make agalsidase beta; the vessels are now producing the drug in lower quantities than in the past, for reasons the company isn’t disclosing; and the company has been making the drug in smaller batches, which is faster but less efficient.

As a result, “additional product conservation measures are now needed to help ensure that the limited remaining Fabrazyme inventory can be made available to as many patients as possible until new material is available,” the company said in today’s announcement. Specifically, the company said that from October 1 through the end of the year, it will only ship enough agalsidase beta to meet 30 percent of global demand; up to now, the company said it had enough of the drug on hand to cover about 80 percent of demand.

Genzyme says it’s working with doctors to set up clinical guidelines for conserving doses of the drug. The company expects to work its way back to full production—covering 100 percent of demand—sometime in the first quarter of 2010.

“We will continue to work with all stakeholders to prepare for the release of this material so that it can reach patients as quickly as possible,” Genzyme chairman and CEO Henri Termeer said in today’s announcement. “I want to express my deep appreciation to the Gaucher and Fabry communities for their support of the existing product conservation guidelines and for their anticipated collaboration in helping to manage the remaining limited product supply through the end of this year.”

Comments | Reprints | Share:        

New England’s diagnostics developers provided more than their fair share of life sciences news this week.

—Rick Jones, CEO of Cambridge, MA-based Ascent Therapeutics, talked with Ryan about his startup’s progress developing new cancer drugs using so-called pepducin technology. Ascent’s lead candidate is emerging in recent tests as a potential rival to Genzyme’s plerixafor (Mozobil), which is used to aid the process of stem-cell transplantation in patients with certain types of blood cancer.

—3PrimiR, a Yale University spinoff based in Westport, CT, raised $2.1 million of a proposed $4 million round of equity financing from unnamed investors, according to an SEC filing. The startup is developing new cancer diagnostics based on research into mutations in a type of molecule called micro RNA.

—Genetic analysis instrument maker Helicos Biosciences (NASDAQ: HLCS) of Cambridge raised $10 million from new and existing investors, after announcing earlier this month that it was running low on cash and exploring “strategic alternatives.” Atlas Ventures, Flagship Ventures, Highland Capital Partners, Versant Ventures, and CEO Ron Lowy contributed to the financing.

—A private family investment firm poured $30 million into Seaside Therapeutics, a Cambridge-based startup aiming to translate research from the lab of MIT neuroscientist Mark Bear into treatments that address the underlying neurological causes of Fragile X syndrome and autism. Founded in 2005, Seaside has never needed venture capital, according to CEO Randy Carpenter, having raised a total of $66 million from the family, the National Institutes of Health, and disease foundations like Autism Speaks and the Fragile X Research Foundation.

—New Haven, CT-based Optherion collected $5 million of a planned $9.5 million convertible notes and warrants offering, according to an SEC filing. The startup is developing a treatment for age-related macular degeneration as well as other drugs and diagnostics for eye and kidney diseases.

—Mansfield, MA-based PrimeraDx raised $20 million in a Series C financing round led by new investor CHL Medical Partners and joined by existing investors Abingworth, Burrill & Company, InterWest Partners, the Invus Group, Malaysian Technology Development Corporation, and MPM Capital. A spinoff of Providence, RI-based Sention, PrimeraDx is developing technology it says can speed up a host of medical tests.

—Having been turned down by the board of Redwood City, CA-based Facet Biotech (NASDAQ: FACT), Cambridge-based Biogen Idec (NASDAQ: BIIB) went straight to the California firm’s shareholders, commencing a $14.50-per-share tender offer for Facet. The offer, which expires October 19, could be worth $355 million in total.

—Diagnostics behemoth Inverness Medical Innovations (NYSE: IMA) of Waltham, MA, acquired Seattle-based Free & Clear for $100 million in cash, plus up to $30 million in potential follow-on payments, depending on the Seattle firm’s 2010 revenues.

Comments | Reprints | Share: