As the time draws near for the annual J.P. Morgan Global Healthcare Conference in San Francisco, it seems as if there has been a surge in deals for local life sciences companies. Here’s our rundown:

—Biogen Idec (NASDAQ: BIIB) agreed to pay Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) $29 million, with the potential for more payments down the road as part of a new drug development partnership. Biogen and Isis agreed to collaborate to advance an experimental drug that Isis has identified for treating spinal muscular atrophy, a rare genetic disease that causes severe muscle atrophy and weakness in newborns. The deal could eventually be worth as much as $299 million for Isis.

—Denmark’s Novo Ventures led a $30 million Series B financing for San Diego-based Elevation Pharmaceuticals to fund development of an aerosol therapy Elevation has been developing for patients living with chronic obstructive pulmonary disease (COPD). Heath Lukatch, a San Francisco-based partner of Novo Ventures told me the funding should be enough to carry development of Elevation Pharmaceutical’s aerosolized bronchodilator drug to the threshold of final-stage trials.

—San Diego-based Santarus (NASDAQ: SNTS) asked the FDA to approve its new drug application for budesonide (Uceris), an oral tablet it has been developing with Italy’s Cosmo Technologies for treating mild cases of ulcerative colitis. If the FDA accepts the new drug application for review, Santarus says it has agreed to make a $4 million milestone payment to Cosmo. Ulcerative colitis is a form of inflammatory bowel disease that causes painful inflammation and ulcers inside the colon.

—Proacta, a San Diego-based cancer-drug developer has raised $500,000 toward a $3 million round of financing, according to VentureWire. The biotech was founded at least six years ago to advance a new group of anti-cancer molecules that are active in hypoxic tissue, which were identified by researchers at New Zealand’s University of Auckland and Stanford University. The company says it has raised $43 million through two private financings, and its investors include Alta Partners, Clarus Ventures, Delphi Ventures, Endeavour Capital (New Zealand), GBS Venture Partners (Australia), Genentech, No 8 Ventures (New Zealand) and Roche.

—San Diego-based Afraxis, which is developing drugs to treat Fragile X syndrome and autism, secured $300,000 toward a $2 million round of debt, rights and securities, according to a recent regulatory filing. The startup is pursuing a … Next Page »

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Clinical trial results and drug collaborators made up the New England life sciences news this week.

—New Jersey-based drugmaker Merck announced backing a few Boston-area companies in the past few weeks. Its Global Health Innovation Fund led a $10 million financing for Cambridge, MA-based Daktari Diagnostics, a developer of technology for testing small quantities of blood and other fluids that it hopes can monitor HIV patients in the developing world. And Merck pledged $17 million to Marlborough, MA-based Physicians Interactive Holdings. The company will put the money towards developing its online and mobile tools to connect doctors and pharmaceutical companies.

—An experimental drug from Cambridge-based Alnylam Pharmaceuticals (NASDAQ: ALNY) helped lower so-called bad cholesterol by an average of 39 percent at the highest dose studied in a small clinical trial.

—Aveo Pharmaceuticals (NASDAQ: AVEO) of Cambridge said it met it goals in a clinical trial called TIVO-1 of its experimental drug for treating kidney cancer. In the study of 517 patients, Aveo’s tivozanib was able to keep tumors from spreading a median of 11.9 months, compared with 9.1 months for another drug in its class from Bayer and Onyx Pharmaceuticals. It was a narrow victory, though, as the trial’s goal was to show the Aveo drug kept tumors from spreading about an extra three months.

—Weston, MA-based Biogen Idec (NASDAQ: BIIB) said it will pay Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) up to $299 million for collaborating on a treatment for a spinal muscular atrophy, a rare disorder found in newborns.

—Inspiration Biopharmaceuticals moved into its new digs in Kendall Square, after more than seven years of operating as a virtual biotech company that’s pursuing hemophilia treatments. It was founded by hedge fund manager John Taylor and Scott Martin, a Texas energy veteran whose son has hemophilia.

—The founders of Sermo, a Cambridge-based provider of an online community for doctors, are moving on to a new spinoff called par8o, the online publication Pharmalot reported. CEO Daniel Palestrant and chief medical officer Adam Sharp say on the par8o website that the new company will be focused on more efficiently connecting doctors and patients.

—Watertown, MA-based Forma Therapeutics inked a deal with Germany-based Boehringer Ingelheim that provides $65 million in upfront cash and four years of R&D support for discovering cancer drugs. Forma, which now has seven partnerships with heavy hitters, could also get potentially $750 million more from Boehringer Ingelheim as the cancer drugs move through development.

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Isis Pharmaceuticals has found a new partner in Biogen Idec that’s betting a large amount of money on a new therapy for a rare spinal disorder in newborns.

Weston, MA-based Biogen Idec (NASDAQ: BIIB) said today that it has agreed to work with Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) on an experimental antisense drug for spinal muscular atrophy in a collaboration that could be worth as much as $299 million. Isis will get $29 million in upfront cash, plus another $45 million from Biogen for development before it may choose to get a license. If Biogen buys a license to the Isis drug candidate, then Isis could get another $225 million in a license fee and milestone payments, plus a double-digit percentage royalty of product sales, if there are any.

Spinal muscular atrophy is a genetic disease that affects an estimated one out of every 10,000 newborns, and causes severe muscle atrophy and weakness. The disease is caused by a faulty version of a gene called survival motor neuron 1 (SMN1) which doesn’t produce enough of the SMN1 protein needed to maintain muscle strength. Spinal muscular atrophy has various forms that cause disability, and in the most severe cases, death in infants. The Isis drug, which comes as an injection into the spine and recently entered clinical trials, is designed to help produce more of the functional SMN1 protein.

Spinal muscular atrophy “is a heartbreaking disease—it can kill children before their 2nd birthday and there are currently no therapies to treat the disease,” said George Scangos, Biogen’s CEO, in a statement. “It is exactly the kind of disease and program that we are focused on at Biogen Idec. The unmet need could not be any greater, the program fits with our mission to bring innovative therapies to patients with serious neurologic diseases, and Isis’ antisense compound has the potential to be a highly effective, first-to-market therapy for this deadly disease.”

Isis, whose business is built around doing scientific work on antisense drugs and then finding partners to finish development, said Biogen fits the bill for this condition because of its expertise in neurology.

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Alnylam Pharmaceuticals has been saying for a while that it needs hard data from clinical trials to prove its skeptics wrong, and today it’s coming out with an early hint of effectiveness with its RNA interference-based treatment for lowering cholesterol.

Cambridge, MA-based Alnylam (NASDAQ: ALNY) is announcing today that it has gotten some encouraging results from a study of 20 patients who got a single shot of Alnylam’s experimental drug called ALN-PCS. This drug, designed to block the activity of a protein known as PCSK9, was able to reduce the protein by an average of 60 percent after four days when given at the highest of five doses studied. That knockdown of the specific protein translated into an average drop of 39 percent in low-density lipoprotein, the so-called “bad” form of cholesterol that clogs arteries and is known to raise people’s risk of heart attack, stroke and death.

The new drug was well-tolerated at a variety of doses, and no one has dropped out of the study because of side effects, although a mild rash was observed in patients on the treatment, the company said. The study is still ongoing, and Alnylam plans to continue examining the safety of higher doses, but the company is communicating the progress before it’s all wrapped up. Preliminary data is being presented today at the Brigham & Women’s Hospital in Boston, and more details are expected to be presented in the first half of 2012, Alnylam said. The company also plans to discuss the results in more detail on a conference call with investors today at 8:30 am Eastern time.

The data is still from the first of three phases of clinical trials normally required for FDA approval, so this drug still has years of rigorous studies to complete if it is ever going to become a new treatment for lowering cholesterol. But the market for cholesterol-lowering drugs was worth $36.4 billion worldwide last year, according to research firm IMS Health, largely because of the huge success of statin drugs. While many of those drugs are losing patents and facing cheap generic rivals, many big biotech and pharma companies (including Amgen and Sanofi) are focusing on a promising new molecular target in PCSK9, which Robert Langreth of Bloomberg News described in a November feature. Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) also has an anti-PCSK9 product in preclinical development with Bristol-Myers Squibb.

Alnylam is wagering that while other companies are focusing on hitting this protein with genetically engineered antibodies, it will have an effective option that works through RNA interference, which specifically silences the RNA that enables the body to make the PCSK9 protein. If Alnylam can continue to show intriguing data from clinical trials (like it did last fall for a rare condition called TTR amyloidosis), it could help revive some of the enthusiasm for RNAi. Excitement for the technique once ran high because of its new ability to molecular targets that have been considered “undruggable” in the past, but enthusiasm has waned in the past couple years as big companies like Roche and Merck have curtailed their RNAi drug development activities.

The data so far for Alnylam’s PCSK9 program is still quite preliminary. Researchers randomly assigned 20 patients with … Next Page »

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A decade ago, when newspaper and magazine editors prepared their rundown of the year’s most important news stories, they really were just choosing the articles that they thought had the most impact. That was old media.

Today, everything is measured and anything can be quantified—at least on the Internet. In cyberspace, people vote with their clicks, and my list of the top 10 stories of 2011 is based on the stories posted on the Xconomy San Diego website (from Jan. 3 through Dec. 23) that attracted the most traffic. That’s new media.

And a new year is beckoning, so it’s out with the old and in with the new.

Believe it or not, some stories published before 2011 still pulled in a lot of interest over the past year. For example, one of the top stories of 2011 was a post I wrote two years earlier about the pervasive skepticism voiced by biofuels industry leaders during the 2009 Algae Biomass Summit in San Diego. It also is noteworthy, although perhaps no surprise, that a 2009 post I wrote about the first human trial of San Diego-based Histogen’s hair regrowth treatment continues to attract readers who are Googling for news about baldness and hair restoration.

The No. 1 story of 2011, however, was surprising—at least to me. It was a commentary about the dramatic changes underway in new treatments for hepatitis C by San Diego Xconomist Steve Worland, the CEO of San Diego-based Anadys Pharmaceuticals. Worland alludes to the spate of new product introductions by Merck and Vertex, and predicts an increasing number of direct acting, cocktail-type antiviral drugs. It’s a hot topic, although Wall Street’s interest might have been piqued as analysts and traders searched to understand why Roche acquired Anadys for $230 million about five weeks after we published Worland’s op-ed.

It’s also worth noting that these high-traffic stories tend to occur in … Next Page »

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

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

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

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

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

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

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

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

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Pfizer is making a new bet on a new drug to fight excessive scarring, by acquiring a former skunkworks project from Isis Pharmaceuticals (NASDAQ: ISIS).

New York-based Pfizer (NYSE: PFE) said today it has reached an agreement to acquire Carlsbad, CA-based Excaliard Pharmaceuticals, a spinoff from Isis. Terms of the deal aren’t being disclosed, but Isis said today it is getting $4.4 million upfront, and as much as $14 million over time for its equity stake, plus further milestones and royalty payments. Excaliard was founded in 2006 with technology from Isis, and the company received a $15.5 million Series A investment the following year from Alta Partners, ProQuest Investments, and RiverVest Ventures.

Excaliard was started to use Isis’ gene-silencing technology, known as antisense, to curb the activity of certain genes implicated in excessive skin scarring. As I described in a feature story in these pages two years ago, Excaliard’s hope is to make scars less visible and bumpy, like those from the 1 million Caesarian section births performed each year, knee surgeries, and reconstructive plastic surgeries. It could also be used for some rarer dermatology conditions like hypertrophic scars that are red, raised, itchy and swollen, or keloids, that are large and raised above the skin like a benign tumor.

If Excaliard can demonstrate this approach works in clinical trials, it could have a wide-open market opportunity, since there are no other FDA approved drugs that it can consider direct competitors. The company said in a statement that it has completed three mid-stage clinical trials, although it didn’t describe the results.

“The acquisition of Excaliard is part of our corporate research and development strategy to actively complement our robust internal project pipeline with innovative and differentiated drugs from biotech partners,” said Mikael Dolsten, Pfizer’s president of worldwide R&D, in a statement.

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San Diego life sciences research and development, the engine that drives innovation, got some new digs at Isis Pharmaceuticals, and J. Craig Venter started the digging for the construction of a new genomics research headquarters. But we didn’t have to go digging for news; our roundup begins now.

—After meeting with federal regulators, San Diego’s Orexigen Therapeutics (NASDAQ: OREX) said it is restarting work on its experimental diet pill, a combination of naltrexone and bupriopion (Contrave), after declaring in June that it was suspending development of the drug. Orexigen shelved the program after the FDA said the company still needed to conduct a costly, long-term clinical study of more than 60,000 patients to demonstrate that the proposed diet pill wouldn’t increase the risk of heart attack or stroke. Orexigen found a way to move forward, however, by proposing a two-year cardiovascular study that would enroll 10,000 patients. Orexigen said the FDA’s feedback was “reasonable and feasible.”

—San Diego-based Independa, a wireless health startup developing technology to help seniors live independently, raised $1.6 million in an early stage financing round involving Miramar Venture Partners and City Hill Ventures, with an additional $200,000 loan from Silicon Valley Bank. Independa plans to spend the money on development of its Software-as-a-Service (SaaS) technology and to expand its marketing and distribution.

—NuVasive (NUVA: NUVA), the San Diego medical device company developing new surgical products and techniques for repairing the spine, said it gave more than it got in a continuing patent dispute with Medtronic. While a formal judgment has not yet been entered, a jury reviewing four of the nine contested patents determined that Medtronic should pay NuVasive $660,000 plus interest for infringing on a NuVasive patent. The jury also found that NuVasive should pay Medtronic $101 million plus interest for infringing three Medtronic patents.

—San Diego scientist J. Craig Venter and local dignitaries attended a ceremony Tuesday as construction began on a new $35 million building to house the West Coast headquarters for the J. Craig Venter Institute (JCVI). It’s going in near the Salk Institute and the new Sanford Consortium for Regenerative Medicine. A JCVI spokeswoman said the 45,000-square-foot building will be support 125 scientists and staff in a state-of-the-art, carbon-neutral building on the UC San Diego campus. The work will be focused on genomic research, including human genomic sequencing and analysis, synthetic genomics, and environmental genomics.

—Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) has completed the consolidation of three R&D facilities into a single corporate and research facility. An Isis spokeswoman said the company’s 320 employees continue to be focused on research and drug development, with technology that enables the company to move three to five new drugs into its pipeline every year. The cholesterol-reducing drug mipomersen is the company’s most advanced drug.

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Chris Garabedian took his first shot at being a CEO last December. Immediately, people thought this was a little bit crazy.

Friends wondered, why leave a job as an up-and-coming VP of corporate strategy at a biotech powerhouse like Summit, NJ-based Celgene (NASDAQ: CELG) to run an obscure little company like AVI Biopharma (NASDAQ: AVII)? AVI was built on a technology, antisense drugs, that few people in the industry believe in. The company’s track record is brutal—30 years spent on R&D with no FDA-approved drug to show for it. There was a leadership void, since a shareholder rebellion led to the ouster of the previous CEO. And, with labs in Corvallis, OR and headquarters in Bothell, WA, it’s a long way off the beaten path for most biotech industry executives and investors.

Garabedian, 44, admits he was skeptical at first. But when encouraged to take a look a year ago by the company’s largest investor, George Haywood, he looked. And the more Garabedian studied, the more he started to think it could be a classic diamond in the rough. It’s a bold, brash thing to say, but Garabedian told me a few weeks ago that the AVI of today reminds him of the 1990s version of Foster City, CA-based Gilead Sciences (NASDAQ: GILD) when it was worth about $500 million, long before it went on to become the world’s largest maker of HIV drugs, worth $32 billion today. Garabedian spent most of eight years in various roles at Gilead during its boom years, before joining another biotech success story in Celgene. Now he says it’s time to apply what he learned in those places.

“Those are experiences at Gilead and Celgene that shaped me, and helped me know what it takes to grow a breakout biotech,” Garabedian says. “I always felt that if I saw another opportunity to do that at another company, that’s something I could be excited about.”

Chris Garabedian

AVI, he says, is the place. There’s certainly room to grow. The stock closed yesterday at $1.55 a share, and the company has a little more than 110 employees, and a market valuation of about $210 million.

“We could make this a breakout biotech. It will take some time. It’s not going to happen in a year,” Garabedian says. “But I think this could be a company valued in the multi-billions in the next several years.”

Before diving into Garabedian’s blueprint for how he intends to lead AVI to that lofty perch, I wanted to know a little more about him. Unlike a lot of biotech CEOs, he never went on to get an MD, a PhD, or an MBA degree. He got a bachelor’s degree from the University of Maryland in marketing, and worked his way up in biotech through various marketing-related roles.

He did some consulting in his first real job out of college for a couple years. He says he “got the biotech itch” while consulting in the early ’90s. He caught on full time with Abbott Laboratories, where he worked on marketing, brand management, and product development in various parts of Abbott’s business in cardiovascular medicine and neurology, he says. “I started to learn how to work with R&D teams,” on things like when to hit the brakes on a new drug development program, when to press on the gas, and what it takes to get the ultimate prize—FDA approval to sell your new drug.

Garabedian’s first experience in a small, nimble biotech came in 1997 as a senior director of marketing for Gilead. He was brought in initially to help craft … Next Page »

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AVI Biopharma (NASDAQ: AVII), the Bothell, WA-based developer of RNA-based therapies, said today it has hired Peter Linsley as its chief scientific officer. Linsley, 59, had previously been the chief scientist at San Diego-based Regulus Therapeutics, a company formed by Alnylam Pharmaceuticals and Isis Pharmaceuticals to develop microRNA treatments.

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San Diego’s life sciences sector must have been lying low over the past week, as there was scant news from local biotech, diagnostics, and medical device companies. Our roundup is here.

—Biopharma executive Stephen Kaldor, who was CEO at San Diego-based Ambrx from 2007 to 2010, has joined Versant Ventures as a venture partner. The firm has offices in San Francisco, Menlo Park, CA, and Newport Beach, CA, but Kaldor, who joined in January, will remain in San Diego, according to the Versant website. Kaldor is currently the acting CEO of a Quanticell, an early stage biotech focused on combatting cancer resistance.

—San Diego’s Astute Medical which raised $26.5 million in a Series B venture round last May, says it has extended the round and raised an additional $13 million to develop new diagnostic tests for acute conditions that require rapid diagnosis. The company raised $6.2 million in its Series A round of venture funding in 2008. The startup, founded in 2007 by CEO Christopher Hibberd and chief scientific officer Paul McPherson, has been working to identify protein biomarkets that could be used to help diagnose kidney injury, acute coronary syndromes, cerebrovascular injury, abominal pain, sepsis, and other acute conditions.

—San Diego-based Aethlon Medical, which has been developing therapeutic blood filtration devices for treating infectious disease and cancer, says the U.S. Food and Drug Administration has approved the company’s request to export its “Hemopurifier” device to India. The FDA’s approval was granted under a section of the Food, Drug, and Cosmetic Act that allows the export of certain medical devices that have not yet received premarket approval in the U.S. by the FDA.

—Newport Beach, CA-based Roth Capital’s annual growth stock conference is bouncing back this year. The 23rd annual OC Growth Stock Conference, which begins Monday at the Ritz Carlton in Dana Point, CA, is billed as Roth’s largest conference to date, with more than 430 presenting companies—including 135 biotech, specialty pharmaceutical, and medical technology companies. About 350 companies presented last year, and 212 companies presented in 2009. Among the small cap life science companies attending the three-day, invitation-only conference for institutional investors are San Diego’s Ardea Biosciences (NASDAQ: RDEA), Avanir Pharmaceuticals (NASDAQ: AVNR), Dexcom (NASDAQ: DXCM), Inovio Pharmaceuticals (AMEX: INO), Isis Pharmaceuticals (NASDAQ: ISIS), Neurocrine Biosciences (NASDAQ: NBIX), NuVasive (NASDAQ: NUVA), Senomyx (NASDAQ: SNMX), Somaxon Pharmaceuticals (NASDAQ: SOMX), Trius Therapeutics (NASDAQ: TSRX), Santarus (NASDAQ: SNTS), and Volcano (NASDAQ: VOLC).

—The San Diego Regional Economic Development Corp., UC San Diego Extension, and the San Diego Workforce Partnership have been collaborating to develop a growth strategy for the region’s cluster of healthcare information technology companies. Researchers at UC San Diego Extension have been conducting interviews with health IT industry leaders and surveying health IT employers. The data collected is intended to help determine the cluster’s potential, identify important issues, trends, and key economic and legislative factors that drive growth of the sector. The EDC has organized a series of workshops this month to review the preliminary findings and collect feedback from industry leaders.

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Alder Biopharmaceuticals prides itself on challenging conventional wisdom. But while Alder has proved the skeptics wrong, showing it can make targeted antibody therapies in a new way with cheap and fast-dividing yeast cells, it has used this technology in a pretty conventional way—to make weapons against cancer and autoimmunity.

Now Alder is stepping out with two really unusual ideas on how to use antibodies in ways they’ve never been used before.

The Bothell, WA-based biotech company, which enticed Bristol-Myers Squibb to enter into a $1 billion partnership in 2009 to co-develop its lead drug for rheumatoid arthritis, is unveiling a couple interesting new antibodies from its discovery pipeline. These new drug candidates, which Alder is discussing today at Life Science Innovation Northwest in Seattle, are aimed at two diseases that have never been treated with antibodies—migraine headaches and high cholesterol.

The idea is to find another way to exploit Alder’s underlying technology in a place where fewer competitors tread, yet where there is still money to be made. Alder’s yeast-based system is made to be cheaper and faster at churning out antibody drugs than the usual bacterial or mammalian cells used by other companies. Partly because of the high costs of making antibodies today, most companies have developed them against diseases like cancer—where drugs can command prices of as high as $100,000. Alder’s idea is to use its more flexible platform to break out of that groove, and think about using antibodies against other chronic diseases that require lower-cost therapies.

There are still plenty of risks here, not the least of which includes whether people will pay something in the ballpark of $5,000 to $8,000 a year for a migraine treatment. Alder’s drugs are also a long way from hitting the radar of your average physician: Alder’s new migraine drug candidate is being prepped for its first clinical trial later this year, and the cardiovascular drug could enter its first human test in late 2011, or early 2012, CEO Randy Schatzman says.

Randy Schatzman

“When people typically think of antibodies in autoimmune disease and cancer, the rationale often is that these are indications in which people will tolerate the high price of those medicines, and these are indications in which people will tolerate some of the safety issues,” Schatzman says. “But we’ve been thinking, are there non-traditional markets where antibodies can play a role that people haven’t thought about in the past, but where we understand the biology?”

Migraine headaches affect an estimated 30 million people in the U.S., and nobody has ever come up with a drug that stops migraine pain before it starts. There is a family of “triptan” based drugs which generated about $3 billion in worldwide sales in 2008, although the former market leader—GlaxoSmithKline’s sumatriptan (Imitrex)—recently lost its patent and began to face generic competition.

Drugs in this class, which work by constricting blood flow to the brain, aren’t really a cure-all. They have to be taken once a patient already feels migraine pain, and then they offer some relief for half to three-fourths of patients within two hours. They don’t last … Next Page »

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There was good news and bad news from San Diego’s life sciences community over the past week. Here’s our recap for you.

—San Diego-based Illumina (NASDAQ: ILMN) said it shipped a record number of DNA mapping systems during the fourth quarter that ended Jan. 2. With demand for its genetic equipment soaring, Illumina said its profit was three times the same quarter last year. Illumina also disclosed plans to relocate its 1,100 San Diego employees to the San Diego campus of Biogen Idec, the Cambridge, MA-based company that is pulling up stakes in San Diego.

—IntegenX of Pleasanton, CA, acquired Carlsbad, CA-based GenVault for an undisclosed amount, and raised $15.6 million in new capital in a round led by existing investor Domain Associates. IntegenX makes automated sample preparation systems for genetics laboratories. GenVault produces bio-sample storage systems that do not depend on refrigeration.

—Orexigen Therapeutics (NASDAQ: OREX) eliminated 23 jobs, or about 40 percent of its workforce, after the FDA rejected the company’s request to sell the obesity drug Contrave in the United States. Orexigen said it expects the cuts will save $5 million a year.

—San Diego-based Leading Ventures‘ co-founder and senior managing director John Rodenrys took me to the living tissue laboratory of UC San Diego bioengineering professor Geert Schmid-Schönbein to better explain the firm’s venture funding strategy. Leading Ventures is providing funding for two startups based on technologies developed in Schmid-Schönbein’s lab.

—San Diego-based Optimer Pharmaceuticals (NASDAQ: OPTR) disclosed a deal with Japan’s Astellas Pharma that gives Astellas exclusive rights to market its treatment for C. difficile infections in Europe, and certain countries in the Middle East, Africa, and the Commonwealth of Independent States. Optimer filed for FDA approval of the drug fidaxomicin in late November.

—Physio-Control of Redmond, WA, and BeneChill of San Diego formed a strategic partnership to sell a portable system that BeneChill developed for use by emergency medical technicians that chills the brains of people who have suffered a stroke, heart attack, or traumatic brain injury. The new partners plan to start marketing the RhinoChill System in Europe this quarter.

—San Diego-based Altair Therapeutics shut down after the startup’s lone drug candidate for asthma failed in a mid-stage clinical trial. Altair was a spinoff from Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS), which has re-acquired Altair’s assets, blocked further clinical development, and dissolved Altair.

—San Diego’s Genomatica, which is developing sustainable chemicals technology, signed a strategic agreement with Houston’s Waste Management to develop ways of making basic chemicals from landfill gas and other sources.

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The notion that Regulus Therapeutics might go public in 2011 sounds like nonsense at first blush. The San Diego-based startup doesn’t have a shred of evidence that says its experimental drugs are safe, or even a little effective, in human beings. And it will be at least another year before the company enters the vital proving ground of clinical trials.

Yet Regulus, the microRNA drug developer that’s barely three years old, just might provide a litmus test on the mood for biotech investment in 2011. It spoke volumes last month when a company as young as Regulus, with a big scientific idea and a couple key partnerships, was able to win a coveted presentation slot at the biggest biotech investing event of the year, the JP Morgan Healthcare Conference.

Even more improbable—about 50 people showed up to hear CEO Kleanthis Xanthopoulos tell the Regulus story at what amounted to the graveyard shift at the conference—1 pm on Thursday afternoon, long after most attendees had flown home. When I met with the tireless chief of Regulus a couple hours later, he still had three more meetings left that day.

“There is a lot of interest in Regulus,” Xanthopoulos says. “People are now beginning to view microRNA as not just a big idea with potential to be disruptive, but something that is much closer to reality than people had anticipated even a year ago.”

Xanthopoulos knows the drill of the IPO process, having been the founding CEO at San Diego-based Anadys Pharmaceuticals (NASDAQ: ANDS), which he helped take public six years ago. He wouldn’t answer directly when I asked him if he’s gearing up for an IPO this year, but he did make it clear he’s paying attention to the markets. He pointed out that he noticed that a number of biotech companies went public in 2010, many are lined up to go out this year, and most have drugs in clinical trials that offer lower-risk/reward profiles than Regulus. That means he offers something different for portfolio managers looking to diversify their holdings with a classic biotech swing-for-the-fence story.

Kleanthis Xanthopoulos

“The fact that we were selected to present—it’s not serendipity,” Xanthopoulos says. He adds: “We spent a lot of time giving updates to investors, to bankers, to analysts.”

Alnylam CEO John Maraganore didn’t do anything to dispel the idea of a Regulus IPO. Maraganore has rooting interest, of course, since Alnylam pooled some intellectual property with Carlsbad, CA-based Isis Pharmaceuticals to found Regulus in late 2007—and Alnylam still has a 45 percent ownership stake in the spinoff. Maraganore is also chairman of the board of Regulus.

“If and when Regulus goes public, or gets sold, gee, we will own 45 percent of something that’s really valuable,” Maraganore says. “That’s more money for us, and we won’t have to sell a single share of Alnylam.”

The Regulus story at this point is mostly still about a big idea, and a lot of validation from its pedigree as an Alnylam/Isis spinoff. It has sizable partnerships with GlaxoSmithKline and Sanofi-Aventis. Those transactions have enabled Regulus to grow into a 55-person organization, with several years of cash on its balance sheet, without having to spend time … Next Page »

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San Diego-based Altair Therapeutics, a spinoff from Isis Pharmaceuticals (NASDAQ: ISIS), has shut down operations after the startup’s only drug candidate failed in a mid-stage clinical trial against asthma, Xconomy has learned.

Carlsbad, CA-based Isis told investors back in November on its quarterly conference call that Altair’s lead drug candidate, AIR645, failed to show enough evidence of benefit in patients. Since then, Isis re-acquired the assets of Altair, halted further clinical development of the drug, and dissolved the company, Isis spokeswoman Amy Blackley says.

“We were disappointed,” Blackley says. “The drug was well tolerated and showed signs of activity in early studies, but not enough clinical activity to warrant further development.” The company was dissolved, as well, because AIR645 “was the only drug they had,” Blackley says.

A number of big-name venture groups made a sizable bet on Altair back in November 2009. The company raised $17 million at the time from Domain Associates, AgeChem Venture Fund, Thomas McNerney & Partners, Forward Ventures, and Isis. The company was led by Joel Martin, a former partner at Forward Ventures. Altair’s vision was to use antisense technology, which is supposed to specifically shut down activity of certain proteins, to silence the activity of two inflammatory molecules that play a role in asthma—IL-4 and IL-13. Altair hoped to tap into a potentially huge market of millions of asthmatic patients, with a drug that works via a novel biological mechanism.

Terms of the asset sale aren’t being made public. Altair only had seven employees because it operated in a “virtual” model that leaned heavily on contractors, Martin says. The Altair employees have mostly gone on to find other jobs since the company wound down in December, he says.

Personally, Martin says he’s trying to take some time off, but is already thinking about what he’ll do next. He might choose to run another biotech startup, he says, noting that he’s interested in a new idea for neurology drug development.

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The past week brought news of clinical trials and funding from drugmakers, as well as a look at venture investing strategy in health IT, and an update on the Genzyme-Sanofi buyout rumors. Catch up on those stories and more below:

—With its recently closed $523 million fund, SV Life Sciences plans to put a greater focus on investments in the health IT space, Ryan wrote. The venture firm, which has offices in Boston and the Bay Area, has so far invested in six companies developing software for the healthcare sector, including Waltham, MA-based Phase Forward (NASDAQ: PFWD). Managing partner Eugene Hill sees promise in the $17 billion that the U.S. government has pledged toward helping healthcare providers update to electronic medical records.

—Waltham-based Avedro, a biotech startup developing technology for using thermal energy in vision correction, raised $4.6 million of a planned $5 million equity, debt, and options offering. The company’s CEO was among those who pioneered the Lasik laser eye surgery technology. Avedro’s system, which doesn’t require surgery, gained European market clearance earlier this year.

—In her column this week, Sylvia took a look at the process in which the media handles news from major clinical trials and scientific breakthroughs.

—Casenet, a Bedford, MA-based maker of health management software, pulled in a $2 million debt- and options-based financing. The company raised $5 million in a similar financing last year, and nabbed a $7.5 million Series B round led by HLM Venture Partners in 2007.

—PerkinElmer, a Waltham-based research and diagnostics technology provider, acquired Bedford-based VisEn Medical. No financial details of the transaction were revealed. Company CEO Kirkland Poss and Ralph Weissleder, the director of the Center for Systems Biology at Massachusetts General Hospital, founded VisEn, which develops in vivo fluorescence imaging products.

—Ryan wrote about Vertex Pharmaceuticals’ potential blockbuster drug telaprevir, initially developed through a partnership with Eli Lilly (NYSE: LLY). The hepatitis C treatment showed … Next Page »

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Genzyme (NASDAQ:GENZ) and Sanofi-Aventis (NYSE:SNY) have continued to be tight-lipped about their rumored buyout talks, making no official comments about Paris-based Sanofi’s reported efforts to scoop up the largest biotech company in Massachusetts.

But the two companies’ silence hasn’t kept unnamed insiders from whispering updates on the Genzyme-Sanofi talks into the eager ears of the business press. And there are plenty of opinions among Wall Street types about the true value of Cambridge, MA-based Genzyme, the world’s largest maker of drugs for rare diseases. There’s also been talk about how much Sanofi, a drug behemoth facing revenue loss due to competition from generic products, would be willing to pay for Genzyme to fill its expected revenue gap.

Bloomberg News reported this week that Sanofi has made an offer to pay between $67 and $70 per share for Genzyme, which would put the buyout at up to $18.7 billion. But sources tell the business wire that Genzyme—whose stock price jumped from less than $55 per share before the buyout rumors surfaced last month to a Wednesday close of $69.41 per share—is seeking an offer in range of $80 per share or more. (Xconomy readers thought that $76.29 per share was the right price.) Analysts have also speculated that Sanofi could mount a hostile takeover of Genzyme if its offer is rejected.

Genzyme spokesman Bo Piela declined to comment on the buyout topic yesterday, and he also assured me that leaks from unnamed sources on this matter weren’t coming from his office. But reporters from all over the world are calling Piela about potential buyout of Genzyme, one of the few large independent biotech companies left after its peers like Genentech, Millennium Pharmaceuticals, and MedImmune have been gobbled up by giant drugmakers in recent years.

On Wall Street, investors have largely shrugged off normally major news events on Genzyme that are unrelated to the buyout rumors. Yesterday, for example, the company and its Carlsbad, CA-based partner Isis Pharmaceuticals (NASDAQ:ISIS) reported that their cholesterol-lowering drug, mipomersen, passed muster in a pair of pivotal clinical trials, giving the two companies the clinical evidence they need to seek regulatory approval for the drug in the U.S. and Europe. On the whole, Genzyme’s stock price hasn’t significantly moved since the news came out. Maybe it’s because of lingering safety concerns about the drug.

Genzyme’s stock also didn’t budge much when a New York Times blog reported on Monday that patients were challenging the patents for the firm’s second-biggest seller, agalsidase beta (Fabrazyme), over shortages of the drug.

Right now, investors only seem to care about how much money Sanofi or some other company is willing to pay for Genzyme in a buyout—all the other stuff seems to be immaterial. So stay tuned for more action on the takeover front.

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Either I have too much time on my hands, or the first half of today’s headline is pretty close to a Haiku in English. Don’t grade me. Let’s just move on with the roundup of life sciences news.

—We briefly noted that San Diego’s Conatus Pharmaceuticals acquired Idun Pharmaceuticals for an undisclosed sum from Pfizer, which has been operating the San Diego-based subsidiary since 2005. But PE Hub’s Dan Primack cogently unraveled how Conatus, which was formed by executives who left Idun, likely paid less than 10 percent of what Pfizer paid to acquire Idun just five years ago.

—Plans by Complete Genomics to raise as much as $86 million through an IPO could lead to a payout for San Diego’s Enterprise Partners Venture Capital, which is among several VCs that invested in the Mountain View, CA, company. Complete Genomics has been developing its own methodology for inexpensive gene sequencing.

—Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) and Cambridge, MA-based Genzyme (NASDAQ: GENZ) said their drug for people with severely high cholesterol passed a pair of key clinical trials. The companies are preparing to seek clearance from regulators next year to begin selling the drug in the U.S. and Europe.

—Ryan talked with two former Vertex Pharmaceuticals (NASDAQ: VRTX) executives, Roger Tung and Rich Aldrich, to unravel how Eli Lilly walked away from nearly its entire stake in the drug telaprevir, the hepatitis C treatment that is nearing approval as a treatment for the chronic liver disease. Today, telaprevir represents a potential multibillion-dollar molecule for Cambridge, MA-based Vertex, which has significant operations in San Diego.

—OK, the Trius Therapeutics IPO was ugly—but the important thing is it got done. The San Diego biotech, which is developing technology to create a class of new antibiotic compounds, raised about $49 million instead of $78 million it had hoped to rake in through its IPO. After postponing its IPO for months earlier this year, Trius (NASDAQ: TSRX) cut its share price and increased the number of shares shortly before the offering.

—San Diego’s Optimer Pharmaceuticals (NASDAQ: OPTR) filed an application to start marketing fidaxomicin in the European Union as a treatment for C.difficile bacterial infections. Optimer plans to seek FDA approval later this year.

—San Diego’s BrainCells Inc. agreed to pay as much as $51 million to acquire a drug, sabcomeline, from London-based Proximagen that could have potential against various psychiatric diseases.

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Genzyme has been all over the news in the past week because of takeover speculation, but today when fundamental news came out about one of its most important assets for the future, investors yawned.

Cambridge, MA-based Genzyme (NASDAQ: GENZ) and its partner, Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) said today that their drug for people with severely high cholesterol passed a pair of clinical trials. The drug, mipomersen, has now passed a total of four pivotal clinical trials, and the companies are preparing to seek clearance in early 2011 from regulators to start selling the drug in the U.S. and Europe.

Isis, which relies more heavily on this product for its future financial success, saw its shares drop 5 percent to $9.49 at 11 am Eastern time, while Genzyme stock dropped 1.6 percent to $69.07.

Expectations have been high for this drug to become a hit for a couple years now, as the next big thing for cholesterol after the patents expire on multi-billion dollar statin drugs such as Pfizer’s atorvastatin (Lipitor). Genzyme was said to have outhustled more than a dozen rivals that wanted to co-develop mipomersen, and it paid a whopping $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 back in January 2008.

There’s so much interest for a few reasons. While statins have been used by millions of people to lower cholesterol for more than a decade, there’s a need for stronger cholesterol-lowering drugs for patients who can’t get their levels under control with conventional statins. The new drug is also based on new science, in that 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. Isis CEO Stanley Crooke told me last October that mipomersen represents the third “remarkable” advance he’s seen in his 30-year career in drug development.

So what did today’s results actually tell us? The first study enrolled 58 patients who were randomly assigned to get a once-weekly injection of mipomersen, or a placebo, for about six months. The patients entered the study with severely high cholesterol—a median LDL count of 276 milligrams per deciliter of blood, even though they were already taking the highest tolerable dose of statins. By the end of the 26-week study, patients on mipomersen saw their cholesterol score drop 36 percent to a more manageable 175 milligrams per deciliter.

Still, not everybody in the trial was motivated to stick with the mipomersen regimen. Of the 39 patients who got the drug, eight dropped out of the study because of adverse events, Isis and Genzyme said. For comparison, just one of the 19 placebo patients dropped out because of an adverse event, the companies said. Researchers also saw increased levels of liver enzymes in mipomersen patients, which can be a sign of liver damage, although there were no reported cases of actual liver damage.

The second study enrolled 158 patients who weren’t as sick—they were classified merely as having a high risk of developing heart disease. More than half of the patients also had diabetes. Patients entered the study with a median LDL cholesterol score of 123 milligrams per deciliter, and when they got mipomersen, they saw that figure drop 37 percent on average to 75 milligrams per deciliter. Half of the patients got to below 70 milligrams, which is a treatment goal for high-risk heart disease patients, the companies said.

“We are pleased with the robust efficacy of mipomersen across all four phase 3 trials. These data, along with the emerging safety profile, support our focused approach on patients at highest cardiovascular risk who are in the greatest need of new treatments,” said Genzyme senior vice president John Butler, in a statement.

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[Updated: 07/02/10 at 10:14 am Eastern time] It appears to be a rare case of fast money made in a biotech startup. The drug giant Eli Lilly (NYSE:LLY) has bought Cambridge, MA-based Alnara Pharmaceuticals and its lead drug for cystic fibrosis patients just two years after the biotech startup incorporated. The companies revealed the deal this morning.

Indianapolis-based Eli Lilly isn’t yet disclosing how much it paid for Alnara, so it’s unclear how well the startup’s elite group of biotech investors are doing in this deal. But read between the lines. Alnara applied to the FDA for approval of its enzyme supplement liprotamase for patients with cystic fibrosis and other conditions in which the pancreas fails to produce enough enzymes to break down foods. Alnara officials have said they hope to have the drug on the market by as early as late this year. Lilly is among multiple drug powerhouses that are in a position to pay a premium to acquire firms that bring new products into their pipelines.

If the FDA approves liprotamase, Lilly will likely have a small but dedicated following for the product among CF patients. Cystic fibrosis, which causes lethal lung infections and digestive problems, affects about 30,000 Americans. Liprotamase, a pancreatic enzyme supplement made in a microbial process, will be offered as an alternative to existing products made with pig enzymes. Bob Gallotto, Alnara’s chief business officer, has estimated that the U.S. market for such supplements is about $400 million annually.

This deal is likely good news for Alnara’s investors, which have pumped $55 million into the startup in two rounds of venture capital financing, including a $35 million round announced early this year. The company’s venture investors include Bessemer Venture Partners, Frazier Healthcare Ventures, Longwood Founders Fund, MPM Capital, and Third Rock Ventures.

“Our agreement with Lilly is an important development as we move liprotamase through FDA regulatory review,” Alexey Margolin, Alnara’s chief executive and co-founder, said in as statement. “Lilly’s deep expertise in the U.S. pharmaceutical business, including regulatory affairs and the development of innovative compounds that address unmet medical needs, created a natural fit and could allow for opportunities in markets beyond cystic fibrosis.”

Alnara and Lilly haven’t officially closed this buyout deal, but for now Alnara is continuing to operate in Cambridge as it pursues market approval of liprotamase, Margolin said in an interview this morning. He and Gallotto declined to discuss any terms of their agreement with their buyer, but Margolin said that “it’s a good deal for everyone.” [Editor's note: This paragraph was added to the initial version of this story that was published this morning.]

Lilly’s buyout of Alnara is more proof that Big Pharma companies want in to the genetic diseases market.

New York-based Pfizer (NYSE:PFE), the world’s largest drug company, said this month that it would set up a … Next Page »

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