San Diego-based Trius Therapeutics (NASDAQ: TSRX) got some long-awaited good news today for its lead antibiotic in development.

The company said today that its experimental drug, tedizolid phosphate, met the main goal of its pivotal clinical trial by showing it was roughly equal (non-inferior) to Pfizer’s linezolid (Zyvox) when treating acute skin and skin structure infections. The study enrolled 667 patients who were randomly assigned to get a once-daily form of the Trius drug for six days, or a twice-daily course of the Pfizer drug for 10 days. The Trius drug was effective for 79.5 percent of patients, while the Pfizer drug worked for 79.4 percent, Trius said in a statement.

“We are very pleased the trial demonstrated that a 6-day course of once daily oral tedizolid is as efficacious as a 10-day course of twice daily oral linezolid while showing an improved tolerability profile,” said Jeff Stein, Trius’s CEO, in a statement.

More details will be presented at a future scientific meeting, Trius said. But in today’s statement, the company said that 24 percent had adverse events in the study that were drug-related, compared with 31 percent on the existing Pfizer drug. The Pfizer product, approved by the FDA in 2000, generated $1.18 billion in worldwide sales last year. Both it and the Trius product are members of the class of antibiotics known as oxazolidinones. The Trius drug is designed to be a potent new option against some of the more dangerous bacterial infections out there, like MRSA.

Trius shares initially surged on the news, but then fell as the day continued, dropping 12 percent to $5.98 at 10:55 am Eastern time.

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San Diego’s Trius Therapeutics, like Zogenix and Pacira Pharmaceuticals, was among the local IPOs that got caught in the jaws of the amazing life sciences valuation-shrinking machine of 2010.

Trius initially filed its IPO in late 2009 to raise as much as $86 million by March 2010, so the company could price its shares in time to fund its planned Phase 3 clinical trials of torezolid phosphate, a promising antibiotic for treating acute, methicillin-resistant skin infections. Torezolid is the company’s lead drug candidate, and as Trius CEO Jeff Stein told me recently, the company was working on its IPO and finalizing the protocols for its late-stage clinical trials at roughly the same time.

As fate would have it, though, the FDA decided in late February to change its guidelines for such studies—necessitating a substantial overhaul of the company’s application for a special protocol assessment (SPA). The SPA process is designed to serve as a kind of roadmap for both the company and federal drug regulators, and sets out how data from the trial can be used as the primary basis for a new drug application.

Jeff Stein

Reaching an agreement on the revised protocols took until mid-June, forcing the company to delay its IPO into what Stein called the summer doldrums. Stein says Trius didn’t want to postpone the IPO any further, as the company needed the capital to fund the planned clinical trials. Trius also is on a tight timeline for launching the new drug, which was tied to other steps in the company’s overall strategy.

“We made the right decision,” Stein said. “The fact that we got it done at all is a testament to the strength of the [torezolid] story, the quality of our management team, and everything else.”

The company paid a price, though, when underwriters chopped the price and increased the number of Trius shares, leading the company to generate about $30 million less than expected in its IPO. Instead of generating close to $80 million, Trius raised … Next Page »

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On the heels of a favorable FDA advisory panel vote on its experimental antibiotic, San Diego-based Optimer Pharmaceuticals (NASDAQ:OPTR) says today that Cubist Pharmaceuticals (NASDAQ:CBST) has agreed to help sell the drug in the U.S.

The deal calls for Lexington, MA-based Cubist to co-promote the Optimer antibiotic, fidxomicin (Dificid), for two years; the drug is under review at FDA as a potential treatment for C. difficile infections. Optimer, which is now in the process of building a sales force, has agreed to pay Cubist quarterly fees that amount to $15 million per year as well as $17.5 million in additional fees to Cubist if certain sale levels are reached during the term the deal, according to the companies.

For Cubist, this deal could give its existing U.S. sales force another product to market in addition to the company’s antibiotic daptomycin (Cubicin), which is approved for treating certain infections caused by such bugs as the notorious Methicillin-resistant Staphylococcus aureus (MRSA). Still, Optimer’s antibiotic has to pass muster with the FDA, which is expected to say by May 30 whether the drug can be marketed in the U.S. An FDA advisory panel unanimously endorsed the safety and effectiveness of the antibiotic yesterday, but the group voted 7-6 against Optimer on whether the drug reduces recurrence of “C. diff” infections. My colleague Luke Timmerman spoke to Optimer CEO Pedro Lichtinger after the FDA panel votes yesterday about the company’s plans to discuss how best to explain the benefits of the drug to doctors.

In today’s announcement about the Cubist deal, Lichtinger explained how the collaboration benefits his company as it prepares for the marketing of what could be its first approved product in the U.S.

“Cubist has a proven track record and well established relations with all stakeholders involved in the antibiotics space. We believe this collaboration will maximize the impact of and de-risk Dificid’s U.S. commercial launch, assuming approval,” said Lichtinger, in a statement. “We also believe this collaboration with Cubist will allow us to accelerate formulary adoption, expand our market reach and penetration to up to 2,000 hospitals, comprising over 90% of U.S. hospital [C. difficile infection] cases, and commit resources to long-term care facilities that comprise approximately one-third of all CDI cases. In addition, this provides the opportunity to capture the undiagnosed CDI market segment which some estimate to be as many as three million cases per year.”

Optimer says that there are an estimated 700,000 cases of “C. diff” infection in the U.S. annually. The bugs infect the inner lining of the colon and cause inflammation, diarrhea, and, in the worst of cases, death. Optimer’s drug has a novel mechanism to selectively kill “C. diff” and reduce impacts on healthy bacteria.

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There are lots of exceptions to the rules in the biotech business, and a big one jumped out me this past week, related to antibiotics.

One day, Reuters ran a story about the overall abysmal state of the world’s pipeline of new antibiotics. Next day, there were reports about how San Diego-based Optimer Pharmaceuticals appears poised to sail through a meeting scheduled for tomorrow of an FDA advisory panel that will size up the merits of its new antibiotic.

Having followed a number of antibiotics developers for the past few years, it strikes me there is no shortage of ideas for fighting dangerous bacterial infections. There are interesting companies all over the map: South San Francisco companies like Achaogen and Theravance (NASDAQ: THRX); Watertown, MA-based Tetraphase Pharmaceuticals and Lexington, MA-based Cubist Pharmaceuticals (NASDAQ: CBST); New Haven, CT-based Rib-X Pharmaceuticals; and a pair of San Diego companies, Trius Therapeutics (NASDAQ: TSRX) and Optimer (NASDAQ: OPTR).

There is government funding available to support this work—Achaogen alone has raked in $155 million in support from government and philanthropic support, not to mention $95 million from venture capitalists. The drugs themselves often perform relatively consistently from early-stage to late-stage studies. And when they work, they can make sizable amounts of money—see Pfizer’s linezolid (Zyvox), which generated $1.18 billion in worldwide sales last year.

Yes, there has been some shifting of regulatory standards at the FDA, which put a crimp in many antibiotic business plans over the past year. But given all the forces properly aligned to support antibiotics, this shouldn’t be a classic case of market failure. And yet here we are, with only five new antibiotics approved by the FDA from 2003 through 2007, as Andy Pollack reported in the New York Times in November. FDA commissioner Margaret Hamburg has said the number of new antibiotics in development is “distressingly low.” Only five of the 13 biggest Big Pharma companies work on antibiotics now, which partly reflects their enduring fixation on blockbusters that can move the financial needle at their overly bloated organizations (but that’s another story, covered here last week.)

The lack of innovation in the antibiotics field is worrisome. Public health officials fret that because of the overuse of the antibiotics on the market today, we are encouraging the rise of more drug-resistant “superbugs” like the sometimes deadly MRSA and C.difficile. More, undoubtedly, will evolve in the future.

This is really just a hunch, but I would argue that a big part of the problem here is an overall lack of will in the biotech industry to create new antibiotics. While everybody talks about the hot new breast cancer drugs or the new thing for diabetes—which are sort of like biotech’s versions of the iPad and iPhone in terms of glamour—the only people who seem really interested in antibiotics are the people at those companies mentioned above. There have been some painful regulatory … Next Page »

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Nathan Myhrvold is a physicist who made his name as a software guy at Microsoft. So it’s natural to think that if his Bellevue, WA-based invention firm, Intellectual Ventures, creates anything of lasting value, it will probably come from physics or software. Maybe it will be something really offbeat (fighting infectious disease with mosquito-zapping lasers), or really big and audacious (cheap, clean nuclear power at TerraPower).

But a couple of new dealmakers that Intellectual Ventures has hired in the past six months say some of the company’s biggest inventions could come from a surprising sector—medical devices. These could be things as simple as efficient new bone screws, safer and more vivid medical imaging devices, new drug discovery technologies, diagnostics, or touchscreen interfaces embedded with technology to automatically kill viruses and bacteria circulating in the environment.

“We have thousands of inventions in the medical technology space that were conceived of by our team of inventors. Literally, thousands,” says Daniel Hawkins, the new vice president of business development at IV, responsible for medical technologies. “The medical device universe is just starting to hear from us.”

Intellectual Ventures has its share of critics, who see it as little more than a patent troll that goes around scooping up intellectual property and then forcing innovators to cough up cash or else get sued for infringement. The firm naturally bristles at this criticism, and counters by arguing that it actually creates a lot of inventions in-house (and that it hasn’t ever sued anyone). Part of this comes through brainstorming “invention sessions” where it brings in superstar scientists like MIT’s Robert Langer and Leroy Hood of the Insitute for Systems Biology to invent stuff. The value of all this inventing is hard to pin down on a spreadsheet, because no one knows what will pay off in the marketplace and what won’t in the future. But IV has grown to the point—with more than $5 billion under management and more than 700 employees worldwide—that it’s time to start showing its investors it can apply inventions to real-world problems and generate returns.

That’s where Hawkins and his colleague Paul Duesterhoft enter the picture. Hawkins, a seasoned medical device entrepreneur, previously worked in a couple of venture-backed startups incubators—one that’s now become Calibra Medical, the maker of a miniature insulin delivery pump, and another called Aspen Medtech, which closed down a year ago. Duesterhoft was formerly a vice president of marketing at Seattle-based ZymoGenetics (NASDAQ: ZGEN). They have both been hired in the past six months at IV, as the first businesspeople charged with sorting through the company’s medical tech portfolio of patent applications and potential patent applications, to see which ones may become real products. That means figuring out what’s valuable to the Johnson & Johnsons, Boston Scientifics, and Medtronics of the world, and striking some deals to license technology to them. Maybe, once in a while, this might even lead to the creation of a new company.

Intellectual Ventures hasn’t talked publicly about … Next Page »

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San Diego’s Trius Therapeutics (NASDAQ: TSRX), which is developing technology for making a new class of antibiotic compounds, ended the day as it began this morning—at its initial public offering price of $5 a share. Trius was forced to cut its price to $5 a share yesterday (from a range of $12 to $14 per share), and increased the size of its offering from 6 million to 10 million shares. The share price traded as high as $5.23 before slipping back on trading volume of more than 2.5 million shares. The company’s lead drug candidate targets a sometimes-fatal bacterial infection formally known as methicillin-resistant Staphylococcus aureus, or MRSA.

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In a page taken from the discount retailing playbook, San Diego’s Trius Therapeutics slashed the proposed price of its pending IPO by roughly 60 percent and increased the number of shares it is offering by 67 percent.

Trius now plans to offer at least 10 million shares at $5 apiece, after initially planning to sell six million shares at a price range between $12 and $14 a share, according to Renaissance Capital, which tracks IPOs. The biotech, which was founded in 2004, plans to use the proceeds to complete late-stage clinical trials of its antibiotic, torezolid phosphate.

As Luke reported last year, the company’s lead antibiotic candidate is from the same class of compounds as Pfizer’s linezolid (Zyvox), which represents a billion-dollar-plus market. Trius, which says it has a technology platform for creating a class of similar molecules, says its torezolid phosphate represents an improved alternative, a pill that can be taken at a lower dose, over a shorter period of time, and be given once a day instead of twice.

Trius has raised more than $68 million in venture funding from Kleiner Perkins Caufield & Byers, Sofinnova Venture Partners, InterWest Partners, Versant Ventures, and Prism Venture Partners, according to VentureWire. The venture investors do not appear to be selling shares in the initial offering.

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Want to raise a mountain of venture capital to pursue your biotech dreams in 2010? Do what Kevin Judice of Achaogen did. First, find some government agencies and charities willing to commit $100 million to your R&D, then see if the VCs will pull out the checkbook.

That’s what happened earlier this year for South San Francisco-based Achaogen. The company (pronounced uh-KAY-oh-jen) raked in a $56 million Series C venture round in April from Frazier Healthcare Ventures, Alta Partners, 5AM Ventures, Arch Venture Partners, Domain Associates, Venrock, Versant Ventures, and the Wellcome Trust. It was the seventh largest venture round of the second quarter in Northern California, according to Dow Jones VentureSource.

The big idea at Achaogen—also being supported by the U.S. Department of Defense, the National Institutes of Health, and the Wellcome Trust—is to create new antibiotics with ability to kill a broad spectrum of the craftiest bacterial invaders that resist existing drugs. The concept, when Achaogen was founded in 2004, was that antibiotic resistance was becoming a big problem in the hospital, and in the community. Partly because of overuse of antibiotics, about 70 percent of hospital-borne infections develop ways to resist one or more classes of drugs, according to the Centers for Disease Control and Prevention. That leaves doctors fewer arrows in their quiver against potentially deadly bugs like MRSA (methicillin-resistant Staphylococcus aureus), which tends to make public health officials nervous. An estimated 90,000 people die from bacterial infections every year, costing the health system $4.5 billion, Achaogen says.

Kevin Judice

So, it stands to reason that if a company could build a diverse portfolio of new drug approaches for multi-drug resistant invaders, there ought to be lots of money to be made. There was relatively little competition from Big Pharma, which, then and now, was more interested in bigger markets like cancer and diabetes. But unlike cancer, where curing the disease in mice doesn’t usually help predict what will happen in humans, antibiotics that work in animals have better odds of performing well in future human studies.

“I liked the idea of starting an antibiotics company,” says Judice, the company’s chief executive and chief scientist. “The need for more antibiotics was acute and growing as time passed.”

Judice, who trained under the prominent chemist Peter Schultz at UC Berkeley in the early ’90s, seemed like the guy to tackle this problem. Judice was one of the first 10 employees at South San Francisco-based Theravance (NASDAQ: THRX), an antibiotic developer. By 2003-2004, he had moved on … Next Page »

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San Diego’s Trius Therapeutics, which was forced to postpone its planned IPO earlier this year to accommodate new FDA guidelines, appears to be back on track. The biotech amended its IPO filing with the Securities and Exchange Commission earlier this week, and the company’s stock offering is now on the runway and scheduled for the week of July 26, according to Renaissance Capital’s IPO calendar.

This one could be a testament of the fortitude at Trius, which submitted its initial IPO filing eight months ago. It’s also worth noting the 6 million shares the company is planning to offer are still expected to price as originally estimated, between $12 and $14 a share, according to the recently amended filing. If shares are priced at the high end of the range, the IPO would raise about $84 million for the company and its underwriters.

As we reported last year, the venture-backed startup’s lead drug candidate is torezolid phosphate, an antibiotic that targets MRSA infections, a fast-moving and life-threatening bacterial infection. (MRSA stands for methicillin-resistant Staphylococcus aureus.) The company’s underlying technology for developing other antibiotic treatments appeared promising enough for the Pentagon’s Defense Threat Reduction Agency to award Trius a contract in May that could be worth as much as $29.5 million to develop novel antibiotics for gram-negative bacterial pathogens.

Trius said in March that it was postponing its planned IPO until its protocol for a late-stage clinical trial of torezolid could be revised to reflect new guidance from the FDA on so-called “non-inferiority” trials—which basically show a new drug is about equally effective as an old one. The company resumed plans for its IPO in June, after announcing it had agreed with the FDA on a special protocol assessment for its pivotal clinical trial.

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Cubist Pharmaceuticals has grown into one of the big success stories in biotech industry of the past few years, based almost entirely on the sales of a single product. The Lexington, MA-based company’s big hit is an intravenous antibiotic for deadly infections called daptomycin (Cubicin). Even though this has propelled Cubist into profitable territory, the company’s (NASDAQ:CBST) stock price has been flat for more than four years amid concerns on Wall Street about potential threats to its antibiotics franchise.

Last week, I visited the company’s headquarters and met with CEO Michael Bonney and discussed the successes and challenges he faces at Cubist. This month the company announced 2009 revenue of $562.1 million, a 30-percent jump from the year before. Revenues have grown rapidly every year since the market debut of daptomycin in 2003. But Bonney was clear that the company doesn’t plan to rest on its laurels, and the firm is taking more aggressive measures than in previous years to bring a second commercial product to market. (The company also sells an antibiotic called meropenem on behalf of AstraZeneca in the U.S., but that agreement brought Cubist only $22.5 million in revenue last year.)

Indeed, analysts have criticized the company’s lack of an encore to its success with daptomycin. Bonney acknowledged that the company’s critics have a point, and that he’s tackling it now.

“I think we could have been a little more aggressive at pipeline building earlier than we started to,” Bonney said. “It’s always a fine balancing act between [profitability] and how much you are going to spend, and there’s no formula that I’ve found in any textbook that says this is how you do it. But I do think, with the benefit of hindsight, that is something we could have done differently.”

Cubist has more than just its pipeline to worry about. It generates 93 percent of its revenue from daptomycin, a compound used in hospitals to treat lethal MRSA (Methicillin-resistant Staphylococcus aureus) infections and other bugs. And while analysts say daptomycin has potential to reach $1 billion in peak annual sales, that is no sure thing. Generic drug maker Teva Pharmaceutical has plans to market a cheaper generic copy of the drug before Cubist’s patents for the product expire between 2016 and 2019. Cubist plans to prove in its pending lawsuit against Teva that its patents protect its lead antibiotic from generic competition.

Cubist’s problem isn’t exactly unique in the biotech game; there are a number of mid-sized drug developers whose success hinges largely on one product. A couple of those companies include Cheshire, CT-based Alexion Pharmaceuticals (NASDAQ:ALXN), which gets all of its sales revenue from one product, eculizumab (Soliris), a treatment for a rare blood disorder called paroxysmal nocturnal hemoglobinuria, as well as Emeryville, CA-based … Next Page »

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Lexington, MA-based Cubist Pharmaceuticals says today that it’s inked a deal to buy fellow antiobiotic drug developer Calixa Therapeutics, of San Diego, for $92.5 million upfront and up to $310 million more in potential payments to Calixa shareholders.

Calixa—which Luke profiled back in March after it cleared a key safety study for one of its antibiotics—has a lead drug candidate called CXA-201 in mid-stage clinical trials for treating serious infections, including those caused by a common and sometimes drug-resistant bug called pseudomonas aeruginosa (or P. aeruginosa), according to Cubist. While not as well known as drug-resistant bugs like MRSA, P. aeruginosa can be similarly lethal. If CXA-201 clears the remaining regulatory hurdles, Cubist says that it has the potential to be a market-leading product. The plan is to develop the drug to treat complicated urinary tract and intra-abdominal infections as well as pneumonia acquired in hospitals.

Cubist said it hopes to have its purchase of Calixa wrapped up by the end of 2009.

Privately held Calixa’s lead drug is a combination of two anti-bacterial compounds, cephalosporin and tazobactam antibiotics. Its cephalosporin compound (dubbed CXA-101) was acquired from Japanese drugmaker Astellas Pharma, and Calixa has rights to develop the antibiotic in all countries accept for some Asia-Pacific territories, according to Cubist. In fact, the $310 million in potential milestone payments that Cubist would pay Calixa shareholders are are pegged to development goals with treatments that include CXA-101 as an ingredient. Cubist is hoping that, if all goes as planned, it could be asking the FDA for approval of Calixa’s lead antibiotic by 2013.

“Cubist has a proven track record of success in developing and commercializing anti-infective products,” said Dennis Podlesak, Calixa’s CEO, in a statement. “We have great confidence in their ability to optimize the therapeutic and commercial potential of the Calixa portfolio.”

Calixa was launched in 2007 with $30 million in Series A financing from well-known life sciences investors such as Domain Associates, Frazier Healthcare Ventures, and Canaan Partners. Despite the large initial financing, Luke reported back in March that the company was operating lean with mostly part-timers and consultants and only four full-time employees.

For Cubist, Calixa’s pipeline puts more potential antibiotics behind its top seller daptomycin (Cubicin), a treatment for MRSA skin infections and other bugs, which accounted for $414.7 million of the company’s total $433.6 million in 2008 revenue.

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San Diego’s Trius Therapeutics, a venture-backed biotech developing a new antibiotic for treating acute and life-threatening bacterial infections, submitted a regulatory filing Friday to raise as much as $86 million in an initial public stock offering. It marks the third IPO filing by a company in the San Diego area so far this year.

The biotech was founded in 2004, and has posted a loss every year since then. No pricing terms were disclosed in the filing. Trius plans to list on the NASDAQ under the symbol TSRX.

The San Diego biotech passed a key Phase 2 test of its antibiotic in June, with an overall cure rate of 96 percent at three different doses for patients with complicated skin infections. The company has been looking to proceed to Phase 3 clinical trials of its antibiotic, torezolid, which Trius describes as a second-generation successor to linezolid, the Pfizer antibiotic known as Zyvox.

Even when I sat down with Trius CEO Jeff Stein seven months ago, he was looking ahead to fund its Phase 3 trials from another fundraising round, or by striking a development deal with a strategic partner.

Trius licensed torezolid from South Korea’s Dong-A Pharmaceuticals, but the company says it has developed new techniques that use antisense technology to identify other potential antibacterial drugs.

Trius says its lead antibiotic, like Pfizer’s linezolid, is particularly effective against drug-resistant strains of bacteria, such as MRSA (methicillin-resistant Staphylococcus aureus). Torezolid also appears to be more potent than linezolid, allowing for lower dosing, and can be administered intravenously. Stein told Luke an estimated 19,000 people in the U.S. die from bacterial infections each year. Total U.S. sales for the four existing antibiotics labeled for MRSA grew from $778 million in 2005 to $1.4 billion in 2008, according to Trius’ IPO filing. Sales of linezolid alone were $1.1 billion.

With the additional funding, Trius says it plans to conduct two Phase 3 clinical trials to evaluate the 200 milligram dose of torezolid for treating acute bacterial skin infections. The first trial, which is expected to begin by June 2010, is intended to evaluate the efficacy, safety, and tolerability of the dosage in adolescent and adult patients in comparison to linezolid. The second trial will begin by administering torezolid to patients intravenously and subsequently switch to oral tablets.

Trius has raised close to $51 million in venture capital, and recently secured a $19.2 million loan from a number of existing investors that is convertible to stock. According to its IPO registration, San Francisco-based Sofinnova Ventures holds a 21.3 percent stake in the company; Menlo Park, CA-based InterWest Partners holds a 17.7 percent stake; San Francisco-based Versant Partners, 17.7 percent; Westwood, MA-based Prism VentureWorks, 13.5 percent; and Kleiner Perkins Caufield Byers, 11.9 percent. None of the firms will retain their current shares following the IPO.

MaxLinear, a Carlsbad, CA, semiconductor designer, also filed for an IPO Friday. San Diego-based Bridgepoint Education went public through an IPO earlier this year.

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Enigma Diagnostics, a UK-based medical diagnostics startup, plans to close its current U.S. office in San Francisco and open a new office in San Diego as its U.S. headquarters, according to chairman and CEO John McKinley.

McKinley outlined Enigma’s development of rapid molecular diagnostic technology in a presentation yesterday at the annual investor conference organized by Biocom, the San Diego life sciences industry group. The company has developed a desktop-size instrument based on advances in PCR (polymerase chain reaction) technology, which McKinley says can identify certain pathogens in less than 45 minutes. Amid concerns over the H1N1 swine flu outbreak and other infectious disease, McKinley says, “There currently is nothing in the market like our pending technology.”

Enigma expects to make an official announcement about its new San Diego office next month, McKinley says, and he estimates the company will have 30 employees here by mid-2010. He tells me he decided to establish an American beachhead for Enigma Diagnostics in San Diego because, “It’s a diagnostics center for the U.S. The pool of labor is certainly here.”

Among the factors that McKinley cited is the presence of Life Technologies (NASDAQ: LIFE), the Carlsbad, CA, company that was formed in last year’s merger of Invitrogen and Applied Biosystems, as well as Quidel (NASDAQ: QDEL), and Stratagene, a San Diego business that is now part of Santa Clara, CA-based Agilent Technologies.

Enigma ML device

McKinley says Enigma, a venture-backed company founded in 2004, first developed a rugged military version of its diagnostic machine for field detection of biological agents under funding from the UK’s Defence Science Technology Laboratory. The company’s investors include the UK’s Porton Capital Group, GlaxoSmithKline, and the UK Government Science Technology Laboratory.

The company intends to first win approval for its automated Enigma ML “mini laboratory” in Europe by next September. Following that, McKinley says Enigma intends to ask the FDA to waive requirements under CLIA, or Clinical Laboratory Improvement Amendments, which would enable the device to be operated in U.S. hospitals, clinics, and other point-of-care facilities.

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We all look for milestones in life, but several San Diego biotechs are approaching important junctures where they’re expected to report positive results from their drug development studies. Read on to find out which ones, and to catch up on the rest of San Diego’s life sciences news.

—San Diego’s Ardea Biosciences (NASDAQ: RDEA) reported some encouraging results last week for the drug it is developing to treat gout. A small number of patients found the drug lowered the amount of uric acid in their blood to acceptable levels within eight days. Still, Ardea is facing increasing competition, since the FDA approved Takeda Pharmaceutical’s gout drug in February and an FDA advisory panel recommended Savient Pharmaceutical’s gout treatment earlier this week.

—Trius Therapeutics CEO Jeff Stein told Luke the company plans to present full results from its recent clinical trial of a new antibiotic for treating MRSA at a conference in September. The startup also is working on a pivotal clinical trial strategy, and it is searching for a potential partner.

—San Diego’s Biocom, the life sciences industry trade group, hosted the CalAsia conference for the first time this week, and more than 300 representatives of the international biotech community attended. In a Q&A with Xconomy, Dr. Hui Cai of Inflexion BioPartners discussed the concerns that U.S. companies have about doing business in China—and China’s concerns about doing business with U.S. companies. In an e-mail yesterday, she adds, “A consensus out of CalAsia is [that] the line between U.S. and Asia certainly is becoming fuzzy. Gaps we see today in knowledge, processes, and other aspects will eventually disappear, and global standards will be established.”

—San Diego’s Lpath is nearing a make-or-break milestone in its development of sonepcizumab, an experimental cancer drug. The biotech stands to receive up to $8 million from Merck Serono for achieving performance targets related to the clinical trial Lpath is wrapping up, and an additional $31 million if the Swiss pharmaceutical company exercises an option to develop the drug.

—San Diego-based aFraxis, which is focused on developing treatments for Fragile X syndrome and autism, has raised $750,000 in early stage funding, according to a recent SEC filing. The startup is backed by San Diego’s Avalon Ventures, and Avalon’s Jay Lichter is listed as chief executive and director.

—Illumina, the San Diego biotech that provides DNA research tools for scientists, plans to offer a service that will enable consumers to get their DNA sequenced—at a cost of $48,000. As expensive as that may sound, it is half as much as the DNA sequencing service offered by Cambridge, MA-based Knome. The idea is to give patients access to comprehensive, personalized information about their vulnerability to disease.

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San Diego-based Trius Therapeutics saw what it wanted from a clinical trial of its new antibiotic against deadly MRSA infections, and now it’s gearing up this summer to take its game to a higher level.

Trius reported earlier this week some impressive results from a trial of 188 patients with complicated skin infections who took low, medium, or high doses of its drug, torezolid (TR-701). The treatment caused 98 percent of patients on the lowest dose to be clinically cured, with no side effects serious enough to make patients drop out of the study. While this is medically intriguing, and enough for Trius to pick the right dose, it’s not enough proof for FDA approval. So I followed up with Trius CEO Jeff Stein to find out what’s coming next.

Before getting too far into that, it’s worth a reminder of what Trius is trying to accomplish. The company’s experimental antibiotic is from the same class of treatment as Pfizer’s linezolid (Zyvox). The Pfizer drug generated $1.12 billion in sales last year, so a lot of people think it’s a worthwhile advance in the fight against dangerous infections, like MRSA bacterium that people tend to pick up in hospitals. Trius hopes to offer a better alternative—a pill that can be taken at a lower dose, over a shorter period of time, and be given once a day instead of twice. That’s important, because greater convenience means patients are more likely to follow doctors’ orders—taking an antibiotic as prescribed is critical to wiping out the bug, and reducing the chances of drug resistance.

The full clinical trial results are expected to be presented at the Interscience Conference on Antimicrobial Agents and Chemotherapy in September, but Stein said there’s nothing in the data that’s disappointing. The Trius group, with about 35 employees, is working on a pivotal clinical trial strategy that will enroll about 1,200 patients in a pair of studies required by the FDA. They are also putting some resources into an intravenous formulation of the drug. And they’re talking with potential partners with the money and manpower to take this drug the rest of the way.

“I’m not aware of results from other companies with an oral drug that’s this effective, in a once-daily pill given over a short course of treatment,” Stein says. “That’s our difference.”

The first big trial—still in a draft form—sounds like it ought to generate the kind of unequivocal answer that the FDA and doctors want to see about a new drug. It will randomly assign patients … Next Page »

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There was a lot of life sciences news over the past week in San Diego, with much of it coming out of the American Diabetes Association annual meeting in New Orleans.

—At a time when San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN) doesn’t need more challenges, Denmark’s Novo Nordisk announced that liraglutide, its once-daily diabetes drug, is substantially better at controlling blood sugar in type 2 diabetes than Amylin’s exenatide, which is injected twice-daily.

—If Amylin Pharmaceuticals’ rivals are targeting the diabetes specialist, at least the San Diego biotech is a moving target. Amylin says the latest clinical data for the new formulation of its exenatide diabetes drug (which only has to be injected once weekly instead of twice daily) shows patients were able to maintain control over blood sugar for two years, helped them lose weight, and lowered their blood pressure.

—San Diego’s Orexigen Therapeutics (NASDAQ: OREX) posted new results of its late-stage drug for treating obesity, showing that 41.5 percent of patients on the drug lost 10 percent of their body weight. That compared with 20.2 percent who did as well taking a placebo.

—Another San Diego drug developer, Arena Pharmaceuticals, (NASDAQ: ARNA) says patients on its lorcaserin treatment for a year generally had reduced their risk of heart attacks.

—San Diego’s Anadys Pharmaceuticals (NASDAQ: ANDS) is cutting its workforce by 40 percent and focusing its remaining resources on its lead drug candidate for treating the hepatitis C virus. The company also says it’s raising $17.5 million.

—Trius Therapeutics, a San Diego biotech developing a new antibiotic against deadly MRSA bacterial infections, said a study showed 98 percent of patients on the lowest dose of its new compound achieved a clinical cure. 

—Raj Krishnan, a bioengineering Ph.D candidate at UC San Diego, began entering student entrepreneur and business contests as a way to raise money for Biological Dynamics, the cancer diagnostics company he co-founded. It worked. He has now won 13 awards, and his most recent win included a check for $40,000. Krishnan, 27, says his research is focused on technology to identify a key biomarker for almost every type of cancer.

—After getting a $20 million infusion from investors last month, San Diego’s Vical (NASDAQ: VICL) says it has enough resources to continue operating through the end of 2011, which should be enough time to complete its clinical study of an immune-stimulating therapy for metastatic melanoma. Vical also is developing a vaccine to prevent life-threatening cytomegalovirus infections in bone marrow transplant patients.

—Bothell, WA-based Sonosite (NASDAQ: SONO) says it’s acquiring San Diego’s CardioDynamics International (NASDAQ: CDIC) in a deal valued at about $10 million. Sonosite makes portable ultrasound machines and CardioDynamics makes noninvasive medical diagnostic tools for cardiovascular disease.

—San Diego-based Tocagen, which is developing gene therapy treatments for terminally ill cancer patients, was among three biotechs that raised cash recently. Tocagen has raised $10.8 million in an $11.2 million equity offering that began in September. The startup was founded in 2007 by Harry Gruber, who previously founded Gensia Pharmaceuticals, Viagene, Aramed, and Metabasis, among others.

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Trius Therapeutics, the San Diego-based biotech company, has passed an important milestone in its quest to develop a more convenient, more effective antibiotic against deadly MRSA bacterial infections that people tend to get in the hospital.

Trius released results today from a study in which 188 patients with severe skin infections were randomly assigned to get a low, mid-range, or high dose of its experimental antibiotic, torezolid (TR-701). The study found the once-daily pill, given for five to seven days, helped 98 percent of patients on the lowest dose achieve what’s considered a clinical cure. There were no clinical relapses at follow-up visits three to four weeks after treatment.

“The nature of such infections usually warrants use of an IV antibiotic, but the trial results indicate that oral torezolid successfully treated these severe infections quickly and effectively,” said Joseph Surber, chief medical officer of Southwest Regional Research Group, and a clinical investigator on the study, in a company statement.

Biotech and pharmaceutical companies have been pushing hard for several years—without much success—to develop new antibiotics that can kill tough bugs like the MRSA pathogen that are becoming increasingly resistant to standard treatments. An estimated 19,000 people in the U.S. die from bacterial infections each year, more than die from HIV, Trius CEO Jeff Stein told me back in October. Two other companies trying to crack this market—South San Francisco-based Theravance, and Cambridge, MA-based Targanta Therapeutics—ran into various roadblocks and delays after applying to the FDA for market approval.

Trius’s goal is to develop a drug from the same chemical family, but with a superior profile compared to Pfizer’s linezolid (Zyvox), one of the fastest-growing antibiotics.

Antibiotics in this class are potent killers of drug-resistant bacteria, like MRSA. The Trius candidate appears to be more potent in animal tests than linezolid, meaning it can be taken at a much lower dose—which could offer fewer side effects and lower manufacturing costs. It also could be given once a day instead of twice a day, Stein has said. Both Pfizer’s drug and Trius’s can be taken as oral pills, but the added convenience of less-frequent dosing could be important, because antibiotic resistance thrives when patients fail to take all their required meds. Giving them a once-daily pill option may increase the odds that patients will stay in compliance with doctors’ orders.

The Trius therapy was considered well-tolerated, and 92 percent of the side effects considered possibly drug-related were graded as mild, researchers said. No patients dropped out because of adverse events. The least number of side effects were reported on the lowest dose, of 200 milligrams, Trius said.

The trial results have given Trius enough information to pick the lowest dose, 200 milligrams once a day, for the next step in development, a Phase III pivotal clinical trial in patients with severe skin infections. The company plans to complete an early-stage trial of an intravenous form of the drug later this year, and to merge the IV and oral development programs in Phase III trials early next year, Trius said in a statement.

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When Luke checked in at Trius Therapeutics almost six months ago, he reported that the San Diego life sciences startup was on a roll, but not quite ready to talk about results of its early stage clinical trials. These days, CEO Jeff Stein says Trius is assessing how best to move ahead in its development of a new anti-bacterial drug, based on results that he characterized as very encouraging.

In developing the drug known generically as torezolid, Stein told me Trius hopes to crack a market for treating MRSA and other drug-resistant infections that is now dominated by Pfizer’s linezolid (Zyvox). He described linezolid, which was approved by the FDA in 2000, as a “blockbuster drug” that generates over $1 billion a year. Linezolid is the only approved compound in the oxazolidinone class of drugs, Stein says, “so for years, just about every anti-infective company has been interested in getting a follow-up drug to Zyvox.”

Trius quickly completed its early stage trials last year, and in January enrolled 180 patients with nasty skin infections in a mid-stage clinical trial. It’s intended to examine the safety and efficacy of torezolid administered orally at three dosage strengths once daily over a five-to-seven day course of treatment.

Trius says more than 90 percent of the germs infecting patients in the trial were Staph infections, and 70 percent of the Staph infections were the “superbugs” known as MRSA, for Methicillin-Resistant Staphylococcus aureus. Trius intends to provide more detailed results of its trial in two or three months, but Stein told me, “Overall, we had about a 96 percent cure rate from our Phase 2 clinical trial.”

In order to go to Phase 3 trials, Stein says, “We’ll either have to do another round of fundraising or bring on a strategic partner.” He says he wants to begin those trials by early next year.

The company has advanced rapidly over the past two years, which Stein says is a testament to the company’s success recruiting key … Next Page »

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Most biotech stories in 2009 are about companies hunkering down or otherwise playing it safe with incremental advances, not people just getting started with an audacious dream. Malcolm Kendall has one of those dreams. He’s starting a company that aims to identify new targets on cells that haven’t been proven before, and create antibiotics to hit those targets. It’s all in the name of coming up with a creative way to fight dangerous pathogens that infect people in the hospital.

The new company, Indel Therapeutics, is based in Vancouver, BC, not far from where its intellectual property originated at the University of British Columbia. Kendall, a former venture capitalist with Durham, NC-based Intersouth Partners, is the CEO, and he told me the story a couple weeks back while he was fundraising in Seattle at Invest Northwest with chairman Mike Abrams, the former CEO of Vancouver, BC-based AnorMed.

Indel is trying to solve one of the problems that freaks out U.S. hospital administrators. There is growing incidence each year of nasty and sometimes deadly bacteria like MRSA or “C.Diff” plaguing U.S. hospitals. Every year, about 1.7 million people in the U.S. get hospital-acquired infections, which kill about 99,000 people a year. It costs the U.S. health system $27.5 billion annually—which is about the same amount the country spends on its entire biomedical research budget. Many of these bugs are becoming increasingly resistant to traditional antibiotics, and pharmaceutical companies have struggled to come up with anything good enough to pass muster with the FDA (see recent stumbles with new antibiotics from Theravance and Targanta Therapeutics). So Indel sees this as a pharmaceutical market that’s ready for new ideas.

“If this works, this is big,” Kendall says. “There’s a screaming need for new targets and novel compounds.”

The idea, from UBC scientist Neil Reiner (who is chair of the Indel scientific advisory board), is to look for subtle differences … Next Page »

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The concept is simple: a computer keyboard that self-sanitizes by zapping potentially deadly germs with ultraviolet light. The technology could help prevent the spread of nasty bacterial invaders like MRSA in hospitals and other institutions with shared computer facilities. That’s the idea behind Vioguard, a Bothell, WA, company co-founded by startup specialist Larry Ranta and his nephew, Craig Ranta, a former hardware engineering director at Microsoft. Larry is Vioguard’s president and CEO, while Craig is the chief technology officer.

Vioguard completed a $1 million first-round financing in January that included angel investors but no venture capitalists, Larry Ranta says. He adds that Vioguard has gotten an additional $250,000 in funding committed since then, and he’s looking to raise between $2.5 million and $3 million more by June, mostly from angel groups. He has been impressed so far with the reception he’s gotten from investors interested in Vioguard.

“This has been the easiest raise I’ve ever seen,” he says. “You show it, people get it, and it’s done. We’re doing another round now, and big players are interested. The next round will be more than we need, to get us through to full revenue. We’ve already designed the machine, so most of our cost will be sales and marketing.”

Vioguard, founded last June, now has five employees, plus six full-time contractors. Ranta has been around the block with startups for the past 25 years, usually in an advisory role—sometimes serving as a C-level executive or vice president, or providing specific help in areas like product marketing.

He seems to have hit on something big with Vioguard. Hospitals are especially motivated to rid their environments of deadly bacteria like MRSA and “C. Diff,” which are seeing fast-growing incidence. About 30 to 40 cases of C. Diff bacteria—which causes horrible and sometimes fatal cases of diarrhea—were reported per 100,000 people discharged from hospitals in 2001, and that figure tripled to about 100 cases per 100,000 discharges in 2005, according to data from the Centers for Disease Control and Prevention. Data is elusive on these kinds of bugs, because hospitals hate to admit any guilt and invite legal liability, but this is undoubtedly a growth market. (Pfizer’s anti-MRSA antibiotic, linezolid (Zyvox), topped $1 billion in worldwide sales last year.)

And hospitals know that bugs like these can spread from the hands of healthcare workers onto common areas like keyboards. What’s special about Vioguard’s patent-pending technology is … Next Page »

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