NanoString Technologies, the maker of a machine that lets scientists digitally analyze how genes are turned on or off in a tissue sample, just won a glowing endorsement from one of the biggest names in biology—Eric Lander of the Broad Institute of MIT and Harvard.

The Seattle-based company has nailed down a three-year research collaboration with the Cambridge, MA-based Broad Institute to look at how networks of hundreds of genes work in concert to form immune defenses against foreign invaders. Financial terms aren’t being disclosed, but NanoString has sold the Broad a couple discounted nCounter machines that normally retail at $235,000 apiece, and will provide proprietary reagent chemicals to operate them, according to acting CEO Wayne Burns. In return, NanoString gets certain intellectual property rights from the collaboration, advice on how to improve its tool, and some golden word of mouth.

NanoString, a private company founded in 2004 with technology from the Institute for Systems Biology in Seattle, has been building stronger ties to the Broad over the past year as people there have started using one of the first commercially available machines, Burns says. The mounting enthusiasm at the institute was instrumental in helping NanoString nail down a $30 million venture capital round in June. The round was led by Clarus Ventures, which has an office just a couple blocks from the Broad. Word has spread to the point that 15 researchers at the Broad are now involved in 20 separate collaborations to see whether the NanoString technology can yield biological insights that couldn’t realistically be attained with competing instruments, Burns says.

“NanoString offers the ability to look at hundreds of genetic markers across many samples at relatively low cost and with high sensitivity. They have developed exciting technology with potential applications to a wide range of scientific problems,” said Lander, the director of the Broad Institute, in a NanoString statement. “We look forward to working together to explore new ways of using of this technology.”

That kind of endorsement is sure to carry weight in the biomedical research community, and can’t hurt a fledging company trying to increase sales. “If you’re in the industry you know exactly who Eric Lander is, the reputation he has, as well as that of the Broad. We have the best of the best endorsing our technology,” Burns says.

For those who are new to the NanoString story, the idea is to allow researchers to look at a large number of genes, with digital precision, to see the extent to which they are turned on or off in a given sample. It’s the sort of technology that’s supposed to help researchers do …Next Page »

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Cambridge, MA-based Aileron Therapeutics has bet the company on the idea that it has discovered a whole new class of drugs that, like RNA interference, can hit targets in the body that are beyond the reach of conventional chemical compounds and biotech therapies. Today, scientists are reporting the drugs can achieve this goal and block one of the prized targets that has eluded cancer researchers for years.

Scientists at Harvard University, the Dana-Farber Cancer Institute, and the Broad Institute of Harvard and MIT say they have used a synthetic “stapled peptide” from Aileron to get inside the nucleus of cells and stop the production of a protein called Notch that’s implicated in uncontrolled growth of cancer cells, according to research being published this week in Nature. The work was repeated in multiple disease models and in animal tests, which showed blocking this target led to cancer cell death, without the side effects of previous drugs, the researchers said.

This finding is bound to stir curiosity in the cancer research world for Aileron’s stapled peptide drugs. Buzz for the new drug technique picked up in June when Aileron raised $40 million in venture capital from a syndicate that included four major drugmakers—Roche, Novartis, Eli Lilly, and GlaxoSmithKline. While a few other peptide treatments are on the market for diabetes and osteoporosis, most of these drugs don’t work because they get chewed up by enzymes in the body before they can hit their target. Aileron’s key insight is to chemically “staple” these peptides in a way that holds them together in a properly folded shape, protecting them and preserving the unique structure that gives them the ability to hit very specific protein targets inside cells, like Notch.

“There have been many valiant efforts that have gone after this target, and they’ve all failed,” says Aileron CEO Joe Yanchik. “This is the first potentially viable therapy.”

As Yanchik explained to me in a profile of Aileron a year ago, traditional small-molecule chemical drugs, like Pfizer’s atorvastatin (Lipitor), usually need “a nice deep pocket” on the targeted protein for the compound to settle into. The problem is that only about one-tenth of proteins have this kind of pocket, while many more have long, flatter pockets inside that are “like a hot dog bun, for lack of a better term,” he said. Engineered peptides, which are protein fragments, are thought to have improved properties because they are larger than traditional small molecules and able to nestle into some of those bigger pockets, but they aren’t so big they can’t get inside cells, like traditional antibody drugs that operate on the cell surface, Yanchik says. Done right, a stapled peptide ought to be efficient at penetrating cells, and bind tightly enough and long enough to its target to have the intended effect.

Researchers led by James Bradner at Dana-Farber and the Broad Institute as well as Gregory Verdine at Harvard, said they found that the Aileron drug was able to bind directly and tightly to Notch in the nucleus of cells. That target is known as a transcription factor—a protein that binds to DNA in the nucleus of cells and regulate important biological processes. By blocking Notch, the scientists found they could prevent a cancer-causing gene from assembling the necessary proteins to grow, and suppress the production of other growth proteins that cancer cells need to live.

This idea of blocking transcription factors is important because they have been traditionally inaccessible, and there are an estimated 1,500 of these proteins involved in regulating key biological processes involved in diseases such as arthritis, asthma, diabetes, infectious diseases, and cancer, Aileron says.

“These results are tantamount to a declaration of open season on transcription factors,” said Verdine, a professor of chemistry at Harvard University and co-chair of Aileron’s scientific advisory board, in a statement.

Getting inside cells to specifically target previously “undruggable” targets sounds a lot like what gets so many scientists are excited about RNA interference …Next Page »

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Who are the innovators who will help keep the San Diego region’s life sciences sector vibrant in the years to come? Which of the emerging ideas here will help transform the way we treat and prevent disease around the world? And how is the San Diego region poised to work with leaders from other hubs to stay on the leading edge of science and business?

These are some of the questions we plan to explore at the next Xconomy Forum we’re organizing in San Diego for the afternoon of December 14: “Tomorrow’s Biotech—Innovators and Innovations.” I’m thrilled to announce today that Xconomy has assembled a world-class group of life scientists and entrepreneurs to discuss where this is all headed.

The keynote speakers include David Baltimore, the Nobel Laureate and Caltech biology professor, and John Maraganore, the CEO of Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY), a leader in the emerging field of RNA interference treatments. Both have strong ties to the San Diego biotech scene as members of the board of directors at Carlsbad, CA-based Regulus Therapeutics. We will also hear presentations from three venture-backed startups in San Diego with the potential to shake up their respective fields of medicine—Fate Therapeutics in stem cells, Regulus in the microRNA field, and Intellikine, which is pursuing one of the hottest targets in cancer biology.

The third and final component of the program will feature a panel discussion with some of the brightest young scientific entrepreneurs at San Diego’s research centers. They are Sheng Ding, a professor of chemistry at The Scripps Research Institute; Trey Ideker, the chief of genetics at the UCSD School of Medicine; and Peter Kuhn, an associate professor of cell biology at Scripps. All have their eyes on new ways of bringing their research to commercial reality. This panel will be moderated by a veteran biotech entrepreneur and venture capitalist, David Kabakoff, executive-in-residence at Sofinnova Ventures in San Diego.

The event will take place from 2 pm-6:30 pm on December 14 at Calit2’s Atkinson Hall, on the UC San Diego campus. You can find more information about how to register by clicking here. There will be time for networking before and after the event. I will personally be coming down from Seattle for the forum, and I look forward to seeing many of you there.

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Santaris Pharma, the Danish company that has pushed the first microRNA therapy into clinical trials, has recruited a pair of big name executives from Isis Pharmaceuticals and Amgen Ventures to help lead its new U.S. subsidiary in San Diego. Mark Wedel, the former chief medical officer at Carlsbad, CA-based Isis, will fill that same position at Santaris, while Stuart Mackey, the former managing director of Amgen Ventures, has joined Santaris as chief business officer. The two executives are part of Santaris’ U.S. growth strategy, which I described in a feature story last month.

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Westport, CT-based diagnostics startup 3PrimiR has raised $2.1 million of a proposed $4 million round of equity financing, according to an SEC filing. Yale scientists launched the startup based on their research that involves how mutations in micro RNA molecules can be used in cancer diagnostics, according to the Yale University Office of Cooperative Research website. The scientists listed as founders of the company on the Web were not immediately available for comment this morning. The SEC filing did not name the investors in the round.

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Santaris Pharma, the Danish company that has pushed the first microRNA therapy into clinical trials, is opening a U.S. subsidiary in San Diego to take advantage of the talent pool of people familiar with cutting-edge RNA-based therapies. As it turns out, that includes Art Levin, a former leader of drug development at Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS).

Santaris, founded in 2003, has recruited Levin to serve as president of U.S. operations and chief development officer for the Denmark-based parent company. Levin tells me his job will be to usher Santaris’ drug candidates through development, and build a team of about 8 to 10 people in San Diego to help raise the company’s profile with prospective partners and investors in the U.S. and Asia. The San Diego operation isn’t expected to do basic research, which will remain in Denmark, he says.

“There’s a wealth of science and RNA drug expertise here in San Diego, and Santaris understands this is a great place to do business,” Levin says.

RNA-based therapies have long excited scientists because they are supposed to offer greater ability to target the root causes of many diseases than conventional chemical compounds or genetically engineered proteins. MicroRNAs offer another new frontier because they can affect not just one gene or protein in isolation, but rather networks of genes. That might be useful in treating complex diseases like diabetes or heart failure, where multiple genes are thought to be out of whack. Isis and Regulus Therapeutics, a company Isis created with Alnylam Pharmaceuticals, are leaders in the field, but Santaris has been gaining visibility for its work. The Danish company has struck new collaborations this year with U.K.-based Shire and Madison, NJ-based Wyeth to co-develop RNA-based therapies.

When I asked if Santaris is also hoping to recruit some of Levin’s friends and former colleagues from Isis and Regulus, he said that would not be appropriate. He noted that biotech can be a “small world” and that he has a lot of friendships in San Diego he wants to keep.

But, he quickly added, “If people knock on my door, that’s great.”

Levin spent about a dozen years at Isis before he left in 2007 to do some consulting for drugmakers on RNA-based therapies. He said he did expert consulting on “all the major players” in RNA based therapies, and decided to take the Santaris job because he likes the chemistry Santaris is using the best.

The company’s advantage, he says, is that it can make RNA-based compounds that have higher affinity for a given target, which means they bond more tightly with the molecules that make up their target. They also appear to be more specifically aimed at targets, which means that they might be more effective at lower doses than competitors, he says.

All of this work is in really early-stages of development. Santaris will get a better feel for what it has when it sees results from its first trial of a drug to block a microRNA target called miR-122, which is being tested as a potential therapy for hepatitis C. The drug, SPC3649, is scheduled to start a mid-stage clinical trial in hepatitis C patients in the second half of this year, according to the company’s website.

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Several of San Diego’s biotech and life sciences companies raised money this past week, while others await the result of studies to see if the money they’ve already invested will pay off.

—Cytori Therapeutics (NASDAQ: CYTX), which is developing a device that can isolate and process regenerative cells from a patient’s fat tissue, has been bulking up its cash position to deal with the recession, Denise reported yesterday. After raising $15 million since March, and with a recent deal with Seaside 88 in June, San Diego-based Cytori will be viable at least through the end of next year. However, after losing the rights to a patent to produce stem cells from fat cells, the company is still a little shaky financially. Luckily for Cytori, this does not affect any of its current developments. The company’s fat isolation and regeneration device is already approved in Europe and is being tested for breast reconstruction after mastectomies as well as for helping blood flow in patients with angina.

—San Diego-based aTyr Pharma, which develops medical therapeutics from proteins, raised $12 million in venture capital to further its research and development, as I reported on Tuesday. The protein drugs aTyr hopes to make come from a group of enzymes that perform catalyzing reactions in the body, known as aminoacyl tRNA synthetases. The drugs could eventually treat a variety of ailments, including autoimmune diseases, metabolic disorders, and blood conditions. While some of the research is done in San Diego, the rest is through Pangu BioPharma, a majority-owned subsidiary at the Hong Kong University of Science and Technology.

—Bruce reported on Tuesday that Helicon Therapeutics has raised $50 million from undisclosed investors to develop memory enhancing drugs. Helicon, which is more than 10 years old although fairly new on the San Diego scene, is working on a gene called CREB to make drugs that will better convert short-term memories into long-term memories. The company is planning its second trial of one of its most recently developed drugs this year.

—Luke profiled Regulus Therapeutics, a company working to develop a new class of drugs based on microRNA technology. Regulus, which came out of Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY) and Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS), started off strong, and despite financing worries, is continuing to grow. The research at Carlsbad-based Regulus has previously shown the effectiveness of microRNA in stopping heart failure in animals, while a recent study showed how a different type of microRNA seems to limit the spread of Hepatitis C.

—Good news may be coming for investors in Avanir Pharmaceuticals (NASDAQ: AVNR), as Denise reported, when the results of a trial for a drug to control involuntary laughter and tears are released. The drug, dextromethorphan/quinidine (also referred to as DMQ), treats a neurological condition sometimes known as pseudobulbar, but after trials three years ago showed negative cardiac side effects, Avanir took the drug back to the lab for reworking. Originally based in San Diego, Avanir is now located in Aliso Viejo, CA, where the results of the trial of the reformulated drug will be released. If the trial is successful, the company will begin marketing the drug under the name Zenvia.

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Regulus Therapeutics, its CEO admits, is a child of privilege. It was born two years ago with a silver spoon in its mouth—some hot intellectual property to make drugs based on emerging knowledge about microRNA biological networks. It has a couple of parents with wealth and pedigree: Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY), and Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS).

Since we’re watching closely to see how innovation is affected during this economic downturn, I figured it seemed reasonable to check whether ideas on the real frontier of biology can still be sustained at a place like Carlsbad, CA-based Regulus, which we first profiled back in October. CEO Kleanthis Xanthopoulos says he’s always worried about financing—it’s the nature of being a biotech CEO—but enough positive things have happened this year that he says the company has still been able to grow.

That’s no small thing, because companies pursuing microRNA know they are staring at what amounts to a 20-year vision to develop a new class of therapies, as Xanthopoulos pointed out in that first story in October. The key is showing people enticing bits of progress along the way. Regulus did that around Thanksgiving, when it published a scientific paper in Nature that was the first to demonstrate a therapeutic benefit in animals by blocking a strand of microRNA. The company raised $20 million from its corporate parents a couple months later, then scored an undisclosed sum of cash from its big partner, GlaxoSmithKline, back in May when it reached a milestone as part of a collaboration worth as much as $600 million. The company has almost doubled in size, from 22 employees last October, to almost 40 today, Xanthopoulos says.

“Am I concerned about financing? Always. I’m paranoid when it comes to financing,” Xanthopoulos says. “It’s a capital-intensive business, with long development timelines. But we’re really well-capitalized.” He has at least three years of operating cash on hand, and the company recently re-organized …Next Page »

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Cambridge, MA-based Archemix, the developer of a new class of drug called aptamers, said today it has formed an R&D collaboration with Boulder, CO-based miRagen Therapeutics, a developer of microRNA treatments. The two companies will plan to attach aptamer drugs to microRNA molecules with a goal of delivering the compounds inside cells. Both companies will contribute resources to the collaboration, and miRagen is getting options to do exclusive development of drugs that emerge from the partnership, although detailed financial terms weren’t disclosed.

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Regulus Therapeutics, the Carlsbad, CA-based developer of drugs that block microRNA targets, said today it has reached the first milestone as part of its partnership with GlaxoSmithKline. Regulus has delivered specific microRNA blockers, known as anti-MIRs, in mice, and shown how they change the expression of genes in immune cells. Regulus didn’t disclose any financial terms related to reaching the milestone. Regulus was founded as a joint venture of Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) and Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY).

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A team of scientists led by biotech pioneer Leroy Hood have spotted a set of genes that go haywire in mice infected with a form of “Mad Cow” disease—a finding that could pave the way for more effective early diagnostic tests for the brain-wasting condition in cattle.

The new findings are being published online today in Molecular Systems Biology, a journal from the Nature Publishing Group. Hood told me yesterday this is one of his most significant scientific publications in years, and it is being hailed in an accompanying review article as a “landmark” in the field of systems biology by Gilbert Omenn, the director of the University of Michigan’s center for computational medicine and biology. The field of systems biology seeks to use high-powered computers to analyze the whole biological system, rather than the traditional approach of isolating one gene or protein to study at a time.

“We were able to see genes perturbed 8 to 10 weeks before any symptoms were observed,” Hood says. “This could be used for presymptomatic diagnosis.”

This disease made headlines around the world in the early 2000s, particularly in the United Kingdom. The condition in cattle, known as bovine spongiform encephalopathy, is thought to be caused by a misfolded protein called a prion. The disease created some amount of hysteria in the past, because it is thought that humans can develop a variation called Creutzfeldt-Jakob disease by eating diseased material from the brain or spinal cord of infected cattle. The disease is extremely rare in people—with 165 documented cases in the UK through February—according to the University of Edinburgh. It may not be a huge cause of death in people, but it was scary enough to cause British agricultural officials to kill 4.4 million cattle in that country as a precaution, according to this 2001 story in The Telegraph of London.

Scientists at Hood’s Institute for Systems Biology in Seattle, including lead author Daehee Hwang, were joined in their analysis of the genetics of prion disease by collaborators at the McLaughlin Research Institute in Great Falls, MT, the University of California, San Francisco, the Allen Brain Institute in Seattle, the I-Bio Program at Postech in Korea, and the European Bioinformatics Institute in Cambridge, UK.

The researchers took 30 million measurements from the brains of the infected mice and used high-powered statistical and computer models to separate signal from noise, Hood says. They were able to narrow it down to 7,400 genes—about one-third of the mouse genome—that were affected by the misfolded prions, which researchers again were able to narrow down to 333 “core” genes that were perturbed, Hood says. Researchers looked at the genes at 10 different time points, and noted which genes were altered for weeks before symptoms showed up. Some of these genes make proteins that are secreted into the blood, which could make for a relatively practical new diagnostic test, Hood says.

There’s currently no cure for prion disease in people, and the U.S. Department of Agriculture may or may not be interested in getting a test, Hood says, but agricultural officials in Japan and Korea would certainly like to have such a test to check on the health of their cattle herds. Since networks of genes are perturbed by prion infections, it’s also possible this condition may lend itself to treatment with microRNA drugs that are still in “very early” stages of development, Hood says.

Even more importantly, this study of systems study of how genes react when exposed to an infectious invader could hold implications for the study of HIV, tuberculosis, malaria, and all sorts of other bugs that kill a lot more people than “Mad Cow” disease ever will.

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Alnylam Pharmaceuticals is one of the fortunate few in biotech with more than $500 million in the bank, so money is the least of its worries. But prioritizing a dizzying array of opportunities, and finding the best way to rally teams of bright people around them, is another thing altogether.

I got some insight into how Alnylam is thinking about these challenges in a couple of recent conversations with CEO John Maraganore. His Cambridge, MA-based biotech company (NASDAQ: ALNY) is watched closely in the scientific community and on Wall Street as a leader in the field of RNA interference, or gene-silencing. If this technology lives up to its billing, RNAi drugs will be able to effectively treat many diseases that were untouchable with drug technologies of the past.

Alnylam, founded in 2002, still has a relatively small internal staff by pharmaceutical standards, with about 165 people. So the company relies on three main ways to move its technology ahead on multiple fronts. It licenses certain rights to its wide-ranging technology platform to larger companies (such as Roche and Takeda); does deals (with the likes of Cubist and Kyowa Hakko) to co-develop specific products; and spins off companies to make the most of technologies that are related to RNAi, but different (first example: Carlsbad, CA-based Regulus Therapeutics.)

Maraganore says he’s become a fan of doing spin-off companies like Regulus, which was formed in 2007 by pooling Alnylam’s intellectual property in a field called microRNA with that of Carlsbad, CA-based Isis Pharmaceuticals. The new company structure made sense because Regulus aimed to do something different; microRNA therapeutics that are thought to control whole networks of genes instead of shutting down one or two specific disease-causing genes, which is what RNAi-based drugs aim to do. A new company structure made it possible to recruit some top pharmaceutical industry talent in Kleanthis Xanthopoulos, Peter Linsley, and Garry Menzel. It also kept the technology from getting lost in the shuffle of a growing internal portfolio, and kept Alnylam’s workforce from getting stretched too thin.

Within six months of its formation, Regulus scored big …Next Page »

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Regulus Therapeutics has shown it can crawl, now it’s ready to walk. The fledgling Carlsbad, CA-based company is taking steps to raise a large round of private investment capital, and become a more independent company developing a new breed of microRNA-based drugs.

Regulus plans to raise “a very respectable amount” of capital from private investors, which will allow it to reorganize as an independent corporation, says Regulus CEO Kleanthis Xanthopoulos. The company currently operates as a joint venture formed by Carlsbad, CA-based Isis Pharmaceuticals and Cambridge, MA-based Alnylam Pharmaceuticals. Xanthopoulos discussed the plan after a series of meetings with investors and potential partners at the JP Morgan Healthcare Conference last week in San Francisco.

The company, founded less than 18 months ago, made waves in the scientific community in late November. That’s when it published results in Nature from a series of experiments that showed for the first time that blocking microRNA targets in mice was an effective way to prevent and treat congestive heart failure. MicroRNAs are tiny substances first discovered in humans in 2001. They are thought to have big potential as drugs, because they can affect not just one gene or protein in isolation, but rather full networks of genes. That might be useful in treating complex diseases like diabetes or heart failure, where multiple genes are thought to be out of whack.

The company has been able to benefit from getting intellectual property, office space, and staff support from its corporate parents, but apparently the offspring yearns for an ability to raise its own cash.

“I’m not in a position to issue equity now because I don’t have structure to do it since I’m in a joint venture,” Xanthopoulos says. Once Regulus re-organizes with new bylaws as a Delaware corporation, then Xanthopoulos can issue new equity shares, and dole out stock options to employees, instead of offering them stakes in Alnylam or Isis, he says.

The new form of Regulus will have to go through a “branding exercise,” Xanthopoulos says. Isis Pharmaceuticals CEO Stanley Crooke called Regulus a “satellite company” during his presentation, while Alnylam’s John Maraganore calls it a “joint venture.” Both said they were pleased with the model of setting up an independent entity to focus exclusively on a promising field like microRNA, rather than trying to keep it in-house as part of a bigger portfolio, where presumably, …Next Page »

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The scientific community, and Wall Street, will be buzzing this week about microRNA. That’s because a Carlsbad, CA-based company called Regulus Therapeutics and its collaborators have suggested for the first time that a drug that blocks microRNA can prevent and treat heart failure in animals.

Regulus, a joint venture of Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY) and Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) is breaking the news today online in Nature. The researchers found in a series of experiments that a tiny strand of RNA called mir21 is overactive in heart failure, and contributes to a stress reaction that causes enlargement of the muscle and inefficient blood pumping. When the scientists designed an antisense drug to specifically block mir21, it prevented those changes in the heart muscle of mice, and was able to reverse that condition in mice who already had the disease, researchers said.

MicroRNAs weren’t discovered until 1993 in worms, and not until 2001 in humans. They are thought to have big potential as drugs, because they can affect not just one gene or protein in isolation, but full networks of genes-a strategy which might be useful in treating complex diseases like diabetes or congestive heart failure, where multiple genes can get messed up. Heart failure, which can occur after stress from a heart attack, certain infections, or high blood pressure, affects about five million patients in the U.S.

“This is big news for the field,” says Kleanthis Xanthopoulos, CEO of Regulus. “This is the first time we believe anyone has demonstrated a therapeutic affect of a drug to inhibit microRNA.”

Until this finding, researchers have been only been able to show microRNAs can have an impact on “surrogate” measurements that suggest early promise against a disease but don’t say for sure whether the drug is really altering the disease. Examples are when a treatment lowers cholesterol, it might reduce the risk of heart attack, or when a drug shrinks tumors, it might help cancer patients live longer, Xanthopoulos says. …Next Page »

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Within the first five minutes of sitting down for an interview with Kleanthis Xanthopoulos, I could see this guy likes to think big. The idea behind his company, Regulus Therapeutics, is to show that a young technology called microRNA has the same sort of potential that gene-splicing techniques represented in the 1970s and targeted antibody drugs did in the 1980s. Xanthopoulos’ message is that this will take a long time, but when it pays off, it will pay off big.

“Companies like Biogen, Genentech, and Amgen were built on that powerful concept,” Xanthopoulos said when I visited his office in Carlsbad, CA a couple weeks ago. “Monoclonal antibodies went through a 15- to 20-year incubation period. It typically takes that long for a transformational technology to yield a tangible drug.”

Regulus is the progeny of a couple other companies built on big ideas. It’s a 50/50 joint venture between Cambridge, MA-based Alnylam Pharmaceuticals (NADSAQ: ALNY), an RNA-interference drug developer, and Carlsbad, CA-based Isis Pharmaceuticals (NADSAQ: ISIS), a pioneer in antisense drug technology. These companies pooled their intellectual property in September 2007 to test the still far-out concept of drugs that block microRNAs. These tiny strands of RNA weren’t discovered until 1993 in worms, and not until 2001 in humans. They are thought to hold huge potential as therapeutics, because they can affect not just one gene or protein in isolation, but full networks of genes—a strategy which might be useful in treating complex diseases like diabetes or autoimmunity, where multiple genes can get fouled up.

Xanthopoulos has some reason to be comfortable talking about a 20-year vision. Before Regulus was even six months old, it was approached by the world’s second-biggest pharmaceutical company, GlaxoSmithKline. In April, Regulus signed a collaboration with Glaxo worth $20 million upfront and as much as $600 million to develop microRNA drugs for inflammatory diseases.

Still, the work is at very early stages. The company hasn’t publicly identified a lead drug candidate. It’s going to be another 18 to 24 months before Regulus can expect to get its first drug tested in humans, Xanthopoulos says.

Regulus is pursuing this work with a staff of 22. Xanthopoulos, an Xconomist, was previously a managing director at Enterprise Partners in San Diego, and was a co-founder and CEO of Anadys Pharmaceuticals (NASDAQ: ANDS). Earlier in his career, in the mid-1990s, he was a section head within the National Institutes of Health, where he worked on the Human Genome Project.

During his days at the NIH, Xanthopoulos and his colleagues looked at long stretches of the 6-billion letter sequence of the human genome and saw vast areas that were “non-coding”—they didn’t appear to provide instructions for making any molecules that performed any sort of bodily function. Those stretches were branded “junk DNA” for years, wrongly. “It was right under our noses. We thought it was uninteresting, but it was,” Xanthopoulos says. …Next Page »

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It may be the dog days of August—a sweltering, 90-degree weekend in the Northwest?— but there was still a trickle of action last week in biotech, biofuels, and software. We’ll see if the deals start to pick up this week, with the rain and cooler temperatures.

—Accelerator, the Seattle-based biotech incubator, has formed a new startup called Mirina. The exact investment amount has not been announced, but it’s in the range of $1.6 million to $5 million. Mirina will develop drugs to block microRNAs, molecules that could control gene networks. Possible targets include cancer, infectious diseases, and metabolic disorders.

—AXI, a Seattle-area biofuels startup, announced its launch with seed funding from Allied Minds, a Massachusetts-based investment firm focused on early-stage technologies from academic labs. AXI was spawned from research on oil-producing algae in the lab of University of Washington biologist Rose Ann Cattolico.

—1Cast, an online news and information delivery service based in Kirkland, WA, raised its first round of funding, led by Eagle River Holdings. Terms of the deal were not disclosed, but 1Cast is expected to launch a beta version of its Web service this year.

—Bellevue, WA-based Ignition Partners and Trilogy Equity Partners have co-invested in an $8.5 million Series B round for Connecticut-based InstallFree, which makes virtualization software for large corporate and government customers. Richard Fade, a partner at Ignition, says virtualization could “fundamentally remake the fabric of computing and software.”

—PATH, the Seattle nonprofit backed by the Gates Foundation, is set to expand its distribution of Vitamin-A fortified “Ultra Rice” to combat malnutrition in Brazil, Colombia, China, and India. The Ultra Rice technology originated with James and Duffy Cox, father-and-son inventors at Bellingham, WA-based Bon Dente International.

—Dendreon (NASDAQ: DNDN) has moved forward with a couple of small clinical trials of Provenge, an immunotherapy treatment for prostate cancer. The Seattle biotech company has begun enrolling patients in its NeoACT trial, which will involve 40 patients at University of California, San Francisco, with localized prostate cancer. Another clinical trial of Provenge, called ProACT, is expected to begin later this month; the multi-center trial involves 120 patients with metastatic prostate cancer.

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Accelerator’s latest big idea is coming in a micro-sized package. The Seattle-based biotech startup machine, affiliated with Leroy Hood’s Institute for Systems Biology, has formed a new company called Mirina to develop so-called microRNA drugs.

The new company is backed by the usual crew of investors in Accelerator, namely Alexandria Real Estate Equities (NYSE: ARE), Amgen Ventures, Arch Venture Partners, OVP Venture Partners, and WRF Capital. The technology comes in an exclusive license from a company strictly focused on diagnostics, San Diego-based Nanogen (NASDAQ: NGEN). Nanogen will keep an equity stake in Mirina representing “less than 20 percent,” of the company’s shares, and stands to receive milestone payments and royalties on sales if Mirina achieves certain goals in the future, says David Schubert, Accelerator’s chief business officer.

The exact dollar amount being funneled into Mirina isn’t being disclosed, yet it is within the $1.6 million to $5 million range Accelerator typically invests in startup companies, says Accelerator president (and Xconomist) Carl Weissman. Research and development at the company will be run by David McElligott, a 10-year veteran of drug discovery at Bothell, WA-based Icos. McElligott was brought in because of his connection to a pair of former colleagues at Icos—Merl Hoekstra, who went on to be a vice president of business development at Nanogen, and Patrick Gray, now Accelerator’s executive scientific director.

“We’re very excited about this, but we don’t do anything unless we’re really excited about it,” Schubert says.

A little science is required to get a feel for what’s special here. MicroRNAs are tiny molecules discovered in recent years to have potential to control networks of genes. Nanogen’s Minor Groove Binder technology, already used in commercial diagnostics, is thought to have potential here. The Nanogen technique should make drugs that have enhanced binding properties with specific strands of DNA or RNA, which could make them more selective for targets …Next Page »

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Look out, heart disease. This week’s announcement of Boulder, CO-based Miragen Therapeutics closing a Series A round worth $8 million is the opening salvo in a new fight against the dreaded disease—and the coming-out party for an intriguing new company. The founding investors are Waltham, MA-based Atlas Venture and Colorado-based Boulder Ventures.

Although Miragen is based in the Rockies, it’s an interesting example of what local VC firms like Atlas are doing to develop early-stage biotech companies. Incorporated in 2007, Miragen was founded specifically to apply the cutting-edge science of microRNA—tiny molecular regulators of gene expression—to heart failure and muscle disease. The funding will be used to expand the company’s R&D efforts to study microRNA as markers of disease, and to develop novel therapies.

“Miragen has a laser-like focus on bringing forward products in cardiology and muscle disease,” says Bruce Booth, a principal at Atlas Venture and chairman of Miragen’s board of directors. What’s interesting is that Atlas is banking on a brand-new approach to tackle a specific disease. “There are other ways to build a company,” Booth says—for instance, by taking a broader approach to drug discovery. But, he says, microRNA and heart disease is clearly the way to go, given the expertise and track records of Miragen’s founders, who include Eric Olson of the University of Texas Southwestern Medical Center, Michael Bristow of ARCA Biopharma and University of Colorado Health Sciences Center, and CEO William Marshall.

We’ll be curious to learn more about what Atlas is doing with its early-stage ventures, so watch this space.

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Last year Alnylam Pharmaceuticals (NASDAQ: ALNY) of Cambridge, MA, joined forces with Isis Therapeutics (NASDAQ: ISIS) in Carlsbad, CA, to form a new affiliate, Regulus Therapeutics. All three companies are doing research on new different types of RNA-based drugs. Today the giant British pharma company GlaxoSmithKline and Regulus announced a new alliance. They will work together to discover, develop, and market therapeutics for inflammatory diseases, such as rheumatoid arthritis.

The deal entitles Regulus to $20 million upfront, and there might more to come; under the agreement GSK has an option to license four different therapeutics. For each of these Regulus can get $144.5 million in different milestone payments, and also royalties on sales.

Regulus’ research is focused on “microRNA,” small pieces of RNA that are believed to regulate the activity of a large number of human genes. MicroRNAs were discovered only recently; so far 500 of them have been identified in the human genome.

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