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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Sanofi-Aventis (NYSE: SNY) hosted a large event at its R&D site in Cambridge, MA, yesterday to make its pitch for why Boston-area biotech companies should want to form partnerships with the French drug giant. It was an impressive show of force by the company, which has historically kept a lower profile in local biotech circles than some of its Big Pharma competitors.

The top brass from Sanofi were there at the firm’s Cambridge Research Center in Kendall Square. Sanofi CEO Chris Viehbacher outlined the global drug-maker’s plans to form stronger ties with biotech firms in Boston and around the world as part of a broader strategy to build a more sustainable business. Viehbacher also confirmed that Sanofi plans to form a venture capital unit to invest in biotech companies and further efforts to access innovation from outside of the company.

Sanofi, like many other Big Pharma companies, is looking outside of its organization to biotech firms for what Viehbacher called the “right brain activity” that leads to creativity and innovation. Sanofi’s shift toward more external product development efforts includes a partnership deal with Merrimack Pharmaceuticals, announced last month, focused on the Cambridge, MA-based biotech’s experimental antibody drug for cancer. There’s a good reason for this: the large and expensive internal R&D organizations of Big Pharma companies like Sanofi haven’t been productive enough. Over the next several years Sanofi is facing patent expirations on some of its biggest sellers, such as anti-clotting drug clopidogrel bisulfate (Plavix) and the sleeping pill zolpidem (Ambien).

“We all know there is a patent cliff in this industry, and it goes from 2012 to 2014,” Viehbacher said. “But my goal isn’t just to fill a sales gap,” it’s to build a sustainable business. (Viehbacher spoke to Xconomy at length in June about his strategy for building sustainable business at Sanofi.)

Sanofi has been in Massachusetts for more than a decade, but the company has been less active in partnering with biotechs in the state than other Big Pharma outfits. The company conducts a wide variety of genomic research at its Cambridge Research Center on Albany Street, and last year the firm expanded its presence in the state with its acquisition of British vaccine developer Acambis, which has operations in Cambridge and Canton, MA. This year the company has formed alliances with …Next Page »

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It was an inspiring afternoon yesterday at Xconomy’s latest event, “Pharma’s Bet on Boston Innovation,” in Cambridge, MA. Local industry pioneers such as Millennium CEO Deborah Dunsire and Sirtris CEO Christoph Westphal talked about how game-changing technologies and sound business strategies have attracted big pharmaceutical outfits to invest in their respective companies.

Our speakers also offered insightful perspectives from within their organizations, including AstraZeneca, GlaxoSmithKline, Merck & Co., Novartis, and Takeda Pharmaceutical Co. Boston-based Enlight Biosciences used our venue to break the news about its recent partnership with healthcare powerhouse Abbott Laboratories. One corporate venture investor from a pharma company likened the returns of her fund to “pocket lint” relative to the revenue of the overall company, but said the corporate venture unit is important to the company’s ability to access innovative science. And Westphal even speculated that our own Luke Timmerman is a “SIRT1 over-expresser” because his genes help him stay thin despite his high-calorie diet. (Laugh if you want, but Sirtris’ deep understanding of genes, like SIRT1, that control aging and cellular metabolism helped the Cambridge, MA-based biotech get sold to Glaxo for $720 million in June 2008.)

A recurring theme throughout the day was that big pharmas and innovative biotechs need each other. Generally speaking, large pharmaceutical companies haven’t created enough innovative products over the past decade to justify their huge internal R&D budgets. But biotech has continued to push the envelope to transform risky science into drugs, providing a source of new products to fill pharmaceutical companies’ ailing R&D pipelines. We heard from executives from such local biotech firms as Aileron Therapeutics, Aveo Pharmaceuticals, Hydra Biosciences, and Enlight Biosciences about how relationships with pharma companies are bankrolling their drug-development activities. (Here’s a link to a list of all the speakers who were on the agenda yesterday.)

Our audience of life sciences innovators helped us pack the 16th-floor ballroom of the Hyatt Regency Cambridge. But for all of you who weren’t able to attend the forum, here are seven key insights from our speakers and panelists:

—Raise lots of money when you can. It’s true that the financing climate in 2004, when Sirtris launched, was completely different from the stingier one today. But Westphal—whose company raised $104 million in private financing before its $69 million IPO in May 2007—aggressively raised capital beginning with a $5 million seed round in August 2004. While raising funds for the seed financing, Westphal understood that there was competition among the venture investors such as Polaris Venture Partners (where he is a former general partner). “The VC guys were all mad because they thought they could do it themselves,” he said. Given the high interest from the venture community, Westphal quickly raised $11 million more from investors in September 2004—just a month after closing the seed round.

—Build it boldly, and pharma will come. Huw Nash, vice president of corporate development at Aileron, knows something about drawing interest from Big Pharma. His Cambridge-based company in June raised $40 million in a financing that included the venture units of Eli Lilly, Glaxo, Novartis, and Roche, as well as traditional venture and angel investors. A big part of the allure at Aileron is the company’s “stapled peptide” drugs that have the potential to home in on thousands of different molecular disease targets not reached by previous treatments. (Read Luke’s story about Aileron for a deeper explanation of its novel platform.) “This is the type of solution that [pharmaceutical firms] need to really open the door to a completely new growth opportunity,” said Nash.

—Pharmaceutical companies want to …Next Page »

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A number of New England’s life sciences companies had good news to report this week.

—Cambridge, MA-based Vertex Pharmaceuticals (NASDAQ: VRTX) reported results from clinical trials that indicate its experimental hepatitis C drug, telaprevir, could work well for patients who haven’t responded fully to standard treatments, and could be as effective taken twice a day as it is taken three times a day. Luke explains what the news means for Vertex’s efforts to capture a share of the potentially huge market for hepatitis treatments.

—Medical device maker Interlace Medical of Framingham, MA, won FDA clearance to market its minimally invasive device for removing uterine fibroids and polyps.

—Burlington, MA-based CorNova raised $2.5 million of a proposed $6 million in equity financing, according to regulatory filings. CorNova is developing coronary stents with platinum surfaces.

—Anti-inflammatory drug developer Virdante Pharmaceuticals completed a second closing of its Series A financing round, bringing the total collected so far to $30 million. Thomas, McNerney & Partners led the deal, which was joined by Osage Partners, Biogen Idec New Ventures, Clarus Ventures, MedImmune Ventures, and Venrock Associates.

—Bedford, MA-based iRobot (NASDAQ:IRBT) launched a new healthcare unit. Under the direction of technology veteran Tod Loofbourrow, the unit will focus on developing robots to help seniors live independently.

—Pharma giant Novartis declined an option to continue development of a hepatitis C drug from Cambridge-based Idenix Pharmaceuticals (NASDAQ: IDIX). Idenix, whose stock dropped on the news, will seek another partner to back development of the drug, IDX184.

—RNA-interference drug developer Cequent raised $3.35 million in the first tranche of a venture round that could be worth as much as $15 million. The Cambridge-based startup is engineering E. coli bacteria to deliver RNAi molecules designed to combat a certain type of polyp in the colon.

—Pulmatrix raised $30.2 million in a Series B venture round led by Arch Venture Partners and Novartis Bioventures Fund and joined by Polaris Venture Partners and 5AM Ventures. The Lexington, MA-based startup is using technology from MIT and Harvard to prevent flu viruses and other pathogens from invading lung tissue.

—Cancer diagnostics developer On-Q-ity of Waltham, MA, reportedly raised $21 million in a Series A round of venture capital from Mohr Davidow, Bessemer Venture Partners, Physic Ventures and Northgate Capital. The firm was formed through the merger of CELLective Diagnostics and The DNA Repair Company, both Mohr Davidow Ventures portfolio companies.

—Ironwood Pharmaceuticals of Cambridge and its partner, New York-based Forest Laboratories (NYSE: FRX), said that Ironwood’s lead drug candidate, linaclotide, fared well in two pivotal clinical trials. The drug is designed to relieve chronic constipation; Luke has all (and I mean all) the details.

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The work leading to Brent Gaylord’s dissertation on using light-emitting polymers to detect bits of DNA was more far more than an academic exercise. His initial paper, and the intellectual property that was subsequently generated, directly lead to the creation of San Diego’s Sirigen.

Gaylord co-founded Sirigen six years ago to enter a business plan competition at UC Santa Barbara, where he earned his doctorate in materials science. Sirigen won the contest, and has been moving forward ever since. Today the venture-backed diagnostics technology startup has 15 employees and formal collaborations with five companies. Gaylord, the company’s chief scientific officer, says it is too soon to identify the collaborators but assures me that “they are names you’ve heard of.” The first product using Sirigen’s technology is expected to reach the marketplace sometime next year, he says.

Sirigen has no intention of producing its own line of complete diagnostic kits or detection devices. Instead the company is pursuing an “Intel Inside” strategy of getting its technology into diagnostic products made by others. Sirigen’s polymers use high-sensitivity fluorescence (HSF) to enhance the ability of conventional assays to detect specific antigens, proteins or bits of DNA. Gaylord says the technology can detect smaller quantities of target substances than conventional tests.

Also, the technology can offer improvements over conventional immunoassays—tests that commonly use an enzyme linked to an antibody to detect the presence of drugs or pathogens, such as the viruses that cause AIDS or hepatitis. Gaylord says existing immunoassays can detect just one target at a time, but an assay that alternatively incorporates Sirigen HSF technology can sense multiple targets with little loss in accuracy.

The result is faster, and potentially cheaper, testing.

Gaylord says the technology is generating interest because it has numerous applications, ranging from biological threat detection to drug discovery. With funding from the Army, for instance, Sirigen successfully demonstrated the ability of its technology to detect …Next Page »

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Shares of Cambridge, MA-based Idenix Pharmaceuticals plummeted in early trading this morning after Novartis declined an option to further develop an Idenix drug for the liver disease hepatitis C.

Idenix (NASDAQ: IDIX) dropped 14 percent to $2.15 shortly after the opening bell this morning after the announcement, and the stock was downgraded by the investment firm Caris & Co. The stock has lost about two-thirds of its value now since the beginning of the year, when it started at $5.79.

Idenix will now retain full worldwide commercial rights to IDX184, and it will look for another partner to support further development, said Jean-Pierre Sommadossi, Idenix’s chairman and CEO, in a statement. But any other company is certainly going to ask a lot of questions about the drug, given the closeness of Idenix’s relationship with Novartis. The Switzerland-based pharmaceutical giant held a majority ownership stake in Idenix, 53 percent, on April 1, according to Idenix’s most recent proxy statement, and Novartis markets another drug Idenix developed telbivudine (Tyzeka) for patients with hepatitis B.

IDX184 is designed to be a once-daily pill that’s active specifically in the liver, where the hepatitis C virus causes damage. It is Idenix’s lead drug candidate for hepatitis C, and it passed a preliminary clinical trial that demonstrated it was safe and had anti-viral activity in a three-day study, Idenix has said. Idenix said today in a separate statement that it plans to release more detailed results from that trial this weekend at the American Association for the Study of Liver Diseases, the big annual meeting for hepatitis C drugs which is being held this year in Boston.

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

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

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

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

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

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

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

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

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

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

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

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Personnel moves usually make for boring news, but sometimes they carry deeper meaning. I couldn’t help but wonder about the deeper meaning when Cambridge, MA-based Ironwood Pharmaceuticals said last month it had recruited David Ebersman, the former chief financial officer of Genentech, to join its board.

Ebersman, a boyish-looking guy just 39, took the chief financial officer job earlier this year at Facebook, joining its more famously boyish CEO, Mark Zuckerberg. But Ebersman is well-known as well for his remarkable 15-year career climbing the ladder to become CFO at Genentech until the company was acquired by Switzerland-based Roche last spring. Ebersman was one of the reasons Genentech had the most respected biotech management team on Wall Street for years. His appointment to Ironwood’s board made me wonder if the privately held enterprise wants a little more help opening some doors with deep-pocketed biotech investors who can take the company to a new level, and maybe even help it go public.

Why say that? I’ve interviewed Ebersman several times and know he has exceptional command of facts and how they fit into company strategy, but even more than that, I remember seeing Ebersman in action at a Genentech analyst day at the Mandarin Oriental Hotel in New York two years ago. In front of at least 500 fairly stressed analysts and fund managers watching every word for market-moving news, he stepped up to the microphone after some heavy scientific presentations and broke the tension. Ebersman said he couldn’t really start into his presentation without first admitting how awed and intimidated he was that day to bump into one of his boyhood heroes in the elevator—former New York Knicks center Patrick Ewing.

David Ebersman

Just the mental image of Ebersman, who’s about 5-foot-6, looking straight up in the elevator at a 7-foot former NBA basketball star like Ewing, had the room break out laughing. Genentech CEO Art Levinson, a science nerd to the core, added to the humor when he admitted he had never heard of Ewing and asked who he was, and why people seemed to think he was a big deal (which prompted some gentle ribbing from Ebersman).

So when I had a chance to talk by phone with Ironwood CEO Peter Hecht a couple weeks ago, I asked him whether he reached out to Ebersman to add his credibility and deep reservoir of good will on Wall Street. Might Ebersman be able to help Ironwood go public?

The short answer from Hecht was no. “We didn’t add David Ebersman to the board with any one transaction in mind. I’ve been working on him for three years to join our board,” Hecht says. But he didn’t disagree with how Ebersman’s affiliation can benefit Ironwood. “David has terrific credibility with investors,” Hecht says, adding that even before Ebersman joined the board, he introduced Hecht to a contact at Morgan Stanley, who led a $50 million financing for Ironwood a year ago.

Even if Hecht doesn’t have any direct comment about IPO possibilities, other people …Next Page »

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The woman who helped bring the famous anti-wrinkle treatment Botox to the U.S. market is working on a pain reliever that she says can compete with some of the best-known drugs in the world—Tylenol and Advil.

Her name is Juliet Singh, and she’s the CEO of a tiny La Jolla, CA-based company called Transdel Pharmaceuticals. Singh, 48, was the director of worldwide regulatory affairs at Irvine, CA-based Allergan (NYSE: AGN) in the late 1990s, where she oversaw efforts to get FDA approval for botulinum toxin (Botox), for eye diseases, before doctors discovered it also helps eliminate wrinkles.

Singh’s latest project is to turn a common pain reliever from a pill form into a topical cream. The goal is to make ketoprofen, a potent non-steroidal anti-inflammatory drug from the same class as ibuprofen (Advil, Motrin), into something people can rub directly on the body part that hurts. Ibuprofen has been approved by the FDA since 1974, and taken by millions of people ever since. But the drug has been known to cause stomach bleeding for some people. That’s a big reason why drug companies in the 1990s sought to make Cox-2 inhibitors like Vioxx and Bextra, which were supposed to be safer on the stomach. But they were ultimately pulled off the market because they raised the risk of heart attack and stroke.

The concept at Transdel is that if you can develop a cream formulation of ketoprofen, it will seep through the skin directly into say, a painful neck, elbow, or ankle, without circulating through the entire bloodstream (and possibly cause stomach bleeding.) The company expects to hear a definite answer from pivotal study of 350 patients by the end of this month, which will determine whether the drug is good enough to win FDA approval. If the company passes this test, it will soon be able to dip its toe into a global market for pain relievers that was worth $19.1 billion in 2008, and is expected to grow to $32.8 billion by 2013, according to market research firm BCC Research.

“I truly think our product will be one of the best in the U.S. market and will be recognized like a Tylenol or an Advil,” Singh says.

Transdel doesn’t have the usual big-time VC backers, and it’s a virtual company with a skeleton crew of just a few employees. The company has burned through about $13 million in capital through the end of June, and its shares (OTC BB: TDLP) trade on the bulletin board, which isn’t the place I usually look to find interesting biotech companies.

But Singh has a credible background, as an endocrinologist by training, a former postdoctoral fellow at Genentech, and as someone who built a track record in regulatory affairs at Baxter Healthcare, Allergan, and Collateral Therapeutics before that company was bought by Schering AG (now part of Bayer AG) in 2002.

Transdel has pinned its hopes on proprietary technology to deliver drugs through layers of skin, fat, and nerves, into underlying muscles feeling pain. The approach has been applied with Ketotransdel, its formulation of ketoprofen, a generic pain reliever that’s available over-the-counter in the U.S. The Transdel drug has been made to absorb …Next Page »

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Seaside Therapeutics, a stealthy biotech startup in Cambridge, MA, has raised $30 million to further develop research from MIT neuroscientist Mark Bear that has the potential to create the first drugs that treat the underlying neurological disorder at work in patients with Fragile X syndrome and autism.

Seaside raised the money from a private, family investment firm that wishes to remain anonymous, says CEO Randy Carpenter. The company, founded in 2005, has now raised a total of $66 million from the family, the National Institutes of Health, and disease foundations like Autism Speaks and the Fragile X Research Foundation, Carpenter says. It hasn’t raised venture capital, and it hasn’t needed any, he says.

“We’re thrilled,” Carpenter says. “The end game for us is not to sell the company for a profit. The end game for us is to develop effective new therapies.”

Autism has been surging in public awareness in recent years and is now estimated to affect one out of every 150 children in the U.S. Yet autism has stumped scientists for generations, because they don’t really know what causes it, or how to classify all the various symptoms like social isolation, obsessions like staring at ceiling fans, or having trouble with language. That’s made it hard for pharmaceutical and biotech companies to even know where to begin with strategies to develop new therapies. But that’s beginning to change, partly because of work done by Bear, a co-founder of Seaside, Carpenter says.

Carpenter and Bear collaborated together earlier this decade at Sention, a Providence, RI-based company that eventually went out of business. But Carpenter says Sention had a “skunk works” project on Fragile X and autism that eventually gave birth to Seaside. The newer company is built …Next Page »

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Ascent Therapeutics is advancing several of its proprietary “pepducin” drugs through early testing, with a lead candidate emerging as a potential rival to Genzyme’s drug plerixafor (Mozobil) for patients with certain types of blood cancer. Cambridge, MA-based Ascent is touting some of its early research at a biotechnology conference in Zurich, Switzerland this week in hopes of attracting new pharmaceutical partners.

Rick Jones, CEO of Ascent, spoke with me from the Sachs Biotechnology in Europe Conference in Zurich yesterday about the startup’s research progress. Among other developments, the firm is saying that its drug was at least as effective as Genzyme’s plerixafor in spurring the movement of stem cells out of the bone marrow in animal tests. The potential drug could be used like plerixafor for patients with such blood cancers as non-Hodgkin’s lymphoma and multiple myeloma who need blood-forming stem cell transplants.

Ascent has enough cash in the bank from its $19 million Series A round to support its operations for about a year, Jones said. That’s not a long time in biotech, since it often takes a decade or longer to develop and garner approval for a new drug. The CEO wants to form two or more partnerships with large pharma companies not only to advance his company’s research funding and scope, but also to win more confidence from venture backers and attract future rounds of financing. Meantime, Jones is hoping that Swiss drug giant Novartis opts to exercise an option it has purchased from Ascent to gain certain rights to the drug candidates for undisclosed uses.

“With the current environment we just can’t go out and ask for $20 million or $30 million to get ourselves into the clinic without having some other proof that we’ve succeeded in building up this platform,” Jones said. “And the venture capitalists are basically telling me that what they’d like to see is another couple of [pharma] companies buy into the platform.”

In a sense, Ascent is fortunate to have closed its first round of venture capital—from blue chip VC outfits including …Next Page »

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Biotech companies run into walls all the time, and either reinvent themselves or die. If they’re fortunate, they get one shot at a turnaround. San Diego-based Ambit Biosciences is getting a third chance, and this time it has some hard data, not just a flashy concept, to offer.

Ambit got started in May 2000, just when the bubble was starting to pop on the Internet and genomics stock bubbles. Ambit’s original plan was to take some technology out of Yale University to build a database of all the proteins in the body and sell the information to drug companies.

When that business model fell out of favor just seven months later, Ambit re-started around the idea of screening ideal drug candidates against certain protein targets. Two multi-billion dollar drugs for diabetes and neurological conditions, metformin and gabapentin, were losing patent protection, and Ambit thought it could develop more effective second-generation treatments if it could discover how they really interacted with protein targets. It raised $20 million on that effort in 2001 and 2002, before it flamed out the next year.

“At the end of the second incarnation, we had nothing. It didn’t work,” says Scott Salka, Ambit’s CEO. “We had two strikes against us, we were standing at the plate, and had hardly any money. We could fold up our tent and go home, or salvage something.”

Ambit’s next chance came with an emerging class of drugs known as kinase inhibitors. They have been a hot area for prospective cancer drugs over the past decade, and block certain enzymes called kinases. Novartis’ imatinib (Gleevec) achieved breakthrough status (and multi-billion-dollar sales) as an inhibitor of a very specific kinase involved in chronic myeloid leukemia. Other pioneering kinase inhibitors, like Pfizer’s sunitinib (Sutent) appeared to work well against kidney cancer even though it blocked several variations in the family of kinases. That stirred debate about whether it was better to be more selective to certain targets, or less, in developing new compounds. That created demand among drug companies to do in-depth selectivity studies, Salka says. As a result, drug companies lined up for services from Ambit, which could screen large numbers of kinases for the best possible drug to block them.

That core skill of Ambit’s was good enough to win support from Roche, Bristol-Myers Squibb, GlaxoSmithKline, Pfizer, Johnson & Johnson, and Cephalon, and has provided some cash to keep the doors open of a fledgling biotech company for nine years. It’s also enabled Ambit to raise a total of $105 million from a list of investors that now stretches 14 deep.

But just like genomics was the hot new thing that faded in 2000, it’s hard to get investors excited about a biotech business that collects fees for services from Big Pharma. The big potential, as always, is in developing new drugs for deadly diseases.

While Ambit was screening kinases for Big Pharma customers, it was also building up a portfolio of kinase drug candidates of its own. The company’s lead asset of the moment is AC220 for acute myeloid leukemia. It’s a malignancy that strikes 13,000 people each year in the U.S., mostly elderly, who have a short life expectancy and no realistic treatment options beyond chemotherapy. With little notice, Ambit is gearing up this month to start a pivotal clinical trial of this product and is even in partnership talks. If this drug can match striking results seen in an earlier study, then Ambit could have this product on the market by the first half of 2011, Salka says.

“It’s a great story for San Diego biotech,” Salka says. “Hopefully we can deliver the goods.”

Ambit drew some attention for its drug last December at the American Society of Hematology meeting in San Francisco. That was where researchers reported that 16 of the first 54 patients with relapsed forms of acute myeloid leukemia had tumor shrinkage …Next Page »

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San Diego’s Orexigen Therapeutics looked like just another biotech on the verge of collapse at the beginning of the year. Its CEO was diagnosed with a terminal case of leukemia and soon died. Three other senior executives had just quit. The company halted development of two experimental drugs to conserve cash.

Orexigen (NASDAQ: OREX) sought salvation from a long-running clinical trial, and didn’t find it. Results from a 793-patient study of obese patients on its experimental weight-loss drug fell short of what Wall Street was expecting, and the stock dropped 15 percent the next day to $5.10.

Then Mike Narachi saw something the market didn’t see at the time. Narachi, a former vice president in charge of Amgen’s multi-billion dollar anemia drug business, heard about the Orexigen CEO opening and decided to think about it. He spent six weeks doing his homework on the obesity market, Orexigen’s pipeline, competition, and its clinical trial results.

The market potential is clear. Obesity is one of the nation’s biggest public health problems, with two-thirds of U.S. adults considered overweight or obese. There’s not a lot of great pharmaceutical competition—Big Pharma has been gun shy about this field since Wyeth was burned so badly by the multi-billion legal settlements related to fen-phen heart damage, and Sanofi-Aventis failed to win approval two years ago for a drug that was linked to rare instances of suicidal thinking. In contrast, the Orexigen drug looked like a contender. It was made through a novel combination of two existing drugs with decadelong safety records, with no evidence of heart trouble or suicidal thinking. Orexigen owned 100 percent of the worldwide rights to a drug in the final phase of clinical trials.

He came to a conclusion: I want this job.

“Here was a company that needed leadership for a product in late-stage development that can address a huge unmet medical need,” Narachi says. “Most people misunderstood it. I saw it as a unique opportunity.”

The announcement of Narachi’s hiring crossed the wire March 31, when the company was limping along at $2.61 a share. Since then, Orexigen has looked like a different company. …Next Page »

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Intellikine has the kind of story you rarely see in 2009. Few biotech companies can rustle up $28 million in venture capital in this year of the Great Recession, especially when they don’t have a single drug candidate in human clinical trials. Either investors are having a bout of 1999-style insanity, or the company has something really intriguing under the hood.

That’s what I wanted to find out last week when I had a chance to talk in some depth with Troy Wilson, the CEO and co-founder of La Jolla, CA-based Intellikine. We broke the story in early July that Intellikine had collected the first part of a big round of venture capital, which could total as much as $51 million. The syndicate included Novartis Bioventures, Biogen Idec, FinTech Global Capital, US Venture Partners, as well as previous investors Sofinnova Ventures, Abingworth Management, and CMEA Ventures.

Intellikine, founded in September 2007, is best known for developing drugs to block what’s known as the PI3 kinase pathway, which controls critical cell processes like proliferation, migration, and cell survival. This has become one of the pharmaceutical industry’s hot targets, as researchers have shown the pathway is involved in both cancer and autoimmune diseases. Since these conditions affect millions of people, the field has attracted lots of competitors, many of whom are ahead of Intellikine in development. The list of rivals includes GlaxoSmithKline, Novartis, and Roche, as well as smaller players like South San Francisco-based Exelixis and Seattle-based Calistoga Pharmaceuticals.

So what makes Intellikine special enough to grab this much investment in a downturn? A lot of it has to do with the startup’s own investment in basic biology to characterize the four different variants of the PI3 kinase pathway, combined with a prolific chemistry team that has created 1,500 different drug candidates to block those targets, Wilson says. That’s in contrast to other companies that may be further down the drug-development path, but have picked one or two horses to bet on, which may or may not have the best attributes for a drug, he says.

“We may not be first in class, but we want to be best in class,” Wilson says. “We wanted to look at every possible kind of inhibitor.” Keeping the options open for now is important, he adds, because, “We’re still learning about these targets.”

Intellikine CEO Troy Wilson

Much of what Intellikine is learning about PI3 kinase biology grows out of science from the lab of Kevan Shokat at the University of California, San Francisco. Shokat, a Howard Hughes Medical Institute investigator, is known for developing chemical techniques to better characterize the individual roles of kinases and the signals they send to cells. Intellikine combined that knowledge with Wilson’s business savvy (he’s a co-founder and former chief business officer of San Diego-based Ambrx) and technical expertise from a pair of scientists at the Genomics Institute of the Novartis Research Foundation in San Diego—Pingda Ren and Yi Liu. Zachary Knight, now a fellow at Rockefeller University, was a fifth co-founder, and remains an adviser to the company.

The company’s first couple of years have been focused on building up a library of small-molecule drug candidates that are potent, selectively hit certain targets, and have good drug-like properties such as being soluble in the bloodstream, Wilson says. These compounds have been made to hit …Next Page »

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Drug companies usually have a hard time recruiting cancer patients in clinical trials, and some dirty little financial reasons for it were exposed last week in The New York Times. Another little secret is that biotech companies often overpromise, and under deliver, when they tell investors they will hit their clinical trial deadlines.

That makes it all the more surprising to hear what’s going on at Bothell, WA-based Seattle Genetics (NASDAQ:SGEN). This company, the developer of an “empowered antibody” against Hodgkin’s disease, said recently its pivotal study is recruiting patients so fast that it is now six months ahead of schedule. That sets off a chain reaction that means it should have results sooner, apply for FDA approval quicker, and reach the market six months earlier, possibly as soon as the end of 2011.

Seattle Genetics has been able to pull this off because of pent-up demand from very sick patients with relapsed forms of Hodgkin’s disease, who are searching for new treatment options. Top cancer doctors hopped on the bandwagon after the American Society of Clinical Oncology meeting in June 2008, when the company released preliminary results showing its experimental treatment was able to completely wipe out or partially shrink tumors for 12 of 38 patients, with mild to moderate fatigue, cough, and nausea as side effects. The preliminary results for brentuximab vedotin (formerly known as SGN-35) started looking even better when longer-term follow-up data was presented at a medical meeting in December.

“More investigators wanted into the trial than we could really let in to participate,” said Tom Reynolds, the chief medical officer at Seattle Genetics, in an interview on Aug. 3. “You usually have to work really hard to get them interested. There seems to be a good buzz going in the oncology community.”

Investors like it too. JP Morgan analyst Cory Kasimov, a Seattle Genetics bull, headlined his note to investors on July 23 with “SGN-35 Momentum Continues to Pick Up Steam.”  Seattle Genetics seized on some of that momentum this week, raising $118 million in a stock offering that priced yesterday afternoon.

Exciting as it all was, drug development is highly regulated and slow. But Seattle Genetics has been pushing hard to move as quickly as possible. One month after producing that stellar data at the American Society of Hematology in December, Seattle Genetics clinched an agreement with the FDA on …Next Page »

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Is it just me, or is the roundup of New England technology and life sciences deals news getting a little longer each week?

—Matrix Partners of Waltham, MA, reportedly raised $600 million for two new funds. A $450 million main fund is to be invested in software, mobile, consumer Internet, communications, and systems startups, and a $150 million special opportunities fund will be used to back companies outside of Matrix’s core fields.

—Drug developer Avila Therapeutics, also of Waltham, closed a $30 million Series B round of venture capital led by the Novartis Option Fund. Abingworth Management, Advent Venture Partners, Atlas Venture, and Polaris Venture Partners joined the deal.

—Waltham’s Phase Forward (NASDAQ: PFWD), a provider of software for data collection and analysis during clinical trials, acquired Indianapolis, IN-based Maaguzi for $11 million in cash. Maaguzi’s online system is used to collect data reported directly by patients.

—Cambridge, MA-based Cerulean Pharma raised $10 million in a Series B financing round. Polaris Venture Partners, Venrock Associates, Lux Capital, and Bessemer Venture Partners—all return investors—participated in the deal, which will help support clinical trial’s of Cerulean’s lead drug, a nanoparticle-based version of the anti-cancer molecule camptothecin.

—FRX Polymers, a maker of eco-friendly, flame-resistant plastics based in Chelmsford, MA, said it has raised $6 million from Israel Cleantech Ventures and Capricorn Venture Partners.

—Needham, MA-based Extreme Reach, a provider of management tools for online and mobile video advertising, raised an unspecified amount of new financing from Village Ventures, Greycroft Partners, and Long River Ventures.

—Ounce Labs, a Waltham, MA-based maker of security and compliance software, was acquired by IBM for an undisclosed amount. The company’s technology scans the source code of programs during software development to identify potential vulnerabilities early on, and can also help spot sources of security and compliance trouble in legacy systems.

—Burlington, MA-based software maker Vela Systems completed a $10.5 million equity financing from unnamed investors. Vela, whose technology allows construction companies to manage their paperwork using mobile devices, took in the first $6 million of the round in July 2007.

—Cambridge-based Forma Therapeutics inked a drug-discovery deal with Swiss drug giant Novartis; specific terms of the arrangement weren’t disclosed.

—Dana-Farber Cancer Institute spinoff MSM Protein Technologies announced partnerships with Germany’s Merck KGaA, and Switzerland’s Debiopharm Group. The deals will give the European firms access to the Medford, MA-based startup’s technology for analyzing complicated biological molecules called multi-spanning membrane proteins, which are the targets of many drugs.

—Vertex Pharmaceuticals (NASDAQ:VRTX) of Cambridge scored $105 million up front in an amended deal with Mitsubishi Tanabe Pharma. The agreement gives Mitsubishi rights to sell and manufacture Vertex’s experimental hepatitis C treatment, telaprevir, for use in combination with the existing drugs interferon and ribavirin in Japan and the Far East.

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Forma Therapeutics, a Cambridge, MA-based biotech firm, said this morning that it has landed a drug-discovery collaboration with Swiss drug giant Novartis. Novartis, which has previously invested in Forma through its Novartis Option Fund, is tapping the biotech startup to apply its cell-based screening platform to discover inhibitor treatments that target protein-to-protein interactions in cancer. Financial terms of the deal and specific drug targets involved weren’t disclosed.

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I’ve got a nice variety of deals—particularly venture financings—to tell you about this week.

—Swiss drug giant Novartis opted to extend a collaboration with Alnylam Pharmaceuticals (NASDAQ:ALNY) of Cambridge, MA, for a fifth year. Under the extension, Novartis will continue to fund certain RNA interference research and development efforts at Alnylam through October 2010.

—Software maker Ibrix agreed to be acquired by Hewlett-Packard for an undisclosed sum. The Billerica, MA-based firm’s technology allows large enterprises to manage network file servers holding petabytes of data.

—Andover, MA-based Acquia raised $8 million in a second financing round. North Bridge Venture Partners and Sigma Partners participated in the deal, as well as the 2007 first round of financing for Acquia, which sells a commercial version of the open-source content-management platform Drupal.

—Cambridge-based Archemix teamed with Watertown, MA-based Dicerna Pharmaceuticals to make new drugs that combine the former’s “aptamer” technology with the latter’s RNA interference technology. Specific financial terms were not revealed, but Dicerna has an option to get exclusive rights to take the new drugs through development.

—Aveo Pharmaceuticals, also of Cambridge, cut a deal worth $20 million—including $5 million in cash and $15 million in investment—to extend a partnership with Melville, NY-based OSI Pharmaceuticals (NASDAQ: OSIP). The deal, which also includes two years of research funding, will give OSI expanded access to Aveo’s mouse model of cancer.

—Boston-based virtualization company …Next Page »

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Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ:ALNY) says that Swiss drug giant Novartis has opted to extend the companies’ research collaboration related to RNA interference treatments for a fifth year. The extension means that Novartis will continue to fund certain research and development efforts at Alnylam through October 2010. “We view this development as very positive for Alnylam because… it provides the company with additional non-dilutive R&D funding, and… it signals Novartis’ continued interest and investment in the RNA therapeutics space in general, and in Alnylam specifically,” wrote Simos Simeonidis, a biotech analyst for investment firm Rodman & Renshaw in New York, in a note to investors.

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Drug development startup Intellikine is disclosing the names of the new investors in its latest round of venture financing, which could total up to $51 million, according to a press release the La Jolla-based firm issued yesterday. The new investors behind the firm’s second-round financing are Novartis Bioventures, Cambridge, MA-based biotech powerhouse Biogen Idec (NASDAQ:BIIB), FinTech Global Capital, and U.S. Venture Partners.

The names of these first-time investors in Intellikine—which is developing drugs to home in on a hot target in cancer treatment—weren’t disclosed when Luke first covered this financing on July 2 and reported that previous backers Sofinnova Ventures, Abingworth Management, and CMEA Ventures had all chipped in for part of the financing. Intellikine now says that Novartis Bioventures led the round, of which $28.5 million has been closed and up to $22.5 million more can be accessed depending on the company’s ability to reach certain performance goals. The potential total of $51 million is a change from the $38.5 million the firm said was the upper limit of this financing in an SEC filing.

Markus Goebel, managing director of Novartis Venture Funds, has joined the board of directors at Intellikine as a result of Novartis’ investment in the startup. Novartis Venture Funds is the venture arm of Swiss drug giant Novartis.

“Intellikine has rapidly assembled one of the best pipelines against a very important class of drug targets,” Goebel said in a statement. “I am very much looking forward to working with the management team and board to build the company and, in particular, to establish clinical proof of concept for the company’s lead programs.”

Intellikine—launched in 2007 with a $12.5 million first round of financing—is developing compounds that block the PI3K pathway, which studies have shown plays a key role in the survival and migration of cancer cells. It plans to develop its drugs to treat cancer as well as inflammatory and autoimmune diseases. Within 12 months the company expects to begin the first human study of its lead compound, INK128, which has shown promise in treating cancer in animal studies.

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