[Updated, Sept. 22, 11:15 am. See end of story] You might have seen Alex Rives around town in the past year, particularly if you’ve spent time hanging out at coffee shops near MIT, Harvard Medical School, and other bastions of basic research. He’s the one invariably wearing dark jeans and a sport coat over a t-shirt—and sporting a light Don Johnson beard.

Rives is a rising star associate with Arch Venture Partners in Seattle—or, rather he used to be in Seattle. Rives has just opened Arch’s first East Coast office here in Boston. It turns out that he’s actually been living in the area for about a year. But after spending most of that time working mostly out of coffee shops—where he would meet with researchers to discuss the potential commercial opportunities of their work—he moved into space on Berkeley Street in the Back Bay last month, setting up shop inside the offices of Oxford Bioscience Partners. This is Arch’s fifth office, joining those in Seattle, Chicago, Austin, and San Francisco. As of this writing the office is not yet listed on the Arch website. But it’s real and open for business, Rives told me last week over a few beers.

I’ve known something was up with Rives and Arch for a quite a while now. Even though Rives is only 28, he was the founding president of Fate Therapeutics, a San Diego-based company built in large part on science from Harvard Medical School that I profiled in April of 2008. We invited Rives to speak about Fate at an Xconomy life sciences forum with co-investor Amir Nashat of Polaris Venture Partners last September, and I’ve seen him around town ever since. I’ve been pressing Rives for months to tell me what’s he up to—and finally, he says, the time was right.

Arch has wide interests, investing across life sciences, information technology, energy, and other areas—often starting at very early stages of research. “Arch has been since its outset about working closely with basic researchers. That’s one of the things that makes us unique,” Rives says. “My role is to really work to develop close relationships with leading researchers in the Boston community. So I spend a tremendous amount of time at various academic research institutions.”

The firm has done a lot of deals over the years in the Boston area. Off the top of his head, Rives lists Alnylam Pharmaceuticals, Quanterix, Ensemble Discovery, and, of course, Fate. A more recent investment, he says, was cancer drug developer Agios Pharmaceuticals, where Arch was a co-institutional founder, along with local firms Flagship Ventures and Third Rock Ventures. Bottom line, he says: “Arch has always seen Boston as vital to it.” Now, the firm apparently sees the area as even more vital.

Many, but hardly all (think Amberwave or Ahura Scientific) of the Boston area firms Arch has invested in are in the life sciences, Rives’ own specialty. But, says Rives, “I’m really focusing …Next Page »

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The buyout of Sepracor was probably the biggest piece of New England life sciences news this past week, but it certainly wasn’t the only one.

—Cambridge, MA-based Quanterix named David Okrongly its new CEO. Founding CEO Nicholas Naclerio will continue to server as chairman of the company, which is developing single-molecule analysis tools for diagnosing cancer and other diseases. Quanterix has its roots in the Tufts University chemistry lab of David Walt, the co-founder of Illumina (NASDAQ: ILMN).

—An FDA panel recommended that the agency approve romidepsin, a drug developed by Cambridge-based Gloucester Pharmaceuticals, as a treatment for a rare form of lymphoma. The agency has until November 12 to decide whether to clear the drug.

—Ryan had a fascinating chat with Richard Gliklich, CEO of Outcome Sciences, about his Cambridge-based firm’s efforts to track the real-world safety and effectiveness of drugs and other medical technologies. Gliklich also talked about how the company, a Harvard spinoff, is benefitting from the focus on such data spurred by the stimulus package pushed by President Obama.

—Thermo Fisher Scientific (NYSE: TMO) of Waltham, MA, acquired German diagnostics maker B.R.A.H.M.S. for €330 million (US $470 million).

—Marlborough, MA-based drugmaker Sepracor (NASDAQ:SEPR) said yes to a $2.6 billion buyout offer from Japanese drug firm Dainippon Sumitomo Pharma; the deal is slated to proceed via a tender offer to begin no later than September 15.

—Ryan profiled Cambridge-based Daktari Diagnostics, which just scored $2.8 million in Series A financing to support the development of cheap, portable technology for performing blood tests for HIV patients. The technology, based on work from Massachusetts General Hospital and Purdue University, could dramatically improve the treatment of HIV in places like remote African villages where standard lab techniques are impractical.

—A federal judge ruled that Irish drugmaker Elan breached its multiple sclerosis drug agreement with Cambridge-based Biogen Idec (NASDAQ: BIIB) by proposing a deal with Johnson & Johnson that would have given J&J an option to acquire Biogen’s stake in the drug, natalizumab (Tysabri), if some other company acquires Biogen.

—In other Biogen news, Redwood City, CA-based Facet Biotech (NASDAQ: FACT), rejected the Massachusetts firm’s $355 million hostile takeover bid.

—Bedford, MA-based Spire sold off its dialysis catheter business to Bard Access Systems for $15 million. Following the sale’s completion, Spire will focus exclusively on photovoltaics manufacturing.

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Quanterix, a Cambridge, MA-based developer of single-molecule analysis technology for use in cancer and other disease diagnostics, said today that it has named David Okrongly its new CEO. Nicholas Naclerio, founding CEO of the startup, will continue to serve as its chairman. Okrongly was most recently a senior vice president in the molecular diagnostics unit of Siemens. Luke recently caught up with Quanterix scientific founder David Walt about the Tufts University chemistry professor’s success in creating value for life sciences investors, among other topics.

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Anyone compiling a list of the most successful life sciences entrepreneurs of the past decade would have to consider a soft-spoken academic named David Walt. He’s the chemistry professor at Medford, MA-based Tufts University who co-founded Illumina in 1998.

San Diego-based Illumina (NASDAQ: ILMN) found its niche in the past decade by boosting the efficiency of fiber-optic sensors to do high-speed analysis of genes, and the subtle ways they can get turned on or off. It’s one of the bigger success stories in San Diego’s biotech cluster, having grown to 1,600 employees and a stock market valuation of more than $4 billion.

I spoke with Walt last week when he was in Seattle to give a keynote presentation at a bioengineering entrepreneurship symposium organized by professor Buddy Ratner at the University of Washington. During his talk, Walt offered some valuable lessons learned from his Illumina experience to young scientists thinking about the entrepreneurial leap.

Walt, 56, urged the young scientists to align themselves with seasoned venture capitalists, who can introduce them to people with the best business skills to implement a new idea. His big break came one day when he gave a talk about his research at The Scripps Research Institute in San Diego, and venture capitalist Larry Bock was in the audience. Bock followed up with him to learn more, and ended up providing seed capital to Illumina, along with Arch Venture Partners and Venrock Associates.

“A lot of this has to do with human relationships, and the serendipity of who you bump into,” Walt said.

While Walt encouraged scientists to think about entrepreneurship, he warned them they have to be willing to accept the realities of business. “Decisions get made at a company for business. The goal is to make money, not to support your lab,” he said.

And, while starting a company that ultimately succeeds can pay off for years’ worth of royalty streams and the coolest new “widgets” to keep an academic lab doing groundbreaking science, there isn’t much glory in it, he said.

“Don’t do it for your ego,” Walt said. “If you’re successful, you will not be recognized. The only people who will know who you are on the board of directors and senior management. You need to prepare for that.”

I followed up with Walt after his talk to ask about some things he didn’t cover, including the race to make gene sequencing better, faster, and cheaper—and his thoughts on his latest idea for a company that he hopes will make it big, Cambridge, MA-based Quanterix.

Here are edited highlights from the exclusive interview:

Xconomy: There’s been a lot of talk lately about bringing down the cost of sequencing entire human genomes to $5,000. Is that really possible or realistic?

David Walt: Absolutely. I think the $5,000 genome is going to be here within a couple years. Right now, Illumina has announced it can do consumer sequencing for $40,000. The expectation is that there will be a decrease in the price in the next few years. That’s for raw sequence. People are still going to have to access bioinformatics to be able to interpret the genome. But for raw sequence, the scientific community is probably not going to be that far off from the $1,000 genome in three or four years.

X: Is there some peril in this race when people are trying to bring the cost down this quickly? Are we going to get a lot of errors, bad sequences from this?

DW: No. There’s a lot happening …Next Page »

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Imagine if we could monitor complex health conditions with a decal on our skin as easily as we look at our check-engine lights to learn of car trouble. Seventh Sense Biosystems, a secretive startup based in Cambridge, MA, tells Xconomy that its technology could transform this vision into reality.

It was reported in December that Seventh Sense had raised $4.75 million in a first-round financing from top life sciences investors Flagship Ventures, of Cambridge, Boston’s Third Rock Ventures, and Polaris Venture Partners, in Waltham, MA. But the company waited until our recent talk with company co-founder and CEO Doug Levinson to share details about its technology and current operations with the press. Levinson, who is also a partner at Flagship Ventures, says that the company is developing products that help people monitor their health continuously, but without intruding on their lifestyles.

“When we were forming this company,” Levinson says, “I was intrigued with the question of how simple can we make a health monitor.”

In fact, Levinson envisions patients being able to apply a health monitor no more intrusive than an imprint on the skin. The monitor could easily alert a patient about a health problem—or alternatively, help them adopt a health behavior—by changing its appearance in response to some measurable change in body chemistry. The CEO declined to say which specific health conditions his firm would develop products to monitor, but he did offer one example to illustrate its utility. Think of a simple mark on the skin turning a certain color to indicate that a patient has too little or too much of a drug in her system.

At the heart of the proposed monitors at the startup are “bioactive pigments,” which are polymer particles designed to change their color or other aspects of their appearance when they come into contact with specific molecular indicators in blood and other bodily fluids. The particles, as pictured on Seventh Sense’s website, each have two separate hemispheres loaded with two different colored dyes. Surface ligands on the particles are designed to bind to certain molecules in the body, causing the pigments to move into a position that shows one of the colors. The appearance of a certain color would indicate the presence of a health-related molecule such as a virus, drug, or disease-related cell.

The bioactive pigments are based on technologies developed by prolific MIT inventor Bob Langer, Joerg Lahann, of the University of Michigan, and Samir Mitragotri, at the University of California, Santa Barbara. Lahann and Mitragotri, who are both professors of chemical engineering, completed research in Langer’s lab at MIT prior to taking their current academic posts. Last year Levinson, who …Next Page »

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In contrast to the big drops in Xconomy’s sister regions of the Pacific Northwest and Southern California, venture deals in New England seemed to hold up pretty well in the third quarter. All told, as Greg reported Saturday, the region’s venture capitalists ponied up some $834 million for 117 deals during the period. That was second only to Silicon Valley ($2.78 billion and 292 deals), and down barely 2 percent from the second quarter, versus a 7 percent drop nationwide.

I say they seemed to hold up because the figures above came from the quarterly MoneyTree report from PricewaterhouseCoopers and the National Venture Capital Association. But Dow Jones VentureSource data released simultaneously showed a much bigger falloff in New England: investment tumbled 23 percent to $769 million in 78 deals, according to their numbers. The two groups usually report the same general trends—both saw a 7 percent national decline in venture investments in Q3, for instance—but because of different reporting standards, they often differ on particulars, although not usually by this much. (I did notice that the Dow Jones numbers above are about $8 million lower than its state-by-state breakouts for New England show—it looks like they forgot Rhode Island, Vermont, and Maine in the big tally—but that still doesn’t explain the difference.)

Both groups, however, agreed that third-quarter investments were actually up over the first quarter.

In any case, below is a list of the New England top 10 venture deals for the quarter—topped by two Massachusetts biotech firms, which each raised $40 million—and the venture firms behind them.

— Link Medicine, Cambridge, MA — $40 million
Investors: Clarus Ventures, SV Life Sciences

— BG Medicine, Waltham, MA — $40 million
Investors: Flagship Ventures, GE Asset Management, Gilde, Humana Ventures, Individual Investors, Legg Mason

— Vanu, Cambridge, MA — $32 million
Investors: Charles River Ventures, Norwest Venture Partners*

— JumpTap, Cambridge, MA — $26 million
Investors: AllianceBernstein*, General Catalyst Partners, Redpoint Ventures, Summerhill Venture Partners, Valhalla Partners, WPP Group

— CambridgeSoft, Cambridge, MA — $21 million
Investors: Goldman Sachs Group

— Carbonite, Boston, MA — $20 million
Investors: 3i Group, CommonAngels, Menlo Ventures

— Eleme Medical, Merrimack, NH — $18 million
Investors: EDF Ventures, Hambrecht & Quist Capital Management, L Capital Partners*, Three Arch Partners

— Cara Therapeutics, Shelton, CT — $12.3 million
Investors: Ascent Biomedical Ventures, Connecticut Innovations, Devon Park Bioventures*, Mitsubishi

— Quanterix, Cambridge, MA — $10.86 million
Investors: Arch Venture Partners*, Bain Capital*, Flagship Ventures*

— NEXX Systems, Billerica, MA — $10.7 million
Investors: Enterprise Partners Venture Capital, Genevest Consulting Group, Individual Investors, Sigma Partners

* lead investor
Source: Dow Jones VentureSource

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We could have called it the “New Biotech Business Model Expo.” Xconomy’s forum—How to Build a Life Sciences Company—attracted venture capitalists and entrepreneurs from around the Boston area (and a few from across the country) to the Novartis Institutes for Biomedical Research in Cambridge on Tuesday morning to showcase the strategies they’ve used to form and fund startups in today’s challenging economic climate. Then a packed house of life sciences executives (and a few of us media types) listened to two living legends in the business, Bob Langer, institute professor at MIT, and Terry McGuire, managing general partner at Polaris Venture Partners, discuss how they have collaborated to launch 14-odd life sciences startups.

The biotech business itself is a startup relative to more established industries, and VCs and life sciences executives are still experimenting with strategies to make early-stage companies successful. It’s too early to tell whether, say, biotech startup Fate Therapeutics has improved its chances to bring a drug to market by uniting authorities in adult stem cell biology from around the country to serve as scientific founders and advisors. And the most proven business scheme among those presented—essentially, to “back science discovered in Langer’s lab at MIT”—may be difficult to replicate.

Many of the business models explored at the Xconomy Forum are likely relevant to other industries such as clean technology and semiconductors, both of which, like life sciences, depend on innovative technologies and funding strategies to prosper. For the benefit of all our readers, regardless of their industry focus, we thought it would be valuable to compile a list the strategies presented at the forum:

The Ensemble Scientific Cast Model:

For sure, dealmakers typically seek out the finest of advisors and executives to lead their young companies. However, Seattle-based Arch Venture Partners and Polaris, of Waltham, MA, took this approach to another level in forming Fate, a startup focused on the development of drugs to control the destiny of cells to treat diseases.

Fate co-founders Amir Nashat, a general partner at Polaris, and Alex Rives, an associate at Arch, presented their case at the Xconomy Forum for bringing together an ensemble cast of adult stem cell authorities—Philip Beachy, a professor of biology at Stanford University; Sheng Ding, an associate professor of chemistry and cell biology at Scripps Research Institute; Randall Moon, a professor of pharmacology at the University of Washington School of Medicine; David Scadden, a professor of medicine at Harvard University; and Leonard Zon, a professor of pediatric medicine at Harvard Medical School—to contribute their scientific discoveries and expertise to the startup. (Bob called this band of stem cell leaders “a scientific dream team” in this April story about Fate.) “We actually forced them to string their science together—that’s very important,” Nashat told the crowd, adding that the task was made easier because some of the scientific founders of Fate already had research collaborations with each other before the company launched last year.

The Nobel Laureate Model:

It never hurts to have a founder with a Nobel Prize for the area of research on which their company is focused. But it’s a dream when the Prize is awarded while you’re on the road pitching for funding. Tod Woolf, CEO of RXi Pharmaceuticals (NASDAQ:RXII), a developer of RNA-interference (RNAi) drugs designed to switch off genes linked to diseases, told the forum that the company was in the midst of its first fundraising effort in 2006 when co-founder and University of Massachusetts Professor Craig Mello learned that he would share a Nobel Prize in medicine with Stanford professor Andrew Fire for their discovery of RNAi. “This is a very good way to start a biotech company,” Woolf quipped.

The Big Pharma Checkbook Model:

Biotech firms practice this business scheme when founders manage to induce major pharmaceutical firms to commit funds at the inception of their startup to support the development of a broad array of platform technologies, which will later be spun out into individual startups. Sound farfetched? David Steinberg, a senior principal of PureTech Ventures in Boston, would likely tell you it’s not so. Steinberg, the first presenter at the forum, serves as CEO of Enlight Biosciences, of Boston, which is pioneering the Big Pharma Checkbook Model.

Enlight debuted this summer with funding commitments of $39 million from drug giants Eli Lilly, Merck, and Pfizer. Why would Big Pharmas open the checkbook for such a venture? All the projects pursued by Enlight involve “pre-competitive” platform technologies that could improve efficiency for all three Pharmas but don’t give a special edge to any—and which may otherwise go undeveloped due to gaps in financing available for nascent technologies, Steinberg explained. (For more on Enlight, here’s Luke’s recent post about the startup.)

The David (or Five Davids) Model:

Basically, this business model is a variation of the oft-practiced, …Next Page »

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We’re looking forward to a great morning tomorrow at our half-day conference, How to Build a Life Sciences Company. In addition to the keynote chat with legendary MIT inventor and entrepreneur Bob Langer and Polaris Venture Partners co-founder Terry McGuire (Xconomy chief correspondent Wade Roush will moderate), we have five case studies of recent startups with different strategies for raising funding and getting going: everything from venture philanthropy to new types of collaborations. Plus, there’s a spotlight presentation from Quanterix, the latest spinoff from Tufts University and David Walt, who also founded Illumina.

One last treat: two special guests from Xconomy’s sister city of Seattle, where we launched in June. One is Alex Rives, an associate at Seattle-based Arch Venture Partners. He is a co-founder and founding president of Fate Therapeutics, which is the focus of one of tomorrow’s case studies. Both he and Polaris general partner Amir Nashat will be speaking about Fate’s unique cross-country collaboration, not just between venture firms but between leading scientists. We also will be hearing from David Schubert, chief business officer of Accelerator Corp., the famous Seattle incubator/startup engine. He will be joining our panel on new approaches to incubation, which will be moderated by Xconomy national biotech editor Luke Timmerman, who is also in from Seattle.

It should be a busy morning, concluding with a great networking lunch–all hosted by the Novartis Institutes for Biomedical Research here in Cambridge. You can get the agenda here and registration details here. Hope to see you tomorrow.

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This week’s Boston-area life sciences news has a little bit of everything—venture deals, new drugs, lawsuits, and a big-time donation. And for the entrepreneurs among you looking for an alternative to the typical venture capital firm, check out Ryan’s directory of corporate VC operations.

—The ranks of New England life sciences companies with their own venture capital arms are growing, so Ryan put together a directory of such outfits, complete with some fascinating details on each one’s focus and personality.

—Luke profiled the efforts of Cambridge, MA-based Biogen Idec (NASDAQ: BIIB) to develop the first drug that might help the body repair the damage done to nerves’ myelin coatings by multiple sclerosis. Currently available MS drugs, such as Biogen’s own Avonex and Tysabri, tamp down flare-ups of the disease in an effort to prevent further damage, but don’t fix myelin defects; a repair drug might help restore walking and other functions affected by the disease.

—Ryan checked in with our Kendall Square neighbor Sermo, and found that the popular social networking site for physicians—which had in the past announced new corporate partnerships, such as one with Pfizer (NYSE:PFE), with great fanfare—had quietly inked deals with eight more of the world’s 12 largest drug companies. Sermo CEO Daniel Palestrant also had a bit of advice for his fellow Health 2.0 firms.

—Dover, NH-based Salient Surgical Technologies pulled its planned $86.25 million initial public offering, for which it originally filed back in March.

—Cambridge, MA-based Quanterix, a Tufts spinoff developing technology for early diagnosis of cancer, Alzheimer’s disease, and other illnesses, closed the second half of a $15 million financing round from Arch Venture Partners, Bain Capital Ventures, and Flagship Ventures.

—A U.S. District Court in Texas reduced the patent-suit damages owed by Boston Scientific (NYSE: BSX) of Natick, MA, to rival Medtronic (NYSE: MDT) from $250 million to $19 million, finding two of the involved patents to be unenforceable.

—Cancer-drug developer Ariad Pharmaceuticals (NASDAQ: ARIA) of Cambridge, MA, is moving quietly toward having its first approved product on the market, Luke discovered. And if its lead drug, developed in conjunction with Whitehouse Station, NJ-based Merck (NYSE: MRK), is a success, Ariad is lined up to hold on to an atypically large chunk of the profits.

—MIT spinoff Hepregen, reportedly raised $3 million out of a $5 million first round of venture capital from Battelle Ventures and Innovation Valley Partners. The startup is developing technology to screen drugs in development for liver toxicity.

—Our sources tipped us off yesterday that Eli and Edythe Broad, the founding benefactors of the Broad Institute of Harvard and MIT, are donating an additional $400 million endowment to the Cambridge, MA-based genomic medicine research powerhouse. The announcement of the donation and its implications is currently underway; we’ll post more when we know more.

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While many of us were cutting out early for the holiday weekend, and to enjoy the last week of summer, New England tech and life sciences firms were cutting a surprising number of deals.

—Tufts spinoff Quanterix closed the second half of a $15 million financing round from Arch Venture Partners, Bain Capital Ventures, and Flagship Ventures. Luke talked with the Cambridge, MA-based firm’s CEO about its technology for pinpointing minute quantities of proteins in a patient’s blood that might serve as early warning signals for cancer, Alzehimer’s disease, or other ailments.

—Lexington, MA-based Mall Networks, which creates online malls that give loyalty cardholders bonus points for shopping, raised $7 million in a Series B investment led by Dace Ventures and joined by previous investors Flybridge Capital Partners, Venture Capital Fund of New England, and LBO Enterprises.

—Living Proof of Cambridge, MA, raised $7 million Series A-3 financing from Polaris Venture Partners and other investors. Though it tries to keep a low profile, the startup is using the expertise of some very high-profile scientists, investors, and executives to address the multi-billion-dollar market for beauty products.

—Cambridge, MA-based JumpTap, which provides mobile Web search and advertising technology for a variety of phones from AT&T, Alltel, Boost Mobile, U.S. Cellular, and a host of other carriers, closed a $26 million Series D financing round. The deal was led by AllianceBernstein and joined by existing investors General Catalyst Partners, Summerhill Venture Partners, Redpoint Ventures, Valhalla Partners, and WPP.

—Specialty pharmaceutical maker Indevus Pharmaceuticals (NASDAQ:INDEV) raised $105 million in a private placement of notes secured by royalties for Sanctura, the Lexington, MA-based firm’s drug for overactive bladder.

—Software-defined-radio startup Vanu of Cambridge, MA, reportedly took in $32 million a Series B venture round from Charles River Ventures, Norwest Venture Partners, and Tata Capital. The firm’s technology allows wireless operators to broadcast to use multiple standards such as GSM and CDMA.

—Dover, NH-based Salient Surgical Technologies, a maker of blood-vessel-sealing devices, pulled its planned $86.25 million initial public offering.

—Boston-based uLocate inked a deal to provide local information and mapping services for Sprint’s new nationwide WiMax network, XOHM, now under construction.

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Quanterix made the news this week when it raised the second half of a $15 million financing round from Arch Venture Partners, Bain Capital Ventures, and Flagship Ventures. The Cambridge, MA-based company has no trouble commanding attention, since its technology comes from the lab of Tufts University researcher David Walt, a co-founder of Illumina (NASDAQ: ILMN), the high-flying San Diego-based maker of biological research tools.

Despite the company’s pedigree, though, Quanterix’s latest round was covered as a run-of-the-mill VC financing blurb. So, I contacted CEO Nick Naclerio to learn more.

The company, which started in June 2007, is working on what it calls a Single Molecule Array, or SiMoA for short. It’s supposed to be 1,000 times more sensitive than the standard Elisa tests, made by big players like Abbott Laboratories (NYSE: ABT) and Becton Dickinson (NYSE: BDX), that are used to detect antibodies in a blood sample and which can diagnose whether a patient has been exposed to HIV, West Nile Virus, or other pathogens.

Quanterix has a prototype device, Naclerio says, and the new capital will be used both to further develop the technology platform and for preliminary clinical trials. The company’s aim is to use SiMoA to find the tiny concentrations of proteins that can’t be seen by Elisa. One example might be a millimeter-wide tumor, at the very early stages of growth, that sheds minute amounts of signature proteins into the blood. It’s theoretically possible the test could spot tiny amounts of proteins that are linked to Alzheimer’s, Naclerio says.

“We are able to count individual molecules,” he says. “Generally, the more sensitive you are with a diagnostic, the better.”

Lots of work still needs to be done to establish how useful such a test might really be, Naclerio says. For instance, clinical studies will have to be done to show whether tiny concentrations of a protein in the blood are really an early sign of bad things to come with cancer. Until a trial says otherwise, it’s possible that small tumors might simply be mopped up by the immune system, and might cause people to be worried for no good reason, I suggested.

Naclerio didn’t disagree, which is why he added that the company is working with physician collaborators on which meaningful proteins they really would like to look for in the blood if they had a powerful device that could find them.

The company plans to concentrate initially on known proteins, and isn’t going to spend its research budget looking for new proteins that could help with early detection of cancer. However, one well-known project of that kind is the International Cancer Biomarker Consortium, led by Nobel Laureate Lee Hartwell, president of the Fred Hutchinson Cancer Research Center in Seattle. Given how much promise Hartwell and his collaborators see with proteins serving as early warning signs of cancer, it seems likely Quanterix won’t have much trouble finding researchers who want to use its precise new tool to learn about those diagnostic clues lurking in the blood.

“This technology has the potential to open up a lot of new applications in diagnostics,” Naclerio says.

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There were some exciting venture deals this past week, and some great in-depth reporting about Boston-area life sciences firms on the part of Luke and Ryan. In case you missed any of it….

—Ryan did some sleuthing on a stealthy startup down the street from Xconomy’s headquarters in Kendall Square, MA, and uncovered (at least partially) Living Proof. With a board that includes MIT’s Robert Langer and Polaris Venture Partners as an investor, the startup is leveling some impressive scientific and business firepower against bad hair days and other cosmetic complaints—and it has $7 million in new financing to buoy its quest for beauty.

—Brand-new Boston-area startup Proteostasis Therapeutics closed a massive $45 million Series A financing from HealthCare Ventures, Fidelity BioSciences, New Enterprise Associates, Novartis BioVenture Fund, and Genzyme Ventures. The firm is aiming to develop small-molecule treatments for Alzheimer’s disease, diabetes, emphysema, and other ailments that work by helping the body maintain normal protein production.

—Medical diagnostics startup Quanterix, a Tufts University spinoff in Cambridge, MA, reportedly raised $15 million in a Series A financing from Arch Venture Partners, Bain Capital, and Flagship Ventures. The startup is developing tools capable of identifying single molecules in human blood.

—Just hired to head the Massachusetts Life Sciences Center—the agency that will administer the state’s $1 billion funding initiative—Susan Windham-Bannister shared her goals and plans for the center in a lengthy interview with Luke. (He had the good sense to save the hard questions for part 2.)

—Wondering what happens to the IP when a biotech goes bust? Ryan caught up with Wellesley, MA, accountant Joseph Finn, who puts defunct firms’ patents on the auction block.

—Resolvyx Pharmaceuticals raised $4 million in an add-on to a $25 million Series B financing round that the Bedford, MA-based company closed in April. Atlas Venture, Flagship Ventures, Radius Ventures, CHL Medical Partners, Biogen Idec, and QVT Fund are supporting the startup’s efforts to turn fish-oil science into treatments for a host of inflammatory diseases.

—Genzyme (NASDAQ: GENZ) of Cambridge, MA, and the nonprofit Medicines for Malaria Venture formed an alliance with India’s Advinus Therapeutics to develop new treatments for pregnant women and infants infected with malaria.

—The FDA said that it is working with Biogen Idec (NASDAQ: BIIB) and Elan (NYSE: ELN) to update the labeling for Tysabri following confirmation that two multiple sclerosis patients on the drug had contracted the often-fatal brain infection PML.

—Lexington, MA-based Indevus Pharmaceuticals (NASDAQ: INDEV) raised $105 million in a private placement of notes; the cash is intended to retire existing debt and carry Indevus into calendar 2010.

—Bob gave a sneak peek of our September 23 forum, How to Build a Life Sciences Company. Robert Langer will be a keynoter at the event; I’m betting it will be a good hair day for him.

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Quanterix, a privately held developer of medical diagnostics technology in Cambridge, MA, has raised $15 million in a Series A financing, according to VentureWire. Arch Venture Partners, Bain Capital, and Flagship Ventures participated in the financing. Tufts University researcher David Walt, a founder of San Diego-based Illumina (NASDAQ: ILMN) is a co-founder of Quanterix. The company’s technology is used to identify single molecules in human blood, which escape detection from standard Elisa diagnostic tests, according to the company’s web site.

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The Boston area is arguably the world’s greatest center of life sciences, fostering both outstanding basic research and a thriving community of companies, big and small. Two of biotech’s pioneering firms, Biogen Idec and Genzyme, were founded here—Biogen is celebrating its 30th anniversary this year. A number of the planet’s largest pharmaceutical makers, including Novartis, Pfizer, and Merck, have R&D operations in Cambridge or Boston. And over the past year, Xconomy has written about scores of newly launched firms in biotech, medical devices, diagnostics, and other areas of life sciences.

But the strategies that worked in the past don’t necessarily hold today. So what does it take to create the next generation of great life sciences enterprises? That’s the central question to be addressed at Xconomy’s upcoming forum: How to Build a Life Sciences Company. The half-day conference will take place the morning of September 23 at the Novartis Institutes for Biomedical Research on Massachusetts Avenue in Cambridge.

The event features a keynote chat between MIT Institute Professor Robert Langer, the dean of area biotech entrepreneurs (and an Xconomist), and Polaris Venture Partners co-founder Terry McGuire, who has teamed with Langer on a host of startups. The rest of the morning will feature a mixture of panel discussions and case studies aimed at providing a from-the-trenches look at company-building from those who are doing it today.

One panel, led by Xconomy’s national biotech editor Luke Timmerman, will look at the latest approaches to incubating life sciences companies—with representatives from Boston University’s growing startup incubator and Escoublac, the first company housed in Biogen Idec’s year-old incubator. Another panel will dive into new funding strategies for life sciences startups—strategies that include venture philanthropy, novel types of collaboration, non-traditional business models, and more. That discussion will be led by Carmichael Roberts, who has teamed with his fellow Xconomist, Harvard chemist and University Professor George Whitesides (a co-founder of Genzyme), to form several life sciences startups, and is now a general partner at North Bridge Venture Partners.

Rounding out the morning will be case studies from the founders or CEOs of some of the area’s hottest startups: Diagnostics-For-All, Cambria Pharmaceuticals, Quanterix, Enlight Biosciences, RXi Pharmaceuticals, and Fate Therapeutics.

The event begins with a continental breakfast and concludes with a networking lunch—and hopefully a few burgeoning deals or job opportunities. You can find all the details for registration here. We hope you’ll join us.

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You can’t spend much time in Kendall Square without realizing how critical universities are to the local innovation ecosystem. One way to look at the role they play is to look at the startup companies formed around technology invented in academia. That’s exactly what I’m about to do—and if you want to cut to the chase you can click here—but first, a conundrum:

In the course of helping Bob get this company off the ground, I’ve had to dig up answers to innumerable startup-related questions that previously I wouldn’t even have thought to ask. Does the term sheet include a double or single trigger for acceleration? Where does one send an 83(b) election if one normally files taxes electronically? If the office lease specifies that tenants have to arrange nightly cleaning, does that literally mean somebody has to clean the place every night?

So far I’ve managed to come up with reasonable-seeming answers for each of these queries as they’ve arisen. But this week I ran into one that has me stumped: When is a startup founded? Where along the timeline of kicking around ideas, writing up plans, pitching them, filing patents, hiring consultants, writing new plans to replace the ones shot down in the first pitch meetings, squeezing cash and free labor out of friends and family, hiring lawyers, filing trademarks, reserving domain names, cold calling investors, filing incorporation papers, looking for office space, alpha testing a product, printing stationery, closing a financing deal, dealing with the broken toilet in the new office, and actually putting a product in the hands of customers—where along that timeline do you put the arrow that says “Company Founded?”

Turns out, folks at different companies and in different universities’ tech licensing offices have wildly different answers to that question. And that complicated things tremendously when we asked five schools—MIT, Harvard, Boston University, Tufts, and UMass—to tell us about the new companies founded around their intstitutions’ technology since the beginning of 2006. Typically, I’m finding out, universities peg the founding of a spinoff to the date when the company licensed the school’s patents. Individual companies might use that date, or they might use the date of their incorporation, the date of their initial funding, or some other milestone. (The strange thing about the licensing approach is some companies wind up being incorporated years before they’re “founded.”)

Thinking back, it’s surprisingly hard to pinpoint a single moment when Xconomy went from being an idea/project/pipe dream to being a real company. The closest I can come is May 8, 2007–the day we incorporated in Delaware. And so in whittling down contenders for our list of recent university spinoffs, I limited myself to only those with incorporation or formation dates in 2006 or 2007. That meant I had to drop some really interesting companies (MIT spinoff Tempo Pharmaceuticals, for instance, was incorporated on November 28, 2005), but at least it levels the playing field. And to be clear, this is not meant to be exhaustive; many spinoffs this young are still so stealth that they haven’t yet authorized their parent institutions to talk about them. But even with those limitations, I think the list–found here–provides a nice snapshot of the latest wave of technologies flowing out of university labs and into the marketplace.

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Below are some of the Boston area’s newest university spinoffs—including companies incorporated or formed since January 2006—and the schools from which they spun. For more on how we generated the list and determined the founding date for each (who’d have thought it could be so tricky?), see here.

Ascent Therapeutics
Sherborn, MA
(Tufts, 2006)
Ascent was launched by former Epix Pharmaceuticals CEO Mike Webb to commercialize work from Tufts-New England Medical Center. The firm is focusing on developing treatments for cancer and inflammatory diseases. In an article last year, Webb told the Boston Business Journal that Ascent would likely partner with an Indian firm for chemical development and preclinical testing.

BA Logix
Medford, MA
(Tufts, 2007)
BA Logix (short for Boolean Accelerator Logic Systems) was launched by pre-seed investment firm Allied Minds to commercialize technology from the lab of Karen Panetta, an associate professor in Tufts’ Department of Electrical & Computer Engineering and a BA Logix co-founder. In a press release, Panetta says that the company’s image-processing and compression technologies “can support a broad set of end users and optimize their wireless, security, video and signal processing needs.” Allied Minds’ other portfolio companies—all launched with university partners—are all in the biomedical sector.

BosteQ
Boston, MA
(Boston University, 2006)
BosteQ’s founders, Boston University associate professor Lars Oddsson and the Massachusetts Eye and Ear Infirmary’s Conrad Wall, are developing wearable devices—tricked-out belts and socks, essentially—to help elderly people improve their balance and avoid falling. Mass High Tech has more details on the technology and the challenges BosteQ will face in getting the technology to market.

Bind Biosciences
Cambridge, MA
(Harvard and MIT, 2006)
Founded by MIT’s Robert Langer and Harvard Medical School’s Omid Farokhzad, BIND (for BioIntegrated NanoDelivery) is developing treatments for cancer, inflammatory disorders, and cardiovascular disease based on nanoparticles targeted to specific cell types or tissues. Polaris Venture Partners and Flagship Ventures are both backing the firm.

ExProDx
Boston, MA
(Boston University, 2006)
ExProDx was founded by BU School of Medicine professors Avrum Spira and Jerome Brody to develop DNA-based diagnostic tests for lung cancer risk determination and diagnosis. In July, the firm won a $175,000 Launch Award from BU’s Office of Technology Development. According to a BU announcement, the firm is using the cash “to prepare for an upcoming clinical trial, legal and regulatory consultants, personnel, and working capital,” so evidently these guys know how to stretch a dollar.

Encapsion
(UMass Lowell, 2006)
This nanotech/biopharmaceutical firm was founded around technology invented by UMass Lowell professors Stephen McCarthy and Robert Nicolosi. The firm, which is targeting a range of pharmaceutical and consumer-product applications for its technology, raised $7.5 million in a first-round of financing this January. New York’s Ascent Biomedical Ventures is an investor.

GMZ Energy
Newton, MA
(MIT, 2006)
GMZ has licensed four MIT inventions, each centered on thermoelectric materials and nanomaterials—which can convert heat to electricity and vice versa. The company is quite stealthy, but in state filings the president, treasurer, secretary, and director are all listed as Michael Clary at the Sand Hill Road (Menlo Park, CA) address of Kleiner Perkins Caufield & Byers.

iWalk
Cambridge, MA
(MIT, 2006)
MIT Media Lab professor Hugh Herr, himself a double amputee, co-founded iWalk to commercialize PowerFoot One, a robotic prosthetic ankle. The device, which allows users to have a more normal gait by adjusting the ankle’s positioning, stiffness, and power on the fly, is slated to hit the market next summer.

Lakewood Pharmaceuticals
Sarasota, FL
(Tufts, 2007)
Lakewood develops treatments for infectious disease. Its lead candidate is a human monoclonal antibody-based treatment for food poisoning caused by certain e. coli strains. The technology was originally developed by Saul Tzipori, director of infectious diseases at the Cummings School of Veterinary Medicine at Tufts.

Nara Biosciences
Boston, MA
(Boston University, 2006)
This early stage drug-discovery company was co-founded by Kenneth Walsh, a PhD biochemist and professor in the Boston University School of Medicine. A licensing deal is still in progress, according to N. Stephen Ober, director of innovation and entrepreneurship in BU’s Office of Technology Development, but the company plans to target obesity and metabolic disease.

RXi Pharmaceuticals
Worcester, MA
(UMass Medical School, 2006)
RXi was formed as a subsidiary of biopharmaceutical firm CytRx to focus purely on RNAi-based therapeutics for a host of ailments, starting with neurodegenerative diseases, cancer, diabetes, and obesity. UMass’s claim on the company is that three of the firms co-owners—including Craig Mello, who shared a 2006 Nobel prize for his role in the discovery of RNAi—are professors at the UMass Medical School. What’s more, RXi has licensed a suite of patents from the school (the firm has a three-year deal granting it options to all unrestricted therapeutic RNAi technology developed there) as well as from Cold Spring Harbor Laboratory and the Carnegie Institution of Washington.

Sand 9
Boston, MA
(Boston University, 2007)
Funded by General Catalyst Partners and Khosla Ventures, Sand 9 develops radio frequency components for wireless devices. The company was founded “to deliver integrated circuit economics to the front-end-module of wireless transceivers,” according to a job ad for the firm (in case anybody’s looking).

SunEthanol
Amherst, MA
(UMass Amherst, 2006)
Biofuel firm SunEthanol’s founder and chief scientist is UMass Amherst microbiology professor Susan B. Leschine. Leschine and a colleague discovered a cellulose-degrading microorganism in soil near the Quabbin Reservoir; now dubbed “the Q microbe,” the bug forms the basis of SunEthanol’s technology for converting corn stover, wood chips, switch grass, and other plant material into ethanol. Investors include VeraSun Energy, Battery Ventures, Long River Ventures, and AST Capital; UMass has an equity stake as well.

TetraPhase Pharmaceuticals
Watertown, MA
(Harvard, 2006)
Built around an exclusive license to technology developed in the lab of Andrew Myers, chair of Harvard’s Department of Chemistry and Chemical Biology, Tetraphase is developing new tetracycline antibiotics targeted at drug-resistant bacteria. Last year the company raised $25 million in Series A financing from Mediphase Venture Partners, Fidelity Biosciences, Skyline Ventures, Flagship Ventures, and CMEA Ventures.

Quanterix
Cambridge, MA
(Tufts, 2007)
In 1998, Tufts chemistry professor David Walt co-founded San Diego-based Illumina, which staked an early claim in the SNP genotyping field. Now he’s helping to put together a local startup, Quanterix, with aims to build single-molecule and single-cell analysis systems for drug discovery and diagnostics. Arch Ventures, Bain Capital 
Ventures, and Flagship Ventures are all investors.

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