The life sciences industry is booming in the Boston area. Witness some of our headlines just over the past few weeks: Flagship Ventures closed a $270 million fund to invest in new biotech companies; startups RaNA and Warp Drive Bio raised significant VC rounds; pharma giant Merck led a $10 million financing of diagnostics firm Daktari. And last year, Pfizer built up its Kendall Square R&D hub and hired 400 new employees there.

So who are the entrepreneurs to watch over the next 10 years, and what can they teach the newest class of biotech executives? We’ll turn the spotlight on five of the region’s biotech CEOs at our next Boston life sciences event, “Xconomy Forum: New England’s Emerging Biotech Stars.” We have a great lineup of biotech up-and-comers, who will give presentations on their emerging companies at this event, which will be held April 4 at Biogen Idec’s campus in Kendall Square:

Chip Clark, CEO, Genocea Biosciences
Doug Fambrough, CEO, Dicerna Pharmaceuticals
Tillman Gerngross, CEO, Adimab
Joanna Horobin, CEO, Syndax Pharmaceuticals
Joseph Yanchik, CEO, Aileron Therapeutics

This afternoon conference will also feature keynote talks from George Scangos, the CEO of Biogen Idec (NASDAQ: BIIB), and Mark Levin, co-founder and partner at Third Rock Ventures.

And that’s not all. We’re also planning a panel discussion that will provide advice for securing research grants from non-profit foundations. We’ll hear from the Juvenile Diabetes Research Foundation, the Multiple Myeloma Research Foundation, and Dana Callow, managing general partner at Boston Millennia Partners a member of the board of the Leukemia & Lymphoma Society.

We hope you’ll join us for what’s sure to be a stimulating afternoon of discussions and networking on April 4. Register today for our special super-saver rate.

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Mark Twain used to toss around a saying about three kinds of lies. There are lies, damned lies, and statistics. This week in biotech, we saw some statistics that could lead some people to get a false impression that everything is just peachy in biotechland.

If you measure the state of life science innovation by the amount of money flowing in, things look swell. Venture capitalists poured $4.73 billion into 446 biotech companies last year, according to the MoneyTree report by the National Venture Capital Association and PricewaterhouseCoopers, based on data from Thomson Reuters. The venture industry association’s press release cheerily noted that overall venture funding jumped 22 percent last year. While software is still the No. 1 and faster-growing sector of the two, biotech held its own, with a solid 22 percent gain in dollars invested compared with a year earlier.

You have to dig deeper to see what’s really going on. There is still a good amount of money going toward late-stage development of drugs people started working on 10-15 years ago. But there is an alarming drop in support for today’s cutting-edge biotech startups. Last year, just 153 U.S. biotech and medical device startups got their first round of financing, the lowest amount of seed investment activity in 15 years, as reported by Ryan Flinn of Bloomberg News.

There’s something really wrong with this picture. Most any biologist will tell you we are living in a golden age of discovery, at a time when we will soon be sequencing entire human genomes for $1,000 in one day. We are able to ask questions about how life works that nobody could even imagine asking a few years ago. It ought to be the time to charge ahead with basic research, and early-stage R&D to test exciting new concepts in diseases like cancer, diabetes, Alzheimer’s, HIV, and more.

But everywhere you look, the story is about cuts, cuts, cuts. The National Institutes of Health, the primary government agency that supports basic biomedical research, used to write checks for one out of every three grant applications, but it’s now down to about one out of every six, NIH director Francis Collins said earlier this month at the JP Morgan Healthcare Conference. Pharma companies are cutting back on R&D, firing workers left and right, and leaning on cheaper outsourced vendors everywhere they can. As many as one-fourth to one-half of biotech venture capitalists are thought to be slowly going out of business, as they are unable to raise new investment funds. The same IPO investors that want to buy Facebook shares look at biotech stocks like a four-year-old looks at lima beans.

There are good reasons why we see all those things happening. Pharma companies have created enormous inefficiencies for themselves through mega-mergers, and now they need to spend years trying to get their houses in order. Biotech as an industry has overpromised and underdelivered, and many investors are tired of it. The FDA, stung by various drug safety scandals, has been cautious about approving new drugs (although there are signs that FDA leadership wants a more balanced approach). And of course, our society is still struggling to come to terms with healthcare reform, and the realization that it’s unsustainable to spend infinite amounts of money on healthcare.

John LaMattina

All that said, an entrepreneur or a bold Big Pharma executive is the kind of person who looks at that picture and believes he or she can overcome the hurdles, and form a plan to turn vision into reality. But there aren’t that many people out there with the can-do spirit, or guts, to put down real money behind really talented teams devoted to the discovery of new drugs. And because everybody’s talking about how to go from Phase I to Phase II with drugs people invented years ago, there’s a real possibility that once those projects run their course, we’ll all look around in 2020 and wonder where all the wonderful new drugs are going to come from.

“You can really get into a vicious cycle when you have to eat your own seed corn,” says John LaMattina, a senior partner with PureTech Ventures, and the former president of R&D at Pfizer.

There are exceptions, of course, with a few people trying creative new ways to plant seed corn. Third Rock Ventures and Atlas Venture are a couple of VC firms that have remained active, continuing to bet big on the edgiest stuff coming out of the labs. Most every Big Pharma company has set aside cash for corporate venture firms that are seeking to help fill the void being created by the shrinkage of traditional VC. Pfizer, Johnson & Johnson, Sanofi, Bayer, and deserve credit for working on creative new collaborations with top biomedical universities and research centers, which seek to minimize some of the problems with the fruitless alliances of the past. J&J made news this past week when it unveiled an incubator for 18-20 startups in San Diego which looks to fill up some lab space it had vacated through its own internal R&D cutbacks.

Right now, we are in an age of experimentation with new organizational structures for supporting biomedical R&D. The hope is that these new organizations can reduce the time, money, and high-risk profile that has made life sciences such a hit-or-miss investment over the years. Pharma companies know they don’t … Next Page »

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Biotech companies once dreamed of building soup-to-nuts operations that put everything under one corporate flag. You’d have research, development, marketing, manufacturing all together in one big team of bright people taking big risks. Think first-generation companies like Amgen, Genentech, Genzyme.

The days of starting companies like that are mostly in the past, thanks in part to the financial crisis of 2008, and the many losses investors have suffered pursuing those models. So even at a time when research is more exciting than ever, how exactly can people take advantage of it to build enterprises that make valuable new healthcare products?

This is one of the vital questions facing the biotech industry, and Xconomy is thrilled to bring a dream team of national leaders together on this theme in Seattle on April 3. This big new Xconomy event, “Reinventing Biotech’s Business Model” will be held from 2 pm to 6 pm on April 3 at PATH, in Seattle’s South Lake Union neighborhood.

The star-studded lineup includes a mix of people from around the country who are experimenting with a wide variety of new biotech models:

—Corey Goodman, partner, San Francisco-based venBio. Goodman is what you could call a biotech renaissance man. He was a Big Pharma executive who ran Pfizer’s biotech drug and innovation center. He’s been an entrepreneur, as co-founder of Exelixis and Renovis. He’s also been an academic, as a professor of neuroscience at Stanford University and UC Berkeley. Now he’s a venture investor with venBio, seeking to help pharma companies make some modest bets on biotech ideas with big potential.

—John Maraganore, CEO, Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY). Maraganore runs the leading developer of RNA interference drugs, which has recently revamped its strategy. While Alnylam made its name in the last decade by striking lucrative deals with Big Pharma partners who were enticed by the broad potential of its technology, those partners have scaled back. Alnylam is now zeroing in on developing its own drugs for several rare liver disorders.

—Kevin Starr, partner, Boston-based Third Rock Ventures. Starr is one of the key drivers at Third Rock, which has raised about $800 million since 2007 to bet on some of the most innovative startups the industry has seen created in the past five years. Starr, who rarely makes public appearances, will offer some special insight into the various models Third Rock is employing to start companies based on cutting-edge biology. He’s also either the best or worst dressed biotech venture capitalist you’ll ever meet. He promises to show me where he buys his designer T-shirts the next time I’m in Boston, but I’m not sure I can pull off the look.

—Kathy Glaub, president, Berkeley, CA-based Plexxikon. Glaub was a key architect of one of biotech’s breakout success stories of 2011. Plexxikon used a strategy of partner early/partner often in the early 2000s, which wasn’t in favor at the time. But it enabled Plexxikon to raise a relatively small sum of venture capital, which paid off in spades when it was acquired by Daiichi Sankyo for as much as $935 million.

—Carl Weissman, CEO, Seattle-based Accelerator. Weissman is one of the local biotech leaders who’s been thinking lately about how to evolve the Accelerator model when it’s harder to find venture capitalists willing to bet big on startups, even when they hit scientific milestones. We’ll pair up Weissman for a chat with Bard Geesaman, the chief scientist at Acylin Pharma, one of Accelerator’s young portfolio companies.

—Also from the local contingent, we’ll feature a chat between Thong Le, the managing director of WRF Capital, and Bruce Montgomery, the chief executive of Seattle-based Cardeas Pharma. Le invested in Montgomery’s prior company, Corus Pharma, but now they’ve had to go about things differently in setting up Cardeas.

—Carol Gallagher, the former CEO of Seattle-based Calistoga Pharmaceuticals, has a great story about how her company was able to stay on a tight budget and generate enough data to convince Gilead Sciences to pay as much as $600 million for a new cancer drug. We’ll hear from Gallagher about some of the lessons she learned there.

—Heather Franklin, the former chief business officer of Seattle-based ZymoGenetics, will be on hand to talk about her experience getting a new startup with technology from the Fred Hutchinson Cancer Research Center, Blaze Bioscience, off the ground without help from deep-pocketed venture backers.

—Steven Tregay, the CEO of Watertown, MA-based Forma Therapeutics, has been on a roll of late, striking four partnerships over the past 14 months. Those partnerships with companies like Genentech, Johnson & Johnson, and Boehringer Ingelheim have enabled Forma to build a 100-person drug discovery operation with capability to rival some Big Pharma companies, after raising the relatively small sum of $33 million in venture capital. And he’s experimenting with ways to pay off his VCs without having to go public, or sell the whole company.

—Last but not least, we’ll feature Brian Atwood of Versant Ventures and one of the key entrepreneurs Versant has backed in the past year, Peppi Prasit. Versant has structured a new incubator around Prasit called Inception Sciences, which will flesh out many of his new drug discovery ideas, and enable Big Pharma companies to buy them a la carte, without having to acquire all the administrative overhead that usually comes with biotech companies.

These folks will tell their stories in a series of fast-moving case studies and interactive chats (no PowerPoint). We will only have space for about 250 attendees at PATH, and I expect this event will sell out in advance of April 3. So I’d suggest getting your tickets early if you want to attend. As always, we are setting aside a limited number of discounted tickets for students and for people at startup companies with fewer than 20 employees. The super saver rate for everyone else will be available until Feb. 1.

This is one of the biggest and best events we’ve done the past four years at Xconomy Seattle, and one of two major public life science forums I’m planning for our region this year. I think this event could inject some great new ideas, and forge critical new connections for our local biotech community. I look forward to seeing you and many Xconomy readers there at PATH on April 3.

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Cambridge, MA-based Constellation Pharmaceuticals is announcing today that it has formed a major partnership with Roche’s Genentech unit, based in South San Francisco, to develop treatments for cancer and other diseases. The deal is worth $95 million to Constellation in the form of an up-front payment and research support over the next three years. Constellation—which was founded in 2008 and backed by Third Rock Ventures and other leading VC groups—may also receive milestone payments and double-digit royalties on any products that come out of the alliance.

This is by far Genentech’s biggest bet to date on epigenetics—the science of understanding and addressing molecular changes in cells that activate or de-activate disease-causing genes—says James Sabry, vice president of Genentech Partnering. “This is a a once-in-a-decade type of deal for us,” Sabry says. And while there are plenty of other startups working in the field, Genentech chose Constellation for the quality of its scientific progress so far, Sabry says. “Epigenetics is a huge evolving area of biology representing hundreds of new targets,” he says. “We actually sat down on the bench with Constellation’s scientists and we felt the quality of their work was akin to ours.”

For Constellation, the deal is a stamp of approval on a broad-based strategy that the company put in place the day it was founded, says CEO Mark Goldsmith. Constellation is pursuing three classes of enzymes that affect chromatin—the combination of DNA and the proteins that the DNA is wound around in the cell’s nucleus. Those enzymes are commonly referred to as “writers,” ”readers,” and “erasers,” because some place chromatin markers that control the epigenetic process, others read those marks, and still others erase them. While several startups have targeted one or another of the classes, Constellation has developed a platform that can uncover drug candidates in all three of them. “From the outset we have emphasized breadth and depth as a differentiating approach,” Goldsmith says.

Genentech's James Sabry

The two companies will collaborate to identify drug targets and lead molecules in a joint steering committee. The initial focus will be oncology, though the companies expect to identify other disease targets as they learn more. A team of Genentech scientists will work closely with Constellation’s researchers, with the common goal of moving as many drug candidates forward as possible, Sabry says. “They will feel like we’re all one company,” he says.

Goldsmith adds that Genentech’s input will be invaluable to furthering the startup’s progress. “The momentum we already established in R&D is now married with the rigorous scientific input of Genentech, which is well known for its ability to translate scientific benefits to patients,” he says.

There are two features of Constellation’s deal with Genentech that make it stand out from other such drug-discovery alliances. First, Constellation will retain exclusive rights to its two most advanced programs, which focus on … Next Page »

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Chris Viehbacher has seen plenty of ideas come and go from people trying to shake up the pharma R&D model. No matter how much people have tried to fix things, it still takes a notorious amount of time, money, and risk to create new drugs.

Now, as the CEO of Paris-based Sanofi (NYSE: SNY), Viehbacher is blowing up the traditional R&D model at a huge, 110,000-employee company. Last year’s big strategic move was the acquisition of Cambridge, MA-based Genzyme, which gave Sanofi a lot more biotech products and expertise. Since then, Sanofi has done what a lot of other pharma companies have done—made cutbacks on its own internal research. And now the company is setting aside an increasing percentage of its $6.5 billion-a-year R&D budget for bets on collaborators doing edgy scientific work in universities and at biotech companies.

I sat down to interview Viehbacher last week at the JP Morgan Healthcare Conference in San Francisco, where we talked about the Sanofi R&D plan, and how the company can help support biomedical innovation more broadly outside its corporate walls. Here are excerpts from the interview, edited for length and clarity.

On Sanofi’s outreach strategy with U.S. researchers, particularly in the Boston area following the Genzyme acquisition:

One of the main rationales for doing the Genzyme deal was to have a strong presence in research in the U.S., and clearly the first choice is Cambridge. Our vision for research is one of open collaboration. How companies do research is evolving, and certainly we are evolving. Traditionally, we’ve had big research centers, and we are trying to get a lot more balance between internal research and external research. Right now, it’s about a 70/30 ratio between internal to external. My objective is to bring that to about a 50/50 balance.

That fits with a number of trends in research. First, there’s a lot of funding for new ideas drying up as venture capital is leaving biotech. Second, is that as we look for innovation, we look for where people are doing basic science experiments that are defining causes of diseases. What you are seeing is that a number of people in the value chain of research are specializing. Not everybody is trying to do everything.

In Cambridge, you’ve got all those things. Being the No. 1 life sciences employer in Boston is great, but we didn’t want to just do the same thing we did everywhere else, having everybody inside our walls. So we created this concept of a hub. There’s a core, with a lot of competencies that a big organization can bring, but the idea of a hub is that we can manage the relationships we have with everybody from Dana-Farber Cancer Institute to Harvard to MIT to the Joslin Diabetes Center to some of the biotechs we work with. And we put our own oncology research team in Cambridge. There’s a whole ecosystem in Boston, and we feel integrated and at the center of it.

On joining Third Rock Ventures and Greylock Partners in a $125 million financing of a new startup called Warp Drive Bio:

The Warp Drive Bio project is interesting because it demonstrates where we want to go. It was certainly an unusual deal for Sanofi, because essentially what we’ve done is jointly fund a startup biotech company. It was very much on the basis of saying we want to work with (Harvard University chemical biologist) Greg Verdine. Someone like that isn’t going to come work for Big Pharma, but we liked the science he was doing. We have a strong interest and expertise in natural products, and he had a genomics screening tool.

We will contribute expertise. I don’t want to be a venture capitalist, or have a venture fund, like some other companies do. But I want to actually partner, where we bring some of what we know, and combine it with what Warp Drive has. The fact that we are trying to bring people from Sanofi into the collaboration, at such an early stage of research, is unusual. The single factor for success will be whether you can take a company like Warp Drive, with a handful of people, and make it work with an organization of 110,000 people without smothering it.

On how Sanofi hopes to change traditional university/industry collaboration templates:

We have some interesting partnerships with UCSF, in diabetes, brain trauma, and oncology. When you look at UCSF, we are trying to do true collaborations. Sometimes you look at academic collaborations and it’s essentially outsourcing a true piece of the research. That’s not … Next Page »

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Development deals, clinical advances, startup funding, and new hires made up the New England life sciences news this week.

—Chelsea, MA-based Civitas Therapeutics, a spinout from the Waltham, MA, biotech Alkermes (NASDAQ: ALKS), said that its inhaled form of the Parkinson’s disease drug L-dopa performed well in a Phase 1 clinical trial. The study aimed to test the drug’s safety and whether the drug’s delivery to the lungs gets it into the bloodstream in levels that produce a therapeutic outcome.

—Serial biotech entrepreneurs Bob Langer (of MIT) and Omid Farokhzad (of Harvard Medical School) have founded their newest company, Blend Therapeutics, alongside MIT professor Stephen Lippard. Blend is reportedly backed by Flagship Ventures, New Enterprise Associates, and NanoDimension.

—Cambridge-based genomics analysis startup Knome named former NormOxys CEO Martin Tolar its new chief executive and landed a new contract from Johns Hopkins University.

—Watertown, MA-based Forma Therapeutics announced a cancer drug discovery partnership with Johnson & Johnson’s (NYSE: JNJ) Janssen Biotech, worth up to $700 million over time. That’s less than a week after Forma’s $65 million partnership with Boehringer Ingelheim was announced.

—Warp Drive Bio came out of the woodwork this week with $125 million in funding, and hopes to examine the genetic makeup of plants, animals, and other organisms to find hot new drugs. Cambridge-based Warp is backed by Boston firm Third Rock Ventures, Greylock Partners, and French pharmaceutical giant Sanofi, and has an elite roster of founders, including Harvard genomics expert George Church.

—Cambridge-based Flagship Ventures surpassed its initial $250 million expectation for its fourth fund, announcing the fund closed at $270 million. It will focus on investments in the life sciences and cleantech sectors.

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Boston area software and life sciences startups are starting off the new year right with a slew of financing, acquisitions, and partnerships news.

—Marlborough, MA-based Physicians Interactive Holdings received a $17 million pledge from Merck Global Health Innovation Fund to develop Web and mobile apps for connecting physicians and life sciences companies.

—Repeat biotech entrepreneurs Bob Langer and Omid Farokhzad founded a new startup, called Blend Therapeutics, along with Stephen Lippard. Blend is backed by $2.8 million from Flagship Ventures, New Enterprise Associates, and NanoDimension, according a FierceBiotech report.

—Last Friday saw a number of financings, some for quirkily named startups: $4 million more for Cambridge-based GrabCAD and $4.5 million for Cambridge-based Krush, $6 million for Boston- and Nashville-based Moontoast, $8.3 million for Linkwell Health, and $4 million for Novogy.

—Safari Books Online, a joint venture between O’Reilly Media and Pearson Education, acquired Threepress, a Boston area company focused on digital publishing tools. The price tag of the deal wasn’t disclosed.

—Woburn, MA-based LogMeIn (NASDAQ: LOGM), which makes remote access and customer support software, paid $16.5 million to acquire Kansas-based Bold Software, a developer of technology for live-chat systems and click-to-call customer service.

—A cluster of area digital marketing startups inked deals: Newton, MA-based Neolane raised $27 million, Boston-based … Next Page »

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Back in May, Xconomy wrote that two-year-old Foundation Medicine was making friends in high places, and today the Cambridge, MA-based startup did it yet again. Foundation announced that it has teamed with French pharmaceutical giant Sanofi (NYSE: SNY) to identify genetic biomarkers for oncology drug candidates, and potentially develop companion diagnostics that would help match the right patients with the right drugs.

This is Foundation‘s fifth major partnership to date. The company also has research alliances with Celgene (NASDAQ: CELG), Novartis (NYSE: NVS), and Johnson & Johnson (NYSE: JNJ), as well as a partnership it has not disclosed.

Foundation’s technology platform uses high-throughput DNA sequencing to analyze cancerous tissues for alterations in more than 200 genes. The company was incubated by Boston-based Third Rock Ventures, and its founding academic advisors came from the Broad Institute, the Dana Farber Cancer Institute, Harvard Medical School, and the Massachusetts Institute of Technology.

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Today a new company called Warp Drive Bio is starting up in Cambridge, MA, with a simple and powerful premise: Mother Nature may be the best source of blockbuster drugs—if only we can find new methods for unlocking her secrets. Warp Drive’s plan is to use genomics technology incubated at Boston-based Third Rock Ventures to discover new “natural products,” which are therapies derived from plants, animals, and other wild organisms.

Warp Drive is being launched with $125 million in funding from Third Rock and French pharmaceutical giant Sanofi (NYSE: SNY). Greylock Partners also participated in the financing. Warp Drive was co-founded by Greg Verdine, a Harvard University chemical biologist and venture partner at Third Rock, along with Harvard University genomics expert George Church, and biolochemist James Wells of the University of California at San Francisco.

The startup’s business model is distinctive in that Warp Drive will remain fully independent. It will retain rights to many of the assets it develops, and even have the freedom to pursue other partnerships beyond its Sanofi alliance. The funding is tranched, and contingent upon Warp Drive reaching milestones in developing the technology and proving it works.

Perhaps what’s most unusual about the deal is that it’s set up to ensure that Sanofi will acquire Warp Drive if certain milestones are reached. “Sanofi doesn’t just have the option to buy, they have the obligation,” says Alexis Borisy, a Third Rock partner (pictured at right) who is serving as interim chief executive officer of Warp Drive. “That decreases the financing risk for Warp Drive, and it decreases the liquidity risk for the VCs. We’re not at the whim of the IPO market.”

Warp Drive refers to its core platform as a “genomic search engine.” The company’s ultimate goal is to develop the technology to the point where it will be able to comb through naturally derived substances—such as plants and soil—and sequence the genomes … Next Page »

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Acquisitions and IPO announcements dominated the deals news in New England this week.

—Boston-based Third Rock Ventures put $34 million in Series A funding into Ember Therapeutics, a startup that’s developing drugs to fight obesity in a new way. Ember, also of Boston, is harnessing new understanding of the bodily tissue known as brown fat, which can help mammals burn off the more commonly known white fat tissue.

—Cerulean Pharma inked a $15 million Series D investment from new investor CVF, an affiliate of Henry Crown and Company, as well as existing backers Polaris Venture Partners, Venrock, Lilly Ventures, Lux Capital, and Bessemer Venture Partners. Cambridge, MA-based Cerulean’s lead drug is a so-called nanoparticle, a tiny chemical package designed to work its way into cancer cells and kill them.

—IBM made its 20th acquisition in the Bay State since 2003, with the purchase of Burlington, MA-based Emptoris, a maker of supply and contract management software. Emptoris has 725 employees across the globe and will become part of IBM’s software group. The financial terms of the acquisition were not disclosed.

—Coronado Biosciences  (NASDAQ: CNDO) started trading on the Nasdaq on Monday at an opening price of $6.50 per share. The formerly New York-based biotech, which moved to Burlington, MA in August, took an unconventional path to going public, by registering its private shares as common stock, rather than undergoing an IPO.

—Coskata, a cellulosic ethanol developer backed by Boston-area venture firms Advanced Technology Ventures and Greatpoint Ventures, filed documents with the SEC indicating its intent to raise $100 million in an initial public offering. The Warrenville, IL-based startup has raised $80 million in venture funding since founding in 2008, and is also backed by GE, Khosla Ventures, and Blackstone Group.

—Woburn, MA-based Excelimmune took in $12 million in financing from an undisclosed private investor to help fund the development of its molecules focused on fighting infectious diseases, like methicillin-resistant Staphylococcus aureus (MRSA).

—And in the week’s more shocking news, two speech software makers that had been battling in court over allegations like patent infringement and commercial bribery announced they would become one force. Burlington, MA-based Nuance Communications (NASDAQ: NUAN) is acquiring Cambridge-based startup Vlingo for an undisclosed sum. The deal enables the two to team up as players like Apple and Google and are focusing more on voice-enabled applications for mobile phones.

—A deal that had been talked about for more than half of this year finally went live. Newton, MA-based online travel company TripAdvisor officially began trading on the Nasdaq on its own (NASDAQ: TRIP), after being spun out by Bellevue, WA-based Expedia (NASDAQ: EXPE).

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New England saw a flurry of life sciences news this week, from venture firms, new startups, and established biotechs.

—Boston-based Avila Therapeutics presented data at the American Society of Hematology from early human trials of its lead cancer drug, AVL-292, which is on track to enter more extensive Phase 2 trials next year. This compound, a so-called covalent drug that bonds tightly to disease-causing proteins to shut down their activity over time, is targeting cancers such as chronic lymphocytic leukemia.

—Alnylam Pharmaceuticals (NASDAQ: ALNY) could be onto something in the field of RNA interference, a technology that has fallen out of favor in the industry, my colleague Luke wrote. The Cambridge, MA-based biotech reported at a scientific meeting last month that one of its experimental RNAi drugs was able to shut down production of a protein that causes a rare and deadly disease called TTR amyloidosis.

—ImmusanT, a new startup working on therapies for celiac disease, inked a $20 million Series A financing from Vatera Healthcare Partners. The Cambridge-based company is developing a vaccine and a diagnostic and monitoring test for the condition, which renders the protein gluten toxic in the body.

—Newton, MA-based AesRx kicked off human trials of its lead drug Aes-103, a treatment for sickle cell disease. A partnership formed with the National Institutes of Health helped the company get this far, after it struggled to raise venture funding.

—Boston-based Ember Therapeutics raised $34 million from Third Rock Ventures to develop drugs that fight obesity by burning off … Next Page »

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Obesity is one of the biggest public health problems of the 21st century, and now a Boston biotech startup is looking to fight it in an unorthodox way. The bet at Ember Therapeutics is that it can coax the body to burn off some of that unwanted fat.

The company is emerging from stealth mode today with a $34 million Series A financing from Boston-based Third Rock Ventures. The idea is to make drugs that take advantage of some of the new understanding about “brown fat,” a type of tissue that helps mammals to burn off the more familiar “white fat” tissue that stores excess energy. The company has recruited some big name advisors from the brown fat field, including Bruce Spiegelman of the Dana-Farber Cancer Institute, Patrick Griffin of The Scripps Research Institute in Florida, and Ron Kahn of the Joslin Diabetes Center.

Ember (not to be confused with the Boston wireless sensor network firm with that name) is being born during a rough time for the obesity drug business, as public companies like Arena Pharmaceuticals (NASDAQ: ARNA), Orexigen Therapeutics (NASDAQ: OREX), and Vivus (NASDAQ: VVUS) have all failed to win FDA approval for new weight loss drugs. Regulators have often cited underwhelming effectiveness, along with various safety concerns for pills that have potential to be taken by millions of people with a condition that isn’t immediately life-threatening. But obesity does lead to a wide variety of expensive, chronic health problems like diabetes, heart disease, arthritis, and depression. The potential market for an effective new weight loss drug is huge, as an estimated one-third of U.S. adults are obese and another one-third are considered overweight.

Lou Tartaglia

Third Rock’s bet is that it can come up with a more effective alternative through this new biology that seeks to help people burn off excess calories, rather than more traditional approaches that seek to work on the central nervous system by suppressing appetite.

“We can’t wait to get going,” says Third Rock partner Lou Tartaglia, the interim CEO of Ember.

Scientists have long known that newborns have a lot of brown fat, which is loaded with mitochondria that expend energy, and release heat to keep them warm. Most of this tissue disappears as people grow up, and adults begin to accumulate more “white fat” which stores excess energy from food we eat. But recent discoveries using positron emission tomography (PET) scans have shown that adults do retain some small amounts of brown fat tissue (usually along the back) which sends signals to burn excess white fat, Tartaglia says.

What’s interesting from a pharmaceutical perspective is that scientists have now identified biologic pathways that suggest it could be possible to “recruit and augment” the brown fat tissue that’s already operating in the body, Tartaglia says. Ember, which takes its name from … Next Page »

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New England startups working on drugs, security software, robots, laser weapons (seriously), and mobile fitness applications have reported a bundle of deals this week heading into Thanksgiving.

—Newton, MA-based Allena Pharmaceuticals, a new startup targeting protein therapeutics, premiered with a $15 million Series A financing. The funding came from Third Rock Ventures, Frazier Healthcare, and Bessemer Venture Partners.

—Area security software makers were busy in the past week. CounterTack, formerly of the DC area, announced a $9.5 million financing and its plans to move to Boston. The new money comes from Fairhaven Capital of Cambridge, MA, along with other private investors. Boston-based Rapid7, a security assessment software maker, pulled in a $50 million Series C round from new backer Technology Crossover Ventures.

—Cambridge-based Agios announced its oversubscribed $78 million Series C financing, from its drug-development partner Celgene (NASDAQ: CELG) and return investors Arch Venture Partners, Flagship Ventures, and Third Rock Ventures. Also participating in the deal were “three leading, large public investment funds,” whose identity Agios did not disclose.

—The week kicked off with a duo of deal announcements from Harvest Automation and TeraDiode. Billerica, MA-based Harvest, which makes robots that harvest shrubs, raised $7.8 million led by Entree Capital. And Littleton, MA-based TeraDiode, which makes lasers for defense and industrial applications, pinned down $10 million in Series B money led by Argonaut Ventures.

—Mobile app developer RunKeeper nabbed a $10 million financing round, led by new investor Spark Capital, with participation from existing investor O’Reilly AlphaTech Ventures and new investor Revolution Ventures (co-founded by AOL chairman Steve Case). The Boston startup said it would use the money to further develop a platform for plugging different health-focused applications and devices into its RunKeeper ecosystem.

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Clinical data, startup financings, and collaborations, oh my. It’s been a busy New England life sciences news week.

—Cambridge, MA-based Genzyme revealed that its experimental multiple sclerosis treatment, alemtuzumab (Lemtrada), significantly reduced relapses and disability in a Phase 3 trial where it was tested head-to-head against Rebif, a form of interferon sold by EMD Serono and Pfizer. The drug from Sanofi’s Genzyme reduced relapse rates by 49 percent and reduced the risk of worsening disability by 42 percent.

—Lexington, MA-based Avaxia Biologics recently announced a $2.2 million investment led by Cherrystone Angels in Providence, RI, with participation from Boston Harbor Angels and undisclosed individual investors. Avaxia is developing an anti-inflammatory drug by inoculating pregnant cows and collecting antibodies from their milk.

—Third Rock Ventures, Frazier Healthcare Ventures, and Bessemer Venture Partners led a $15 million Series A investment in Allena Pharmaceuticals of Newton, MA. The startup, whose team comes from the now Eli Lilly-owned biotech Alnara, is working on enzyme-based oral treatments for kidney and urologic diseases.

–Agios Pharmaceuticals of Cambridge took in $78 million in an oversubscribed Series C financing. The money comes from existing investors Arch Venture Partners, Flagship Ventures, and Third Rock Ventures, and Celgene (NASDAQ: CELG), who Agios has been collaborating with on developing cancer-starving drugs.

—Speaking of drug collaborations, Cambridge-based Aileron Therapeutics expanded a partnership it first inked with Roche in 2010. The two companies had been working on turning Aileron’s “stapled peptide” technology into cancer treatments in two programs, and announced this week that they would add a third, focused on inflammatory diseases.

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Cambridge, MA-based Agios said today it has secured $78 million in an oversubscribed Series C financing. Included in this round are Agios’s drug-development partner Celgene (NASDAQ: CELG), along with existing investors Arch Venture Partners, Flagship Ventures, and Third Rock Ventures. The company also attracted several new investors that it did not name, except to say they included “three leading, large public investment funds.”

Agios is working in the field of cancer metabolism, which is the study of enzymes that alter the metabolism of cancer cells by feeding them key nutrients. In April 2010, Summit, NJ-based Celgene formed a development deal with Agios worth $130 million, and on Oct. 5, it extended the deal to four years from three, for another $20 million. All in all, Celgene is taking a huge bet on a very early technology: Agios is still about two years away from having drug candidates that are ready for human testing.

In October, Celgene’s president of research, Thomas Daniel, told Xconomy his company has been particularly impressed by Agios’s research into a mutated gene called IDH1. The data so far, he says, suggests that the metabolite produced by IDH1 may influence epigenetics—the molecular changes in cells that turn genes on or off. Celgene markets two leading epigenetic drugs in oncology, azacitidine (Vidaza) and romidepsin (Istodax).

Agios said today that the new funding will help it expand into a class of genetic diseases known as IEMs, which are caused by mutations or defects in metabolic genes. These mutations cause substances to build up in the body and interfere with normal metabolic functioning.

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Allena Pharmaceuticals, based in Newton, MA, is announcing today that it has started up and raised $15 million in a Series A financing round, led by Third Rock Ventures, Frazier Healthcare, and Bessemer Venture Partners. The new company is pursuing protein therapeutics and is especially focused on kidney and urologic diseases. Its management team is stocked with veterans of Alnara, a biotech company that was purchased in 2010 by Eli Lilly for $380 million. Allena’s three lead investors were also backers of Alnara.

Taking a page from Alnara’s playbook, Allena is developing enzyme-based drugs that can be taken orally, rather than injected. They are designed to remain stable in the stomach and to deliver their therapeutic benefits from there—without ever getting distributed broadly in the body. “We want zero percent of the enzyme to end up in circulation,” says Alexey Margolin, CEO of Allena. “The beauty of this approach is it results in a low level of toxicity.”

Allena is targeting diseases that are caused by wayward “metabolites,” substances that the body produces during the digestive process. Margolin says he isn’t quite ready to reveal what diseases the company is working on, but he offers gout as an example of a metabolite-related disease. Gout, a type of arthritis, occurs when excess amounts of the metabolite uric acid build up in the blood. “With the right enzyme, you can destroy the metabolite without leaving the gut,” Margolin says. “For each bad metabolite, there is a good enzyme. It’s as simple as that.”

Allena’s scientists are developing techniques to improve the stability of enzymes, so they don’t get destroyed by the stomach before they can deliver their therapeutic payload. Robert Gallotto, the company’s chief operating officer, says the company is spending a lot of time studying its enzymes in animals, so “by the time we get to the clinic, we’ll know how they work, where they work, and to what degree they work time-wise,” he says.

Allena plans to announce its lead disease target in the coming months. Though some of the conditions the company seeks to treat may be rare, Margolin and Gallotta believe the market opportunities are vast. In kidney disease in particular, says Margolin, “there haven’t been new drugs for many years.”

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Merck veteran Keith Gottesdiener will become the new CEO of Boston-based Rhythm Pharmaceuticals, a Boston startup developing experimental drugs for the treatment of metabolic conditions such as obesity and diabetes, according to an announcement today.

Gottesdiener oversaw pivotal clinical trials as Merck’s former vice president and late-sage therapeutic group leader, and is joining Rhythm as it pushes two drug programs through clinical development. The biotech is navigating the crowded therapeutic field with two drug compounds it has licensed from the French biotech company Ipsen.

Rhythm’s compound RM-131 could enter a Phase 2 clinical trial early next year as a treatment for a complication of Type 1 and Type 2 diabetes called gastroparesis—a digestive disorder involving the abnormal emptying of the stomach. Rhythm is also aiming to file an FDA application by the end of this year to begin human testing of its compound for curbing food intake in severely obese populations who suffer from diabetes or are at risk of developing the disease.

Rhythm is backed by MPM Capital, New Enterprise Associates and Third Rock Ventures.

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