—Merry Christmas, Troy Wilson! Japan’s Takeda Pharmaceutical agreed to pay $190 million upfront, plus another $120 million in future milestone payments, to acquire Intellikine, the San Diego biotech that CEO Wilson co-founded in 2007. Takeda wants to combine Intellikine’s portfolio of small molecule drugs in the PI3 kinase pathway, a hot target in cancer biology, with its Cambridge, MA-based Millennium: The Takeda Oncology Company.

—San Diego’s Zogenix (NASDAQ: ZGNX) said it completed a series of meetings with FDA regulators about its new drug candidate, an extended-release and acetaminophen-free formulation of the painkiller hydrocodone (Zohydro). Zogenix said it hopes to submit a new drug application for its opioid early in the second quarter of 2012.

—San Diego specialty drugmaker Somaxon Pharmaceuticals (NASDAQ: SOMX) said it hired an investment banking firm to evaluate the possible sale of the company and other strategies “to maximize shareholder value.” After launching doxepin (Silenor) last year as a treatment for difficult insomnia cases, Somaxon has encountered unexpected competition from generic drugmakers. The alternatives under consideration include selling Somaxon or its doxepin-related assets, forming a partnership, or pursuing other collaborations related to the prescription or over-the-counter rights to the drug.

—San Diego’s Trius Therapeutics (NASDAQ: TSRX) said its lead antibiotic drug candidate, tedizolid phosphate, met the main goal of its pivotal clinical trial. A study of 667 patients showed that the Trius antibiotic was roughly equal to Pfizer’s linezolid (Zyvox) when treating acute skin and skin structure infections.

— In his Intellectual Capital column, Steve Chapple profiled Steve Jurvetson, managing partner of the Menlo Park, CA, venture firm Draper Fisher Jurvetson. The 44-year-old Jurvetson led the firm’s investments in San Diego’s Synthetic Genomics and its agricultural spinoff, Agradis, as well as Genomatica, which has been developing ways to use bacteria and sugar to make chemicals. Jurvetson told Chapple, “San Diego’s ground zero for the renaissance that I call Biotech 2.0.”

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San Diego-based Zogenix, a specialty pharma that has been selling its first product (a fast-acting migraine drug in a single-dose injector) for 22 months, is getting ready to diversify its portfolio.

As we reported in August, Zogenix successfully completed its late-stage safety and efficacy trials for an extended-release formulation of the painkilling drug hydrocodone bitartrate (Zohydro). Earlier this month, Zogenix executives told me they are doing the final analyses of their clinical findings for the drug, which is intended to provide lasting relief for people with chronic pain. Zogenix says it plans to submit a new drug application (NDA) in early 2012.

If Zogenix wins FDA approval, the company says it could begin marketing for its second product in 2013, calling it the first extended-release painkiller in the hydrocodone class—a drug category that includes acetaminophen/hydrocodone (Vicodin) and acetaminophen/oxycodone (Percocet). Zogenix says its pain-killer also would be the first “single-entity” hydrocodone (i.e. acetaminophen-free), which became a relevant selling point earlier this year, when the FDA announced a limit on how much acetaminophen could be used in combination drugs and required liver toxicity warnings.

With its clinical trials basically completed, Zogenix CEO Roger Hawley says the company plans to meet with FDA regulators in coming weeks in preparation for its NDA submission sometime after January 1. (The company also plans to release its third-quarter earnings on Nov. 10.)

Zogenix has based its core, long-term strategy on its needle-free DosePro technology, which uses pressurized nitrogen gas to drive a liquid jet of a prescribed drug under the skin in less than 1/10th of a second. The FDA cleared the company to sell its first drug-and-device product, the DosePro with a fixed dose of the painkiller sumatriptan, in 2009. Zogenix plans to build its business on a series of similar drug-and-device combinations focused on diseases and disorders of the central nervous system, and could even license its DosePro technology.

The bad news is that each drug-and-device combo will require a separate FDA review. The good news, however, is that each combo is considered unique—and therefore eligible for patent protection. Even if patent protection for a particular drug has expired, Zogenix says it … Next Page »

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Our roundup of San Diego’s life sciences news is short and sweet this morning. Could these be the dog days of summer?

—Scientists from Seattle’s Theraclone Sciences, San Diego’s Scripps Research Institute, South San Francisco’s Monogram Biosciences, and the New York-based International Aids Vaccine Initiative (IAVI) have identified 17 new human antibodies that target a chink in the armor of HIV. Under their collaborative agreement, IAVI owns the rights to all the antibodies for potential development of an AIDS vaccine; Theraclone keeps commercial rights to the broadly neutralizing HIV antibodies for therapeutic purposes.

—San Diego-based Zogenix reported encouraging results from a late-stage efficacy study of hydrocodone bitartrate (Zohydro), an experimental extended-release pain-killer intended to treat moderate to severe chronic pain in patients who require 24/7 opioid therapy for extended periods. Zogenix says the pain-killer met its end point for efficacy and was safe and well-tolerated. If approved, the drug would be the first extended-release hydrocodone available without acetaminophen.

—San Diego-based TrovaGene, which was previously known as Xenomics, said last week it has regained development rights for transrenal technology for prenatal and cancer diagnostics. TrovaGene had licensed its technology to San Diego-based Sequenom (NASDAQ: SQNM) in 2008, only to learn that Sequenom had “mishandled” its clinical trials data. TrovaGene alleged in a 2009 lawsuit that Sequenom had deliberately falsified the data.

—In his BioBeat column, Luke says the volatility roiling the markets these days is not as bad as the 2008 financial crisis that triggered the great recession—despite all the scary talk. Even though biotech investments carry considerable risks, Luke says this is no time for life sciences investors to hide their cash under the mattress.

—DNA sequencing tools from companies like San Diego’s Illumina (NASDAQ: [[ticker: ILMN]]) and Carlsbad, CA-based Life Technologies (NASDAQ: LIFE) are improving so fast that it will soon be possible to generate the 3-billion-letter signature of a person’s complete genome for $1,000—and possibly in as little as 15 minutes. Xconomy has organized an afternoon conference with prominent leaders in this emerging field to explain the implications for personalized medicine. The event will be held Oct. 24, at the Byers Auditorium on UCSF’s Mission Bay campus. Online registration is here.

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Buying, Selling, Agreeing. San Diego’s life sciences companies conducted a lot of different transactions over the past week. We have a rundown for you.

—San Diego’s ResMed, which specializes in medical devices used to treat sleep apnea and related breathing disorders, said it acquired BiancaMed, a private Irish maker of sensor technology used to monitor sleep and breathing. Financial terms were not disclosed, but a ResMed spokeswoman told the U-T the deal represented a significant premium over the $15.8 million that all of BiancaMed’s investors—include ResMed—previously put into the company.

—-The executive chairman of San Diego’s aTyr Pharma, John Mendlein provided an overview of an idea he conceived that would enable nonprofit disease foundations to help fund aTyr’s R&D, along with big government agencies and privately held pharmaceutical and biotech companies.

—ActivX business development executive Robert Hillman alerted me yesterday to just-published findings, which the San Diego-based unit of Japan’s Kyorin Pharmaceutical said validate its KiNatiV technology. Hillman says the technology uses probes that interact and bind with kinases within cells of any tissue from any species, enabling ActivX to use sophisticated mass spectroscopy to identify key attributes of kinases that can’t be obtained any other way. In a statement, the company says, “Given the utility of kinase inhibitors as research tools and promising agents for molecular-targeted therapy, the opportunity to characterize their interactions with native endogenous kinases undoubtedly represents a significant step forward.”

—San Diego’s Cadence Pharmaceuticals (NASDAQ: CADX) got a new headache, after the FDA disclosed that an unidentified competitor wants to bring a generic version of Cadence’s pain reliever to market in the United States. The FDA allowed Cadence to start selling its injectable formulation of acetaminophen to hospitals just nine months ago.

—Life Technologies (NASDAQ: LIFE), the Carlsbad CA-based giant in biomedical diagnostics, settled an intellectual property dispute with Fluidigm (NASDAQ: FLDM), the South San Francisco maker of microfluidic instruments used to identify rare and valuable cells.

—San Diego’s CareFusion (NYSE: CFN) agreed to pay $150 million to acquire Rowa, a German maker of robotics used in pharmacies for the automated high-speed storage and retrieval of pre-packaged pharmaceutical products. CareFusion said the buyout offers an opportunity for the company to expand its Pyxis line of products in markets outside the United States.

—OncoSec Medical, a three-year-old San Diego company developing a proprietary electroporation technology that’s intended to make cancer drugs more effective, raised $3 million through a private stock placement. The company trades on the over-the-counter bulletin board as ONCSD.

—San Diego-based Apricus Biosciences (NASDAQ: APRI) sold BioQuant, its contract research organization (CRO) subsidiary, to BioTox Sciences for $5 million in up-front and future earn-out payments and a potential to get as much as $20 million over the next 10 years. Apricus Bio said it retained all NexMed-related research conducted by Bio-Quant as well as BioQuant’s profitable diagnostic kit business. Apricus, which was previously a New Jersey life sciences company known as NexMed, moved to San Diego after it acquired BioQuant about eight months ago.

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San Diego-based Cadence Pharmaceuticals (NASDAQ: CADX) won FDA clearance in November to start selling the first intravenous form of a common pain reliever, and it’s already attracting competition from a generic rival.

The FDA’s website was updated today to show that another company is seeking to sell a generic version of injectable acetaminophen, which Cadence markets under the brand name Ofirmev. The FDA website didn’t disclose the name of the company seeking to bring the generic treatment to the market. Cadence, in a regulatory filing, noted that its drug is covered by two patents. The product in question here is different than the acetaminophen tablets you can find at every corner drugstore, marketed under the name Tylenol.

“We firmly believe in the strength of our patents. We anticipated challenges and are prepared to vigorously defend our intellectual property rights to Ofirmev,” said Cadence CEO Ted Schroeder, in an e-mailed statement.

No doubt, Cadence has good reason to gear up for a legal battle to defend its patents. Its reformulated version of acetaminophen, used in hospitals, is the company’s only product that is currently available for sale on the U.S. market. Cadence has positioned the new drug as an option for hospital-based patients who can’t take oral pain relievers, and as an alternative to opioid-based narcotic pain relievers that can be addictive and cause side effects, like chronic constipation. Cadence has reported strong initial demand from hospitals for the product. The company has said it expects its drug to win a spot on the preferred drug lists of 1,000 to 1,200 hospitals by year’s end, compared with its original forecast of 800 to 1,000 hospitals.

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Cadence Pharmaceuticals (NASDAQ: CADX), the San Diego-based maker of an intravenous pain reliever, said it has raised $86.2 million through an underwritten stock offering. The company sold 11.5 million shares at $8 apiece, and it may raise more if its underwriters exercise options to buy another 1,725,000 shares over the next 30 days, the company said. Cadence was in the fortuitous position to raise more money about a week after it won FDA approval for its first marketed product, an IV version of acetaminophen (Ofirmev) that it plans to sell to hospitals as an alternative to potentially addictive opioid-based pain meds.

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The question with the life sciences roundup this week is not so much, “Where to begin?” as it is “Where can we resume?” With the closure of Biogen Idec’s San Diego operation, local business leaders say it’s now a matter of picking up the pieces and starting over.

— Weston, MA-based Biogen Idec (NASDAQ: BIIB) said it plans to close down its San Diego cancer R&D center as part of a major restructuring in which it is cutting 13 percent of its workforce and getting rid of 11 drug development programs.

—Biogen Idec CEO George Scangos, who took the helm less than four months ago, told Xconomy’s Ryan McBride he wants to make Biogen more like a biotech and less like a pharmaceutical firm. As part of that, Scangos is divesting the company’s cancer and cardiovascular drug pipelines to focus on developing drugs for neurological disorders.

—Reaction among local business leaders in San Diego tended to be on the fatalistic side—or maybe just pragmatic, with Biocom CEO Joe Panetta saying the local talent cut loose will go on to start new San Diego biotech companies. Still, Idec Pharmaceuticals founder Ivor Royston voiced a common sentiment, telling The San Diego Union-Tribune, “It’s disappointing that we can’t develop a major pharmaceutical company that stays here.”

—On the plus side, San Diego’s Cadence Pharmaceuticals (NASDAQ: CADX) won FDA approval to begin selling an intravenous form of the pain reliever acetaminophen (Ofirmev) for use in hospitals. Cadence said it plans to introduce the drug in the U.S. by the end of March.

—Luke profiled RF Surgical Systems, a Bellevue, WA-based company with an engineering center in San Diego, which is developing surgical sponges with radio-frequency tags embedded that makes it easier to track the dozens of sponges that might be used in surgery.

—Synthetic Genomics‘ founding CEO, J. Craig Venter, explained to scientists at the NASA Ames Research Center in Mountain View, CA, how rapid sequencing of genes could help the space agency better select astronauts who can cope with confinement in space during long flights.

—The TEDMED conference returned to the San Diego area last week, with dozens of talks over the four-day event. Peter Daszak, a disease ecologist and president of the New York-based EcoHealth Alliance, says approximately 75 percent of emerging infectious diseases that affect humans today originated in wild or domestic animals.

—San Diego-based Adventrx Pharmaceuticals (NYSE Amex: ANX) submitted a new drug application to the FDA for vinorelbine, its reformulated chemotherapy drug.

—Good news for San Diego’s Ligand Pharmaceuticals (NASDAQ: LGND): Japan’s Ministry of Health, Labor, and Welfare approved partner GlaxoSmithKline’s application for eltrombopag (Revolade), a drug developed to treat a blood disorder called chronic idiopathic thrombocytopenic purpura (ITP).

—David Schlotterbeck said he’s retiring on February 28 as chairman and CEO of San Diego-based CareFusion (NYSE: CFN).

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Cadence Pharmaceuticals had to wait a little longer than it wanted, but today it got its wish.

The San Diego-based biotech company (NASDAQ: CADX) said today it won FDA clearance to start selling an intravenous form of the pain reliever acetaminophen (Ofirmev) for use in hospitals. The drug, known in its over-the-counter form as Tylenol and Excedrin, has never cleared for sale before as an intravenous form in given in U.S. hospitals.

The approval is a big deal for Cadence, because this represents its first marketable product in the U.S. It’s also a mark of perseverance, given the company suffered two regulatory delays in the past year. The new treatment offers an alternative for patients who can’t take oral pain relievers in the hospital, and provides medical personnel another alternative to opioid-based pain relievers that can be addictive and cause serious side effects, like chronic constipation.

Cadence now plans to introduce its new drug to the U.S. market before the end of March, CEO Ted Schroeder said in a statement. Cadence doesn’t have the European rights to the drug, although acetaminophen is approved there, and has the most market share among injectable pain relievers in hospitals, Cadence said.

“The approval of Ofirmev is a significant milestone for Cadence as we advance our mission to improve the lives of hospitalized adults and children,” Schroeder said in the statement.

The last time I talked with Schroeder in depth about the market potential of the IV acetaminophen, a lot of things were different, including the drug’s brand name. At that time, Wall Street was ballparking the price at $8 a dose, and the overall market opportunity in the U.S. at about $500 million. Cadence’s market research at the time suggested that as many as 70 percent of patients undergoing surgery complain that existing drugs don’t control their pain well enough, and the company was hoping to position its treatment as a safer alternative.

Cadence plans to discuss the approval and its commercial plans on a conference call with investors at 5 pm Eastern/2 pm Pacific today.

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We saw a spate of deal-making in the past week. Those developments and more are summarized for you here.

—Avalon Ventures, one of the few San Diego venture capital firms that continues to invest in early-stage life sciences companies, embarked on fund-raising for its ninth venture fund with the intention of raising $150 million from its investment partners. The fund will split its investments between life sciences and Web and wireless companies.

—Erin identified four San Diego life sciences companies that raised less than $1 million in March. Leading her under-the-radar deals list is Tracon Pharmaceuticals, which is developing treatments for cancer and age-related macular degeneration.

—Sequenom (NASDAQ: SQMN) said a federal judge in San Diego approved its $14 million class-action settlement with shareholders who sued the company after it retreated from plans to introduce a diagnostic test for Down syndrome due to “employee mishandling” of R&D test data and results

—Cadence Pharmaceuticals (NASDAQ: CADX) re-submitted its new drug application for an IV form of acetaminophen (Ofirmev) to the FDA. In February, the agency told Cadence it could not approve the drug because it found deficiencies during its inspection of third-party manufacturer, Baxter International.

—Schrödinger, a New York and Portland, OR-based maker of chemical-simulation software for drug development and research, received a $10 million equity investment from Bill Gates through Cascade Investment. The company has an office in San Diego.

—Althea Technologies, a contract development and manufacturing company focused on biologics, acquired the assets and IP portfolio of Waltham, MA-based Altus Pharmaceuticals for an undisclosed price. Althea said applications of Altus’ technology range from therapeutics to protein purification and catalysis.

—Luke profiled Proteostasis Therapeutics, a Cambridge, MA-based biotech working on drugs for Alzheimer’s disease and Parkinson’s disease. Jeffery Kelly of the Scripps Research Institute in San Diego is one of the scientific founders of the company.

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Cadence Pharmaceuticals (NASDAQ: CADX), the San Diego-based developer of a pain reliever for use in hospitals, said today it has re-submitted its new drug application for the IV form of acetaminophen (Ofirmev) to the FDA. The company’s earlier application was delayed on February 10, when the FDA said it found deficiencies on an inspection of a third-party manufacturer. Cadence said it met with the FDA on April 16 to discuss the deficiencies found in the letter, and the agency didn’t require any new studies.

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The integration of information technology and life sciences is well underway in San Diego, judging from the past week’s headlines. We’ve summarized it all here.

—Illumina (NASDAQ: ILMN) CEO Jay Flatley chatted with Luke about the outlook for the gene-sequencing business, among other things. Flatley has an interesting take on the business potential of bioinformatics and offers his prediction on when we’ll see the $1,000 genome.

—Medsphere Systems Chief Operating Officer Rick Jung told me the Carlsbad, CA-based provider of electronic medical records software expects to triple its bookings this year, thanks to the impetus the field is getting from federal stimulus funds. The company’s subscription software is based on technology developed by the Veterans Health Administration.

—Xconomy had a great event with four longtime life sciences innovators—John Mendlein, chairman of Fate Therapeutics; Paul Schimmel, Scripps Research Institute scientist and serial entrepreneur; Fred “Rusty” Gage, Salk Institute for Biological Studies researcher; and Dan Bradbury, CEO of Amylin Pharmaceuticals (NADSAQ: AMLN)—sharing their thoughts on where San Diego has been and where it’s going. Could bioinformatics be the next big opportunity? Luke summarized their comments.

—CareFusion (NYSE: CFN), a San Diego-based medical device company, said that it would acquire Medegen, a maker of disposable systems for delivering medication intravenously, for $225 million in cash.

—Ryan profiled DR Systems unit eMix, a company that provides Web-based delivery of radiological images. The company is entering a field that is rapidly heating up.

— Michael L. Eagle, a former manufacturing vice president at Eli Lilly, joined the board of Cadence Pharmaceuticals (NASDAQ: CADX). The FDA recently told Cadence it could not approve its intravenous acetaminophen because of manufacturing problems. The drug is being produced by a third-party manufacturer, Baxter International.

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San Diego-based Cadence (NASDAQ: CADX) disclosed two weeks ago that the FDA could not approve the company’s pain reliever because of manufacturing problems, but the company didn’t provide any details. Now the FDA inspection report on the manufacturing plant has surfaced—and the details aren’t pretty.

The FDA found numerous deficiencies in the production process and discovered that one of three batches of Cadence’s intravenous acetaminophen was contaminated with a piece of nylon, three PETs (a polymer used to make bottles or clothing) and human skin. The drug is being produced for Cadence by Baxter Healthcare, a unit of Baxter (NYSE: BAX), at a factory in Cleveland, MS.

Intravenous acetaminophen is intended to be Cadence’s flagship product. Cadence licensed the drug from Bristol-Myers Squibb (NYSE: BMY), which sells intravenous acetaminophen in Europe under the name Perfalgan.

Cadence hopes to market the drug to hospitals in the U.S. as an alternative to opioid-based pain relievers, which can be habit-forming and can cause other side effects, such as constipation. Patients recovering from abdominal surgery can’t swallow the acetaminophen pills or capsules that are currently available. It should be noted that while acetaminophen isn’t addictive, it can cause liver damage.

The FDA inspection report states that Baxter must sequentially produce three acceptable batches of intravenous acetaminophen in order for the drug to receive FDA approval. So far, it seems, Baxter has failed to do so.

The report states: “The firm did not successfully produce three sequential batches for NDA submission nor did they (sic) process … Next Page »

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Some local biotechnology companies landed funding deals during the past week. We’ve got that and other highlights below.

—Tioga Pharmaceuticals raised $18 million in private equity to fund a late-stage clinical trial of asimadoline, its experimental drug for irritable bowel disorder.

—San Diego received $4.95 million of $225 million in stimulus funding awarded nationwide to increase educational, training, and placement services for people seeking local life sciences and health care jobs.

—The FDA told Cadence Pharmaceuticals (NASDAQ: CADX) it found production problems at the contract manufacturing plant that produces Cadence’s intravenous form of acetaminophen, a situation that must be rectified before the drug can be approved.

—Carlsbad, CA-based Verdezyne raised $9 million in an ongoing $15.2 million venture round. The industrial biotechnology company will use the funds to validate its technology for making adipic acid, a key feedstock chemical for production of nylon.

—There was some good news for a change from Sequenom (NASDAQ: SQMN), which said it launched a non-invasive fetal sex determination test.

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Cadence Pharmaceuticals’ plans to market an intravenous form of acetaminophen received another regulatory setback today. The FDA told the San Diego-based company that it could not approve the drug because of manufacturing problems at a plant where the drug is made.

The company’s shares dove nearly nine percent to close at $9.46.

Cadence (NASDAQ: CADX) said that the FDA discovered the problems during an inspection of the facility on February 5. The factory is operated by a third party manufacturer, which intends to respond promptly to the FDA, Cadence said.

In a press release, Cadence said it plans to request a meeting with the FDA to make sure the manufacturing deficiencies are addressed. The FDA did not request additional studies of the drug or raise any safety or efficacy issues, Cadence said. That’s a sign the setback could be temporary.

In November, the FDA extended by three months its deadline for completing its review of Cadence’s application to market the intravenous pain reliever. The deadline was extended to give the agency time to review additional clinical pharmacology data Cadence submitted at the request of the FDA.

Cadence developed the drug for use in hospitals as an alternative to opioid-based pain relievers, which can be habit-forming and can cause other side effects, such as constipation. Patients recovering from abdominal surgery can’t swallow the acetaminophen pills or capsules that are currently available.

Cadence plans to position its drug as a safer option to opioid drugs. However, acetaminophen also carries side effects, including … Next Page »

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Drug development programs got extended at two San Diego life sciences companies, while others had some good news on the fund-raising front. We wrap it all up for you here.

—Fate Therapeutics, a startup working to supply “industrialized” stem cells for the pharmaceutical industry without using embryos, said it raised $30 million in venture capital. That brings the total amount raised by the San Diego-based company to about $50 million since its inception two years ago.

—Cadence Pharmaceuticals (NASDAQ: CADX) said the FDA has delayed its review of the San Diego company’s intravenous pain reliever by three months, to Feb. 12. Cadence provided additional data to the FDA after an advisory panel raised concerns about liver damage from excessive doses of acetaminophen. But Cadence said it remains confident it will win FDA approval of its drug, which contains acetaminophen.

—Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) and its Big Pharma partner, Genzyme (NASDAQ: GENZ), have extended the timeline for their much-anticipated cholesterol-lowering drug by nearly a year. The companies reported encouraging results from a clinical trial, but noted that four out of 34 patients saw their liver enzymes increase to three times normal, a sign of potential liver damage. The companies plan to tinker with the dose of the injectible drug in future trials.

—San Diego-based NextImage Medical, a developer of a Web-based system for scheduling and managing diagnostic imaging services, reporting raising $5 million in a venture round led by Chrysalis Ventures of Louisville, KY.

—San Diego-based Altair Therapeutics, a company developing inhalable drugs to block inflammatory proteins involved in asthma and other respiratory diseases, has closed on the second part of a Series A venture financing, bringing the total amount raises this year to $17 million.

—San Diego-based Cyntellect, which makes work stations used by biotechs for cell analysis, purification, and processing, raised $15.5 million so far in a secondary round that aims to raise a total of $18.6 million, according to a recent regulatory filing.

—GenVault, a Carlsbad, CA-based company that markets dry-storage technologies that allow scientists to store biological samples at room temperature, said it expects to break even by the end of next year. The startup has raised about $32 million so far.

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San Diego-based Cadence Pharmaceuticals (NASDAQ: CADX) said today that the FDA has pushed back its deadline for reviewing the company’s intravenous pain reliever by three months. The FDA’s new deadline for completing its review of IV acetaminophen is now Feb. 12. The company said it remains confident it will win FDA approval, although shares fell 5 percent today on the news.

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Biotechnology start-ups have long been seen as fearless innovators, embracing experimental technologies, like gene therapy, that big pharmaceutical companies won’t touch. But the news flow from San Diego this summer suggests the industry may have become a bit more cautious. More and more companies, it seems, are focused on reviving or repurposing older drugs – and avoiding the risks of inventing a medicine entirely from scratch.

Take Cadence Pharmaceuticals, (NASDAQ: CADX) which is developing an intravenous pain reliever containing acetaminophen, the active ingredient found in Tylenol. Another San Diego company, Somaxon Pharmaceuticals (NASDAQ:  SOMX), is working on a sleeping pill that contains the old antidepressant drug doxepin.

Then there is Avanir Pharmaceuticals (NASDAQ: AVNR), located just across the San Diego border in the Orange County community of Aliso Viejo. It hopes to market a tablet for a side effect of ALS and Parkinson’s disease that contains two existing drugs – dextromethorphan, an ingredient in over-the-counter cough medication, and quinidine, an old drug for treating irregular heart rhythms.

Working on existing drugs has some obvious advantages. Because the drugs have already been approved, companies have access to mounds of data to guide their development programs. In some cases, they may be able to forgo some pre-clinical tests or even clinical tests.

“You are dealing with known chemical entities. So from a baseline perspective, you are ahead of the curve. You do have a sense of how the compounds work, and a large amount of data,” Avanir CEO Keith Katkin tells me.

Getting a running start in this way can save start-ups many thousands or millions of dollars in research and development costs—and reduce the risk of failure. It’s a compelling strategy, particularly in an economy that has been brutal for more traditional biotechs. Over the last few months, we’ve seen La Jolla Pharmaceuticals (NASDAQ: LJPC) wind down its operations, and TorreyPines Therapeutics (NASDAQ: TPTX) announce a merger agreement to avoid a similar fate. The troubles aren’t confined to San Diego; to the north in Seattle, gene therapy pioneer Targeted Genetics (NASDAQ: TGEN) is fighting for survival.

But if the chances of losing big are lower, so are the odds of winning big.

A recycled drug isn’t likely to become a multibillion-dollar blockbuster like Genentech’s Avastin, a cancer medicine invented entirely in-house. That said, few drugs are as successful as Avastin. And the revenue potential of some reformulated drugs isn’t shabby; some analysts think Cadence’s intravenous acetaminophen could bring in $500 million a year.

So retooled drugs may become successful products – but are they innovative ones? It’s an important question to Xconomy, and I asked it of Eckard Weber, a venture … Next Page »

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We saw a couple of San Diego’s life sciences companies successfully raise capital in the past week. But a couple of others experienced problems that would have been difficult to anticipate.

—Sciele Pharma, an Atlanta, GA, unit of Japan’s Shionogi & Co. left San Diego’s Victory Pharma at the altar last week, after announcing in May that it would acquire Victory Pharma for $150 million. Sciele said only that the cancellation was due to an unforseen development after the agreement was signed. However, Denise found that an FDA advisory committee’s call for banning drugs that combine acetaminophen and narcotics could affect two of the pain relievers marketed by Victory Pharma.

—San Diego’s Sorrento Therapeutics, which raised $2.3 million in June, announced it has arranged a reverse merger with QuikByte Software, a Florida company with registered securities but is no longer in business. Once the merger is completed, Sorrento Therapeutics will take over the dormant shell company to become a publicly traded company. QuikByte will officially be renamed and relocate its headquarters to San Diego. The deal, which is expected to close by the end of September, is subject to QuikByte getting an aggregate investment of $2 million. Sorrento Therapeutics specializes in new methods for developing fully human monoclonal antibodies. Antonius Schuh will continue to head the startup as CEO.

—Telegraph Hill Partners, a San Francisco private equity firm, has put $5 million in venture funding into Poway, CA-based Nexus Biosystems, a four-year-old biotech. Nexus specializes in making automated sample storage and retrieval systems for use by biotech laboratories in storing biological samples.

—TorreyPines Therapeutics is trying again today to muster enough shareholder votes to approve a liquidation plan for the San Diego biotech. The company had to continue its special shareholder meeting last week after failing to get a simple majority of shareholder votes to approve a measure to dissolve the company.

—Carlsbad, CA-based biomedical diagnostics startup Helixis has raised $5.5 million out of a planned secondary round of $6.5 million in venture capital funding. The company plans to commercialize advanced molecular diagnostic technology developed by two prominent Caltech scientists.

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Victory is not yet in sight for San Diego’s Victory Pharma, a specialty drug company focused on pain relievers. A Japanese drug marketer backed out of a $150-million deal to acquire Victory this week, leaving the San Diego pain specialist in need of solace and a new game plan.

Sciele Pharma said in a press release that the companies called off the acquisition because of “an unforeseen development that occurred after the agreement was signed.” Sciele, an Atlanta, GA, unit of Japan’s Shionogi & Co., didn’t elaborate and Victory spokesman and CFO David J. Parker did not return calls.

Although the reasons for the breakup are a mystery, it is worth noting the deal fell apart less than two weeks after an FDA advisory committee called for tougher restrictions on drugs containing the pain reliever acetaminophen, which is found in two Victory products. The FDA committee called for an outright ban on drugs that combine acetaminophen and narcotics, such as Victory’s Xodol, a combination of acetaminophen and hydrocodone. Another Victory pain pill, Dolgic plus, combines caffeine, acetaminophen and butalbital, a barbiturate.

Acetaminophen is the active ingredient in over-the-counter pain relievers like Tylenol, and billions of doses of acetaminophen are safely used every year. But the advisory committee’s concern was focused on acetaminophen overdoses, which can cause liver damage and death. The FDA isn’t required to follow the advice of its committees, but the agency typically does.

Victory markets a total of four prescription drugs, so a ban on one or two of its products would be a significant blow. The venture-backed company had sales of $57 million in 2008, and its lead product was a sustained-release formulation of the pain reliever naproxen sodium. In announcing the acquisition of Victory in May, Sciele said its parent had targeted pain as an area for growth.

Victory’s pipeline includes a MGX006, an experimental treatment for severe nausea and vomiting. The company said this week that it expects to launch the drug during the first half of 2010, pending FDA approval. About 25 million prescriptions are written in the US annually for anti-emetic drugs, according to Victory, which sees opportunity in that market. With luck, MGX006 will help Victory Pharma live up to its name.

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We had some good news, mixed news, and odd news about San Diego’s life sciences companies over the past week. Read on for our full spectrum of coverage.

—San Diego’s Intellikine said in a recent regulatory filing that it had raised $16 million in venture capital, and plans to raise an additional $22.5 million. But that was only part of the story. The startup biotech, which is developing a new class of cancer drugs, said in a statement yesterday it actually has closed on $28.5 million in the current venture round, and up to $22.5 million can be accessed, depending on Intellikine’s ability to meet certain performance goals. The company also identified the four new investors who participated in the round: Novartis Bioventures, which is lead investor in the current round; Biogen Idec (NASDAQ: BIIB); FinTech Global Capital; and U.S. Venture Partners. Three existing investors also put money in: Sofinnova Ventures, Abingworth Management, and CMEA Ventures.

—When an FDA advisory panel recently recommended new restrictions on the pain reliever acetaminophen, Luke checked in with San Diego’s Cadence Pharmaceuticals to see how that would affect its development of Acetavance—the first intravenous form of acetaminophen. Cadence CEO Ted Schroeder said it’s not a concern, however, because clinical trials showed Acetavance the intravenous treatment provided effective pain relief at lower doses than the levels that raised safety concerns for the FDA panel. Cadence, which is awaiting FDA approval for the pain reliever, plans to market it to hospitals as a safer alternative to narcotics for patients who can’t take oral medications.

—San Diego’s Somaxon Pharmaceuticals (Nasdaq:SOMX) says the FDA has accepted the company’s revised new drug application for its insomnia drug doxepin (Silenor). The biotech also raised about $6 million in a private stock placement, which should be enough to carry it through the next 12 months.

—San Diego’s Vical (NASDAQ:VICL), which is developing DNA-based vaccines, said it’s encouraged by early results from a mid-stage trial of a vaccine it’s developing for cytomegalovirus. But Vical said complete results from the study won’t be done until early 2010.

—San Diego’s Lpath (OTC:LPTN), which is developing antibody drugs for cancer, told Denise the dismissal of its outside auditor was an unfortunate case of bad timing. A spokesman for Lpath explained that the company decided to change accounting firms some time ago, but Lpath didn’t have a replacement auditor lined up before proxy ballots were printed. So Lpath asked shareholders at its June 24 annual meeting to vote to approve the retention of LevitZacks—then dismissed the firm five days later.

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