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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Medivation’s long shot for Alzheimer’s came up short today. The San Francisco-based company (NASDAQ: MDVN) said today its Alzheimer’s drug candidate dimebon failed in a pivotal clinical trial. Medivation and its collaborator, Pfizer, said they plan to quit developing the drug.

The bad news came from a trial known as Concert, which enrolled more than 1,000 patients with mild to moderate symptoms of Alzheimer’s, the neurodegenerative disease that impairs the memory and cognition of millions of elderly people. The drug failed to show a statistically significant benefit on a common cognition score, or a measurement of activities of daily living and self-care.

“We are disappointed in the Concert results and the implications for Alzheimer’s disease patients and their caregivers,” said David Hung, Medivation’s CEO, in a statement.

The Medivation drug, original developed in Russia in the 1980s as an allergy treatment, showed some promise in a smaller study Medivation conducted including more than 180 patients with Alzheimer’s, which was published in 2008. But investors largely gave up on the drug when Medivation and Pfizer failed to reproduce the results in March 2010 in a pivotal trial of about 600 patients, known as Connection. Medivation suffered layoffs after that setback, but it has made a comeback on the strength of a prostate cancer drug called MDV3100, which showed last November that it was able to help men live longer. Details from that trial are expected to come out this year at a medical meeting.

“Given Dimebon’s poor precedence from its Phase III Connection trial in 2010, the failure of Concert should come as no surprise. Investor focus should remain on MDV3100 for prostate cancer,” said Biren Amin of Jefferies & Co., in a note to clients this morning. He notes that the full data from the pivotal study of MDV3100 is expected to be released at the American Society of Clinical Oncology’s Genitourinary symposium, scheduled for February 2-4.

Shares of Medivation fell 1.2 percent to $55.01 shortly after the opening bell.

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At an R&D and business briefing meeting that Merck (NYSE: MRK) held for Wall Street analysts at its Whitehouse Station, NJ, headquarters in November, the drug giant generated quite a bit of buzz for a drug that’s still several years away from market. That’s because the drug, called MK-8931, may offer a completely new way to attack Alzheimer’s disease—one of the hottest and most challenging targets in drug development. “We think this is the molecule that will provide the best option for Alzheimer’s patients,” declared Peter Kim, president of Merck Research Laboratories, during a Q&A with analysts towards the end of the meeting. It was a bold statement, considering the fact that the drug has so far only been tested in healthy volunteers.

But the results seen in that one small trial were enough to persuade Merck’s scientists to forge ahead and test MK-8931 in Alzheimer’s patients. The drug targets an enzyme known as BACE (beta-site APP cleaving enzyme), which generates proteins that in turn lead to the formation of amyloid plaques—the brain deposits thought to cause the cognitive impairments that are the hallmark of Alzheimer’s. In the trial, a once-daily dose of MK-8931 taken by mouth lowered levels of the amyloid-forming protein by more than 90 percent, with no significant side effects.

Scientists at universities and drug companies around the world have spent much of the last decade trying different methods for blocking BACE—to little avail. When Merck bought Schering-Plough in 2009, the two companies merged their BACE efforts, embarking on a multifaceted plan that resulted in MK-8931 and several back-up compounds. It was no small feat, Kim said during the R&D briefing. “If you look at what our chemists had to do, it’s an unbelievably impressive story,” he said.

During a recent phone interview with Xconomy, one of the scientists who managed Merck’s BACE program provided a taste of the hurdles the team faced, and the technology they used to come up with new approaches to targeting BACE. Eric Parker, senior director and neuroscience site lead for Merck, says the basic challenge lies in the very structure of BACE. The enzyme is so complex, he says, “you need a large molecule to make many different points of contact with it.” With any drug, he adds, “it’s difficult to make it stick—to make it bind with high affinity for the enzyme.”

One problem with large molecules, Parker says, is that it’s difficult to make them into pills that can travel through the stomach without getting destroyed. What’s more, large molecules can’t easily cross the blood-brain barrier or … Next Page »

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John Lechleiter has spent his entire 32-year career at Eli Lilly, and now he’s the CEO just as the company faces one of the bigger challenges in its history. Over a three-year stretch, Lilly will lose patent protection on five blockbuster drugs that generated $12.7 billion in sales last year—more than half of its revenues.

The pharma industry’s inability to produce a crop of innovative new medicines to replace the aging blockbusters is a well-worn narrative. But Lilly has taken heat for bucking a couple of popular coping strategies. One, it has resisted the urge to get tied up in a mega-merger like Pfizer/Wyeth, Merck/Schering-Plough, Roche/Genentech that often creates some kind of illusion of improved performance in the short term. Two, it has continued to ratchet up R&D spending to $4.9 billion last year even as other companies have turned to cost-cutting.

I met with Lechleiter to talk about the state of Lilly (NYSE: LLY) and the pharma business for about a half hour on Friday while he was in Seattle doing community outreach at the Washington Biotechnology & Biomedical Association’s annual meeting. We talked mostly about how pharma can get out of its current rut, and he was also willing to field a few questions that readers sent to me via Twitter.

It was a long conversation, so I’m breaking this into a special two-part edition of BioBeat. The second half of the chat will run tomorrow, featuring Lechleiter’s responses to the questions that readers relayed to me via Twitter.

Xconomy: You’ve made a decision to continue to invest in R&D at Lilly when a lot of other pharma companies are cutting back. Some on the Street are wondering why pharma companies are doing research at all, why not get out of that line of business? Give up, and in-license everything from biotech companies. Why continue doing research within Big Pharma?

Eli Lilly CEO John Lechleiter

John Lechleiter: I’ve been employed here 32 years, and we’ve been around 135 years as a company. Success has come, in general, from taking a long-term view. We invest in a steady and a patient way. We have a pipeline today of about 65 or so molecules, and most are coming from internal research. We work with partners, but it’s mainly driven by what I call our internal research engine. It’s the most exciting pipeline we’ve ever had. Many, but not all, of those pipeline molecules will mature into products. We’ve got to have the discipline and the courage to stay with that.

We can look back over the last 10 years and make a critique, whether it’s a Lilly critique or an industry-wide critique, which says we haven’t been as productive as we had hoped. But that doesn’t mean we should abandon ship. Industry always moves in cycles. Sometimes they are long cycles. Sometimes they are 10-year cycles. My own personal belief is that we are in a new era of higher research productivity. And that will be reflected in medicines that come out of our pipeline and other people’s pipelines.

The other thing is, new medicines just don’t grow on trees. There’s no universe of exciting molecules from “biotech” companies out there that are ready for the picking. If there was, you’d see even more deal activity than you currently see. Do we work with biotechs and academic institutions? Are we surveying that landscape? We are. But if I have to place a bet—and as a CEO you always have to place a bet—the bet I’m placing is that research efforts largely driven through our internal investment strategy, and working with partners around the world, is the best strategy for Lilly.

There’s no question we are focused on research productivity. I think we’ve achieved some pretty big gains. We are placing more than a dozen molecules a year, some years as high as 15-17 molecules, into clinical development. This is a huge step up from the kind of output we saw from our discovery efforts 10 years ago, and it augers well for the future.

X: But how many new FDA approved products have you introduced in the last, say, five years? Two?

JL: In the last five years, we haven’t had a lot. But in a period from 2002-2005, we … Next Page »

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Seattle-based Impel NeuroPharma has gotten a big vote of confidence for its technology that aims to deliver certain drugs more efficiently to the brain.

The company, a University of Washington spinout, said today it has secured funding from two of the world’s top 10 pharmaceutical companies, plus another $500,000 in a Series B angel financing. Impel, founded in 2008, has now raised more than $2.1 million combined from the U.S. Department of Defense, Washington’s Life Sciences Discovery Fund, and angel investors from the Wings medical device network, according to co-founder and CEO Mike Hite.

Impel isn’t disclosing terms of the pharma collaborations, but Hite said one will test its nose-to-brain drug delivery technology in animals, while another will study the drug/device combo in humans. Impel plans to run its first two human studies in 2012, Hite says.

“Other people have tried intranasal delivery, but largely devices deliver the drug to the lower two-thirds of the nasal cavity, not all the way from the nose to brain,” Hite says. “Pharma has tried everything else to get drugs in the brain and it hasn’t worked as well as they’d like, and they see this as the best device currently out there.”

Impel, as I described in an Xconomy feature in September 2008, is trying to take advantage of anatomy deep in the upper nasal passage. It has been developing a device to propel drugs way back there in the skull—the only place in the body where primary neurons are accessible via the outside environment. The Impel device, as scientific co-founder John Hoekman described it then, is made to deliver a pressurized, rotational flow of aerosol to reach those neurons.

Impel NeuroPharma's Nose-to-Brain drug delivery device

That way, patients who need the powerful pain drug Fentanyl, for instance, could take a nasal spray that delivers the drug directly to the brain and reduces pain within five minutes, without going through the bloodstream and causing side effects, namely severe constipation.

The device was originally tested for research at the University of Washington in Rodney Ho’s lab. Since the company’s founding in 2008, much of the development work has focused on taking a research prototype with many components and heavy electronics and turning it into something lighter, cheaper, and more convenient for patients to use.

One key question in human studies will be to see whether the miniaturized device can continue to deliver 60 to 80 percent of the dose where it needs to go, in contact with those primary neurons deep in the skull. Existing nasal sprays may be good at getting a drug into the bloodstream quickly, but they only deliver about 1 percent of their dosage all the way into the upper nasal cavity, Hite says.

“We’ve taken it now from the bench and miniaturized it,” Hite says. “We have made it into a manufacturable, scalable, disposable product.”

The device in its current form is designed to be small enough that a patient can carry it around easily in a personal bag, Hite says. The U.S. military has shown interest, he adds, in having a device that soldiers can clip on their belts, loaded with antidotes to chemical nerve agents they may be exposed to in the field.

Other companies have ideas about nose-to-brain drug delivery, including one local operation—Lynnwood, WA-based Kurve Technology. That company’s device recently received some attention for a study of 104 patients, in which insulin was delivered through the nose as a treatment for Alzheimer’s. UW researcher Suzanne Craft participated in that study, which was described last month in the Archives of Neurology.

Like any company just embarking on its first human studies, lots of questions still need to be answered before Impel can say it has the better mousetrap, or even a viable commercial product. But signing the collaborations and raising the cash means that Impel will at least get a chance to find out whether this technology has legs or not.

“These deals are of huge significance to the company,” Hite says.

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As Pfizer’s vice president of venture capital, Barbara Dalton will bring two valuable perspectives to Xconomy’s Life Sciences 2031 panel discussion on October 13: that of a VC and that of a pharma executive. Dalton, who was trained in immunology and virology at the Medical College of Pennsylvania, began her career as a research scientist at SmithKline (now GlaxoSmithKline). While there, she was a founding member of EuclidSR Partners, a private New York-based VC firm where SmithKline was a leading limited partner.

Dalton joined Pfizer (NYSE: PFE) at the end of 2007, a few years after the drug giant started up a venture capital unit. At first, Pfizer’s fund was housed in its finance department, and most of its investments were in technologies and services that supported Pfizer’s already-marketed products. Then Pfizer moved the venture group into the worldwide business development organization, and gave it a mandate to invest in ways that support all of Pfizer’s pursuits—not just its marketed products.

Today, Pfizer devotes a $50-million-a-year budget to investing across a wide range of areas, including healthcare IT, health services, and medical devices. About one-third (32 percent) of the portfolio is invested in drug development, while one-fourth (24 percent) is in companies developing diagnostic and imaging products. Healthcare IT is also a big focus: 12 percent of Pfizer’s venture funds are supporting startups in that area.

Xconomy chatted recently with Dalton about Pfizer’s venture investments, and what she hopes comes out of the discussion at Xconomy’s Life Sciences 2031 event.

Xconomy: What’s the reasoning behind the diversity of Pfizer’s portfolio?
Barbara Dalton: They are all products and technologies that in some way or another support our future. Pfizer is a large organization with a diverse set of businesses, from nutritionals to animal health, to consumer brands, vaccines, biologics, and small molecules. I believe the venture capital group should mirror those businesses.

X: How does healthcare IT fit into that mission?
BD: Healthcare IT relates to all of our businesses, because it can be defined quite broadly. There are technologies that, for example, our sales force may use. There are technologies we may use to monitor clinical trials, monitor patients, track a drug product, or manage manufacturing processes. So healthcare IT in its broader definition—and I include pharmaceutical business IT—is part of that.

X: I imagine part of the mission is also to invest in early-stage drugs that Pfizer may someday be interested in developing. How much does that play into investing decisions?
BD: These are investments that are purely investments. We are ahead of the corporation in terms of their [research] interests. We like products that have been demonstrated in humans, but we may invest in a novel product a couple of years ahead of when the corporation would be interested in it. We look for opportunities in the five or six therapeutic areas that Pfizer is working in these days. But we’re also opportunistic, because … Next Page »

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We saw several headlines surrounding clinical development by New England-area drugmakers this week.

—Weston, MA-based Biogen Idec (NASDAQ: BIIB) said that it nabbed a conditional approval from the European Commission to market a long-acting version of fampridine (Fampyra) to adult patients with multiple sclerosis who have walking disability. The agency has also asked Biogen to commission a study exploring the benefits, beyond improved walking speed, of the therapy—which Biogen said it had planned to do post-marketing.

—Xconomy East Coast biotechnology editor Arlene Weintraub wrote about how Watertown, MA-based EnVivo Pharmaceuticals is charging ahead with development of its Alzheimers drug—despite negative data reported by Eli Lilly in a drug trial of its own similar compound. EnVivo began Phase 1 testing on June 1 of its compound, EVP-0962, which reduced brain inflammation caused by Alzheimer’s, reversed behavioral defects, and appeared to have a better safety profile than gamma secretase inhibitors (which the Lilly drug is), during animal trials.

—Also perserverent, Cerulean Pharmaceuticals of Cambridge, MA, is pushing ahead with its nanotechnology for drug delivery. The company began a trial this month of its cancer nanoparticle drug and is also continuing development of its technology for the field of RNA interference—which has struggled to realize its potential in the form of successful drugs.

—Natick, MA-based Boston Scientific (NASDAQ: BSX) announced second-quarter sales of nearly $2 billion and earnings of $.17 per share—beating Wall Street predictions by about a dime. The medical devices firm also announced plans to repurchase $1 billion of its common shares and (the day before its earnings announcement) revealed that it will be investing $150 million over five years in a manufacturing facility in China and will be upping its employee head count in the country.

—San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN) and Waltham, MA-based Alkermes (NASDAQ: ALKS) resubmitted their application for the FDA’s approval to market their drug exenatide once-weekly (Bydureon) as a new treatment for diabetes in the U.S. The FDA, which had previously asked the two biotechs to submit data indicating the drug doesn’t have an effect on abnormal heart rhythms known as the QT interval, will have about six months to review the application.

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When Eli Lilly stopped developing an Alzheimer’s compound a year ago due to side effects and lack of effectiveness, some experts expressed doubt about a similar drug being developed by Watertown, MA-based EnVivo Pharmaceuticals. Those doubts may have intensified last week, when pharmaceutical giant Lilly released more data on the drug, called semagacestat, which is in a drug class known as gamma secretase inhibitors. During the Alzheimer’s Association International Conference in Paris, a senior medical director for Lilly said patients taking semagacestat experienced worse cognitive functioning than did patients taking the placebo—even seven months after they stopped taking the drug.

But EnVivo CEO Kees Been, who spoke to Xconomy just before the conference, is undeterred. EnVivo moved its own gamma secretase-targeting drug, EVP-0962, into Phase 1 testing on June 27. In animal trials, the company says, the drug reduced brain inflammation caused by Alzheimer’s, reversed behavioral defects, and appeared to have a better safety profile than gamma secretase inhibitors.

Gamma secretase is an enzyme that contributes to the buildup of amyloid plaques in the brain—a major feature of Alzheimer’s. Problem is, says Been, “gamma secretase is a very pluripotent enzyme,” meaning it serves many functions in the body. “If you inhibit it, you can create all kinds of side effects.”

For example, gamma secretase is critical for the processing of a protein called Notch, which controls cell differentiation and communication. By inadvertently inhibiting Notch, semagacestat may have touched off the severe gastrointestinal side effects seen in some Lilly patients, Been says. Participants in Lilly’s trial also faced a higher risk of developing skin cancer.

The difference between Lilly’s and EnVivo’s compounds is that EVP-0962 is a gamma secretase modulator, not an inhibitor. That means it was designed to target certain … Next Page »

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Cambridge, MA-based Proteostasis Therapeutics has found a big new benefactor to support its R&D against neurological diseases.

Proteostasis said today it has formed a strategic alliance with Ireland-based Elan to develop traditional small molecule drugs and diagnostics with Proteostasis against neurodegenerative diseases like Parkinson’s, Huntington’s, and multiple sclerosis. Elan, the developer of the hit multiple sclerosis drug natalizumab (Tysabri), has agreed to invest $20 million into the small company, and may pump in another $30 million over the next five years. In return, Elan is getting a 24 percent ownership stake in Proteostasis now, a seat on its board of directors and scientific advisory board, and the first chance to exclusively license new drug compounds from the collaboration, the companies said in a statement.

Proteostasis has been pretty quiet lately, but it made a splash in the Boston biotech scene in September 2008 when it raised a whopping $45 million in its initial venture financing from HealthCare Ventures, Fidelity Biosciences, New Enterprise Associates, Novartis Option Fund, and Genzyme Ventures. The founding science came from the San Diego labs of Jeff Kelly at The Scripps Research Institute and Andrew Dillin at the Salk Institute for Biological Studies, and Richard Morimoto at Northwestern University.

As I described in a feature story a year ago, Proteostasis is about delving into biology that seeks to alter protein pathways that deteriorate as people age, which can lead to neurodegenerative diseases like Alzheimer’s and Parkinson’s. When people are young and healthy, they might produce amyloid plaques, for example, but a network of proteins works to dispose of them. One theory is about Alzheimer’s is that as people age, this garbage disposal network weakens, amyloid plaques build up, and it leads to the cognitive impairment in the brain that’s associated with Alzheimer’s.

Today’s statement had a few details on what each party is supposed to bring to the table. It said that Proteostasis will contribute its discovery technology, novel biological targets, and drug candidates. Elan plans to contribute with its proprietary animal models, biology, medicinal chemistry, and clinical development.

Proteostasis’ president and chief scientist, Peter Reinhardt, said Elan is “a proven leader” who will help speed up the R&D progress at Proteostasis. Kelly Martin, Elan’s CEO, added: “This initiative with Proteostasis reinforces our commitment and strategic business objective of being an exceptionally high-caliber, science-driven company and provides a multitude of opportunities for Elan to advance its position as a world leader in the broad field of neuroscience.”

This isn’t the only Boston-Ireland connection we’ve seen in these pages lately. Elan recently agreed to sell one of its divisions to Waltham, MA-based Alkermes (NASDAQ: ALKS) for $960 million in cash and stock.

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23andMe is used to lots of eye-rolling from scientists. One geneticist, quoted a year ago in the New York Times, ridiculed the Mountain View, CA-based maker of consumer genetic tests for providing little more than “a really wonderful form of recreation.”

One year later, 23andMe CEO Anne Wojcicki stood in front of a room of genomic scientists at the Institute for Systems Biology in Seattle, and boldly declared that 23andMe is turning into “a research company.” Sure, the business still relies heavily on persuading consumers to buy a test to look at certain regions of their DNA, partly out of curiosity and potential health benefits. But now 23andMe is building up a second revenue stream, using its database of 75,000 customers and counting, to help drug companies and scientists engage with the public, with an eye toward advancing research.

“We got a lot of criticism early, from people who said, ‘You launched too early, there wasn’t tons of data behind it.’ It was probably true,” Wojcicki said in her May 15 talk to scientists at the Seattle conference. Things are changing now, she says: “We still give people access to their genetic information. But a lot more than that, we are really a research company.”

The big change at 23andMe, to enable this kind of shift over the past year, has been about price. The company, founded in 2006, introduced its first product at $999. Benefitting from the breakneck pace of faster/cheaper DNA sequencing the past couple years, 23andMe has progressively brought its price all the way down to $99, plus a $5 monthly fee. The test looks at regions of a person’s genome to determine things like ancestry, and genetic mutations that are thought to slightly raise or lower the risk of certain diseases.

Anne Wojcicki

Wojcicki’s Seattle talk didn’t include any financial data on how well privately held 23andMe is doing, and she wouldn’t provide any forecasts when I asked a couple follow-up questions. But she said the company has seen an accelerating demand from consumers since last Thanksgiving, when it lowered the price of its test from $199 to $99. The lower price has encouraged more consumers to give the test a try, but equally important for 23andMe is what happens after the customer pays for the first test.

The key to its research plan, Wojcicki says, is in maintaining a relationship with its consumers through use of targeted surveys. So far, the company has crafted 50 different surveys, and found ways to make them fun for consumers by sprinkling in random questions so it’s not just “one big topic” that bores people, Wojcicki said. About 50,000 people have taken at least one of the 23andMe surveys, and the average person who does a survey takes 10 of them, Wojcicki said.

It wasn’t totally clear to me from Wojcicki’s talk how this can help drug development, other than simply being able to provide access to patients. But she gave one example in which 23andMe surveyed its customer base three days before an important meeting with a pharmaceutical company. 23andMe asked its customers about their experience with dry eye, got “thousands” of responses, and took the data into the meeting, Wojcicki said.

“We’ve taken on partnerships with pharma companies, where they may want to put out a survey, and we’ll do that for them,” Wojcicki said in a short interview last week, following her talk. “We never return individual-level data. It’s always aggregated. We can ask questions like ‘Is there a genetic association in certain reactions to sunscreen?’ Things like that. We’ve found that consumers are really interested in how they can participate in research.”

Wojcicki didn’t name names of the pharma companies involved, but the company’s growing ability to survey distinct groups of patients—like, say, those with Parkinson’s disease—could be the sort of thing that helped attract a couple more drug companies into its investor syndicate last year. The company’s investors include Google (where Wojcicki’s husband, Sergey Brin, is the co-founder), Genentech, New Enterprise Associates, Johnson & Johnson, MPM Capital, and Roche.

Lee Hood, the high-speed gene sequencing pioneer who leads the Institute for Systems Biology in Seattle, said he was particularly interested in how 23andMe has … Next Page »

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The board of iPierian, the South San Francisco-based stem cell company with high-profile scientific founders from Harvard University and prominent financial backers that include GlaxoSmithKline, Kleiner Perkins Caufield & Byers, Google Ventures, and Biogen Idec, has terminated several members of the company’s senior executive team as part of a shift in strategy, Xconomy has learned.

Michael Venuti, who was named CEO of Ipierian in July 2010, was fired by the board in late April of this year, and the company’s top executives in charge of finance, business development, and legal/intellectual property were dismissed within days, according to John Walker, Venuti’s predecessor as CEO of iPierian, and two other sources with knowledge of the situation. The chief technical officer, Berta Strulovici, left in the weeks prior to the departures of the other executives, sources said. iPierian hasn’t publicly announced the departures, but it has updated its corporate website, which says the new CEO is Peter Van Vlasselaer, the former CEO of Palo Alto, CA-based Arresto Biosciences. Van Vlasselaer is the only person listed under “Leadership Team” on the company’s website.

Two members of the iPierian board, Corey Goodman and Beth Seidenberg, declined to comment on the moves. Venuti didn’t respond to a request for comment, and neither did Van Vlasselaer or George Daley, a co-founder of the company at the Harvard Stem Cell Institute.

iPierian has been one of the nation’s highest profile stem cell startups of the past few years. The company in its current form was put together in July 2009, when Pierian, a company co-founded by three world-renowned stem cell researchers at the Harvard Stem Cell Institute, was merged with iZumi Bio, a San Francisco startup that focused on reprogramming adult cells to become “pluripotent,” so they could have the vast potential, like that of a stem cell, to morph into most any cell type in the body.

The new combined company, which I profiled in these pages last June, has a high-profile set of venture backers that have poured more than $50 million into the company. The crew of backers includes Kleiner Perkins Caufield & Byers, Highland Capital Partners, MPM Capital, Google Ventures, GlaxoSmithKline’s SR One, FinTech Global Capital, Mitsubishi UFJ Capital, Mission Bay Capital, Atel Ventures, and Biogen Idec New Ventures. iPierian’s last financing came as a Series B round worth $28 million, which Xconomy reported in September.

iPierian’s business strategy has long been to develop technology for using “induced pluripotent stem cells” as a tool for screening new drug candidates; it would then license the technology to Big Pharma companies. In my profile last June, then-CEO Walker said iPierian had created 200 different “lines” of induced pluripotent stem cells from patients with neurodegenerative diseases like Spinal Muscular Atrophy, Huntington’s, Parkinson’s, and Alzheimer’s, and from people with Type 2 diabetes. The company was comparing those cells with cells from healthy relatives to better home in on what might be going awry in the patients with the ailments, and which drugs might have the best chance to change the course of their disease in clinical trials.

iPierian hasn’t yet found a Big Pharma partner to provide cash and validation for this strategy, but Venuti was in position to execute on the plan at the point he was fired, Walker said … Next Page »

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It is not unusual to read about another drug failure in a challenging neurological disease such as multiple sclerosis, Alzheimer’s disease, or Parkinson’s disease. Designing therapeutics with exquisite specificity has been the goal of modern drug development, and significant resources continue to be allocated towards this approach, only to see treatments fail due to inadequate efficacy or intolerable side effects. How we approach the development of new therapeutics for treating complex diseases will be key for achieving better patient outcomes.

A recent example of a once promising drug candidate using a targeted approach is semagacestat, a treatment developed by Eli Lilly and Elan. Proposed to lower the build-up of harmful plaques in the brain of Alzheimer’s disease patients, its Phase III trial was halted last August because semagacestat worsened clinical symptoms compared to placebo. Semagacestat targets a single enzyme called gamma secretase, which turns a protein found in normal brain into amyloid, the building block of the plaques found in Alzheimer’s disease. Semagacestat’s failure represents the difficulties in developing treatments that target specific molecules, whether these targets are surface proteins or signaling pathway intermediates inside of cells.

Several stumbling blocks can be identified in the development of targeted therapies, using semagacestat as an example:

1. The role of the target is not well established.

Many drugs target proteins whose function within a specific disease is difficult to ascertain. Alzheimer’s disease is characterized by the presence of plaques that prevent nerve cells from communicating. The therapeutic value of targeting plaque build-up is unclear, and a lack of definition for the exact role of amyloid in disease progression adds uncertainty for the therapeutic effectiveness of drugs like semagacestat.

2. Redundancy in cellular communication prevents efficacy of the drug in the absence of toxicity

Obstructing the generation of amyloid alone has limited effect on the complex nature of Alzheimer’s disease. The dysregulation of a group of proteins called Tau has recently taken the forefront as another important contributor. Genetic factors, such as variations in the lipoprotein APOE, play a significant role in disease progression and may greatly impact the ability of proposed therapeutics to affect the entire patient population. In addition, inflammation … Next Page »

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San Francisco-based Medivation (NASDAQ: MDVN) and its partner, New York-based Pfizer (NYSE: PFE) said today that an experimental drug for Huntington’s disease failed in a pivotal clinical trial. The companies are now discontinuing development of the drug, dimebon, for Huntington’s, although a Phase III clinical trial is continuing for patients with mild-to-moderate Alzheimer’s disease.

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Score one for neurodegenerative disease therapies. Cambridge, MA-based NeuroPhage Pharmaceuticals said today it has closed $12.4 million in Series B financing led by Mérieux Développement, the healthcare investment arm of French firm Institut Mérieux. Irish biopharma Shire (NASDAQ: SHPGY) also participated in the round as a new investor.

This is the first round of institutional funding for NeuroPhage, which raised a $7 million Series A round from angel investors in early 2008. The quiet biotech startup says it plans to use the new money to prepare its lead drug candidate—NPT001 for the treatment of Alzheimer’s disease—for Phase 1 clinical trials within the next two years.

The company’s technology is designed to prevent the buildup of amyloid plaques and to break up existing plaques, which degrade the performance of neurons. In addition to Alzheimer’s, NeuroPhage intends to address a broader class of disorders thought to be caused by protein misfolding, including Parkinson’s, amyotrophic lateral sclerosis, and other rare diseases. There has been a growing amount of activity in this field in the past half-year, including Pfizer’s acquisition of FoldRx Pharmaceuticals, and Roche’s strategic alliance with reMYND.

NeuroPhage was founded in 2007 by a small team of Boston-area entrepreneurs, together with Beka Solomon, a neuroscientist and expert in immunotherapy for Alzheimer’s at Tel Aviv University in Israel. The company currently has a dozen employees worldwide. Its scientific advisors include John Maraganore, CEO of Alnylam Pharmaceuticals; Franz Hefti, chief scientific officer at Avid Radiopharmaceuticals; and Cynthia Lemere from Harvard Medical School and Brigham and Women’s Hospital.

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It was relatively quiet for life science news in San Diego over the past week, but it was nevertheless encouraging, with a new research collaboration, new funding, and a new company planning to move here. Our roundup begins now.

—San Diego’s Sanford-Burnham Medical Research Institution announced a three-year pact with a Johnson & Johnson subsidiary to search for new drugs to treat Alzheimer’s disease and related disorders. Specific financial terms were not disclosed, although the collaboration was structured like a biotech alliance and could eventually be worth more than $85 million to the Sanford-Burnham.

—A French molecular biologist, Patrick Merel, told me he plans to move to San Diego with Portable Genomics, a direct-to-consumer personal genomics startup he founded in Bordeaux. Portable Genomics has been developing subscription-based software that will cull useful clinical data from the massive amount of computerized data generated by genome sequencing, and deliver it to consumers’ iPads, smartphones, or other mobile devices.

—A small San Diego-based life sciences investment firm, Leading Ventures, plans to raise a $10 million inaugural fund, according to Dow Jones’ VentureWire. The firm’s move was prompted by progress at two companies owned by the firm, Inflammagen and AnoZyme, which are nearing commercialization, VentureWire reported.

—San Diego’s Ardea Biosciences (NASDAQ: RDEA) announced plans for a secondary public offering of 2.5 million shares of its common stock, with an additional 375,000 shares authorized to cover any overallotments. BofA Merrill Lynch and Jefferies & Company are joint book runners for the offering.

—Xconomy’s National Biotechnology Editor, Luke Timmerman, showed off a few photos from the 2011 J.P. Morgan Healthcare Conference, which was held last week in San Francisco.

—The Sanford-Burnham Medical Research Institution’s chief business officer, Paul Laikind, and Chrysa Mineo of San Diego-based Receptos have joined the lineup for the Xconomy Forum on diabesity, to be held in San Diego on January 27th. Also speaking are Amylin Pharmaceuticals CEO Dan Bradbury, Arena Pharmaceuticals CEO Jack Lief, and partners from Frazier Healthcare Ventures, Sofinnova Ventures, and Thomas McNerny & Partners.

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The Sanford-Burnham Medical Research Institute has struck its second big deal with a Big Pharma company in the past month.

The San Diego-based nonprofit is announcing today it has formed a new collaboration with Ortho-McNeil-Janssen Pharmaceuticals, a unit of Johnson & Johnson (NYSE: JNJ), to discover new drugs for Alzheimer’s disease and major psychiatric disorders. Financial terms aren’t being disclosed, but the collaboration is structured like a biotech alliance, in which Sanford-Burnham will get an upfront fee, support for its discovery research, milestone payments on success in drug development, and royalties on future product sales. Over time, this deal could be worth more than an $85 million alliance announced in November between UC San Francisco and Pfizer, says Pam Lord, a spokeswoman for the institute.

This new collaboration represents the latest sign of an ongoing trend in which Big Pharma companies are leaning on not just small biotech companies, but also academic centers, to be their fountains of innovation. UCSF, now led by the former president of Genentech, has struck recent deals with Pfizer and Bayer, while Sanford-Burnham has found new sources of support from Takeda Pharmaceuticals and J&J. The latest deal is a culmination of an effort that Sanford-Burnham president John Reed has pushed for the past couple years, to make sure that top-notch science eventually leads to new products to treat disease—not just more basic science.

“We’re really looking at how can we leverage what has been built at Sanford-Burnham over the past 10 years,” says Paul Laikind, the chief business officer of the institute. “It’s unique in my view, in terms of combining some of the best science out there with an entrepreneurial bent. We’re kind of between an academic institution and a biotech in terms of how we operate.”

Laikind knows more than most in academia about the nexus of science and entrepreneurship, given that he was previously a CEO at Metabasis. He was brought in to help bring some more business savvy and connections to the Sanford-Burnham back in October 2009, around the same time Reed tapped another key lieutenant from industry, Michael Jackson of Johnson & Johnson, to help make its discovery research more relevant to the folks in pharmaland.

Paul Laikind

Sanford-Burnham, Laikind says, has sought to apply its science a number of ways, partly through nurturing spinoff companies, but more through what he calls “thematic” partnerships with pharma companies that are focused on a therapeutic area. One example of this approach was revealed right after Christmas, when Sanford-Burnham announced it had formed a deal with Takeda to identify new molecular targets for the treatment of obesity. That is a two-year partnership which will involve Sanford-Burnham’s basic researchers in San Diego, some of its clinical researchers who see patients at a site in Florida, as well as a focused team from Takeda. It’s one of the largest and most ambitious discovery partnerships Takeda has ever done with an academic center, Laikind says.

The latest partnership with J&J builds on an institutional relationship that started about two years ago. The deal runs for three years, in which multi-disciplinary teams from the nonprofit and J&J will work together to find new compounds for Alzheimer’s and psychiatric disorders that could go into J&J’s pipeline for further development. One of the keys to the deal is … Next Page »

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Neuroptix, an Acton, MA-based developer of a diagnostic test for Alzheimer’s disease, has raised $4.6 million of a mixed offering of equity and rights that could total $9.1 million, according to an SEC filing. The company brought in $18.5 million in a Series B round of funding in 2008, led by Inventages.

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Allon Therapeutics, a Vancouver, BC-based developer of drugs for neurological disorders, said today it has started enrolling patients in a pivotal clinical trial of its lead drug candidate. The trial will look at whether Allon’s davunetide offers any benefit for patients with progressive supranuclear palsy (PSP), a rare and deadly brain disease. Allon has also tested this drug’s potential against Alzheimer’s and schizophrenia, as CEO Gordon McCauley described in an interview with Xconomy last April.

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Satori Pharmaceuticals, a Cambridge, MA-based developer of treatments for Alzheimer’s disease, has raised $7 million in equity funding, according to an SEC filing. The funding is part of Satori’s previously disclosed $22 million round of financing, according to an e-mail from company director Daphne Zohar, a managing partner at PureTech Ventures in Boston. Satori’s investors include PureTech, InterWest Partners, New Enterprise Associates, Prospect Venture Partners, and others. Zohar, whose firm formed Satori in 2005, was also the startup’s founding CEO, according to Satori’s website.

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Biogen Idec is making another step towards building itself into a neurological diseases drug specialist. The Weston, MA-based biotech company (NASDAQ:BIIB) said today it has acquired a subsidiary of the Swiss biotech firm Neurimmune Holding to gain worldwide rights to antibody drugs against three specific proteins, which might cause neurodegenerative diseases such as Alzheimer’s, ALS, and Parkinson’s when they mis-fold.

Biogen, the world’s largest maker of multiple sclerosis drugs, said it has agreed to pay Neurimmune $32.5 million upfront and up to $395 million in potential milestone payments. The companies have a previous agreement that dates back to 2007 to discover antibodies against a separate protein target related to the treatment of Alzheimer’s. For the programs included in the new deal, Biogen is responsible for clinical development and commercialization of the antibody drug candidates and Neurimmune is taking on research duties such as discovery of back-up candidates against the protein targets of interest.

This latest deal fits with the strategy that Biogen revealed in early November when it announced it would axe about 650 jobs, close its cancer research hub in San Diego, and take other steps to emphasize its neurology business. The company, founded in 1978, is building on its existing base in this market with products such as its top-selling MS drugs interferon beta-1a and (Avonex) and natalizumab (Tysabri). The layoffs and other cost-cutting steps the firm announced last month are expected to reduce its expenses by about $300 million per year.

This deal with Neurimmune helps Biogen build up its neurology pipeline beyond its core strength in multiple sclerosis, which is becoming an increasingly competitive corner of the neurology market with large drug makers such as Novartis and EMD Serono advancing new oral MS therapies.

“Biogen Idec is committed to becoming the global leader in the development of innovative therapies for neurodegenerative diseases,” Alfred Sandrock, senior vice president of neurology research and development at Biogen, said in a statement. “Neurimmune continues to impress us with their ability to translate scientific insights into innovative antibodies for the potential treatment and prevention of many neurodegenerative diseases.”

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