One of the scientific co-founders of San Diego-based Fate Therapeutics, along with his team at The Scripps Research Institute, is reporting a major advance that will make it faster, cheaper, and potentially practical on an industrial scale to turn adult cells into stem cells that can morph into any type of cell in the human body.

Sheng Ding and his colleagues at Scripps have found a combination of three conventional small-molecule chemical compounds that can coax adult human cells into an embryonic-like state. The new technique is about twice as fast as existing methods, and produces 200 times more cells per batch. The research in how to efficiently make these so-called “induced pluripotent stem cells” was sponsored by Fate, and is being published online today in the journal Nature Methods.

The technology, which is exclusively licensed to Fate through its sponsored research agreement with Scripps, is a big feather in the cap for the startup company as it seeks to strike deals with pharmaceutical and biotech companies that are looking get into the stem cell game. Fate has been a leader in the field since its founding two years ago by a group of top stem cell scientists from Harvard University, the University of Washington, Stanford University, and Scripps. One of those co-founders was Ding, a young scientist who got his first faculty post in 2003 at Scripps.

“This is the first example in human cells of how reprogramming speed can be accelerated. I believe that the field will quickly adopt this method, accelerating [induced pluripotent stem cell] research significantly,” Ding said in a statement from Scripps.

The latest advance builds on the discoveries of Shinya Yamanaka of Kyoto University and James Thomson of the University of Wisconsin, who showed for the first time two years ago that scientists could transform adult human cells into a pluripotent state, like that of cells in an early embryo. That was important because it was a way to circumvent the political and ethical controversy over destroying embryos in order to harvest their stem cells for research.

Pioneering as that work was, it was nowhere near ready for prime-time use in the biotech and pharmaceutical industries. Yamanaka and Thomson used viruses to insert multiple copies of four genes into adult cells. Two of the genes are known to cause cancer. Given that risk, it’s almost impossible to imagine regulators ever allowing cells with that kind of genetic modification to be injected into people who want to, say, regenerate new pancreas cells to treat their diabetes. The other big problem with the original method was that it took four weeks from start to finish, and only worked in about one out of every 10,000 cells.

Today’s announcement is the second big stem cell paper this year from the Ding lab. In May, the Ding lab reported that it had essentially gotten around …Next Page »

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The news has been breaking fast and furious here at Xconomy, just as we are putting the finishing touches on a terrific event on Monday that will explore the 20-year outlook for the Seattle region as a life sciences hub.

—Xconomy dug up an exclusive late Friday afternoon from a couple SEC filings that showed Seattle-based Dendreon has added two heavy hitters to its board of directors. They are Ian Clark, the incoming CEO of the Genentech unit within Roche, and Pedro Granadillo, the former senior vice president of manufacturing at Eli Lilly. Dendreon (NASDAQ: DNDN) announced the move officially, and the wire services picked up the report, on Monday.

—Amgen generates $15 billion a year in revenue, and plows back 20 cents on the dollar, or about $3 billion, back into research and development. But what does it really do with that money, and what ideas does it have to improve on the industry’s abysmal 1-in-10 average success rate for new drugs entering clinical trials? Senior vice president Joe Miletich offered up some fascinating insights on what Amgen is trying to do, and how Seattle and Boston teams contribute, in an exclusive interview.

—Leroy Hood, the biotech pioneer who has started more than a dozen companies, announced this week that he has raised another $30 million to launch a startup that embodies his latest vision—Integrated Diagnostics. This company will seek to develop instruments that can detect cancer and Alzheimer’s disease by looking at concentrations of proteins from a tiny droplet of blood.

—Seattle-based Omeros (NASDAQ: OMER) pulled off the first IPO of a true biotech company anywhere in the U.S. since February 2008. The company netted about $62 million, part of which will go to support pivotal trials of its treatment to help improve recovery from knee surgery. But other biotechs watching this as a bellwether have to be a little concerned after seeing Omeros price its offering at $10 a share, the low end of its forecasted range. The stock has been heading downhill ever since it started trading, to $7.44 at yesterday’s close.

—Chris Henney, the co-founder of Immunex, Icos, and Dendreon, offered up a very entertaining list of six tips for investors on how to spot a winning biotech company. He made these remarks at a luncheon event organized by the CFA Society in Seattle, in front of about 100 investing professionals.

—Medical device startups are feeling a lot of pain this year, for a lot of reasons, and it was all laid bare this week in a sobering report by Ernst & Young.

—One of the more fortunate medical device companies in Seattle, Uptake Medical, secured an additional $1.2 million in equity financing, meaning it has now raised $4.6 million out of a venture round that could be worth as much as $13.3 million. The company is developing a minimally invasive technique for treating chronic lung diseases by using hot vapor to seal off damaged parts of the lung so air doesn’t get trapped there.

—Lots of people are wondering whether Roche will retain most of the talent at Genentech in the wake of its acquisition this spring. Bothell, WA-based Seattle Genetics (NASDAQ: SGEN) pried loose at least one important player from the industry’s pioneering company, naming Bruce Seeley to the newly created position of executive vice president, commercial, with responsibility for future sales and marketing. Seattle Genetics will lean on him to spearhead what it hopes will be a successful commercial rollout of its “empowered antibody” for Hodgkin’s disease.

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The deals rained down on the Northwest this past week. We saw some strong activity in biotech, gaming, and software.

—Integrated Diagnostics, the new biotech company founded by Lee Hood, has secured $30 million in venture funding from Menlo Park, CA-based InterWest Partners, the U.K.-based Wellcome Trust, and Germany-based dievini Hopp Biotech holding, as Luke reported. The startup aims to detect cancer and neurodegenerative diseases like Alzheimer’s in their earliest (and most treatable) stages.

—Washington state’s venture funding numbers for the third quarter of 2009 fell to $144 million, down from $275 million in the previous quarter, as Bruce reported. And one deal in September, the $50 million investment in Calypso Medical, a Seattle-based developer of technology that pinpoints radiation therapy for cancer to minimize side effects, dominated the state’s third-quarter figures.

—Decho, the Seattle-based subsidiary of EMC (NYSE: EMC), formed a partnership with British mobile network operator Vodafone to develop new data backup services for European markets. Financial terms weren’t given. The products will be built using Mozy, the online backup service operated by Decho.

—Redmond, WA-based Bionavitas formed a partnership with Seattle-based Blue Marble Energy to make biochemicals from algae, as Luke reported. Financial terms of the deal weren’t announced, and the companies didn’t say exactly what they plan to make under this alliance.

—Seattle-based Evri formed a partnership with media giant Hearst to power its new website and news aggregator, LMK (which stands for Let Me Know). Evri, a Paul Allen-backed startup that uses semantic analysis and natural language processing to find connections between entities on the Web, is providing the content-filtering software for LMK.

—Omeros, the Seattle biotech company developing a treatment to improve recovery from knee surgery, completed its initial public offering last week, raising $68.2 million, as Luke reported. The state’s first IPO in more than two years was underwritten by Deutsche Bank and Wedbush PacGrow Life Sciences. Omeros (NASDAQ: OMER) opened trading at $10 a share and closed its first day at $8.73, giving it a market valuation of about $186 million.

—Seattle-based Amazon (NASDAQ: AMZN) participated in a $19 million Series C investment in Engine Yard, a cloud computing and software automation company based in San Francisco. Amazon was a previous investor in Engine Yard, along with Benchmark Capital and New Enterprise Associates. The latest deal also included new investors DAG Ventures, Bay Partners, and Presidio Ventures.

—Seattle-based PopCap Games raised $22.5 million in its first outside funding round since its founding in 2000. The investment was led by Meritech Capital Partners, based in Palo Alto, CA, and also included participation from investors Larry Bowman and John McCaw. The money will be used to help accelerate PopCap’s global expansion and distribution of its games.

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Lee Hood, the legendary researcher and entrepreneur who invented machines that made the Human Genome Project possible, has secured $30 million in venture capital for a startup that aims to detect cancer and neurodegenerative diseases like Alzheimer’s in their earliest and most treatable stages.

The new company is called Integrated Diagnostics, or InDi for short (not Integrative Diagnostics, as previously reported in government filings). The company has secured the first of three tranches of financing in a $30 million commitment from Menlo Park, CA-based InterWest Partners, the U.K.-based Wellcome Trust, and Germany-based dievini Hopp Biotech holding, which is part of a collaboration with the government of Luxembourg, according to a statement.

Integrated Diagnostics, which we first reported on more than a year ago—and again last month when the first public financing document appeared—is working to create a new generation of precise diagnostics. These tests are being designed to take a pinprick of blood and spot signature proteins that are associated with tumors, or Alzheimer’s disease. If successful, this work has the potential to shake up the healthcare system in three big ways, Hood says. It will make it possible for doctors to diagnose diseases much earlier; it will open the door to more individually tailored therapies that will have much greater odds of success; and it will allow doctors to follow up with patients to see if treatments they prescribe are really working at the molecular level, Hood says.

The dream for this company is as bold as anything Hood has done before at more than a dozen companies he has co-founded.

Leroy Hood

“This is going to transform medicine,” Hood says. “My view is that P4 medicine—predictive, preventive, personalized, and participatory—will emerge over the next five to 20 years, and this is the first step. This is going to be the platform in the initial days.”

The science behind this vision—which Hood and others call systems biology—seeks to go beyond the traditional study of one gene or one protein in isolation. Instead, Hood and his colleagues use high-powered computers to look at full networks of genes and proteins, and how they interact.

“We are optimistic that systems biology will become a critical tool in the development of personalized medicine and believe that Integrated Diagnostics is at the leading edge in this field,” said Julie Eskay-Eagle, head of The Wellcome Trust Health Care Investments, in a statement.

The founding intellectual property for Integrated Diagnostics comes from two main places—Hood’s lab at the Institute for Systems Biology in Seattle and Jim Heath’s lab at Caltech …Next Page »

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While San Diego has seen a big decline in VC investments this year, it’s nice to know that Domain Associates, one of the region’s most-active life sciences VCs, has raised a new fund. We’ve got the rundown on that and more news of interest to the life sciences community.

—San Diego’s life sciences community got some encouraging news earlier this week when the venture capital firm Domain Associates said it has closed Domain Partners VIII, a $500 million venture capital fund devoted exclusively to the life sciences industry. While Domain is based in Princeton, NJ, the firm maintains an office in San Diego, and many of its investments are in California.

—Seattle’s Bonnie Ramsey first learned of a cystic fibrosis drug under development by San Diego’s Aurora Biosciences nine years ago, when she was working for the Cystic Fibrosis Foundation’s Therapeutic Development Network. Aurora was later acquired by Vertex Pharmaceuticals (NASDAQ: VRTX), and now the Cambridge, MA, biotech has advanced development of Aurora’s CF drug—now known as VX-770—to the final stage of clinical trials. Luke talked at length with Ramsey, who is a clinical researcher affiliated with Seattle Children’s Hospital, and the University of Washington.

—How long should it take a company’s reconstituted board of directors to elect a new chairman? It’s taken more than two months at San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN), which was subjected to a proxy fight this spring. That’s taxing the patience of Rick Barry, the founder and portfolio manager of Eastbourne Capital Management. Barry, whose firm holds a 12.5 percent stake in Amylin and has been pushing for change at the diabetes drug specialist, told me he wants the new chairman to be chosen from one of the four newly elected directors to the company’s 12-person board.

—SpectraScience (OTCBB: [[ticker: SCIE]]), a San Diego-based maker of optical biopsy technology used to detect cancerous tissue, has raised $930,000 of a planned $5 million investment round among individual investors. The medical diagnostics company plans to use the capital to expand its sales and distribution network for equipment it has developed to search for telltale signs of cancer.

——The National Institute of Neurological Disorders and Stroke has awarded a $3.3 million grant to privately held Ichor Medical Systems of San Diego for development of a DNA vaccine for Alzheimer’s disease. The company makes it easier for cells to absorb its DNA vaccines by using an electroporation delivery system that creates temporary pores in cell membranes.

—Sequenom (NASDAQ: SQNM), the San Diego biotech developing DNA-based diagnostic tests, has maintained radio silence since it first disclosed three months ago it had uncovered R&D test data was mishandled for its much-anticipated genetic test for Down syndrome. In a recent statement, Sequenom says the company is no longer relying on previously announced test data and results, but it’s unclear if that means the company’s planned introduction is slipping further behind schedule. Sequenom had planned to introduce its SEQureDx test in June.

—Avanir Pharmaceuticals (NASDAQ: AVNR), a one-time San Diego biotech now based in Aliso Viejo, CA, said it hopes to submit results of its late-stage drug trial for treating an unusual neurological disorder to the FDA in the first half of next year. The company said this week that its drug passed a final-stage clinical trial, designed to see whether it was effective in treating involuntary bouts of laughter, crying, and other emotional outbursts.

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Ichor Medical Systems, a privately held San Diego biotech, says it’s getting a $3.3 million grant award from the National Institute of Neurological Disorders and Stroke to develop a vaccine for Alzheimer’s disease. Using an electroporation delivery system that creates temporary pores in cell membranes, Ichor has been developing DNA vaccines and drugs for treating an array of diseases, including influenca, hepatitis, HIV, melanoma, and malaria.

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Health care reform took a turn for the better when members of key committees in both the U.S. Senate and House of Representatives recently recommended an approval pathway for biosimilars—products that attempt to be similar to an innovator biologic drug—while also preserving the hope for future medical treatments. Specifically, the committees agreed that to preserve medical innovation, biotech medicines should receive a reasonable 12 years of exclusive rights to their research data (also called “data exclusivity”) before a biosimilar may reference it for their own abbreviated approval. This period of time will act to preserve the research and development of breakthrough therapies for diseases like cancer, Alzheimer’s, and multiple sclerosis.

This is not simply a technical policy matter, but an important aspect of health care reform that is vital to the future development of new and better medicines. Amgen recognizes and supports a responsible, science-based regulatory pathway for biosimilars that ensures patient safety, follows sound science, demonstrates comparable efficacy — and as currently recognized by the Senate Health, Education, Labor and Pensions (HELP) Committee and House Energy and Commerce Committee — provides fair incentives for continued development of treatments for serious diseases.

We believe that a reasonable approval pathway for biosimilars will have a positive impact on our local and national economies. Washington state is a leader in biotechnology, and a biosimilar policy that preserves incentives for innovation will help ensure that our state can continue to be a leader in breakthrough medical innovation. Amgen is the largest private biotech employer in the region, providing approximately 900 jobs. The workforce we employ is highly educated, passionate about our mission to help patients, and dedicated to enriching the communities in which we live and work. Amgen’s Seattle-area laboratories are the largest commercial biotech facilities in the Pacific Northwest, representing a more than $600 million investment in biotechnology infrastructure.

The recent Senate and House committee decisions are also positive news for patients suffering from many types of crippling and life-threatening conditions who depend on the scientific breakthroughs that can only come from continued biotechnology research. As we frame changes to our health care policies, we must take care to preserve the innovation in biotechnology that holds the promise for future treatments for these patients.

Congress must also be mindful of the patient safety issues that are also at the heart of the biosimilars debate. It is essential that a scientifically-sound process is in place at the FDA to approve drugs that are similar, but not identical, to existing biotechnology medicines. Biologics are large, complex molecules, much larger and more complex than chemical molecules found in pills. You might visualize …Next Page »

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Avanir Pharmaceuticals (NASDAQ: AVNR) has been working for so long on a drug for an odd neurological syndrome that triggers involuntary laughter and tears, it’s almost enough to make some investors cry. Soon they will learn if the wait has been worth it.

In the next few weeks, the onetime San Diego biotech now just over the Orange County border in Aliso Viejo, CA, will announce results of a late-stage trial of a reformulated version of its experimental drug dextromethorphan/quinidine, or DMQ, to be marketed as Zenvia.

The drug’s original formulation reduced unwanted laughter and tears in neurological patients, but carried worrisome cardiac side effects and caused nausea and dizziness—a potential hazard in people with conditions that also affect balance, such as amyotrophic lateral sclerosis (Lou Gehrig’s disease). When the FDA raised concerns, Avanir agreed to develop and test a new version of the oral drug. That was three years ago.

“It has been a long road by our team,” CEO Keith Katkin tells me.

It could get longer still as Avanir begins to create a market for DMQ. Doctors may not recognize emotional outbursts in patients with neurological diseases or injuries as a behavioral syndrome with a potential treatment. Avanir calls the odd behaviors pseudobulbar affect, or PBA, but that name may not be familiar even to those who suffer from it. It isn’t described in the copies of the Merck Manual or Diagnostic and Statistical Manual of Mental Disorders I consulted to try to learn more about PBA. When I googled PBA, I didn’t immediately find pseudobulbar affect but pulled up numerous references to some better known PBAs, such as the Professional Bowlers Association.

Daniel Wynn, a Chicago neurologist who was involved in clinical trials for DMQ, tells me the symptoms of PBA go by different names—but the disorder is real, regardless of what it is called. He says there are parallels between PBA and overactive bladder or erectile dysfunction. There is little doubt that those conditions are real, he says, yet no one really used those terms until drugs came along to treat the disorders. Involuntary crying or laughing is distressing to patients, he says, who may withdraw from social situations or quit work because they can’t keep their reactions under wraps.

“Imagine if you shared an office with someone and you couldn’t stop crying,” Wynn says.

Still, there’s no question Avanir will need to do some serious marketing …Next Page »

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One consequence of the downturn is that it appears to be widening the gaps between the winners and losers in Seattle biotech. Here’s a rundown of who was up and who was down:

—One of the emerging winners, Dendreon (NASDAQ: DNDN), raised a fresh $221 million through a public offering underwritten by Deutsche Bank. The Seattle biotech company was able to raise that kind of loot to beef up its manufacturing and marketing capacity as it gets ready to bring its prostate cancer drug, Provenge, to the U.S. market. The company is in the midst of a hiring binge, looking to fill 81 jobs at last count, to give it the horsepower to commercialize this product that analysts say has $1 billion sales potential.

—Seattle-based Targeted Genetics, a mainstay of the field of gene therapy, appears headed in the opposite direction as Dendreon. The company (NASDAQ: TGEN) said it will consider bankruptcy or shutting down the business if it doesn’t raise money in the next few weeks. The company said it is “unlikely” it will raise the needed cash.

—Cell Therapeutics is continuing its high-wire act. A week after the Seattle biotech company (NASDAQ: CTIC) disclosed it only had enough cash to operate into August, it went out and raised $20 million from an unnamed institutional investor. The cancer drug developer plans to use some of the money to wipe out about three-fourths of the debt on its books—$89.2 million.

—As everyone who tries to make a living in the Seattle biotech scene knows, it’s hard to find a good job out there. But we had a thoughtful post this week from Richard Gayle, a former scientist at Seattle-based Immunex, on where he still sees opportunities for young scientists.

—Is Seattle a “minor league” innovation town? Ed Lazowska, a University of Washington computer science professor, made this point in front of a high-tech and biotech audience this week at the sixth annual OVP Venture Partners technology summit. His argument is that Seattle lags far behind San Francisco and Boston as hotbeds of innovation, and our region needs to have a serious debate about what we can do better.

—Seattle-based ZymoGenetics (NASDAQ: ZGEN) had a tidbit of positive news this week, that its IL-21 drug for metastatic melanoma showed an ability to shrink or stabilize tumors in a mid-stage clinical trial.

—A few miles up the road, Vancouver, BC-based Tekmira struck a big deal with Swiss pharmaceutical giant Roche to develop RNA interference drugs for cancer. Roche agreed to pay more than $18 million upfront to get access to Tekmira’s technology, which puts RNAi drugs in lipid nanoparticles so that they can remain stable and be delivered throughout the body.

—We had a flurry of news briefs cross our wire. Kirkland, WA-based ProteoTech, the developer of drugs for Alzheimer’s and Parkinson’s disease, raised $519,000. Aspen Medtech, a Bellevue, WA-based medical device incubator backed by Polaris Venture Partners and Three Arch Partners, closed down. And lastly, CMC Icos Biologics, the contract manufacturer of biotech drugs in Bothell, WA, reached a deal with Brisbane, Australia-based Implicit Bioscience to manufacture a drug for acute lung injury.

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Epix Pharmaceuticals, the Lexington, MA-based developer of an Alzheimer’s drug, said it is seeking strategic alternatives, including a sale or merger, to fund its operations. The company (NASDAQ: EPIX) has hired JP Morgan and Canaccord Adams to assist the board in evaluating its options, according to this AP report. The company needs a cash infusion to operate beyond August, according to the AP.

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ProteoTech, a Kirkland, WA-based developer of neurology drugs, said it has raised $519,000 in a debt offering, according to a regulatory filing. The company, founded in 1996, is testing an oral pill called Exebryl-1 in clinical trials for mild to moderate Alzheimer’s disease, and has another drug in animal testing for Parkinson’s disease, according to its website. Chairman Alan Snow couldn’t be reached for comment.

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Acadia Pharmaceuticals struck an important deal this morning to continue developing a Parkinson’s drug. The San Diego-based biotech company said it will get $30 million in upfront cash through an alliance with Biovail to develop a new drug for psychoses related to Parkinson’s and Alzheimer’s disease.

Acadia (NASDAQ: ACAD) stands to get as much as $395 million in milestone payments from Mississauga, Canada-based Biovail. Besides the upfront payment, Acadia stands to get $160 million in milestone payments if it can successfully complete clinical trials and regulatory applications, another $160 million in sales milestones, and $45 million if the drug can be applied for another use. Acadia will receive 15 percent royalties on sales below $100 million a year, and that percentage will rise to 20 percent for sales above that threshold.

The news was a major boost to Acadia, causing its stock to more than double this morning from $1 to $2.52 at 9:53 am Eastern. Even more importantly, the partnership brings in much needed cash. Acadia had about $60 million in cash entering this year. So this deal, in combination with a Japanese partnership announced in March that brought in $25 million upfront, will keep its balance sheet from relatively healthy compared to the many biotechs running out of money for their drug development programs.

The drug, pimavanserin, is designed to block a receptor called 5-HT2a, which appears on cells in the brain. The compound is currently in the final stage of clinical trials for patients with psychosis related to Parkinson’s disease. Psychosis is considered common in Parkinson’s patients, and is thought to be caused by overuse of the standard L-dopa medication to relieve symptoms of the disease, like tremors and rigidity. About 1.5 million people in the U.S. have Parkinson’s, and Acadia estimates that as many as four out of 10 patients suffer from psychosis, which can be in the form of hallucinations or delusions. There is no treatment for this condition in Parkinson’s patients.

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In this ugly economy, it takes a special recipe of compelling science and willing investors to launch a new biotech startup. Newly hatched biotech TargAnox, which is focused on developing drugs to curb a sometimes disease-related biochemical condition called oxidative stress, has stirred that recipe together in recent months and closed a $5.1 million Series A round of financing, company officials tell Xconomy.

Ascent Biomedical Ventures in New York led the round, providing the majority of capital. Partners Innovation Fund, the venture arm of the Partners HealthCare System in Boston, invested $250,000 in the financing round and helped draw up the initial business strategy for TargAnox, says Roger Kitterman, acting president of TargAnox. Kitterman is a partner at Partners Innovation Fund, which was formed in 2007 by Partners’ founding medical centers, Massachusetts General Hospital and Brigham and Women’s Hospital.

TargAnox is commercializing discoveries from the lab of its scientific founder, Joseph Loscalzo, who is chief of medicine at Brigham and Women’s in Boston. The firm aims to develop drugs—likely biotherapeutics such as antibodies—that protect cells from oxidative stress caused by diseases, Kitterman says.

Oxidative stress is caused by an imbalance of reactive oxygen molecules that can harm cells and even cause cellular death. Protecting cells from oxidative stress could provide new treatments for multiple illnesses including cardiovascular disease, diabetes, and Alzheimer’s disease. Kitterman says that the company hasn’t yet decided which diseases it will target. “We’re going to …Next Page »

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The board of Epix Pharmaceuticals (NASDAQ:EPIX) has appointed Elkan Gamzu to be its CEO, after the 35-year life sciences industry veteran served as interim chief executive beginning last summer, according to the company. Gamzu, 66, took over the CEO role at Lexington, MA-based Epix vacated by former Epix CEO Michael Kauffman, who resigned in July 2008 after a series of clinical and regulatory setbacks at the firm during his two-year tenure.

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Satori Pharmaceuticals has a dream of being the world’s first company to stop the progressive loss of memory and cognition caused by Alzheimer’s disease. Today, Cambridge, MA-based Satori will announce it has raised enough money to put its vision to the test, with $22 million in venture capital to develop drugs that halt the disease in early phases, something no other drug on the market today can claim.

Satori’s new shot of cash comes from some of the top life sciences VC firms, including InterWest Partners, Prospect Venture Partners, and New Enterprise Associates. Boston-based PureTech Ventures, which founded Satori, also participated in the round, along with other existing investors. Satori has hired Jeff Ives, the former head of neurology drug development at Pfizer, to be its CEO. I spoke with Ives by phone yesterday to learn more.

The opportunity for any effective drug against Alzheimer’s is huge, with more than 5 million people in the U.S. alone who suffer from the disease, or about one in eight people over age 65, according to the Alzheimer’s Association. The problem is that the best form of therapy on the market, cholinesterase inhibitors like Pfizer’s $2 billion-a-year drug, donepezil (Aricept), basically just slow down the mental decline for a few months before they wear off, Ives says. That class of drugs had its first breakthrough in 1987, and a generation of scientists have struggled ever since to come up with something better that can halt the cognitive damage and decline, or even help the brain restore its memory and thinking capacity.

“We’re pushing for early diagnosis, and we’re looking to stop the progression of the disease,” Ives says. “That’s the end-all.”

A predictable all-star lineup of directors and advisers have flocked to the company, including Bennett Shapiro, a senior partner with PureTech, and a former executive vice president of basic and external research at Merck. “Satori is an extremely exciting and unique opportunity,” Shapiro said in a phone message. “Obviously, Alzheimer’s is a huge unmet need, it’s completely unsolved. Getting a disease-modifying therapeutic is key, and Satori has a unique approach unlike anything I’ve seen before.”

So how exactly does Satori plan to solve this medical mystery? Satori is developing conventional small-molecule chemical drugs that can be safely taken on a chronic basis, Ives says. This family of compounds will be designed to block the production of toxic proteins, in a different way than other drugs designed to block buildup of amyloid proteins that are widely thought to kill brain cells and cause the disease. The company has important collaborations in place with academic researchers who are searching for traces of proteins in the blood that could serve as early warning signs of this toxic buildup. If caught early by one of these diagnostic tests, then a doctor could prescribe the Satori drug to halt the disease, Ives says.

“This would be something where you come in to the doctor with some memory loss that’s more than just about how you forgot where you put the car keys, but you haven’t yet gotten to the point where you can’t remember your daughter’s name,” Ives says.

One of the big challenges will be …Next Page »

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Ceregene said its experimental gene therapy technique for Parkinson’s disease failed in a mid-stage clinical trial of 58 patients. The San Diego-based biotech company said its injectable treatment, CERE-120, didn’t offer a signficant improvement compared with a placebo. Ceregene’s chief scientist, Raymond Bartus, said in a statement he was “stunned” by the result, and will continue to analyze the findings to figure out why it turned negative. The company also has treatments in development for Alzheimer’s disease, Lou Gehrig’s disease, and eye conditions.

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Boston is the biggest center of life sciences in the Xconomy network, and by our analysis, the Bay State’s biotech sector is also the best equipped to survive the economic crisis.

I reached this conclusion by combing through public company filings of more than 70 life sciences companies in Boston, Seattle, and San Diego. For all those companies, I asked the two most important questions about their financial health: How much cash does the company have in the bank, and how fast is it burning through it?

The good news for Boston is that it has a lot of companies with a lot of cash. Of the 40 companies that reported quarterly financial results through the end of September, 15 of them had war chests with more than $100 million. A subset of that group—10 companies—are also quite profitable, including Genzyme, Biogen Idec, and Thermo Fisher Scientific, to name a few. By comparison, San Diego has 10 companies with more than $100 million in reserves, and just three companies that are consistently profitable. Seattle has two companies in the $100 million cash club, and just one profitable operation (Sonosite, the ultrasound device maker).

Of course, there’s plenty of misery and anxiety to go around in Boston, too, as you’ll see below. Here’s a rundown of the 40 companies I analyzed, in alphabetical order. It’s not a comprehensive list, so if you’d like to nominate an operation that was left out, please send us a note at editors@xconomy.com.

—Abiomed (NASDAQ: ABMD). The Danvers, MA-based medical device company had $50.6 million in cash and investments at the end of September and a $6.3 million net loss in the third quarter.

—Alkermes (NASDAQ: ALKS). This Cambridge, MA-based company burned through about $47 million of its cash in the first nine months, but it still had $425.8 million left at the end of September.

—Alnylam Pharmaceuticals (NASDAQ: ALNY). The Cambridge, MA-based developer of RNA interference drugs doesn’t have any products on the market, but it actually has more cash now than it did at the beginning of the year because of partnership deals. Alnylam had $520 million in cash and investments at the end of September, and expects to close the year with more than $500 million. …Next Page »

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Not many people in the world have played a leading role in delivering 23 new drugs and vaccines to the U.S. market. Bennett Shapiro is the only person living in Seattle who can say it.

Shapiro, 69, spent the first chapter of his career as a biochemist at the National Institutes of Health, followed by a 20-year run at the University of Washington. He left the chairmanship of UW’s biochemistry department in 1990 to become a leader at Merck. He was executive vice president of basic research during a golden age for the company, and oversaw the emergence of the ill-fated pain reliever Vioxx, and a vaccine to prevent cervical cancer, Gardasil. When he left, he was in charge of global in-licensing, where it was his job to identify the most exciting biomedical research in the world happening outside of Merck and bring it in.

He rarely does interviews, but I spoke with Shapiro in a fascinating 45-minute phone conversation last week while he was in New York. The point wasn’t to reminisce. It was to get up to speed on all the leading-edge science Shapiro has his fingers on right now. For starters, he’s a partner with one of Boston’s leading life sciences venture firms, Puretech Ventures. He’s also on at least a dozen boards to lend his advice to a younger generation of scientists and entrepreneurs at places like Celera, Fate Therapeutics, Ikaria, and the Mind & Life Institute.

“This is a wonderful time in life for me, having both experience and energy,” Shapiro says. “I try to be useful. That’s the name of the game in life.”

If you look carefully at which organizations Shapiro has joined, it shows he has omnivorous interests in a wide variety of life sciences. He has a view of more precise genetic diagnostics (Alameda, CA-based Celera), adult stem cell therapies (San Diego-based Fate), and hibernation-on-demand that could save people from bleeding to death (Ikaria, which has significant operations in Seattle). Another company, Tel Aviv, Israel-based Vascular Biogenics, is developing a novel pill to tamp down the inflammation that causes heart disease to turn deadly. He also has a taste for global health, through the nonprofit Geneva, Switzerland-based Drugs for Neglected Diseases Initiative, which has developed two new drugs for malaria in Africa as well as Asia and Latin America, with only about $70 million of investment. The drugs cost 25 cents for kids, and 50 cents for adults, he says.

I get the impression that a few more Seattle companies would like to tap into Shapiro’s experience more of the time, but he’s careful about how he doles it out. Carl Weissman, president of the Seattle-based startup incubator Accelerator, said that Arch Venture Partners’ Bob Nelsen has had the most success getting Shapiro to lend his advice to young companies. “Ben’s years of experience in developing drugs is not something you find in very many people in Seattle. There aren’t many people around here hanging out at Starbucks who have experience of taking 20 drugs onto the market,” says Weissman, who served with Shapiro on the board of Cambridge, MA-based Elixir Pharmaceuticals.

All this activity requires that he spend a lot of time on airplanes, but Shapiro still spends about one-third to one-half of his time at a waterfront home in Seattle’s Magnolia neighborhood. It’s a refuge, with inspiring views of Puget Sound and the Olympic Mountains, where he likes to read and host friends for dinner. He still skis and hikes in the Cascades, and says one of his favorite things to do is sail on the Sound by the San Juan Islands. “I love Seattle,” he says.

While he was at the UW, Shapiro told me, he never thought he’d leave Seattle. When Merck came calling, he said he had “leftist” ideas about price-gouging pharmaceutical companies, and he wasn’t very interested. “I didn’t think working in the pharmaceutical industry would be a noble undertaking,” he says. …Next Page »

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TorreyPines Therapeutics (NASDAQ:TPTX) says it has agreed to sell its Alzheimer’s disease genetics research program for $1.5 million to partner Eisai Co. TorreyPines will record the payment from the Nov. 6 deal in its fourth quarter financial results, the company said today in a filng with government regulators. 

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Fidelity Biosciences has invested $65 million in EnVivo Pharmaceuticals, a Watertown, MA-based developer of drugs for Alzheimer’s and schizophrenia, in a Series D venture financing round, according to this report on Fierce Biotech from Dow Jones VentureWire.

The Boston-based fund bought out all of the company’s other investors, including BCM Technologies, Cogene Ventures, and NeuroVentures Capital, according to the report. The new round of cash will support drug candidates for schizophrenia and Alzheimer’s in the early stages of clinical testing, according to its website. EnVivo, which expects the cash to last into 2010, is considering forming a partnership to co-develop its drugs with a pharmaceutical company, according to the report. A spokesperson for EnVivo didn’t immediately respond to a request for comment.

EnVivo, according to its website, was founded in 2001. Its CEO is Kees Been, former CEO of Bionaut Pharmaceuticals and a former senior vice president of business development for Cambridge, MA-based Biogen Idec, whom Ryan interviewed last November. EnVivo says on its website that it has 38 full-time employees.

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