—San Diego’s Amylin Pharmaceuticals says Bydureon, its new once-a-week drug for treating Type 2 diabetes can hit the market as early as next month, after the FDA cleared Bydureon. The FDA rejected the Amylin’s drug twice before. An estimated 26 million people in the United States, or roughly 8 percent of the population, have type 2 diabetes.

—San Diego’s life sciences sector has expanded since 2009, with employment increasing by more than 5,550 jobs, or 15 percent, over the past two years, according to a new economic report from Biocom, the local industry group. The comprehensive study counted more than 1,700 life sciences companies with a total of 41,937 employees throughout San Diego County in 2011, and says those numbers are expected to grow over the next two years.

—The FDA gave its approval to Cambridge, MA-based Vertex Pharmaceuticals (NASDAQ: VRTX), which has substantial operations in San Diego, for a new drug called Ivacaftor (Kalydeco), developed to treat a rare form of cystic fibrosis. The twice-a-day pill targets about 4 percent of the 30,000 patients in the U.S. with cystic fibrosis.

—Johnson & Johnson’s reorganized R&D operation in San Diego, now known as Janssen Healthcare Innovation, is trying an experiment in innovation by creating an incentive prize challenge. Janssen is offering a total of $250,000 for technology that helps improve care for patients who have just been discharged from a hospital.

—The folks who produce the quarterly MoneyTree report on venture capital funding just released a deeper dive into the details of life sciences investments. The survey shows that VC funding for life sciences increased 21 percent nationwide in 2011, with a total of $7.5 billion going into 785 deals. San Diego ranked third among metropolitan regions in terms of capital invested in the fourth quarter. The top five are Bay Area ($498 million), Boston ($384 million), San Diego Metro ($193 million), NY Metro ($98 million), and Orange County ($97 million

—Optimer Pharmaceuticals (NASDAQ: OPTR) CEO Pedro Lichtinger outlined his plans for expanding the market for the company’s first product, the antibiotic fidaxomicin (Dificid), as a preventative therapy for hospital patients at risk for a nasty intestinal infection called C. difficile. San Diego-based Optimer is planning a clinical trial to prove the drug can help prevent severe diarrhea in patients undergoing bone-marrow transplants.

—A tweet from Bob More of Frazier Healthcare Ventures prompted Luke to delve into the importance of character among life sciences leaders in his BioBeat column. “Politics pretty similar to backing CEO’s,” More said. “Newt may be smart and a good debate guy. But Newt=Smug. Never back smug,”

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News of FDA drug approvals shone the spotlight on some New England biotechs this week.

—Waltham, MA-based Alkermes (NASDAQ: ALKS) and San Diego-based Amylin Pharmaceuticals(NASDAQ: AMLN) won FDA approval for their injectable diabetes drug exenatide once-weekly (Bydureon). This was their third time seeking clearance for the drug, which uses technology from Alkermes to last long enough in the bloodstream to turn it into a once-weekly injection

—Additionally, the FDA cleared a drug developed by Lexington, MA-based Curis and its partner Genentech as treatment for a common form of skin cancer called basal cell carcinoma. The drug, vismodegib (Erivedge), is the first approved product for Curis.

—They say good news comes in threes. Cambridge-based Vertex Pharmaceuticals also got a faster-than-expected FDA OK to start selling its drug ivacaftor (Kalydeco) as a treatment for a rare form of cystic fibrosis. That’s the second drug approval for Vertex (NASDAQ: VRTX), which also sells a treatment for hepatitis C. Bonnie Ramsey, one of the key people involved in developing the drug, talked to my colleague Luke about the implications of the approval.

—But there was some bad news, too: A week after reporting data that its pancreatic cancer treatment saridegib (IPI-926) showed some success in a small study, Infinity Pharmaceuticals (NASDAQ: INFI) halted a bigger, mid-stage clinical trial of the drug when it showed patients were living longer in the placebo group. The Cambridge, MA-based company’s shares fell more than 30 percent after the news last Friday.

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[Updated: 3:47 pm] Amylin Pharmaceuticals and Alkermes have gone to the FDA twice before to seek approval of their new diabetes drug, and been turned back, but now the persistence has paid off. The FDA has cleared their once-weekly injectable diabetes drug for sale in the U.S.

San Diego-based Amylin (NASDAQ: AMLN) and Dublin- and Waltham, MA-based Alkermes (NASDAQ: ALKS) today won clearance to start selling exenatide once-weekly (Bydureon) in the U.S., according to a letter posted on the FDA website. The approval came after the agency held up the application twice before—first in March 2010, and again in October 2010, saying it needed further assurance that the drug doesn’t cause an irregular heart rhythm known as QT prolongation. The companies expressed confidence back in July that the issue had been resolved, based on results of an additional clinical trial. The drug won approval in Europe back in June.

[Updated with added detail on Alkermes royalty] The long-awaited U.S. approval is vital to future of Amylin, as it started investing back in 2005 in a $500 million Ohio factory to mass-produce the new drug. Amylin’s fortunes have become even more tied to Bydureon since November, when longtime partner Eli Lilly bowed out of a collaboration to co-market the drug. Alkermes, which provided technology that made the drug last long enough in the bloodstream to turn it into a once-weekly injection, will pick up an 8 percent royalty on sales of the first 40 million units sold in a single year, and a 5.5 percent royalty once sales exceed 40 million units in a single calendar year. While there is competition from Novo Nordisk’s liraglutide (Victoza) as a once-daily injection for diabetes, and various other oral pills and injectable insulin, the new drug from Amylin and Alkermes is the first treatment that can be injected as little as once a week. Amylin has been marketing the original form of exenatide (Byetta) as a twice-daily injectable since 2005.

About 25 million people in the U.S. have the disease, and numbers are growing fast as the nation’s obesity rate continues to surge. The new Amylin drug could generate $1.25 billion in peak U.S. sales in 2018, said Cory Kasimov, an analyst with JP Morgan, in a note to clients on Nov. 11.

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Yesterday, we ran the first installment of an interview with Eli Lilly CEO John Lechleiter, in which he says the pharmaceutical industry is breaking out of its current rut, and is beginning to get more productive at pumping out more innovative new drugs.

Today, we follow up with the second half of the interview, which includes some interesting thoughts on “open innovation” that were prompted by a question from Twitter.

Xconomy: Is it possible to get too big as an organization to innovate? Is this partly why you’ve resisted the urge to do a mega-merger like some people have said they want to see?

John Lechleiter: We’ve done lots of studies, several huge studies in the late 1990s that date back to the pre-Prozac patent expiration. We fail to see a connection between size and innovativeness. I’m not smart enough to say that it’s best to be this size or that size, but obviously if you’re a $50 billion-a-year company or a $70 billion-a-year company, growing 10 percent a year means you have be a lot more innovative in an absolute sense than a company of Lilly’s size at $23 billion in revenue. We study this question of how to create a company that’s really innovative. I don’t think there’s an easy answer, otherwise the industry would have locked and loaded on it.

I do think there are things that matter. I think co-location is important. Hiring talented people and keeping them. There are cycle times of 10-15 years in this industry. I’ve been at Lilly for 32 years, and I’ve only been around the horn two or three times.

We still think we hire people for careers. That may sound corny to some people, and fly in the face of what we hear. I think we heard today (from University of Washington president Michael Young) that people can expect to have three different careers. But we aim to give people a reason to want to stay and want to be productive at Lilly, and that they can stay and realize their career ambitions. Obviously there are lots of other things that go into the equation. Things like what kind of leadership and management is most conducive to innovation. I can tell you when I talk about commitment to innovation, this is what our scientists want to hear. They want to know they have a CEO who is committed to what they do. I think it matters a lot. I’m betting on them, and they know it. And I think it’s a good bet.

Eli Lilly CEO John Lechleiter

X: You made a reference earlier today about the pharma industry’s need to better communicate what it does to the broader public. But I have to challenge that, and bring up some of the major ethics problems this industry has had over the years, and which the public hears a lot about. Whether it’s hiding bad data, or bribing clinical researchers overseas to get good data, or pay-to-delay agreements with generic companies, tax evasion, off-label marketing, and on and on and on. My question to you is what are one or two things that the industry can do, that are legitimate things, that could restore some public confidence?

JL: First of all, transparency. We were the first company, in 2004, to post our clinical trial results online, whether they are positive or negative. Now everybody does that. It’s interesting to me that you don’t hear much anymore about concerns over clinical trial data not being shared. Or about negative results not being shared. It doesn’t mean, Shazam!, the problem goes away. But I think most people are reasonably assured now, through clinicaltrials.gov, and through other disclosure mechanisms, that the light in the room is on, and there is widespread knowledge of what trials have been started, which ones are running, and what the results are.

It’s interesting to me to think back 10-15 years ago, about all the reasons we didn’t want to share that information, and most of that revolved around concerns about proprietary information. We have shareholders to think of, and competitive issues to manage. It turns out that wasn’t such a problem. Transparency around clinical trials is something we have been able to manage, and we’ve been able to maintain necessary protection around the intellectual property that we need.

Secondly, we have to show we can be trusted. We need to recognize that some people’s view of pharma is going to be colored by past transgressions. People can point to a failure here or there, but in the long run we have shown we can be trusted partners, based on our behavior. We put in a state-of-the-art, robust, and effective program within Lilly to ensure it’s more than words. We have an assurance that all 35,000 people across the company who work for us understand how it is we do business, and how the way we do business reflects on who we are, and how we are seen by the public.

The other thing I was talking about before (during the WBBA conference) is about doing a better job over time, putting in understandable terms, what we do, how we do it, and why we do it. Our business is very complex. It doesn’t lend itself to sound bites. When you say to people it takes $1 billion to bring a medicine to the market, can I explain that in 15 seconds? It’s very difficult to do. It’s hard to talk about why intellectual property is important. Some will say it keeps medicines from being widely available in countries where people can’t afford to pay for them. There’s a great discussion around that. The answer is IP doesn’t preclude that automatically. But having those debates, and being out in public as I was here today, and being willing to engage on tough and sensitive topics is something all of our leaders and all our companies frankly need to be more engaged in.

X: You also spoke earlier about the need to modernize the FDA to help improve innovation. What do you have in mind specifically? … Next Page »

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The price of shares at San Diego’s Gen-Probe, Amylin Pharmaceuticals, and Optimer were clipped for various reasons over the past week, but several local startups successfully raised capital. Our good news, bad news briefing begins here.

—Rempex Pharmaceuticals, a San Diego biopharmaceutical startup developing a new approach to antibiotics resistance, said it raised $67.5 million in Series B venture funding—bringing total funding for the company to $76 million since its founding less than five months ago. The startup is on a fast track, and plans to use the capital to accelerate the commercialization of its therapies for treating gram-negative bacterial infections. Rempex said it plans to file a new drug application for its first drug candidate in the second half of 2012. New investors Frazier Healthcare Ventures and Vivo Ventures joined existing investors SV Life Sciences, OrbiMed Advisors, and Adams Street Partners in the latest round.

—Cambridge, MA-based Vertex (NASDAQ: VRTX) has held the high ground in hepatitis C therapies since the FDA approved its protease inhibitor drug telaprevir (Incivek) last year. But two rivals are gaining ground. The price of Vertex shares have fallen with the rise of Alpharetta, GA-based Inhibitex (NASDAQ: INHX) and Princeton, NJ-based Pharmasset (NASDAQ: VRUS). Vertex, which has operations in San Diego, hit a 52-week high of $58.87 on May 12, but it has been trading around $31 in recent days.

—Adding to the competition in hepatitis C drugs, San Diego-based iTherX Pharmaceuticals raised almost $3.2 million to advance its development of a prophylactic treatment for Hepatitis C, according to a regulatory filing earlier this week. The startup said in March that its drug candidate TX-5061 appears to prevent the hepatitis C virus from entering liver cells, and has shown “potent preclinical antiviral activity against all HCV genotypes.” Former UCSD virologist Flossie Wong-Staal is a co-founder and chief scientific officer. The company raised $2.8M in 2010.

—San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN) agreed to pay Eli Lilly more than $1.5 billion as it gradually reassumes responsibility for global commercialization of its best-selling diabetes drug in a deal that ends its 10-year partnership with Lilly. Under their agreement, which also ends litigation with Lilly, Amylin will take over sales of exenatide (Byetta) in the U.S. by the end of this month—and global sales of both Byetta and an experimental, extended release version (Bydureon) over the next two years. Amylin shares, which hit a 52-week high of $16.65 on Jan. 27, have been trading around $10 a share over the past few weeks.

—Xconomy east coast biotechnology editor Arlene Weintraub profiled PharmaSecure, a four-year-old startup in Lebanon, NH, with operations in San Diego, Michigan, and India. The company provides machines to drug-makers that print unique bar codes and serial numbers on drug packaging. PharmaSecure raised $3.9 million last month from Innovation Endeavors, Gray Ghost Ventures, Healthtech Capital, and angel investors. The Tech Coast Angels (TCA) participated in … Next Page »

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We are limited, not by our abilities, but by our vision. —Ralph Waldo Emerson

In a world thick with healthcare conferences, MedtechVision, held September 15-16 at the Rosewood Hotel in Menlo Park, CA, stood out, both for its quality of content and for its participants.

“I hadn’t given any thought to the fact that it was theoretically a ‘women’s conference’ before I walked into the room. I’d just promised the organizer, a friend, that I would come,” said Vance Vanier, CEO of Navigenics. “But walking into the room full of women had quite an impact; I realized how much I stood out and it was worth noting. It made me realize what women experience when they go to events like this.”

Vanier was commenting on his experience as a male attendee at the conference, which was intended to provide a platform for the many women executives in the medical technology field to wield the microphone. Some 200 women and 3 intrepid men spent two days in a room hearing from some of the most influential and experienced provider, corporate, government and investment executives representing medical technology organizations nationwide.  If you are a man and reading this article, don’t run away yet. What was most notable about the conference overall was that it wasn’t for women and about women—rather it was intended to give a platform to executives who just happened to be women and who are rarely given a place at the microphone to talk about general medical technology issues that apply to the entire field. No “bikini medicine” here; this was a conference about health and business in a world where bringing new medical technology to market is getting ever more challenging.

Organized by Covidien, Abbott Vascular, and a number of other organizations with leadership roles in the field of medical technology, the conference gave healthcare executives a chance to come together to learn and problem-solve within this highly stressed and rapidly changing field. The presentations and panels covered emerging regulation and reimbursement issues as well as the challenges of nurturing medical technology companies in a rapidly changing healthcare industry. Not only was it unusual to see a conference like this where all of the experts were women, but it was also unusual to see a medical technology conference where the issues of cost and the need for evidence-based medicine were so closely coupled in the context of innovation.

Presenters and panel members, including executive representation from public and private companies, the FDA, numerous hospital systems, insurance carriers, and private equity firms, were all female, but it was their mountain of experience and knowledge that stood out, not their hairstyles. Keynote speakers included Ginger Graham, former CEO of Amylin Pharmaceuticals and former group chairman, Office of the President, Guidant Corp.; Bray Patrick-Lake, president & CEO of the PFO Research Foundation; and, Ellen Zane, president & CEO of Tufts Medical Center. Zane’s message to the audience was right on point: Providers must reduce needless variations in care, insurers must reform their administrative practices, employers must stop offering the world to employees while complaining about costs, governments must pay adequately for needed care, and consumers must take responsibility for their own behavior when it comes to their health. Without great advances toward these goals, Zane noted, the healthcare system cannot evolve beyond its troubled state.

Particularly interesting were the pairings on panels that juxtaposed people on all sides of key issues. The reimbursement panel, featured medtech executives from Sonitus and Covidien, as well as the chief medical officer of CMS Region IX, Dr. Betsy Thompson, and Robin Cisneros, national director of medtech assessment for the Permanent Federation.  A key takeaway from this panel was the rising tension between payers’ desire to reimburse only for new products that demonstrably improve health outcomes and manufacturers’ desire to … Next Page »

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It seems that IT news has dominated this week, so we’re bringing you a short and sweet roundup of life sciences funding and drug development news from around New England.

—Cambridge, MA-based Ironwood Pharmaceuticals (NASDAQ: IRWD) and New York-based Forest Laboratories (NYSE: FRX) announced that they submitted a new drug application to the FDA for their irritable bowel syndrome treatment, linaclotide. The application included data from safety studies and four placebo-controlled clinical trials of patients with IBS with constipation and chronic constipation.

—Boston-based T1D Exchange, funded by a three-year $26 million grant from the charitable trust set up by hotel heiress Leona Helmsley and her husband, is launching a social media site for diabetes patients, called Glu. T1D got started in September 2010 as a clinical registry service focused on connecting diabetes patients and researchers.

—T2 Biosystems of Lexington, MA, nabbed a $23 Series D investment from new investor Aisling Capital, with participation from its return backers Flagship Ventures, Polaris Venture Partners, Flybridge Capital Partners, Physic Ventures, Partners Healthcare, Arcus Ventures, RA Capital, Camros Capital, and WS Investments. T2 said it will put the funding toward development and clinical trials for its diagnostic machine that it says can identify biological substances such as proteins, small molecules, viruses, and DNA more quickly and cheaply than traditional optical-based technology.

—The FDA has set a deadline of January 28 to complete its newly updated review of exenatide once-weekly (Bydureon), a once-weekly injectable diabetes medicine from San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN), Indianapolis-based Eli Lilly (NYSE: LLY), Waltham, MA-based Alkermes (NASDAQ: ALKS).

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San Diego’s life sciences community was teeming with news over the past week. We’ve got it all cultivated for you.

—Shares of San Diego’s Adventrx Pharmaceuticals (NYSE Amex: ANX) plunged by more than 55 percent after the biotech company said the FDA refused to approve its new lung-cancer drug vinorelbine injectable emulsion (Exelbine) until a key bio-equivalence trial is repeated. Adventrx CEO Brian Culley has said the company has enough capital to shift its focus to other drugs in its pipeline.

—Qualcomm’s (NASDAQ: QCOM) wireless health team hit the halfway mark today in an eight-week fitness challenge that has equipped 32 employees with wireless monitors and weight scales to help increase their activity and lose weight. I posted a Q&A with Qualcomm’s Don Jones, who also posted this update today on the Qualcomm blog. A Qualcomm spokesman tells me the 32 participants have burned a total of roughly 1.9 million calories and lost a total of 48.5 pounds.

—Pfizer added UC San Diego Health Sciences to its network of drug discovery innovation centers that includes prominent research institutions in Boston, New York, and San Francisco. UC San Diego Health Sciences’ partnership agreement with Pfizer could be worth as much as $50 million over the next five years.

—The La Jolla Institute for Allergy & Immunology officially opened a new center today that is focused on RNA interference technology, and is intended to operate as a collaborative and open resource for the scientific community in San Diego and elsewhere. The RNAi Center was funded by a $12.6 million grant from the National Institutes of Health. If scientists make discoveries of potential clinical benefit, “the natural next step would be to seek partnering opportunities for clinical translation and potential drug development,” said Steve Wilson, the center’s executive director and chief technology officer.

—Former SKY MobileMedia CEO Naser Partovi introduced a year-old startup that provides outpatient management software called Wellaho. Partovi told me that Wellaho operates a HIPAA-compliant social media network around the chronically ill, and which is tailored to the needs of that patient. “You can’t just join Wellaho,” Partovi says. “It must be prescribed for you by your doctor.”

—San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN) and Japan’s Takeda Pharmaceuticals said they are halting further development of pramlintide/metreleptin for the treatment of obesity. Their program was in mid-stage development as a … Next Page »

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San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN), Indianapolis-based Eli Lilly (NYSE: LLY), and Waltham, MA-based Alkermes (NASDAQ: ALKS) said today that the FDA has set a deadline of Jan. 28 to complete its review of the newly updated application for exenatide once-weekly (Bydureon). The companies are seeking FDA clearance to start marketing the new product as the first once-weekly injectable medicine for diabetes patients in the U.S. The drug was approved in the European Union in June.

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[Updated 8/4/11, 6:55 pm. See below.] San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN) and Japan’s Takeda Pharmaceutical threw in the towel today, saying they are discontinuing development of pramlintide/metreleptin for the treatment of obesity.

[Updated 8/4/11, 6:55 pm to clarify explanation] Observers feared something like this might happen in March, when Takeda and Amylin suspended a clinical trial examining the safety and effectiveness of the compound, which combines pramlintide, an analog of the natural hormone Amylin, with metreleptin, an analog of human leptin. The program was in mid-stage development as a formulation for twice-a-day injection. The partners halted the study voluntarily to investigate antibody-related findings with metreleptin in two patients who had been participating in a broader obesity trial.

A spokeswoman for Amylin, however, tells me in an email this evening, “the joint decision to discontinue the pramlintide/metreleptin program was not related to the March announcement, but rather to the reasons specified in this afternoon’s press release.”

In their statement, the companies said their joint decision was based on a commercial reassessment of their prospects as well as “evolving dynamics” within the field of obesity therapeutics. Amylin and Takeda plan to evaluate other assets for treating obesity under the terms of their existing collaboration agreement. The two companies signed that agreement in late 2009, a partnership deal that was once valued at more than $1 billion for Amylin.

Amylin CEO Dan Bradbury told Luke in January the company was still working on getting the right formulation of metreleptin and pramlintide before moving to a late-stage clinical trial.

[Updated 8/4/11, 6:55 pm to correct nature of single heart study required by FDA] Amylin said earlier this week it had re-submitted its application to the FDA for another drug—exenatide once-weekly (Bydureon)—with two partners, Indianapolis-based Eli Lilly (NYSE: LLY), and Waltham, MA-based Alkermes (NASDAQ: ALKS). In an unexpected move last October, the FDA refused to approve exenatide once-weekly for sale to U.S. diabetes patients until the partners conducted a study focused on an irregular heart rhythm known as QT prolongation.

In their statement today, Amylin and Takeda said the abandoned study was not expected to require either company to revise its latest financial guidance for their respective 2011 fiscal years.

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If there’s a common thread in San Diego’s biotech news over the past week, it would be perseverance. If you can persist with our briefing, you’ll see what I mean.

—Cambridge, MA-based Vertex, (NASDAQ: VRTX), which has a sizable presence in San Diego, said it generated $74.5 million in second-quarter sales of telaprevir (Incivek), its new drug for treating hepatitis C. Wall Street analysts had expected the number would be less than half that.

—San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN), Indianapolis-based Eli Lilly (NYSE: LLY), and Waltham, MA-based Alkermes (NASDAQ: ALKS) re-submitted an application to the FDA to market exenatide, its new, once-a-week version of Bydureon.

—San Diego-based Arena Pharmaceuticals, (NASDAQ: ARNA), which sustained a major setback last October when the FDA refused to clear its obesity drug, reported results from a recent study that could address part of the FDA’s objections. Arena said its weight-loss drug lorcaserin (Lorqess) was found in cerebrospinal fluid at much lower concentrations in human beings than in rats. The company plans to address each of the concerns raised by the FDA about its drug.

—San Diego-based BrainCells Inc., which has raised at least $77 million in venture capital since it was founded in 2003, has raised nearly $1 million in a planned financing of $14 million. But BrainCells is moving forward without CEO James Schoeneck, who joined the company more than five years ago, and Carrolee Barlow, who was the chief scientific officer. Consultant Robert Williamson has been serving as the company’s acting CEO.

—There’s a new venture firm in town, called Moore Venture Partners. Terry Moore told me he can make a difference in helping San Diego’s underserved startup community with even a small fund of $10 million to $15 million. Moore plans to invest in both tech and life sciences startups, and participated in last year’s $26.5 million Series B financing at San Diego-based Astute Medical.

—San Diego-based Illumina (NASDAQ: ILMN) said it is working with the University of Oxford to sequence the whole genomes of 500 people with a range of life-threatening genetic diseases or disorders that pose major challenges in diagnosis, treatment, and care. The team plans to recruit patients from Oxford’s clinical community in an effort to identify genetic mutations that could be used to diagnose their diseases and optimize treatment.

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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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San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN), Indianapolis-based Eli Lilly (NYSE: LLY), and Waltham, MA-based Alkermes (NASDAQ: ALKS) said today that they have re-submitted an application to the FDA, for clearance to start marketing exenatide once-weekly (Bydureon) as a new treatment for diabetes in the U.S. The agency turned down an earlier application, asking the companies to produce more data showing the drug doesn’t have an effect on abnormal heart rhythms known as the QT interval. The new application includes such a study, which the companies reported on earlier this month. The FDA will likely have six months to complete its review of the application, the companies said. If approved, analysts expect the drug could generate billions in annual U.S. sales.

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Against a backdrop of rising worries over the U.S. economy, we saw San Diego life science companies forming new partnerships, raising new funding, and closing some new deals over the last week. We also saw drops in share prices at two of our biggest life science companies. Your briefing is ready now.

—San Diego’s Trius Therapeutics (NASDAQ: TSRX) agreed to an exclusive licensing agreement that gives Germany’s Bayer rights to market its new torezolid phosphate antibiotic in most of Asia, Africa, Latin America, and the Middle East. Bayer agreed to pay Trius $25 million upfront and to provide $69 million in future milestone payments, along with lucrative royalty payments. Trius retained ownership of the drug in the U.S., Canada, and Europe.

—Chelmsford, MA-based Brooks Automation (NASDAQ: BRKS), which makes a variety of semiconductor-based equipment, paid more than $79 million to acquire Nexus Biosystems of Poway, CA. Nexus makes automated equipment used to handle chemical and biological sample in laboratories worldwide.

—Chemist Peter Schultz, who was director of the Genomics Institute of the Novartis Research Foundation until a year ago, is listed as a co-founder and scientific adviser at Wildcat Discovery Technologies, a San Diego startup specializing in cleantech materials development. Wildcat, which just raised $7.5 million, is applying high-throughput screening technologies to synthesize and test thousands of new materials for potential use in batteries and elsewhere.

—Shares of Illumina (NASDAQ: ILMN), the San Diego maker of genetic diagnostic equipment, plunged by nearly 18 percent yesterday, after the company’s revised 2011 forecasts fell short of Wall Street estimates. Illumina’s stock closed last night at $57.33 a share, down $12.32 from the previous day’s close of $69.65. The company estimated its profit will increase this year by 33 to 36 percent over 2010 and revenue should rise by 24 to 26 percent. Both estimates are less than analysts were expecting, however.

—The price of shares in San Diego’s Amylin Pharmaceuticals (NASDAQ: ALMN) lost almost 10 percent after the diabetes drug developer reported a bigger loss Tuesday than analysts were expecting. In a conference call with investors, Amylin CEO Dan Bradbury led with positive news out of Europe, where regulatory agencies gave marketing authorization for the long-acting version of exenatide (Bydureon). Amylin’s partner, Eli Lilly, recently launched the product in the United Kingdom.

—San Diego-based ResMed (NYSE: RMD) agreed to give San Diego-based CareFusion (NYSE: CFN) a license that gives CareFusion exclusive rights to distribute two of ResMed’s non-invasive ventilators and accessories in the United States. ResMed has not previously sold these ventilators here, and expects to gain a marketing advantage by using CareFusion’s extensive sales contacts at hospitals, acute care, and nursing facilities.

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The diabetes drug that people are counting on at Amylin Pharmaceuticals, Eli Lilly, and Alkermes has passed a crucial test that the FDA demanded almost 10 months ago.

San Diego-based Amylin (NASDAQ: AMLN), along with its partners, said today that exenatide once-weekly (Bydureon) didn’t appear to cause an irregular heart rhythm, known as QT prolongation, when it was studied in healthy individuals at both normal, and higher-than-normal doses. The study compared 75 people who were randomly assigned to get the new drug, or a placebo. Full study details weren’t released in today’s statement, but the companies said they plan to present the data at a future medical meeting, and submit the results for publication.

Investors and researchers are watching this study carefully because this drug seeks to replace a twice-daily injection with a once-weekly shot—raising the potential of a more convenient medicine for patients, and a steadier way to control blood sugar in people’s daily lives. Amylin shares jumped 10 percent in after-hours trading after the announcement.

“The findings of this thorough QT study are clear. Exenatide did not lead to QT prolongation, even at very high concentrations in the blood,” Christian Weyer, Amylin’s senior vice president of R&D, said in a statement. “This study was designed in accordance with existing guidelines and in consultation with the FDA. We are confident in these results and will continue to work toward making Bydureon available to patients in the U.S. as soon as possible.”

The FDA delayed the original application for approval of Bydureon last October, when it asked the companies for more data on the drug’s effect on QT prolongation. The new data will be packaged together and shipped off to the FDA for review sometime before the end of September, the companies said. Amylin has the most at stake in the FDA’s decision, since it only has two other approved products and the new drug is supposed to be its major profit driver for the future. But Waltham, MA-based Alkermes (NASDAQ: ALKS), the company with technology that makes the diabetes drug last long enough in the blood to enable once-weekly injections, also has a lot at stake. Alkermes stands to collect an 8 percent royalty on worldwide sales of the drug, without having to pay expenses for marketing or manufacturing.

The market clearly has potential to be lucrative for all the companies. Demand for new diabetes treatments is surging as an estimated 25 million people in the U.S. suffer from the disease, and incidence is expected to climb for years as more people develop complications from obesity. Jefferies & Co. analyst Thomas Wei forecasted, in a June 27 note to clients, that the drug has potential to generate U.S. sales of about $2.38 billion in 2016. The product was cleared for sale in Europe by regulators there last month.

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Richard Pops went on hiatus for a while as CEO of Alkermes, and when he returned in September 2009, he vowed to put the company back in “building mode.” It could have been dismissed as rah-rah rhetoric, but over the past couple of months, the investment community has started to rally behind Pops’ bold plan to build Alkermes into a much bigger, more stable company.

Waltham, MA-based Alkermes (NASDAQ: ALKS) has enjoyed a bull run ever since May 9, seeing its shares climb more than 30 percent after unveiling plans for a $960 million takeover of Ireland-based Elan Drug Technologies. There are moving parts to any acquisition, sometimes in the fine print, but investors have been warm to this deal from the start. By obtaining the 400-person unit of Elan, Alkermes is putting together a portfolio of 25 commercial products-five of which have potential to be cash cows well into the 2020s. The “new” Alkermes is supposed to be consistently profitable, have more than $450 million in annual revenue, and offer a diversified lineup of products that can help protect it from any potential hiccups (regulatory, commercial, manufacturing or other) that can damage a company that counts on just one or two drugs.

Ultimately, it’s about taking the company up a notch, into the league of Big Biotechs where investors care not just about scientific “blue-sky” possibilities, but also how much money you can make each year, and how durable all the legs really are on the company stool.

“At first blush, Wall Street’s reaction was ‘Aha, I get it, it’s financially transformative,” Pops said during a lunch meeting a couple weeks ago in downtown Boston. “You go from a money-losing biotech company to one that’s growing revenues, growing margins, growing cash flows for a long time.”

Richard Pops

The acquisition of Elan Drug Technologies, which will technically reincorporate Alkermes into a Dublin-based company, still has to pass a vote of shareholders, which is expected sometime before the end of September. But no real opposition has emerged, or even much bearish sentiment, so this looks like it’s basically a done deal. As Cory Kasimov, a biotech analyst with JP Morgan put it in a May 9 note to clients, “ALKS has been one of our favorite mid-cap biotechs, and at first glance, this development further entrenches our view.”

To understand what’s going on here, a little background on the “old” Alkermes is needed. The company is best known for its technology that helps make biotech drugs remain stable for longer periods of time in the bloodstream, enabling them to be given as less-frequent injections. The company in its current form gets more than 80 percent of its revenue today from one product—Johnson & Johnson’s long-lasting version of risperidone (Risperdal Consta) for treating schizophrenia and bipolar disorder.

Alkermes also has high hopes that its delivery technology will generate significant cash with a new treatment to help wean people off addiction to opioid-based painkillers (Vivitrol), and a long-awaited new treatment for diabetes—Amylin Pharmaceuticals and Eli Lilly’s exexatide once-weekly (Bydureon).

Before this deal was announced, Alkermes bears on Wall Street had plenty to chew on. Vivitrol has generated a lot of optimism among drug-treatment officials, but it hasn’t yet translated into … Next Page »

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The Food and Drug Administration, often the center of attention for the U.S. biotech and medical device industries, came under the spotlight a bit more this week amid talk of changing the agency’s mission statement. There also was news from Amylin that should address at least some concerns FDA regulators have raised about its once-a-week treatment for diabetes.

—Shares of San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN) have gained more than 13 percent since Friday, when the company said its analysis of an earlier trial found no connection between its once-weekly injectable version of exenatide (Bydureon) and prolonged heart rhythms in 148 patients. At the American Diabetes Association’s annual conference in San Diego, Amylin also said another study showed that an earlier version of the drug, the twice-daily injectable version of exenatide (Byetta), was associated with a lower risk of heart failure. At the FDA’s request, the company is conducting another trial to specifically measure the drug’s effect on the QT interval, the time the heart’s electrical system takes to recharge after each beat. Amylin shares closed yesterday at $13.37, gaining $1.54 since closing last week at $11.83.

—San Diego-based Vital Therapies recently raised $22.6 million toward a possible $56.8 million Series D financing that combines equity, warrants and securities, according to a regulatory filing. The company has developed technology to stabilize liver function in patients with life-threatening, acute liver failure, through a process akin to dialysis that uses a proprietary filter to help regenerate healthy liver cells. Since the company was founded in 2003, Vital Therapies has raised about $40 million through three financing rounds. Versant Ventures is the lead investor.

—Independa, a wireless health startup founded in San Diego two years ago, said it’s making its integrated telecare app available for beta testing. The tablet-based system enables friends, relatives, and other caregivers to monitor an elderly loved one. The technology also uses … Next Page »

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The American Diabetes Association begins its 71st annual scientific conference today at the San Diego Convention Center, drawing more than 13,500 endocrinologists, scientists, and others involved in diabetes research and health care.

You could argue that in the comfort of the modern world, the twin epidemics of diabetes and obesity have replaced famine among the four horsemen of the apocalypse. The ADA says diabetes affects almost 26 million children and adults in the United States, and contributes to the deaths of over 230,000 Americans each year. In the United States alone, the association estimates the total cost of diagnosed diabetes at more than $174 billion.

As we’ve previously reported, San Diego is an innovation hub for diabetes research, ideas, and new therapies, so I checked to see what local companies would be presenting during the hundreds of scientific sessions scheduled to take place over the next four days. It’s not intended to serve as a comprehensive rundown, but rather as a sampling of what’s happening among San Diego’s diabetes specialists:

—Amylin Pharmaceuticals (NASDAQ: AMLN), a big kahuna in San Diego’s war on diabetes, won a much-needed vote of confidence earlier this week when the European Union’s executive body, the European Commission, approved its once-weekly injectable version of exenatide (Bydureon) as a diabetes treatment. The FDA told Amylin in October it wanted additional studies of how the drug might affect the heart. Amylin says it plans to present new data about the long-acting version of exenatide, as well as its twice-daily version of exenatide (Byetta) and another diabetes drug, pramlintide acetate (Symlin), through two oral presentations and 17 poster sessions. The company also plans to make a presentation for investors on its findings in a webcast set for Sunday evening, and to post highlights on its recently launched corporate blog.

—San Diego-based Arena Pharmaceuticals, (NASDAQ: ARNA) and Eisai of Woodcliff Lake, NJ, plan to release data from their late-stage clinical trial (dubbed “BLOOM-DM”) of lorcaserin, Arena’s investigational weight-loss drug. Arena also has been regrouping since October, when the FDA raised questions about the “marginal” effectiveness of the drug. Arena’s scientists are scheduled to present their lorcaserin data in three poster sessions on Sunday.

—Halozyme Therapeutics (NASDAQ: HALO), a San Diego specialty drug developer, plans to deliver three presentations concerning its work, including a late-breaking abstract on its formulation of recombinant human hyaluronidase in treating type 1 diabetes.

—San Diego-based Cebix plans to present data on the company’s C-peptide replacement therapy for treating microvascular problems associated with type 1 diabetes, such as peripheral neuropathy, retinopathy, nephropathy and erectile dysfunction. C-peptide is a naturally occurring product formed when insulin is cleaved from pro-insulin in the body, and has been shown to play a role in keeping the smallest blood vessels healthy in different tissues. Earlier this month, Cebix said it had begun an early stage trial to evaluate its proprietary long-acting form of C-peptide.

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It was not a week for a lot of life sciences news, but what we’ve got is pretty interesting. Judge for yourselves; our roundup begins now.

—A global survey of venture capitalists released this week reveals substantial pessimism among VCs about venture investment levels in U.S. life sciences startups over the next five years. The annual survey by The National Venture Capital Association and Deloitte shows that 81 percent of the VCs polled expect biopharmaceutical investments in the U.S. to stay the same (51 percent) or decrease (30 percent) through 2016. In the medical device and equipment sector, 76 percent anticipate funding will stay the same (52 percent) or drop (24 percent). Their attitude toward China is just the opposite; with 100 percent of the VCs polled saying biopharmaceutical investments in China will rise (83 percent) or stay the same (17 percent). Nobody thought biopharma funding will decline in China. On medical devices and equipment, 93 percent anticipate investment levels will increase (77 percent) or stay the same (16 percent.)

—European Union drug regulators approved the once-weekly injectable version of exenatide (Bydureon) for treating type-2 diabetes, providing a shot in the arm to San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN) and its partners-Indianapolis-based Eli Lilly (NYSE: LLY) and Waltham, MA-based Alkermes (NASDAQ: ALKS). The FDA declined to approve Bydureon for the U.S. market eight months ago, asking the companies to run a thorough study that evaluated effects of bigger doses on patients’ heart rates.

—Peppi Prasit, who left Amira Pharmaceuticals in November, appears to have started another San Diego biotech, Inception 1, which has raised $5 million in venture funding, according to a recent regulatory filing. Prasit, who was Amira’s co-founder and chief scientific officer, is identified in the filing as an executive and director. There isn’t much additional information disclosed. Versant Ventures partner Bradley Bolzon is listed as a director and San Diego’s Thomas Coll is listed as an executive.

—San Diego’s industrial biotech, Genomatica, received the EPA’s annual Green Chemistry Challenge Award. Genomatica has genetically engineered a type of bacteria to consume sugar in fermentation tanks and produce 1,4-Butanediol (BDO), an intermediate “building block” chemical needed to make spandex and various plastics.

—Carlsbad, CA-based GenMark Diagnostics (NASDAQ: GNMK) said it arranged a secondary offering of its stock to the public at a price of $4.25 a share that was intended to raise at lease $30 million. The company makes automated DNA and RNA diagnostics testing systems.

—San Diego’s Anaphore named former Fate Therapeutics CEO and Sanderling Ventures managing director Paul Grayson as its new CEO. He replaces founding CEO Kathy Bowdish, who will stay on as an Anaphore consultant.

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San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN) and its partners—Indianapolis-based Eli Lilly (NYSE: LLY) and Waltham, MA-based Alkermes (NASDAQ: ALKS)—said today that their once-weekly injectable version of exenatide (Bydureon) was cleared for sale in Europe as a treatment for diabetes. The drug’s introduction has been delayed by regulators in the U.S., who have asked for more data on the drug’s potential effect on an abnormal heart rhythm known as QT prolongation. The companies said today they expect to respond to the FDA’s questions later this year. Amylin, Lilly, and Alkermes are all counting on this drug to become a future profit driver, as it represents the first once-weekly injectable medicine for diabetes, which often requires many more needlesticks.

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