Theraclone Sciences has been searching for more than a year for a new CEO, and it found one close to home in Cliff Stocks.

The Seattle-based biotech company is announcing today that Stocks, a veteran biotech dealmaker with experience at Icos and Calistoga Pharmaceuticals, is taking over as CEO at Theraclone. Stocks is replacing Steve Gillis, the company’s chairman, who had been interim CEO since Dave Fanning died suddenly in June 2010.

Even without a full-time CEO, Theraclone has made significant strides this year. It raised a little more than $10 million in venture capital, made a splash with the discovery of some broadly neutralizing antibodies for HIV, formed a sizable partnership with Pfizer, and moved its first new drug candidate into clinical trials against the flu. Now the company is looking to continue its growth, partly by leveraging its technology through working with partners that Stocks surely knows well from his many years in business development.

“The idea is to do some select collaborations,” Stocks says. “We’re not going to do a lot and become a service entity. We’re going to have a few partnerships with strong partners, and structure them to allow Theraclone to maintain or keep a substantial portion of the value we develop with our partner.”

Theraclone, founded in 2005 at the Seattle-based Accelerator, specializes in the discovery of novel antibodies. The company works by starting with blood or tissue samples from patients, and identifying antibodies that are made by people’s immune systems against foreign invaders like viruses, bacteria, or cancer cells. Mother Nature has evolved pretty efficient defense mechanisms against these rogue cell types, so Theraclone’s scientists figured it was a good idea to listen to what nature is saying, and then make genetically engineered copies of these antibodies as drugs.

Besides the flu antibody program, Theraclone is moving ahead toward its first clinical trial with an antibody for another infectious disease—cytomegalovirus. And further in the future, the company has its sights on the most lucrative market for today’s antibody drugs—cancer.

Stocks, 53, was previously … Next Page »

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The evidence is mounting to prove the point that Genentech’s scientists have been trying to make for years—that a souped-up version of its top-selling antibody drug for breast cancer can be more effective in some cases than the original.

Genentech, the South San Francisco-based unit of Roche, and its partner, Waltham, MA-based ImmunoGen (NASDAQ: IMGN), are announcing today that their experimental drug trastuzumab emtansine reached its main goal. This study enrolled 137 breast cancer patients with a mutated form of the HER2 protein who were getting a first round of treatment for disease that had spread. The trial showed that patients on the new drug (T-DM1) were alive and able to keep their tumors from further spreading for a median of 14.2 months, compared with 9.2 months for those who were randomly assigned to the standard trastuzumab (Herceptin) and chemotherapy.

What’s equally, if not more, interesting is that patients on the new medicine also reported about half as many cases of moderate to severe side effects—about 46.4 percent on the new medicine, compared with 89.4 percent on the standard drugs. And only 7.2 percent of patients on the new drug dropped out of the study because of adverse events, compared with 28.8 percent on the standard treatments.

The results are being reported today at the European Multidisciplinary Cancer Congress in Stockholm, Sweden. Hal Barron, Genentech’s chief medical officer, called the results “very exciting” in a company statement.

“Herceptin is a great drug, but we think we can be doing even more for patients,” says Genentech spokeswoman Krysta Pellegrino.

The results come from a mid-stage clinical trial, so Genentech still has to bolster its case through a series of ongoing pivotal trials before this drug can be cleared for sale by the FDA. But it’s an important step in the journey for this new drug, which is seeking to become part of an emerging class of therapies that combine an antibody’s ability to zero in specifically on cancer cells along with a toxin that’s supposed to deliver a knockout punch to tumors. If Genentech can confirm these results in these pivotal studies, then it could be in position to seek FDA approval for this “supercharged” version of Herceptin. The original has been a huge boon to the company, producing more than $5 billion in annual worldwide sales, and analysts predict this new version will be huge, too. ImmunoGen, which helped develop the technology to link the antibody to the toxin, stands to collect royalties on worldwide sales if the new drug reaches the market.

About one year ago, researchers reported some interim results that hinted that Genentech was on the right track with this drug. Back then, researchers said … Next Page »

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This week we had a so-small-it’s-scary acquisition of a local medical device company, along with some more encouraging news of a local biotech company entering its first clinical trial.

—Seattle-based Calypso Medical Technologies agreed to be acquired by Palo Alto, CA-based Varian Medical Systems this week for $10 million upfront, plus undisclosed future milestone payments. This will amount to a big write-off for Calypso investors, including Seattle-based Frazier Healthcare Ventures, who have poured more than $150 million into the company since its founding in 1999. The Calypso system, which enables medical pros to deliver prostate cancer radiation therapy with pinpoint accuracy, generates $15 million in annual sales, the company says.

—Theraclone Sciences, a Seattle biotech company that has pulled in the more modest sum of $41 million since its founding in 2005, reached a key milestone. Theraclone said it has started its first clinical trial of an experimental antibody it believes has potential to treat or prevent a wide variety of types of influenza. This first trial will assess safety at a variety of doses, and future trials will have to sort out whether it’s more useful as a hospital-based treatment for severe flu patients, or whether it can help protect first-responders in the event of a flu pandemic.

—I announced our next big Seattle biotech event this past week, called “The Immunex Impact.” This event, timed for the 10th anniversary of Amgen’s acquisition of Immunex, will bring together a number of prominent Immunoids still doing their thing in Seattle. Steve Gillis, Chris Henney, Doug Williams, Stewart Parker, and Dave Urdal will all be there, among others. Tickets are going super-fast for this one, and I’m really looking forward to seeing a lot of readers there at the Institute for Systems Biology on December 1. For info on how to register, click here.

—Cocrystal Discovery, the Bothell, WA-based startup led by Icos veterans Gary Wilcox and Sam Lee, pulled in $7.5 million last week through an investment from Israel-based Teva Pharmaceutical. Teva, the generics company seeking to invent new drugs, is betting on Cocrystal’s experimental polymerase inhibitor against hepatitis C, as well as other antiviral programs.

—This week in the BioBeat column, I chose to stir the pot about how more biotech industry leaders should stir the pot. Essentially, an industry like biotech that relies on broad support from the public and investors needs to work hard to keep people engaged. And being outspoken every once in a while about industry issues is definitely one way to do it.

—This week, I had the good fortune of being one of about five guys who attended a networking event with 200 professional biotech women. It was the kickoff event for the Seattle chapter of Women in Bio, which seeks to help women advance their careers in biotech. There was a lot of enthusiasm in the room, and for proof, check the handful of photos I snapped there.

—Lastly, I had some national news about how pharma giant Merck has decided to join the long list of Big Pharma companies that are now investing in biotech companies. Merck is getting its start with a $250 million fund for biotech startups, and another $250 million fund for global health innovations.

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Theraclone Sciences has made a lot of news lately with its antibody discovery prowess, but now it’s getting to the point where the rubber hits the road in biotech—clinical trials.

The Seattle-based biotech company, founded in 2005, is announcing today that it has started its first clinical trial. This study will look at an experimental antibody, TCN-032, designed to fight various strains of the flu. The trial will enroll 40 healthy volunteers in the U.S. who will get randomly assigned to the drug or a placebo, the company says. Theraclone will be looking to see if the drug is safe at a variety of doses, and it expects to see results in the first half of 2012, says Eleanor Ramos, the company’s new chief medical officer. The antibody is one that emerged from a collaboration with Japan-based Zenyaku Kogyo that was formed two years ago.

Theraclone doesn’t yet know, and won’t learn from this study alone, exactly how a new anti-flu antibody might be used in the real world. Since it’s delivered intravenously, the antibody could be reserved as another line of treatment for serious cases of flu in hospitalized patients. Or it might be used as a protective agent for first-responders at risk of getting infected during a flu pandemic, Ramos says. What Theraclone’s scientists know so far is that this engineered antibody has shown potent ability to attack vulnerable regions on a variety of flu strains in animals. That versatility in a pinch, if proven out in humans, might make it an attractive agent for government stockpiling in case a pandemic arises of a new mutant flu strain that can resist current treatments like Roche’s oseltamivir phosphate (Tamiflu) or GlaxoSmithKline’s zanamivir (Relenza).

Theraclone has one more experimental antibody, for what’s known as cytomegalovirus (CMV) infections, teed up to enter the clinic next year, Ramos says.

It’s all been part of a very busy period at Theraclone. The company pulled in $10.6 million in additional venture capital last week. A few weeks before that, Theraclone and its collaborators had a publication in Nature that described the discovery of 17 new broadly neutralizing antibodies against the HIV virus. And it got some national recognition when it was named one of the Fierce15 emerging biotech companies by FierceBiotech, an industry publication.

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Theraclone Sciences acting CEO Steve Gillis dropped a hint earlier this week that he was looking to close another $10 million in financing for the company, and now it’s official.

Seattle-based Theraclone, the antibody drug discovery shop, is announcing today it has raised $10.6 million in an extension to its Series B financing. The Series B deal, originally announced as being worth $29 million in March 2007, has now grown to a total size of $41 million, Theraclone said. Previous investors Arch Venture Partners, Canaan Partners, MPM Capital, Healthcare Ventures, Alexandria Real Estate Equities, Amgen Ventures, and Zenyaku Kogyo participated in the Series B extension, the company said.

Gillis, a managing director at Arch Venture Partners, has been filling in as CEO of Theraclone since June 2010 when Dave Fanning died suddenly. Earlier this week, Gillis told FierceBiotech that he hopes to recruit a permanent CEO for Theraclone once the financing is done.

Theraclone made news earlier this year when it struck an antibody discovery collaboration with New York-based Pfizer (NYSE: PFE) and when its work toward discovering broadly neutralizing antibodies for HIV was featured in Nature. The company, originally known as Spaltudaq, was founded in 2005 at the Seattle-based Accelerator.

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This being a short week, I’m reaching back for two weeks’ worth of headlines, especially since a lot of readers are just getting back from vacation.

—Seattle’s Theraclone Sciences picked up some national recognition this week by being named one of the Fierce 15 emerging life sciences companies by FierceBiotech. Acting CEO Steve Gillis told the newsletter that the company is looking to raise another $10 million, and then add a permanent CEO.

—Bothell, WA-based Marina Biotech (NASDAQ: MRNA) came back from the holiday weekend to announce some serious shuffling in its management team. Marina has seen its RNA interference technology fall out of favor among prospective Big Pharma partners over the past year, while its cash balance has run low.

—Vancouver, BC-based Zymeworks, the developer of “bi-specific” antibodies that can specifically hit more than one target on cells, struck a partnership with pharmaceutical giant Merck that could be worth $187 million over time. Zymeworks CEO Ali Tehrani talked about how the company has shifted its focus from making industrial enzymes in its early days to its new bet on pharmaceuticals.

—Seattle-based Amnis, the maker of high-speed cell imaging instruments for researchers, said it agreed to be acquired by EMD Millipore, the Billerica, MA-based unit of Germany’s Merck KGaA. Financial terms weren’t disclosed, but Amnis said in a statement it generated $14 million in sales in 2010, and has maintained an 80 percent compound annual growth rate since 2005. Amnis said the deal will enable it to accelerate its growth.

—This being the opening week of the NFL season, I thought it would be fun to apply some fantasy football analysis to the latest installment of BioBeat. If you know of some sleeper picks, or various overrated or underrated players in biotech, I’d love to hear your thoughts.

—I announced the full lineup of speakers who will be part of the “Computing in the Age of the $1,000 Genome” event Xconomy is planning for Oct. 24 in San Francisco. This event is modeled after a similar conference we did in Seattle in February, and the agenda includes a few prominent Seattleites, including EMC/Isilon’s Sujal Patel, PerkinElmer’s Rob Arnold, Life Technologies’ Tim Hunkapiller, Ingenuity Systems’ Doug Bassett, and Microsoft’s Jim Karkanias.

—Seattle-based Qliance Medical Management, the provider of primary care clinics that operate on monthly fees instead of health insurance, said it is opening two new clinics in Tacoma, WA and Mill Creek, WA.

—Dendreon (NASDAQ: DNDN) has had a rough few weeks, but it did have one piece of good news when it said the FDA approved the third and final manufacturing facility for sipuleucel-T (Provenge). Now if Dendreon can iron out its problems with reimbursement, it should be able to dial up production at its factories. But today at 1:30 pm Pacific, another shoe will drop. Dendreon said yesterday it plans to announce details on the restructuring and layoff plan that it hinted at last month when it said it will miss its 2011 sales forecast.

—Last week’s BioBeat column revisited a Fortune expose about Pfizer, and raised the question of ‘how big is too big?‘ when it comes to innovation in life sciences. I know a lot of people wish we had more of a Big Pharma presence here in Seattle, but maybe this is one of those cases where we should be thankful we have small companies instead.

—Lastly, we had another sharp guest post from Stewart Lyman on how drug discovery is even harder than rocket science. If you are someone who finds it hard to explain biotech basics to your Mom and Dad, this is not a bad place to start.

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Seattle-based Theraclone Sciences is enjoying a moment in the national biotech spotlight today, just as it happens to be on the prowl for some new cash.

Theraclone was honored today as one of the Fierce 15, an annual award that the trade publication FierceBiotech gives out to 15 emerging biotech companies around the world. In a profile of the company today by FierceBiotech editor John Carroll, Theraclone acting CEO Steve Gillis says he wants to put together a new $10 million financing round for the company in the next few weeks and then complete the search for a permanent CEO. Theraclone has been without a permanent CEO since Dave Fanning died unexpectedly in June 2010.

Not very many Seattle biotechs end up garnering the national spotlight, although Fierce has typically recognized one or two companies a year from the Northwest. Last year, Bothell, WA-based Alder Biopharmaceuticals and Seattle-based VentiRx Pharmaceuticals made the cut, while Seattle’s Calistoga Pharmaceuticals (recently acquired by Gilead Sciences) took home the prize the year earlier.

Theraclone gained some visibility in the past year when it struck a partnership with Pfizer, and got some important work published in Nature about how its antibody-drug discovery technology can be used to potentially help develop an AIDS vaccine.

Gillis and Theraclone’s chief financial officer, Russ Hawkinson, didn’t immediately respond to e-mailed requests for comment about the financing.

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Xoma, the Berkeley, CA-based antibody drug developer that has been around for 30 years, said today that CEO Steve Engle has resigned, effective immediately. He will be replaced on an interim basis by John Varian, a member of the board.

Engle, who has been with the company four years, is also relinquishing his titles of president and chairman of the board, according to a company statement. Xoma didn’t provide any official reason in today’s statement for Engle’s departure, although Varian said the company now has “an opportunity to take a fresh look at our business, potentially finding additional ways to build value in the company and for our shareholders.”

Xoma has the dubious distinction of being one of the longest-surviving biotech drug developers to have never developed an FDA approved product—the New York Times once called it one of biotech’s “zombies.” The company has burned through more than $867 million of investor capital since its founding, according to its most recent quarterly report.

The developer of antibody drugs for cancer and inflammatory diseases has struck a number of partnerships with other companies over the years, and during Engle’s time, it sought to become more commercially oriented with a lead drug known as XOMA 052.

Shares of Xoma fell 4.9 percent today to close at $1.96 today, before the announcement.

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Merck has made plain that it needs to elevate its game in biotech drug development, and that means turning to partners for help. The latest chapter in this ongoing story is now unfolding at a little company called Zymeworks in Vancouver, BC.

Zymeworks is announcing today it has secured a partnership with Whitehouse Station, NJ-based Merck (NYSE: MRK) to develop new antibody drugs for cancer and autoimmune diseases that are engineered to hit two or more targets on cells instead of just one. In exchange for helping Merck create these so-called “bispecific” antibodies, Zymeworks is getting an undisclosed cash fee upfront, plus milestone payments, which could be worth as much as $187 million over time if drugs from the partnership reach certain goals. Merck will have exclusive worldwide rights to sell drugs from the partnership and Zymeworks will get tiered royalties on product sales if any materialize.

The deal is part of Merck’s long term plan to catch up in the business of biotech drug development. Estimates are that eight of the world’s 10 best-selling drugs in 2014 will be biologic medicines, leaving only two compounds made from chemical synthesis—Merck’s historic wheelhouse. The pharma giant has leaned on another startup, Lebanon, NH-based Adimab, as a source of antibody drug candidates, and it has spoken publicly about its growing ability to make antibodies at its GlycoFi facility and in facilities obtained through its Schering-Plough mega-merger of 2009. But the Zymeworks deal represents a chance for Merck to move into a hot area of protein drug engineering that biotech leaders like Genentech, Amgen, and Biogen Idec have been pursuing for years.

“We didn’t invent the field of rational protein engineering, but we have stepped up to take it to the next level,” says Zymeworks founder and CEO Ali Tehrani.

Zymeworks, founded in 2003, has developed a technology for creating lots of custom-designed protein drug candidates with properties drug developers want. The system can be used to make potent proteins that can last longer in the bloodstream, enabling patients to take fewer injections. Zymeworks can also engineer in specific structures that can make an antibody bind specifically and tightly with one or two different targets of interest on diseased cells. And it says the technology can be used to alter proteins to induce what’s known as “effector function,” which basically means that they can be made to trigger an immune system reaction which could give a cancer drug an extra potent boost.

Zymeworks CEO Ali Tehrani

The company spent its first four years trying to develop this technology to make industrial enzymes, until it saw bigger market potential in the pharmaceutical business, Tehrani says. “We could have been a mom and pop, coffee shop type of business,” he says.

Zymeworks now has ambitions to become a drug developer of its own, not just a technology provider to Merck and a few other partners, Tehrani says. The company still has a long way to go on that expensive journey. It has 37 employees, has raised less than $15 million through its history from Montreal-based CTI Life Sciences Fund, the Canadian government, and private investors. It hasn’t yet entered clinical trials with any drug candidates. But Tehrani, who got his microbiology and immunology doctorate from the University of British Columbia, says Zymeworks grabbed the attention of Merck and other prospective partners with “solid” data from experiments with its protein drugs in petri dishes.

Zymeworks certainly isn’t the only startup out there with visions of developing better versions of today’s protein drugs. Seattle-based Allozyne, San Diego-based Ambrx, South San Francisco-based Sutro Biopharma, and South San Francisco-based CytomX Therapeutics are just a few startups in that space along with many of the traditional biotech giants mentioned above. Zymeworks seeks to differentiate itself a couple different ways, Tehrani says. One is that it has software to better characterize the properties of the drug candidates, which ought to help researchers predict how they will perform in clinical trials. The other key feature is that Zymeworks can engineer its properties into immunoglobulin class-1 proteins, which Tehrani says offers an advantage over other techniques in manufacturing.

Zymeworks’ long-term goal, Tehrani says, is to grow up to be like Applied Molecular Evolution, a San Diego-based protein engineering company acquired by Eli Lilly for $400 million in 2004.

Zymeworks had interest from several partners in its technology, Tehrani says, but chose Merck for a few reasons. First, Merck provided enough validation of the technology, and upfront cash, to help stir up some more interest among investors in putting more capital into the company, Tehrani says. Plus, Merck’s development capabilities at its Palo Alto, CA-based biologics facility were a cut above facilities from other companies, he says.

“We are protein engineers. They are drug developers with a detailed understanding of biologics,” Tehrani says. “We see a long term strategic collaboration.”

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Just glance at the name, Seattle Genetics, and you get the drift this is a science-based company. But Seattle Genetics is morphing into something bigger and more valuable, which creates a whole new challenge: How do you maintain an inspired scientific culture from the early days, while living up to the cold market reality to start producing real sales and profits?

Seattle Genetics (NASDAQ: SGEN) has been thinking hard about how to manage this transformation over the past year. Almost 14 years after its founding, the company is now just weeks away from what analysts expect will be a slam-dunk FDA approval of its first marketed product—a drug for rare lymphomas. Expectations are sky-high, as Seattle Genetics stock closed last week above $20 a share, making it worth more than $2.3 billion. To maximize this opportunity, Seattle Genetics has spent months vetting, hiring and training a new commercial team of 100 employees, bringing its total staff up to 450 people. Manufacturing, sales, marketing, supply chain logistics, and insurance reimbursement are just a few of the skills the company has had to add.

It’s hard to overstate how important managing this growth is to Seattle Genetics’ future as a company. If they do it right, this new commercialization crew will help the R&D groups realize their early vision of helping patients and blazing a new trail for “smart bomb” antibody drugs for cancer—a type of drug that has eluded scientists for three decades. But if the new commercial folks botch the product rollout, or engage in unseemly marketing practices to hit their numbers, then Seattle Genetics is asking for trouble. As Josh Boger, the founder and CEO of Vertex Pharmaceuticals said in a speech last week at the Biotechnology Industry Organization’s convention, “it will tear your company apart if commercial has its own set of values. Commercial plans have to be consistent with company values.”

The co-founder and CEO of Seattle Genetics, who is like Boger a scientist by training, has definitely been thinking hard about how to maintain the science-based culture as the company grows up.

Seattle Genetics CEO Clay Siegall

“We were very careful to select commercial folks who were very excited and passionate about a company that is led by the scientific discoveries and the clinical data we have,” says Seattle Genetics CEO Clay Siegall. “We wanted sales reps that didn’t just want talking points to sell the product. They want to know how the product works, and what kind of patient populations it works in. They wanted to understand CD30 [the drug's biological target] and its expression profile. When you have commercial folks asking about underlying science questions, and not just things like, ‘What are the sales targets?’ that’s the kind of person we wanted.”

A little science background is required to see why this matters. Other biotech companies have had a lot of success with targeted therapies over the past decade, making genetically engineered antibodies that specifically zero in on markers on tumor cells, while mostly sparing healthy cells—unlike typical chemotherapy.

Seattle Genetics has gone a step further, by turning genetically engineered antibodies into what amounts to a “smart bomb” against cancer. The company’s technology links the targeting antibody to a potent toxin, which gets unleashed on the tumor.

Most of these efforts to soup-up antibodies have failed over the years, but Seattle Genetics proved it had solved the puzzle last year in a pair of clinical trials. They showed that the new Seattle Genetics drug, brentuximab vedotin (Adcetris) could … Next Page »

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Boston tech and life sciences companies kept busy even through the holiday weekend with partnership, IPO, and financing news.

—Proteostasis Therapeutics of Cambridge, MA, received an initial payment of $20 million from Elan to develop traditional small molecule drugs and diagnostics against neurodegenerative diseases like Parkinson’s, Huntington’s, and multiple sclerosis. The partnership could also include another $30 million for Proteostasis over the next five years.

—Nashua, NH-based AutoVirt, a maker of file virtualization software, took in $5 million in equity financing from five investors, an SEC filing showed.

—Woburn, MA-based Excelimmune, which develops drugs made with human recombinant polyclonal antibodies, said it pinned down a $10.5 million Series B funding round, from both new and existing individual backers. The biotech said the money will go to enhancing its discovery platform and manufacturing processes, as well as advancing development of its treatment for methicillin-resistant staph infections, Staphguard.

—Aveo Pharmaceuticals (NASDAQ: AVEO) of Cambridge said that it had entered into a licensing deal with Centocor Ortho Biotech, a unit of Johnson & Johnson (NYSE: JNJ), taking in $15 million upfront and potentially $540 million more in milestone payments and royalties. The companies will work together on Aveo’s antibodies targeting a receptor that may be involved in the regulation of tumor growth, cancer survival and metastasis, and bone disruption.

—Novophage, a Boston-based startup engineering viruses (phages) to combat bacterial contamination in industries like oil and gas, paper, and heating and cooling systems, drank up $5.7 million in Series A financing. The deal was led by Flybridge Capital Partners, and also included Founder Collective, Boston University, and strategic investors Chevron Technology Ventures and The Kraft Group.

—Quincy, MA-based biochemical developer Myriant Technologies plans to raise $125 million in an initial public offering, an SEC filing revealed. The company reported a $16 million loss on $14 million in revenue in 2010, and is looking for the IPO proceeds to fund the completion of its plant in Louisiana, as well as working capital, research and development, and general corporate purposes.

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Waltham, MA-based ImmunoGen (NASDAQ: IMGN), the developer of targeted antibody drugs for cancer, said today it has raised $84 million through a stock offering. The company sold 7 million new shares at $12 apiece. Jefferies & Co., Oppenheimer & Co., RBC Capital Markets, William Blair & Co., Canaccord Genuity and Morgan Joseph TriArtisan managed the offering. ImmunoGen had $115.8 million in cash on hand at the end of March, according to its most recent quarterly report.

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Seattle Genetics (NASDAQ: SGEN), the developer of targeted cancer drugs, said today in its quarterly financial report that it ended March with $455.9 million of cash and investments in the bank. That’s up from $295 million in cash that it reported heading into this year. The increased cash reserves reflect the addition of $168 million from a stock financing in February, plus revenue from collaborators who are using SeaGen’s technology that links antibodies to toxins that make them more potent against tumors. The company also said the FDA has conditionally accepted its proposal to use Adcetris as the brand name for brentuximab vedotin, its lead drug candidate for Hodgkin’s disease and anaplastic large cell lymphoma.

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Cambridge, MA-based Dyax (NASDAQ: DYAX) and South San Francisco-based FivePrime Therapeutics said today they have agreed to collaborate on an effort to discover new antibody drugs. Dyax will use its phage display technology to help FivePrime identify the best antibody candidates aimed at multiple biological targets. Dyax will get undisclosed technology license fees, and support for research. Dyax is also eligible for milestone payments and royalties if FivePrime successfully develops any drugs using its technology.

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Genmab, the Denmark-based developer of antibody drugs, said today it has formed  a second collaboration to use technology from Seattle Genetics (NASDAQ: SGEN) that’s designed to make antibodies more potent. Genmab will seek use the “empowered antibody” technology against a target known as CD74, which is found on various blood cancer and solid tumor cells. Seattle Genetics is getting an undisclosed upfront payment, and will have the right to co-develop and co-market the drug candidate after Genmab completes the first phase of clinical trials.

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Alder Biopharmaceuticals prides itself on challenging conventional wisdom. But while Alder has proved the skeptics wrong, showing it can make targeted antibody therapies in a new way with cheap and fast-dividing yeast cells, it has used this technology in a pretty conventional way—to make weapons against cancer and autoimmunity.

Now Alder is stepping out with two really unusual ideas on how to use antibodies in ways they’ve never been used before.

The Bothell, WA-based biotech company, which enticed Bristol-Myers Squibb to enter into a $1 billion partnership in 2009 to co-develop its lead drug for rheumatoid arthritis, is unveiling a couple interesting new antibodies from its discovery pipeline. These new drug candidates, which Alder is discussing today at Life Science Innovation Northwest in Seattle, are aimed at two diseases that have never been treated with antibodies—migraine headaches and high cholesterol.

The idea is to find another way to exploit Alder’s underlying technology in a place where fewer competitors tread, yet where there is still money to be made. Alder’s yeast-based system is made to be cheaper and faster at churning out antibody drugs than the usual bacterial or mammalian cells used by other companies. Partly because of the high costs of making antibodies today, most companies have developed them against diseases like cancer—where drugs can command prices of as high as $100,000. Alder’s idea is to use its more flexible platform to break out of that groove, and think about using antibodies against other chronic diseases that require lower-cost therapies.

There are still plenty of risks here, not the least of which includes whether people will pay something in the ballpark of $5,000 to $8,000 a year for a migraine treatment. Alder’s drugs are also a long way from hitting the radar of your average physician: Alder’s new migraine drug candidate is being prepped for its first clinical trial later this year, and the cardiovascular drug could enter its first human test in late 2011, or early 2012, CEO Randy Schatzman says.

Randy Schatzman

“When people typically think of antibodies in autoimmune disease and cancer, the rationale often is that these are indications in which people will tolerate the high price of those medicines, and these are indications in which people will tolerate some of the safety issues,” Schatzman says. “But we’ve been thinking, are there non-traditional markets where antibodies can play a role that people haven’t thought about in the past, but where we understand the biology?”

Migraine headaches affect an estimated 30 million people in the U.S., and nobody has ever come up with a drug that stops migraine pain before it starts. There is a family of “triptan” based drugs which generated about $3 billion in worldwide sales in 2008, although the former market leader—GlaxoSmithKline’s sumatriptan (Imitrex)—recently lost its patent and began to face generic competition.

Drugs in this class, which work by constricting blood flow to the brain, aren’t really a cure-all. They have to be taken once a patient already feels migraine pain, and then they offer some relief for half to three-fourths of patients within two hours. They don’t last … Next Page »

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Folks who follow Amgen closely know there’s really been one main theme to this story the past couple years—Dmab, Dmab, Dmab. Also know as denosumab, this is the targeted antibody drug Amgen developed for bone disorders that is supposed to be biggest thing to emerge from its internal R&D pipeline in about 20 years (although that’s not saying much because there were a lot of lean times).

The Thousand Oaks, CA-based company (NASDAQ: AMGN), which has significant R&D operations in South San Francisco, Seattle, and Cambridge, MA, won two coveted FDA approvals for denosumab last year—the drug is now sold under the name Prolia for osteoporosis, and as Xgeva to fight bone fractures in cancer patients. Combined sales could reach $2 billion in 2013, according to analyst Eun Yang of Jefferies & Co. That’s real money even to a company as huge as Amgen, with $15.1 billion in sales last year.

Still, there’s another side to the bone R&D story at Amgen that fewer people have noticed. Amgen has a drug that you might call the “son of Dmab” advancing through its clinical trial pipeline. It’s made to work in a completely different way than denosumab, and could offer physicians with a one-two punch against bone disorders. If clinical trials for this drug, AMG785, pan out this year, Amgen could be in position to grab an even greater share of the $9 billion-dollar-plus osteosporosis market as some of the old workhorse drugs turn generic.

“It’s appropriate to focus on Dmab because of the impact it will have on patients and the company in two big indications, but it has taken away focus from everything else we’re doing, and everything else we’re doing is very interesting,” says Amgen’s chief medical officer, Sean Harper. He adds: “Between dmab and this sclerostin program, we dominate the excitement in the bone field. To the key opinion leaders in the bone field, dmab is old hat for them. They are all focused on sclerostin.”

Sean Harper

It takes a little bit (not much, I promise) of science to understand what Harper is talking about with sclerostin, and why it matters.

First off, healthy people maintain a constant balance of what scientists call bone remodeling, in which bone is broken down and rebuilt in response to both injuries and normal wear and tear. Cells known as osteoclasts work to break down bone, while another kind of cell, osteoblasts, build up new bone. The two cell types have a yin-yang relationship, but when that cycle falls out of balance, it can lead to bone loss, Amgen scientist Bill Dougall explained in this October 2008 feature story.

Denosumab is designed to work by blocking a protein called RANK Ligand which activates the osteoclasts. So essentially, the drug works by preventing excessive breakdown of bone, and giving osteoblast cells enough breathing space to do their thing and build up bone.

But Amgen has long been interested in the other side of the equation—the osteoblasts themselves. That’s where the protein called sclerostin comes into the picture. Sclerostin works against … Next Page »

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Arsanis, a mysterious biotech firm based in Lebanon, NH, has raised $9.6 million in equity financing, according to an SEC filing. Tillman Gerngross, the co-founder and CEO of the Lebanon-based antibody discovery firm Adimab, is listed as an executive and director of Arsanis.

Arsanis’s board also includes some of Gerngross’s previous Adimab backers, among them Terry McGuire of Polaris Venture Partners, Michael Ross of SV Life Sciences, and Carl Gordon of OrbiMed Advisors, according to the regulatory filing. (Polaris and SV Life Sciences also backed Gerngross’s earlier biotech, GlycoFi, which Merck (NYSE:MRK) acquired in 2006 for $400 million.) It’s not clear whether this new firm Arsanis is related to a company called Arsanis Biosciences, which has online advertisements for jobs at its lab near Vienna, Austria, and is focused on developing human antibodies against bacterial infections.

A call was made early this afternoon to a phone number Arsanis listed in its SEC filing (which turned out to be Adimab’s main office line), but there was no answer. The filing says that Arsanis was founded in 2010.

Gerngross, who couldn’t be immediately contacted today, has been building up Adimab’s platform for a yeast-based system for discovering human antibodies for several years. Founded in 2007 by Gerngross and Dane Wittrup of MIT, Adimab has already struck drug-discovery alliances with industry giants such as Pfizer (NYSE:PFE), Merck, and Novartis (NYSE:NVS). At GlycoFi, Gerngross led the development of the company’s yeast-based technology for engineering protein drugs.

It’ll be interesting to learn what Gerngross and his investors are up to at Arsanis.

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Seattle Genetics has raised a new load of cash to brace itself for a big year ahead, as it prepares to hire a lot of people and introduce its first drug on the U.S. market.

The Bothell, WA-based company (NASDAQ: SGEN) said today it has raised another $155 million through a stock sale. The company sold 10 million new shares at $15.50 apiece, and has granted its underwriters options to buy another 1.5 million shares over the next 30 days. Jefferies & Co., JP Morgan Securities, Leerink Swann, RBC Capital Markets, Needham & Co., William Blair & Co., Oppenheimer & Co., and ThinkEquity all helped manage the offering.

Seattle Genetics has been on a roll the past year seeing its stock rise more than 60 percent, and, not surprisingly, was able to command good terms. The company’s stock closed yesterday at $16.17, before it announced that it planned to sell more shares, essentially diluting the value of existing ones. Even so, Seattle Genetics was able to sell shares at just a 4 percent discount to yesterday’s closing price, which could mean many of the new investors will be motivated to hold on and wait for the shares to climb so they can see a bigger return.

The company hasn’t reported how much cash it had in the bank heading into 2011, but did say it had $315.6 million in cash as of September 30, it most recent date of record. Much of the money will go toward the commercial push for brentuximab vedotin (SGN-35). That’s the new “empowered antibody” that Seattle Genetics and its partner, Cambridge, MA-based Millennium: The Takeda Oncology Company, are developing for Hodgkin’s disease, anaplastic large cell lymphoma, and other related lymphomas with a common protein target called CD30. The drug showed unprecedented tumor shrinkage rates for patients in two pivotal trials last year, and now Seattle Genetics plans to seek FDA approval to start marketing the drug in the U.S.

Getting its first drug on the U.S. market after 13 years in business requires Seattle Genetics to hire a lot more people, with new skills in things like marketing and manufacturing, as CEO Clay Siegall explained in this feature last May. Siegall, in an interview in December, said the company expects to build a commercial team with 110 people by the end of 2011, which will be part of an overall company staff of about 475 to 500 people.

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Richard Lerner, the president of one of San Diego’s leading research institutions for the past two decades, will soon step down from the top job at The Scripps Research Institute—and he is likely to be replaced by a top chemist and molecular biologist from UC Berkeley, Xconomy has learned.

No formal announcement has been made, and a successor won’t be officially named until a vote is held by the Scripps board of trustees, says Scripps spokeswoman Mika Ono. But Michael Marletta, a chemist and molecular biologist at UC Berkeley has emerged as the likely successor, Xconomy has learned from multiple sources inside Scripps. Ono, the institute’s spokeswoman, confirmed that Marletta is a candidate on a “very short list,” but she said the deal isn’t yet “signed, sealed, and delivered.” News of a search for Lerner’s successor broke last July when the institute advertised for the job in Cell, and the story was picked up by GenomeWeb.

“The board has to vote,” Ono says. “It’s in the works, but it’s not done yet.”

The change in leadership represents a big move for Scripps, where Lerner has been the only president since the institution reorganized as a nonprofit in 1991. Lerner, 72, who first arrived at Scripps’ predecessor institution in 1965, is best known for his work in the discovery of catalyzing antibodies along with chemist Peter Schultz. Lerner is expected to remain on the faculty, according to last summer’s GenomeWeb report.

Marletta, the Aldo DeBenedictis Distinguished Professor of Chemistry and a professor of biochemistry and molecular biology at UC Berkeley, said in an e-mail that he can’t comment at this time. Lerner didn’t respond right away to a couple of e-mailed questions this afternoon, although when my colleague Bruce Bigelow asked him by e-mail over the weekend if he has retired, Lerner said, “not true.”

Michael Marletta

Lerner oversaw a period of significant growth at Scripps, as it has emerged as as one of the world’s largest independent nonprofit centers for biomedical research, and an anchor of the San Diego biotech community. The institute has 35 acres of land and 1 million square feet of office space near the Pacific Ocean, UC San Diego, and a number of the region’s top biotech companies. As of last month, the institute had more than 3,060 employees between its campuses in San Diego and Jupiter, FL, and more than 540 faculty and scientific and professional staff. The institute has a reputation for excellence, with three Nobel laureates and numerous members of the National Academy of Sciences on staff.

If I hear any further comments from Lerner or other sources close to the situation, I’ll be sure to update the story.

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