South San Francisco-based Portola Pharmaceuticals has formed a lucrative alliance today with Biogen Idec (NASDAQ: BIIB) to co-develop drugs for autoimmune diseases, seeking to stop the immune system from attacking healthy tissues like a virus.

Under the deal, Portola is granting Weston, MA-based Biogen Idec an exclusive worldwide license to co-develop oral pills that block a biological target called Syk. In return, Biogen Idec has agreed to pay Portola $45 million upfront, with $36 million coming in cash, and the rest from an agreement to buy a $9 million equity stake in the smaller company. Portola is also eligible for $508 million in future payments if the drug program reaches certain development and regulatory milestones, the companies said. Biogen will lead development and the commercial push for the oral Syk inhibitor program in two big markets—rheumatoid arthritis and lupus—while Portola will retain the lead development role for the drug in smaller markets.

Biogen and Portola have agreed to a 75/25 split of the worldwide costs and profits of the drug program.

“This program is an excellent strategic fit with our focus on immunology,” said Biogen Idec CEO George Scangos, in a statement. “Portola is a high-quality company with a great track record in small molecules, and we have crafted a collaboration that truly is a win for both companies. We will now focus on a thoughtful and aggressive program to fully explore the potential of Portola’s compounds against this very interesting target, with the goal of creating an effective, safe and convenient oral treatment for patients with debilitating autoimmune and inflammatory diseases.”

Biogen Idec is the world’s largest maker of drugs for multiple sclerosis, a neurodegenerative disease in which the immune system goes haywire and attacks the fatty coating around nerve fibers. Last year, it scrapped a number of programs in its pipeline, including cancer drugs, to focus more on what it considers this strength.

Portola’s lead drug candidate is still at the earliest phase of clinical development, with a code name of PRT062607. Portola has raised a ton of venture capital in its history, around $220 million as of July 2009. Its backers include Abingworth Management, Advanced Technology Ventures, AllianceBernstein, Alta Partners, Brookside Capital, CIDC Consulting, D.E. Shaw, Frazier Healthcare Ventures, Goldman Sachs, IBT Management Corp., MPM Capital, Prospect Venture Partners, Sutter Hill Ventures, Teachers’ Private Capital, T. Rowe Price, Apothecary Capital, Janus Capital and PAC-Link BioVentures.

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Seattle-based Kineta, the developer of drugs for immune disorders, said it has received a $2.8 million grant from the National Institutes of Health. The grant will support Kineta’s work on a new class of antiviral drugs that trigger the innate immune system to fight various viruses like hepatitis C, influenza, and West Nile. The company said it expects to pick a lead drug candidate in 2012.

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Seattle-based Adaptive TCR, a startup that grew out of immune-system profiling work at the Fred Hutchinson Cancer Research Center, has raised $5.8 million in an equity investment round that could be worth as much as $7.5 million over time.

Adaptive TCR, profiled in these pages back in December, has secured the new financing from a group of wealthy individuals, according to CEO Chad Robins. He’s not naming names, although a filing with securities regulators says that 63 accredited investors participated in the round, and Robins said none are venture capital firms. This is the second notable cash infusion for the company, got up and running with its first $4.5 million in March 2010.

The investors are betting here on a big new idea that uses fast/cheap DNA sequencers, cloud computing infrastructure, and proprietary software. Those tools, taken together, are used to analyze a bewilderingly complex set of data on how a patient’s immune system has gone awry, or how it’s effectively responding to viral or bacterial invaders. So far, Adaptive TCR has found a market for this kind of tool, assembling a roster of more than 50 customers from academic research centers in its first year.

Lately, the business has been adding new customers at the rate of almost one per day, Robins says. That kind of momentum enabled the company to raise the new capital, which it plans to use for developing the technology into a new kind of diagnostic test for various forms of cancer or autoimmune disease.

“What we have is like the MRI for the immune system,” Robins says. The financing, he says, “will allow us to aggressively grow our brand and platform and emerge as a dominant player in the next-gen sequencing immune profiling space.”

Adaptive TCR isn’t disclosing how well it’s doing in terms of sales just yet. It has grown to 14 employees, and, while it isn’t yet profitable, it could get to that point by late 2011 or early 2012, depending on how much it chooses to invest in R&D, Robins says.

Chad Robins

The size of the market is really anybody’s guess since this is a new niche, and there are only a few emerging players besides Adaptive TCR, such as San Francisco-based Sequenta. The opportunity will depend on which diseases Adaptive TCR sets out to diagnose. Robins wouldn’t say which forms of cancer or autoimmunity the company has in mind.

Adaptive TCR’s biggest fans are early adopters in the biomedical research community, Robins says. While the company hopes to publish eight to 10 academic research papers of its own this year, to show what its ImmunoSEQ system can do, the technology could get an even bigger boost from what those scientists do with it on their own, he says. About a half dozen influential scientists have submitted papers to top scientific journals on discoveries they have made with the Adaptive TCR system, and the company has increasingly been cited for its work at scientific meetings, Robins says.

What this tool is supposed to do is something that nobody really thought seriously about until DNA sequencing got super-fast and super-cheap, as did cloud computing infrastructure.

A little science is required to get the gist. While the 3 billion letters of DNA that make up a genome are consistent in almost every cell of the body, the immune system’s B cells and T cells are an exception. In these cells, … Next Page »

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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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Doug Williams spent more than 20 years working his way up from bench scientist to CEO, and long after reaching the top, a realization hit. What he wanted most was to go back to his true passion—getting his hands dirty in a big and strong R&D organization with potential to create new drugs.

“Having done the CEO thing at ZymoGenetics, what I spent an awful lot of time doing was talking to investors and raising money for the company,” Williams says. “Not that I didn’t enjoy it—I did—but for the next chapter in my career what I truly wanted to do is be back in the day-to-day, doing R&D activities all day, every day.”

Williams, 52, will still talk to investors from time to time, but he will certainly get a chance to ply his science and business acumen on a day-to-day basis as the new head of R&D at Weston, MA-based Biogen Idec (NASDAQ: BIIB). The company has grown into the fifth-most valuable organization in the biotech industry, with a $15.9 billion market valuation, ranking it behind Amgen, Gilead Sciences, Celgene, and Genzyme. Much of Biogen Idec’s value is based on its strength as the world’s largest maker of multiple sclerosis drugs. The company runs in the black, generated $4.37 billion in revenue in 2009, and has assembled a talented workforce with 4,275 employees at last count. The R&D budget was about $1.3 billion in 2009.

Despite all that, Biogen hasn’t been able to deliver a new FDA approved product since natalizumab (Tysabri) arrived in 2004. The lack of R&D output has prompted blistering critiques from billionaire investor Carl Icahn, who accused the company in 2009 of suffering from “failed leadership.” Not long after the public attack, R&D chief Cecil Pickett stepped down, and so did CEO James Mullen. Chairman Bill Young, moving on, said the next CEO would likely be a scientist. Sure enough, when CEO George Scangos was introduced, the first thing he said was that R&D had to improve. A few months later, Biogen said it was cutting 650 jobs, closing its San Diego operation, getting rid of cancer and cardiovascular research, and concentrating much of its effort on its core strength of neurology and immunology.

While cuts have already been made, Biogen still needs to start showing more R&D progress if it wants to thrill investors again. Williams, who I have been covering for almost 10 years now dating back to his days as the chief scientist at Seattle-based Immunex, comes to this task with a background that’s clearly relevant to a Biogen that wants to focus on neurology and immunology.

Williams got his Ph.D in physiology, and did a stint on the faculty at Indiana University before he moved to Seattle to join the biotech industry at Immunex in the late ’80s. He carved out his expertise in immunology and autoimmune diseases there, and was the chief scientist at Immunex when it introduced the groundbreaking drug etanercept (Enbrel). That drug is now projected to be the world’s third-best selling pharmaceutical with $8 billion in worldwide sales by 2014, according to Thomson Reuters.

After Immunex got bought by Amgen, Williams moved on to take senior R&D jobs at Seattle Genetics and ZymoGenetics. He was promoted to CEO of ZymoGenetics two years ago.

The experience at the helm of ZymoGenetics was a tumultuous one, where Williams laid off more than one-third of the staff, and made significant cutbacks to a once proud and sprawling ZymoGenetics R&D operation in cancer and autoimmune diseases. To Williams, those were cuts … Next Page »

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[Update: 10:30 am, 12/30/11] Immunex was the company that made Seattle believe it could become a world-class cluster for the biotech industry.

The company was born during the industry’s founding wave in the early 1980s. Young genetic engineering hotshots from around the world gravitated to its culture of freewheeling scientific inquiry, can-do entrepreneurship, and irreverence. Immunex, after a couple near-death experiences, truly delivered on its promise by 1998 when it won FDA approval for a breakthrough for autoimmune diseases—etanercept (Enbrel). That product is now on track to be the world’s third-best selling drug in 2014 with $8 billion in worldwide sales, according to Thomson Reuters.

But, as Seattle biotechies know well, the party didn’t last. Immunex failed to manufacture enough of its wonder drug to meet demand from patients, and couldn’t deliver investors another immediate Enbrel-caliber hit. The company, which grew to 1,600 employees at its peak in Washington, ultimately was sold to biotech powerhouse Amgen for $10 billion in July 2002. Amgen continued to build out a state-of-the-art R&D center along Seattle’s Elliott Bay, and still occupies those labs, but about 500 local jobs were lost through the merger, and many longtime “Immunoids” left over the next couple years.

More than eight years have gone by, and Seattle still doesn’t have a company with the international impact of Immunex. While many of the scientists and businesspeople who built Immunex have moved elsewhere, quite a few of its alumni have stayed in the Northwest.

To get a sense of the kind of legacy the company still has today, I’ve put together a directory with links to help alumni connect and re-connect. This list includes bigwigs like co-founders Steve Gillis and Christopher Henney, and the rank-and-file. The list includes 326 names at last count.

Now here’s the part where you can help. If you or someone you know would like to be included, please send me a note. If you see any information below that’s out of date or incorrect, let me know and I’ll fix it. You can reach me at ltimmerman@xconomy.com.

Over time, I hope this story can become a richer and more valuable resource for Immunex alumni. Here’s the list in alphabetical order, with the most updated titles and affiliations I found online.

Nick Abbott, vice president, Barclays Capital

Cynthia Adkins, managing member, Adkins, Plant, Elvins, & Black

Jan Agosti, senior program officer, Bill & Melinda Gates Foundation

Michael Aguiar, senior vice president, chief financial officer, Theravance

Maria Aiello, director of clinical development, HemaQuest Pharmaceuticals

Mark Alderson, director, pneumococcal vaccine project, PATH … Next Page »

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Seattle is known for spawning companies that grow up to define entirely new industries like Amazon, Starbucks, and Costco. One startup with similar aspirations for a new niche of the biotech world, Seattle-based Adaptive TCR, is making huge strides in an industry that didn’t exist a couple years ago, and would have been unfathomable then.

This little company has started to emerge since Xconomy had the scoop back in March that it had spun out from the Fred Hutchinson Cancer Research Center with $4.5 million in angel financing. Almost entirely based on buzz around presentations by its scientific founders, in its first year, Adaptive TCR built a customer roster that includes 50 academic research centers. They are writing “five-figure” checks for a service that provides vividly detailed profiles of how an individual’s immune system adapts on a genetic level to pathogens, and which can monitor exposure to drugs and vaccines, says CEO Chad Robins.

Adaptive TCR, Robins says, is on a trajectory to turn profitable in its second year, 2011. It is in what he calls “serious discussions” to offer its technology to five of the world’s top 10 pharma companies. Further down the road, it has a chance to dominate at least one, and maybe two, new industries that will be worth hundreds of millions of dollars, he says.

“People originally discounted this, saying ‘Oh, this is a service business,’ and then they forget about it,” Robins says. “It’s a several hundred million dollar business on clinical trials alone. It’s a matter for us of scaling.”

These are the early days in the business of immune system profiling. The idea has now become feasible because of the breakneck pace of innovation in both life sciences (faster/cheaper DNA sequencing) and computing (low-cost, large-scale cloud computing data servers).

Those technologies have enabled Adaptive TCR to pursue its own big idea. While the 3 billion letters of DNA that make up a human genome are consistent in almost every cell of the body, the immune system’s B cells and T cells are an exception. In these cells, DNA gets shuffled around in bafflingly complex combinations, allowing T cells to recognize specific invaders, such as flu viruses, and bacteria that people get exposed to over time, and B cells to produce specific antibodies against those intruders. Each person is thought to have 50 to 100 million unique T cell receptors in their immune repertoire, for instance, so that’s a lot of DNA getting reshuffled around in novel combinations that nobody really knows anything about.

Chad Robins

Scientists today generally have no way to look at that exquisite complexity in individual immune systems, and tend to look at generalized markers of inflammation like C-reactive protein.

The new immune profiling system is supposed to be far more sensitive. It’s the kind of thing that ought to tell researchers how susceptible a patient is to certain infections, or might show whether a vaccine in early development is doing what it is supposed to do. Scientists have long known that elderly people lose much of their immune repertoire as they age, but it’s now becoming possible to actually see how specific defenses fade over time, laying the groundwork for new vaccine strategies, Robins says. One collaborator at the Hutch is using the system to see how quickly a patient’s immune system regains strength after a bone marrow transplant. That could tell physicians when it’s OK to quit giving powerful antiviral meds that cause side effects, Robins says.

The founding team of Adaptive TCR isn’t exactly full … Next Page »

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Allozyne, the Seattle-based developer of targeted therapies, is announcing today that its experimental antibody drug that hits not just one, but two targets on inflammatory cells, passed a pair of animal tests that will pave the way for clinical trials.

That’s not normally much in the way of news, but it signals a shift of emphasis at Allozyne. The drug, AZ17, is what’s known as a “bi-specific” antibody that zeroes in on two inflammatory proteins on cells with a marker called Th17. No drug like this is approved for sale in the U.S. by the FDA, but many big biotech and pharmaceutical companies are intrigued by the idea of such bi-specific antibodies against complex diseases like inflammation, in which it is thought to be an advantage to block more than one type of protein target.

Allozyne isn’t saying much in today’s statement about the AZ17 studies to date. But CEO Meenu Chhabra says the company plans to present the data at a scientific meeting and in a peer-reviewed scientific journal in 2011, and will aim to start clinical trials in late 2011 or early 2012. This drug candidate is coming along behind AZ01, which Allozyne has developed for multiple sclerosis. Allozyne, Chhabra says, plans to release its initial clinical trial data on that product candidate before the JP Morgan Healthcare Conference in January, the biggest meeting of the year for biotech dealmakers. While that drug is further along in development, potential partners appear to be just as interested in AZ17, the company’s second candidate, Chhabra says.

“It looks like [AZ17] will carry as much if not greater commercial potential than AZ01,” Chhabra says in an e-mail. “Bi-specifics that are safe and effective are the holy grail for Big Pharma.”

The target Allozyne is pursuing, Th17, is a hot one that others are chasing as well with different types of treatments. Plymouth, MI-based Lycera, for one, is seeking to develop oral pills that block the target.

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The economists all say that the recession is over, but you’d hardly know from the creative contortions entrepreneurs must perform to start a biotech company in 2010. The latest sign of the times comes from Resolve Therapeutics, an interesting new startup in Seattle.

Resolve is the latest spinoff from the University of Washington, where it was cooked up in the labs of rheumatologist Keith Elkon and immunologist Jeff Ledbetter. They co-founded this company with CEO Jim Posada, a former dealmaker with Eli Lilly and GlycoFi before that New Hampshire-based company was sold to Merck in 2006 for $400 million. The startup’s vision is to create an effective new drug for lupus, a chronic disease in which the immune system goes haywire and attacks healthy tissue like an invading virus.

The way this company is getting structured says a lot about the cautious, short-term thinking that prevails today in biotech. Ledbetter is a proven scientific entrepreneur, having co-founded Seattle-based Trubion Pharmaceuticals, and having a played vital early role in the development an FDA-approved drug—Bristol-Myers Squibb’s abatacept (Orencia). The opportunity in lupus is still huge, with no new drugs approved in at least four decades, and an estimated 1.5 million to 2 million people in the United States suffering from the illness. Many companies have tried and failed in their quest to tap this huge potential market. Rockville, MD-based Human Genome Sciences (NASDAQ: HGSI), along with Roche’s Genentech unit and AstraZeneca’s MedImmune operation, have rekindled hopes of patients and physicians through a series of advances in recent years.

Instead of seeking to raise a mountain of venture capital to build a company to pursue the big idea, Resolve is following the lean and mean “virtual” company model that has become popular by necessity. That’s nothing novel, but what’s more interesting is that Resolve is being financially structured to produce a quick payday for its investors. Knowing that it would take too long and cost too much to follow a traditional path, Resolve’s game plan is to raise $12 million to push a single drug candidate through the first part of mid-stage clinical trials, and then generate liquid returns through a partnership with a Big Pharma company that seeks to finish the long, expensive, and risky slog of drug development. There’s no pretending here that Resolve will go public, and it doesn’t need to be acquired for a fortune someday by a big drugmaker.

Jim Posada

“There’s a well thought out plan here,” Posada says. “We’re going to operate with as little capital as possible and get ourselves to a partnership deal as quickly as possible. We can provide returns for our investors in a timely way, and we can provide Big Pharma what it needs in terms of new drug candidates.”

The company hasn’t raised its money yet, although it now has an exclusive license from the UW to develop protein therapeutics against autoimmune diseases, including the biggie—systemic lupus erythematosus. This is based on deep knowledge of the disease and its molecular pathways from Elkon, lots of expertise in protein drug engineering from Ledbetter, and business strategy and dealmaking experience from Posada.

Posada says he got excited about the new idea about six months ago. The UW scientists have already created a fusion protein molecule, made to … Next Page »

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Ambit Biosciences, the San Diego-based biotech company in its third incarnation, is now gearing up to take the IPO leap.

Ambit is hoping to raise as much as $86.3 million in an initial public offering underwritten by JP Morgan, Credit Suisse, Leerink Swann, and Wedbush PacGrow Life Sciences, according to an investor prospectus filed with the Securities and Exchange Commission. As Dow Jones points out, Ambit is attempting to strike while the iron is at least mildly warm, since there were 18 offerings in October, the most in three years.

The company, born in the genomics heyday of 2000, originally sought to build a comprehensive database on proteins and sell the information to pharma companies, and when that didn’t work, it tried to build a business screening drug candidates for pharma companies. Now the company is hoping to take advantage of its knowledge of kinase drug targets to become a drug developer in its own right, with a lead product candidate for acute myeloid leukemia, which I described here in a September 2009 feature story. Four months later, Ambit made news when it struck a partnership with Japan-based Astellas Pharma to co-develop that drug quizartinib (formerly AC220), and others against cancer and inflammatory diseases.

Ambit has run up a $158 million accumulated deficit in its history, and had about $31.3 million in cash left on the books at the end of June, according to its investor prospectus. Ambit’s IPO bid will be led by a new boss, Alan Lewis. Lewis, the former CEO of the Juvenile Diabetes Research Foundation, stepped in to replace Scott Salka as Ambit’s CEO in July.

Some well-known investors stand to cash out sizable holdings if Ambit can pull off this transaction. Ambit’s largest investors heading into the offering are the Perseus-Soros Biopharmaceutical Fund (19.2 percent); Apposite Healthcare Fund (13.3 percent); San Diego-based Forward Ventures (11.9 percent); GrowthWorks Canadian Fund (10.9 percent); MedImmune Ventures (9.4 percent); and OrbiMed Advisors (8 percent).

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Doug Williams, one of the few nationally prominent biotechnology executives in Seattle, has officially left his job as ZymoGenetics CEO now that the company’s $885 million takeover by Bristol-Myers Squibb has been completed, Xconomy has learned.

Both Williams and former ZymoGenetics president Stephen Zaruby have left the company after it was acquired last month by Bristol-Myers Squibb, according to Bristol spokeswoman Jennifer Fron Mauer. She didn’t say who else on the senior management team has left, or who is now in charge of Bristol’s new operation in Seattle. The New York-based pharma giant hasn’t yet decided what to do with the remaining Zymo employees, or its local facilities, she says.

Now that Williams, 52, is officially a free agent again, he will have his pick of various plum jobs. He has deep roots in Seattle going back to the 1980s, and has built up a big Rolodex and gained lots of executive experience at Immunex, Amgen, Seattle Genetics, and ZymoGenetics. Williams is obviously still young enough to run another mid-cap biotech company, start a new venture, or do something else. As his longtime friend and legal advisor Stephen Graham of Fenwick & West once said, Williams has a reputation as a “calm, thoughtful, insightful and unflappable” business leader.

“Doug is one of the key players in the Seattle market that has CEO experience and a solid scientific background,” says Bob Nelsen, managing director with Arch Venture Partners in Seattle. “He can do anything he wants, from CEO, startup, to VC. Hopefully he stays here! I would back him any day.”

When I spoke with Williams yesterday by phone, he confirmed he’s looking at a number of different job opportunities. “I’m not ready to hang up the cleats yet,” he says. “I sort of feel that after 20-plus years in the business, I’m starting to figure out some of the do’s and don’ts. I’m definitely not ready to stop. I enjoy working in this business.” [For the full interview with Williams, check Xconomy tomorrow.]

As with anybody who’s been around biotech for a long time, Williams has a track record with its share of ups and downs. He was the chief technology officer at Immunex when that company had its breakthrough success with etanercept (Enbrel), and he was there when the company failed … Next Page »

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Who am I kidding about the importance of biotech news this week? The San Francisco Giants and the election owned the news cycle, and rightfully so. I hear from a reliable source that Xconomy founder Bob Buderi, a Bay Area native and lifelong Giants fan, is “very happy.” But in case you missed a few biotech dispatches, here’s a chance to catch up.

—Rare diseases are hot these days, and we saw some strong evidence to support the idea from South San Francisco-based Hyperion Therapeutics. The company, which raised $60 million a year ago, passed its pivotal clinical trial with a new drug for urea cycle disorders, and plans to file an application with the FDA before the end of September.

—Mountain View, CA-based ChemoCentryx is starting to show it might have created an effective oral pill for Crohn’s disease, after raising more than $330 million over the past 13 years. ChemoCentryx partner GlaxoSmithKline presented some eye-opening data from a mid-stage clinical trial late last month.

—Nektar Therapeutics (NASDAQ: NKTR), the San Carlos, CA-based biotech company, said it has struck a $50 million agreement with Amgen to make polymers that are a key ingredient in pegfilgrastim (Neulasta), the hit drug Amgen markets to help stimulate infection-fighting white blood cells for cancer patients.

—The obesity and diabetes drug business has been reeling the last few weeks, and the latest data point came from Mountain View, CA-based Vivus (NASDAQ: VVUS). Vivus’ application to market a new obesity drug was turned down by the FDA, which asked for more evidence on whether the drug is linked to birth defects or miscarriages.

—Last but not least, a Boston biotech CEO turned in a gem of an op-ed piece this week on how he’s learned Twitter can be a valuable resource, not a waste of time. Like me, the author, Stromedix CEO Michael Gilman, is wondering when (or if) large numbers of biotech executives and scientists will join the Twittersphere.

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One of the big dreams in the pharmaceutical business is to develop a once-daily oral pill that can relieve symptoms of autoimmune diseases. These are the kind of energy-sapping, pain-inflicting, or disfiguring illnesses people get when the body’s immune system goes awry and attacks healthy tissue like it’s a foreign virus.

No one has come close to doing this with a safe and effective pill, but one little-known biotech company plugging away for years in an office park in Mountain View, CA, ChemoCentryx, has recently produced some eye-opening results. If ChemoCentryx can nail its next big trial, it could be a couple years away from delivering a potent new option for patients with Crohn’s disease, an autoimmune disease of the intestines.

“This is the most exciting phase in our development since I started the company 13 years ago,” says ChemoCentryx CEO Tom Schall.

ChemoCentryx has kept a low profile since its founding 1997. The company has scooped up more than $330 million in financing during those years from partnerships, government grants, and venture capitalists and private equity investors. The vision—backed by HBM BioVentures, Alta Partners, OrbiMed Advisors, Jennison Associates, and GlaxoSmithKline among others—is to create small-molecule oral pills that interact with novel protein targets called chemokines and chemokine receptors. By limiting the activity of the chemokine system, the idea is that ChemoCentryx can disrupt a vital process that leads to autoimmunity, without shutting down essential immune defense functions that protect people from infections.

The prize at stake here is among the biggest in the pharmaceutical business. Estimates are that between 14 and 24 million people in the U.S. have autoimmune diseases. Fortunes have been made for Amgen, Johnson & Johnson, and Abbott Laboratories on the back of one-hit wonder drugs for such conditions, including rheumatoid arthritis and psoriasis. Total sales of rheumatoid arthritis drugs alone are estimated to grow from $7 billion in 2007 to $17 billion by 2017, according to Datamonitor. And there are an estimated 80 different autoimmune diseases to tackle, although not all are going to be that lucrative.

Tom Schall

Plenty of people argued in the late ’90s and early 2000s that the original biotech drugs for autoimmune diseases would flop because patients wouldn’t want to take injectables for a chronic condition. Plenty of companies have tried, unsuccessfully, to create conventional small-molecule drugs that can be made into more convenient oral pills for autoimmunity, figuring that whoever does it, will take over the market.

I’ve covered a few startups in other parts of the country going after such treatments, notably Plymouth, MI-based Lycera and San Diego-based CalciMedica. Both of those companies, however, are at much earlier stages, on the cusp of entering clinical trials.

ChemoCentryx is going about its plan a little differently, essentially to try to carve out a niche as “chemokines-R-us.” Schall, a Stanford-trained cancer biologist with experience at Genentech and Schering-Plough, told me all about this with the kind of enthusiasm I’d expect from a graduate student or postdoc. “I’ve been living and breathing this stuff essentially my entire adult life,” he says.

“This stuff” is the science of chemokines—signaling molecules that control how immune cells move in and out of inflamed tissues—and the receptors on immune system cells that chemokines bind to. The key to ChemoCentryx’s approach, as in many fields of drug development, is to tap deep understanding of these targets in order to craft drugs that act on them specifically, while causing minimal collateral damage in the form of side effects.

Pretty much all of the Big Pharma companies, to varying degrees, have tried or are trying to make drugs like this against chemokine-system targets. Pfizer has … Next Page »

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One of the more audacious biotech startups in San Diego just got a big vote of confidence at a moment when few companies of its kind are getting any sort of respect.

San Diego-based aTyr Pharma has pulled in $23 million in its Series C round of venture financing, led by Domain Associates. aTyr’s existing investors, Alta Partners, Cardinal Partners, and Polaris Venture Partners, also participated. Domain partner Jim Blair is joining the aTyr board in connection with the deal. By adding the new round, aTyr has now raised a total of about $46 million since it was incorporated in 2006, according to executive chairman John Mendlein.

The company (pronounced A-tire) was founded by Paul Schimmel and Xiang-Lei Yang of The Scripps Research Institute and John Clarke of Cardinal Partners to do something that would have been in step with the original biotech wave of the 1970s. The idea is to better characterize an entirely new class of biological targets which aTyr is calling “physiocrines.” These are natural proteins that send signals between cells. The plan at aTyr is to develop genetically engineered copies of these physiocrine proteins so they can be given themselves as drugs, and to build a foundation of deep understanding of biology so that these physiocrines could become targets for more classic drugs like small molecule chemicals or antibodies.

“This is probably a once in a lifetime opportunity to be associated with a new class of human protein and make drugs out of them,” Mendlein says. “That doesn’t happen very much. It feels like we’re back at Amgen, Genentech or Biogen in the early days of the industry, where people were creating fundamental discoveries about proteins.”

None of aTyr’s drug candidates have yet made it into clinical trials, but the company has shown it can make physiocrine drug candidates in E.coli bacteria, Mendlein says. The company has identified a lead drug candidate, Tmax, which it plans to test as a treatment for thrombocytopenia—a lack of platelet cells that help people naturally form blood clots. That drug candidate should be ready for its first clinical trial by late 2011, Mendlein says. Other candidates are being prepared in the pipeline as treatments for immune system disorders, he says.

John Mendlein (left) and Paul Schimmel

The company has rallied some serious talent around the idea. Schimmel is a prolific biochemist, formerly with MIT, and an entrepreneur who has co-founded many major biotech companies, including Waltham, MA-based Alkermes (NASDAQ: ALKS), Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY), Cambridge, MA-based Sirtris Pharmaceuticals (now part of GlaxoSmithKline), and Lexington, MA-based Cubist Pharmaceuticals (NASDAQ: CBST).

Mendlein is also a big name on the biotech scene, who signed on as executive chairman of aTyr back in May. He’s also the chairman of San Diego-based Fate Therapeutics, and was previously the CEO of Waltham, MA-based Adnexus Therapeutics, which also sought to develop a new class of drug molecules, and which was sold to Bristol-Myers Squibb for $430 million in 2007. ATyr’s CEO is Jeff Watkins, a biochemist and the former chief scientist at Applied Molecular Evolution, a unit of pharma giant Eli Lilly (NYSE: LLY).

Mendlein talked in some detail about what aTyr is all about, and what drew him to the company. These proteins have long been overlooked … Next Page »

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One of the interesting new ideas in the treatment of autoimmune disease is approaching a critical turning point at San Diego-based CalciMedica. This little company, so close to the ocean you can smell it from the CEO’s office window, is based in part on some intriguing science that got its start at the Immune Disease Institute and Harvard Medical School in Boston.

CalciMedica, founded in October 2006, has raised $19 million since the beginning from GlaxoSmithKline’s SR One investment arm, Sanderling Ventures, and Biogen Idec New Ventures. Much of CalciMedica’s early years were spent toiling away on the basics of biology and chemistry to create new drug candidates. But now it is ready to take a big new step, starting human testing early next year of a once-daily oral pill designed for patients with moderate to severe psoriasis.

This trial could be the start of a big, aggressive development program. Estimates are that between 14 and 24 million people in the U.S. have immune systems that go haywire, attacking healthy tissue like an invading flu bug. They have a chronic, lifelong pain in the case of rheumatoid arthritis, skin lesions if we’re talking psoriasis, or plenty of other symptoms from an estimated 80 other diseases. CalciMedica’s drug, while originally intended for psoriasis, may also be useful someday for other chronic inflammatory diseases like rheumatoid arthritis, ulcerative colitis, and asthma.

“It’s important for us, however far removed we might be from the endpoint, to not lose sight of who’s going to benefit from this,” says CalciMedica’s CEO, Gonul Velicelebi. As she explained to Bruce last year, researchers also are intrigued by the idea of creating alternative drugs that avoid side effects of some immune-suppressing drugs prescribed to prevent organ transplant rejection.

Of course, this is also about tapping into some very big potential markets. Autoimmune patients are often willing to pay big bucks for relief, creating the kind of markets that Big Pharma companies lust for. Total sales of rheumatoid arthritis drugs alone are estimated to grow from $7 billion in 2007 to $17 billion by 2017, according to Datamonitor. And the really big hits in that market-including Amgen’s etanercept (Enbrel) and Abbott Laboratories’ adalimumab (Humira) —are injectable drugs, not oral pills like the ones CalciMedica has in the works.

Gonul Velicelebi

The idea at CalciMedica, like the name suggests, is to make drugs that interact with calcium channels on the surface of cells. It got its start when Velicelebi, and two employees from Torrey Pines Therapeutics—Kenneth Stauderman, and Jack Roos—discovered the role of a protein called Stim1 in regulating the activity of certain calcium channels known as CRAC channels. They pooled this knowledge with work from scientific collaborators Anjana Rao, Patrick Hogan, and Stefan Feske in Boston, who described the role of a related protein called Orai1 that acts as a calcium channel, and is activated by Stim1.

Once those two proteins were shown to clearly work together in 2006, the decision was made to go ahead and start a company that put them together. The plan was to zero in on these calcium release-activated calcium (CRAC) channels as a way to tamp down the destructive effects of excessive inflammation. While many cells need to let calcium pass in and out through calcium channels, CRAC channels are of interest because they are specifically found on immune cells, and aren’t thought to play any significant role in other cell types like heart cells, or nerve cells, Velicelebi says.

What really fired up CalciMedica was a finding, published in Nature in 2006, of a teenage boy … Next Page »

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The Bay Area has a new player in antibody drug development, backed with some big bucks from the world’s largest maker of antibody drugs.

CytomX Therapeutics is announcing today it has raised $30 million in a Series B venture round led by Third Rock Ventures, along with Roche Venture Fund. While CytomX is currently based in Santa Barbara, it plans to move to the Bay Area by the end of this year, to tap into a bigger biotech R&D talent pool as it pushes its new class of antibodies toward clinical trials.

The big idea at CytomX is to develop a new class of genetically engineered antibody drugs that have the same ability to hit specific targets on cells, but are designed to produce fewer side effects. The concept, from the UC Santa Barbara lab of chemical engineering professor Patrick Daugherty, is to combine a peptide with the antibody, so that the drug only gets activated in the presence of certain enzymes (proteases) in diseased cells. This way, the antibody will remain inactive while it circulates in the bloodstream.

The company, founded in February 2008, has pushed its most advanced drug candidates only to the animal testing phase, so this concept is a long way from being proven in humans. But the potential is huge, as the antibody drug market generated about $30 billion in worldwide sales in 2009, and is projected to grow 14 percent annually through 2012, according to Datamonitor.

“We saw an opportunity to improve on the antibody landscape, improve on some of the liabilities and create what’s really a more targeted, locally active antibody,” says Nancy Stagliano, CytomX’s CEO.

Third Rock is now making its second bet on improved antibodies as part of its Bay Area expansion. Along with Pfizer, Third Rock invested earlier this year in San Francisco-based Ablexis for its new mouse model for antibody drug discovery. Roche also has an obvious interest in antibodies. Now that Roche owns 100 percent of South San Francisco-based Genentech, the pioneering developer of antibody drugs like trastuzumab (Herceptin) and bevacizumab (Avastin), it is unrivaled as the world’s largest maker of targeted antibody drugs for cancer.

Nancy Stagliano

CytomX isn’t saying much yet about what it really has come up with. Two of the company’s peptide/antibody combination drugs are aimed at treating cancer, while others could be designed to treat autoimmune diseases like rheumatoid arthritis, Stagliano says. She wouldn’t disclose the name of the molecular targets those drugs are aimed at, although she did say CytomX’s plan to is go after targets that have already been validated by FDA-approved drugs, before it ventures into the riskier territory of pursuing novel targets.

Manufacturing these new molecules shouldn’t be any harder than making existing antibody drugs, which are incubated in living mammalian cells. The peptide and antibody arise from a single gene product, Stagliano says, meaning that there isn’t another complex step required to attach the two proteins, she says.

The human stars aligned in an unusual way for CytomX. Stagliano, a neuroscientist by training, spent almost eight years at Cambridge, MA-based Millennium Pharmaceuticals before moving to Santa Barbara for personal reasons, she says. There, she was introduced by Millennium colleagues to Daugherty at UCSB, and a third future founder of CytomX, Frederick Gluck, a former managing partner of McKinsey & Co. CytomX, with this mix of science and business experience, raised about $5 million from angel investors, many of them in the Santa Barbara area, to test whether its concept was worth a shot commercially.

“The local community was very good to us,” Stagliano says.

Right now, CytomX has eight full-time employees who have played a key role in its early scientific days. It plans to hire another 10 people in the Bay Area as part of the new financing, including a chief scientific officer. Given that the Bay Area is home to a lot of experienced antibody hands from places like Genentech, Abgenix, and PDL Biopharma, it shouldn’t be too hard to find the right people as CytomX seeks to grow.

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The CEO of Lycera, one of Michigan’s high-profile biotech startups, has left the company after less than a year on the job. CEO Bill Sibold, the former Biogen Idec executive who was hired to lead the Plymouth, MI-based startup in January, has resigned to pursue other interests, Xconomy has confirmed.

Sibold’s corporate biography no longer appears on the Lycera website, and Gary Glick, the University of Michigan chemistry professor who founded Lycera in 2006, confirmed that Sibold has left the company. Glick wouldn’t say whether Lycera has started to search for a replacement. Sibold didn’t respond to a request for comment.

“Bill is a senior and experienced biotech executive with an excellent track record at Biogen, but both he and the board felt that the fit was not optimal with a heavily science based company like Lycera,” said Jeff Leiden, Lycera’s chairman, in an e-mailed statement.

Leiden added: “All scientific, development and business development activities are on or ahead of schedule and will continue to move forward unchanged. The board remains extremely excited about the progress and prospects of the company. We wish Bill the best of luck in his next leadership position.”

The hiring of Sibold made news in our pages back in January. Sibold, then 43, said he was excited to take on his first position running a startup, saying that “Lycera can be a great company that can compete with anybody.” The startup raised a $36 million Series A venture round a year ago from InterWest Partners, Arch Venture Partners, Clarus Ventures, and EDF Ventures.

The money represents a big bet on a new method of treating autoimmune diseases, in which the immune system goes awry and attacks healthy tissue like a virus. While companies like Amgen, Abbott Laboratories, and Johnson & Johnson have developed groundbreaking treatments for many patients with these disorders, the products are injectable, and they disable part of the immune system, leaving patients vulnerable to infections. Lycera is seeking to go a step further with oral pills that are more convenient, and which are made to hit different targets on cells that can tamp down the excess inflammation without weakening people’s immune defenses.

Lycera, when it hired Sibold, agreed that its core scientific team would remain in Michigan while Sibold and the head office would reside in Boston to tap into the New England biotech talent pool. In an April follow-up story, Sibold said managing the two separate sites wasn’t difficult, since it was only a 90-minute flight to Detroit, and that between phone and e-mail, “we stay in touch.”

Lycera plans to keep its Boston office going, Glick says, noting that is where the company’s vice president of preclinical development, Robin Goldstein, is based. Nothing major has changed with the progress of company’s two lead drug candidates since investors agreed to supply the second tranche of the $36 million financing back in April, Glick says.

“The board is delighted with the progress of the company. Both of our programs are proceeding very well,” Glick says.

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One fascinating new idea in predictive, personalized medicine is starting to gather momentum in South San Francisco. Nodality, a Stanford University spinoff from the lab of biologist Garry Nolan, is now on the cusp of going commercial with technology to help Big Pharma companies, and doctors, better understand why individuals respond differently to drugs, and how to craft the most effective combinations of treatments for an individual patient.

Nodality made news back in March, when it secured a $15.5 million financing led by the venture arm of Pfizer (NYSE: PFE) and Laboratory Corporation of America (NYSE: LH), and which included previous investors Kleiner Perkins Caulfield & Byers, TPG Biotechnology, and Maverick Capital. The money was supposed to go toward Nodality’s commercial rollout of a new test to predict the success of certain treatments for acute myeloid leukemia, and guide physicians trying to treat this deadly disease. The commercial push is now just a couple months away, so I caught up with Nodality CEO David Parkinson earlier this week for an update.

This is certainly a huge problem Nodality is seeking to solve. Only about one out of every 10 cancer drugs that enters clinical trials ever passes all the tests to become an FDA-approved therapy, and scientists often struggle to explain why so many of them fail. Even the ones that do make it on the market often only help about one-fourth of patients, and even with all the molecular biology tools in the world, doctors and drugmakers can seldom predict in advance which patients are likely to respond, and which won’t.

Nodality’s big idea is to run biological samples from individual patients through modern tools for counting cells at high speed, called flow cytometers. With specialty chemicals customized in-house, Nodality uses antibodies to bind to important intracellular proteins that are tagged to show how active they are in a given tumor sample. Armed with that data, Nodality’s team uses proprietary software to look for specific patterns in the biological pathways of a patient’s tumor that will give the doctor a more vivid idea of the malignancy he or she is up against. By knowing what’s happening in the biological pathways, it should provide doctors with better information to form a treatment strategy to keep the individual patient alive and well.

“These are truly predictive tests,” Parkinson says. “We think we have excellent tests, which will allow physicians much more certainty when they talk to patients.”

The company is still being somewhat coy about the business details thus far. Nodality has secured partnerships with two major pharmaceutical companies that it hasn’t yet announced, and … Next Page »

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Santarus, the San Diego-based drug developer, said today it has acquired two biotech drugs. Santarus (NASDAQ: SNTS) said it has acquired recombinant human C1 inhibitor (Rhucin) for hereditary angioedema from Netherlands-based Pharming Group for a $15 million upfront free and a $5 million milestone payment. Santarus is also getting a humanized anti-VLA1 antibody drug for inflammatory and autoimmune diseases via the acquisition of closely-held Covella Pharmaceuticals for $1.8 million. Last week, Santarus also sought to build up its pipeline by obtaining a drug candidate for type 2 diabetes.

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Nuon Therapeutics, the San Mateo, CA-based developer of treatments for autoimmune diseases, has raised $10 million in a financing composed of debt and option securities, according to a regulatory filing. The document doesn’t say who invested, although its board of directors includes representatives from Domain Associates, Frazier Healthcare Ventures, and GBS Venture Partners. Affymax CEO Arlene Morris is also a director.

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