[Editor's Note: We asked selected Xconomists a series of questions designed to zero in on the big issues of the year, including "What would you be willing to throw a punch over?"]

The FDA is the easy target for those of us who are in drug development. But what I am most mad about is the unwillingness of our industry to focus and invest in innovative, high-impact drugs instead of “me too” knockoffs. Thus, my “anger” is focused on institutions that myopically insist on investing in low-risk, copycat ideas that undermine the true strength of our industry over the long term.

Risk-taking and innovation in drug discovery are critical to our field. Aspiring merely to be fast followers instead of striving for innovation is putting our competitive advantage at risk. The entrepreneurial spirit has been key to America’s success in many industries, especially biotech, but there have been several recent events that are stifling innovation.

The downturn in the economy has obviously dampened the financing of new ideas. Changes to patent law arguably encourage long, drawn-out opposition hearings that could be detrimental to the smaller inventor. However, my key concern for our industry is the lack of new and innovative drugs, despite the stunning pace of scientific progress over the last several decades. Not enough companies are focused on innovation and not enough people in charge are taking the right level of risk to actually come up with a new idea that can have a substantial impact on human health. Innovation is the alpha and the omega of our industry and should always be cherished as a way to create valuable and meaningful high-impact drugs.

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[Editor's Note: We asked selected Xconomists a series of questions designed to zero in on the big issues of the year, including "What would you be willing to throw a punch over?"]

It takes a lot to get me riled-up—I’m overly rational, if anything. Outside of the bad behavior we were supposed to outgrow in kindergarten—dishonesty, disrespect, etc.—there are few professional issues of sufficient emotional magnitude. One of the most frustrating issues today is the FDA situation. While easy to say, “The FDA is at fault and needs to be reformed in order to speed the approval of new medicines,” that is a dramatic oversimplification of the problem. All parties in the ecosystem are at fault to some extent, and it will take concerted efforts and change by each in order to fix it.

For example, the FDA has absolutely been more/overly safety conscious in recent years, but I believe we all would act that way if faced with being hauled in front of Congress to justify the risk-benefit of a drug approval that positively impacts more than 99.99 percent  of the people who use it. Why should we, as a country, require or expect that medicines be as safe as clean water? At the core, sick people, whether with cardiovascular issues, autoimmune disease, or other afflictions, are taking a medicine in order to improve their condition, so while absolutely safe drugs would be wonderful, a level of risk is warranted based on the improvement in the disease. If we can cross that bridge and accept that medicines will have risks, then we have the tools to deal with the safety vs. speed of approval conundrum. We can shorten commercialization timelines while dramatically improving safety monitoring if we test for efficacy and major safety during development, while tracking long-tail safety issues in the commercial setting—perhaps the first 100,000 people prescribed a new product?

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[Editor's Note: We asked selected Xconomists a series of questions designed to zero in on the big issues of the year, including "What would you be willing to throw a punch over?"]

The most important issue facing Aastrom and many other companies in biotechnology is the lack of adequate funding to support innovative new companies, technologies and therapies. The challenges in drug development, especially in the early stages, are only compounded by the current regulatory environment with a primary focus on risk reduction.

Unfortunately, with this combination there isn’t one punch we can throw to rapidly improve the situation. But, the current situation has to change if the United States is going to remain the global leader in the discovery, development, and commercialization of innovative new therapies in the next two decades. If we don’t improve the current conditions, we will continue on a path to increasing irrelevance in biomedical research and innovation, especially given the fact that other countries are rapidly recognizing the potential of our industry to improve human health and create jobs, and they are in many ways ahead of the U.S. in supporting these companies.

To address the problem in the U.S., NIH funding has to be re-directed to focus less on support for early-stage research and discovery and more on the critical translational phase of new product development. This period is often referred to as the “valley of death” in new product development in healthcare—the period between early preclinical promise and clinical proof of concept. In a risk-averse environment, funding for products at this stage is very limited, and many will not move forward even though they could represent important advances in patient care. We need to introduce more funding sources that are positioned to accept the inherent risks at this stage.

As we work to introduce new funding sources, the FDA should also consider opportunities to recalculate the risk/benefit equation for many products. Working more as a supportive partner with industry, the FDA can work to make faster decisions. To protect both patients and industry, the FDA can also introduce mechanisms to more rapidly respond to post-marketing issues related to approved products. In this way, the FDA can balance the benefits of bringing new therapies to market quickly with the risks associated with the decision and a plan to take action post-approval if necessary. The ability to review and approve new therapies with great speed and, equally importantly, the ability to “disapprove” and remove therapies from the market or alter the product indication post approval, could significantly improve the competitive position of the U.S. in biotechnology in the years ahead. Industry will have to accept the fact that FDA decisions might not mean approval forever. They will build a model where marketing can begin while additional data is collected to provide further confirmation that benefits outweigh risks.

Finally, venture capital investors need to return to their roots—funding truly innovative companies, technologies, and therapies at the early stages. They need to lose their recent aversion to risk—seemingly honed over the past decade. Importantly, they may be more willing to move in this direction if the FDA takes steps to establish a more receptive and less uncertain regulatory environment.

A reflection of the current funding environment: a partner with a prominent venture capital firm recently told me that his firm is only funding companies that have an already approved product (the historical province of private equity and growth capital firms) or very early-stage “science-based” companies. The level of regulatory uncertainty has reached critical levels. When very smart and successful venture capital firms cannot accept the level of regulatory uncertainty, the alarms have clearly sounded—and changes in Washington and within industry seem essential to address these problems successfully.

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[Updated 12:30pm ET, see below.] OK, we knew this was coming—it was just a matter of when. Hopkinton, MA-based data storage giant EMC (NYSE: EMC) announced today it will acquire Seattle-based Isilon Systems (NASDAQ: ISLN) for $2.25 billion in cash. EMC is paying $33.85 per share, a 29 percent increase over Isilon’s previous closing price of $26.29. (Takeover speculation drove Isilon’s stock up to $26-28 in the past few weeks, and the high price of the acquisition has reportedly been an issue in negotiations.)

The deal, which should be completed by the end of the year, fits with EMC’s broader strategy of growth through acquisitions. Technology-wise, Isilon fills a need for EMC in the area of network-attached storage, which is a way for companies and organizations to manage huge amounts of data for multimedia, online services, and other applications. The acquisition is one of EMC’s biggest—even larger than the $2.1 billion purchase of Data Domain last year. The latter deal has been quite successful for EMC, so we’ll see if it follows the same game plan for integrating the Isilon team—that is, leave the technology and sales teams intact and add massive distribution.

Isilon has a long history of ups and downs. The company started in 2001, co-founded by former RealNetworks engineer Sujal Patel. The idea was to provide cheaper and more efficient data storage for companies needing to host or deliver multimedia content that requires lots of storage space. Isilon attracted venture funding from Madrona Venture Group, Atlas Venture, and Sequoia Capital.

Data storage was (and still is) a brutally competitive field, but Isilon’s technology set it apart. Its approach was to cluster together a large number of storage “bricks”—each one including disks, memory, processing, and networking—into a single storage unit. This was an inventive way to do network-attached storage, which is now a multibillion dollar industry.

Isilon flew high and raised $108 million in an IPO at the end of 2006. Then things started to go bad. Very bad. By the next year, the company was failing to meet its own sales projections, and its stock price had plummeted. Patel, who was then chief technology officer, was appointed CEO in late 2007, to turn things around.

It has been a long road back—focusing on R&D, making product distribution more efficient, and hiring a new senior management team. But early this year, Isilon posted its first quarterly profit in its 10-year history. Its customers include Sony, XM Radio, LexisNexis, Facebook, MySpace, Kodak, Adobe, major movie studios and TV networks, government agencies, and biomedical research organizations (a particularly fast-growing sector).

Some in Seattle will lament the loss of a mid-size public tech company that is owned and operated locally. Judging from EMC’s way of doing business, though, Isilon’s team and employees probably will remain in Seattle. If it’s a good cultural fit, the acquisition should help Isilon’s business expand globally.

And Isilon’s venture investors should make out very well from the deal. At last count, Seattle-based Madrona Venture Group still owned some 5.8 million shares of Isilon and has representation on its board (Matt McIlwain). What’s more, Isilon’s chairman is Bill Ruckelshaus, one of Madrona’s strategic directors. Madrona’s remaining stock amounts to about $196 million by the terms of today’s deal. Not too shabby, considering Isilon raised less than $70 million in total venture financing (by my count) prior to its IPO.

Reached by phone today, Madrona said it invested a total of $15 million in Isilon and expects its overall return to be 15-20 times its investment. Not to be outdone, Boston-area-based Atlas Venture, Isilon’s largest shareholder, said its proceeds are $473 million, and its multiple is 20x. [This paragraph was added to provide more VC specifics---Eds.]

We’ll be watching to see what people have to say about the deal—and how the integration of Isilon into EMC goes.

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Ever since it announced its $5.5 million Series A funding round in January 2008, we have covered the news of Follica, the Boston area startup out to bring a scientific approach to developing novel ways of treating and, perhaps one day even curing, baldness and other hair-follicle disorders. These stories, including news of Follica’s $11 million Series B round in August 2008, and the hiring of a new CEO last spring, have attracted a tremendous readership, and indeed have drawn several thousand comments, as fans and followers of Follica have become some of our most treasured readers.

But to the dismay of many of those readers, who are anxious for the latest from the startup, we have had nothing to report since the hiring of CEO William Ju last May. Several of you have written to me personally to ask if there is any way I might coax more news out of the company.

I have been trying, I assure you, and this week I had a modicum of success. Though I couldn’t get anything on the record from a Follica official, sources at the company confirmed that “we are very excited about the progress and are pushing forward with our programs. Everything is going very well and management, the board, and the Scientific Advisory Board are all extremely encouraged by our scientific progress and results.”

I also learned that the company has made some recent hires to expand its staff, though my sources wouldn’t name names or specify how many people have been hired or what roles they are filling.

Lots of caveats to consider. First, try not to read too much into this. These are very vague comments, of the type many companies make when they don’t have much new to impart, or when they don’t want to raise anyone’s expectations. And remember, the science Follica is pursuing is, as far as we can tell, still extremely experimental. So even with some solid advances, an effective treatment could well be years off.

Still, I hope this helps to some degree. Rest assured, we will keep trying to learn more and will let you know as soon as we do. And if you learn anything, please don’t hesitate to let us know, and we will try to run it down.

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Over the last few weeks, as the holiday season heated up and the decade wound down, we reached out to our distinguished network of Xconomists—who include many of the top technologists, scientists, and business innovators in our three cities—and asked them (and a few more tech and life sciences leaders) to describe the most important innovations of the past 10 years in their respective fields.

We figured we’d get two or three who could take time out during this busy season to write for us, but we were wrong. The response was staggering. We received so many thoughtful posts about the last decade (more than a dozen) that we’ve only just begun to look forward and process their responses to the other question we asked—about the biggest advances they think will come in the next decade.

Beginning today, with Boston Xconomist Michael Greeley’s Venture Capital Oscars piece about the films that best represent the economic and investment climate of the next few years, we will be running a series of posts about the coming decade. But before we dive deeply into those, we thought it would be useful to take a minute—pause—and actually think some more about what these experts have told us so far. So here is a rundown of 12 Xconomist Forum reflections on the 2000s, noughties, or whatever you want to call them:

Top Five Robotics Hits of the 2000s (Rod Brooks)
Highlight: “Thousands of remotely piloted and autonomous aircraft in the U.S. military.”

Top Five Biotech Innovations of the 2000s (Jay Lichter)
Highlight: “Genentech’s ranibizumab (Lucentis)—The first treatment of its kind for the ‘wet’ form of macular degeneration.”

Top Five Global Health Innovations of the 2000s (Christopher Elias)
Highlight: “New recombinant, platform-based [vaccine] technologies may greatly speed vaccine production, decrease manufacturing costs, and increase production in developing countries.”

Top Five Medical Innovations of the 2000s, and One Big Concern (James Topper)
Highlight: “The development of novel mechanisms and combination therapies in HIV, which have turned a universally fatal disease into a chronic one.”

Four Groundbreaking Innovations from the 2000s, and One More Life-Changing Event (Chad Waite)
Highlight: “A night that I was in NYC (home of the ENEMY) in October 2004 when the Red Sox FINALLY won the World Series!” (OK, also the iPod. And Facebook.) … Next Page »

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If last month is any indication, 2009 is going out with a whimper when it comes to the number of dollars in new venture deals for Washington companies. Though there has been a mini-comeback of small software financings since October.

That’s according to the latest roundup figures from ChubbyBrain, a New York-based maker of tools for investors, startups, and entrepreneurs. Their stats say Washington companies raised a total of $79.4 million in November, up from about $70 million the previous month. But almost half of it was in a $35 million debt financing for Light Sciences Oncology, a Bellevue, WA-based developer of a drug-device combo treatment for cancer.  (Actually, as Luke reported, Light Sciences Oncology secured the right to a $23.3 million line of credit, and granted investors $11.8 million of options they may choose to exercise later.)

There were 10 venture financings worth a total of $44.4 million (see table below). The two biggest were Redmond’s EndoGastric Solutions ($12 million as part of a $21.5 million Series E round) and Seattle-based Redfin ($10 million Series D round led by new investor Greylock Partners).

Six of the 10 venture deals were in software and Internet, which marks a slight rise in activity in the sector over the past couple of months (in terms of number of deals, not dollars). These deals included up-and-comers Doxo and Enroute Systems, notably both Series A rounds. Of the remaining financings, two were in alternative energy (Bio Architecture Lab and Infinia), and two were in medical devices, Calibra Medical and EndoGastric. (Both of those device companies, interestingly, were co-founded by Seattle-area inventor Clif Alferness, but have actually moved their headquarters to the San Francisco Bay Area.)

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They are the deals that slip through the cracks unnoticed. They are worth less than $1 million, but at least $100,000. Though small in size, these investments need to be included along with the bigger deals that get more press, if you want a more complete picture of the funding landscape in the innovation community. And there were at least 16 of these deals in the Northwest in September (see table below), according to ChubbyBrain, a New York-based information services company tracking VC, angel, and other investments in private companies.

It’s probably too soon to talk about trends, because this is the first month we’ve had access to ChubbyBrain’s data on these smaller deals, which were compiled from regulatory filings, user submissions, and other sources. But here are some quick observations.

About two-thirds of the deals (11 of 16) were equity investments, while one-third (5 of 16) were debt financings. Half the investments (8) were in software companies, while about a quarter each were in biotech/medical (4) and cleantech (3) firms. The majority of the deals were in the Seattle area (10), but a significant number were near Portland or in Oregon (6). Anecdotally, all those breakdowns seem consistent with the deal flow we’ve been seeing and reporting on in the Northwest for the past year or so. The data didn’t include the investors or the stage of the investments.

Without further ado, here are the 16 “under the radar” deals from last month:

Vantos (Seattle)                                            Equity        $873,487
Investigation software

InEnTec (Bend, OR)                                     Equity        $800,000
Cleantech fuels

WA 32609 (Redmond, WA)                           Equity         $800,000
Biotech

Inson Medical Systems (Bellevue, WA)      Equity         $642,536
Biomedical drug delivery

Napera Networks (Mercer Island, WA)         Debt           $600,000
Networking software

Acucela (Bothell, WA)                                    Equity         $439,603
Biotech drugs

Adometry (Kirkland, WA)                               Equity         $400,000
Analytics software

Smilebox (Redmond, WA)                              Equity         $399,999
Consumer software

Asemblon (Redmond, WA)                             Debt            $386,000
Cleantech/materials

Ohio River Clean Fuels / Baard Energy (Vancouver, WA)    Debt            $245,000
Cleantech fuels

Safetec Compliance Systems (Vancouver, WA)                    Debt            $235,000
Software for chemical compliance

Second Porch (Portland, OR)                          Equity         $225,000
Social software

SynapticMash (Seattle)                                    Equity         $200,000
Educational software

Silere Medical Technology (Kirkland, WA)      Debt            $120,000
Medical devices

BallLogic (Portland, OR)                                   Equity         $100,000
Consumer devices

Site 9 (Portland, OR)                                          Equity         $100,000
Web development software

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Some tech companies seem to be at their best when things are at their worst. Those are the ones you really need to keep an eye on, especially in a recession. Isilon Systems is one of those companies.

The Seattle-based data storage firm (NASDAQ: ISLN) is announcing its third-quarter earnings this afternoon, and it will be interesting to see how well its products are selling across a wide range of industries—everything from movie studios and media companies to financial institutions and biomedical research organizations. I recently sat down with Isilon’s founder and CEO, Sujal Patel, for a wide-ranging interview about the nine-year-old company’s technology and business strategy. It makes for a pretty compelling case study of a tech startup’s growing pains, and how it has bounced back from adversity to become a leading player in a crowded and competitive field.

In case you don’t know all the twists and turns in Isilon’s history, here’s a quick recap. Patel, a former engineer at Seattle-based RealNetworks (NASDAQ: RNWK), co-founded Isilon in January 2001. The basic idea was to provide cheaper and more efficient data storage for companies needing to host or deliver video, music, and other multimedia content that requires a lot of storage space. In his previous role as chief architect of RealNetworks’ media delivery software, Patel had seen many customers struggle to upgrade their storage capabilities. So there was a real problem to solve. But the tech bubble had collapsed, so customers weren’t necessarily in the mood to buy. Patel says he “pretty much timed the worst spot of the decade to start a company.”

What’s more, there were already about 250 venture-funded storage companies out there, Patel says, and about 50 of them sounded just like Isilon. Patel says he built his business plan around solving the specific problem Real’s customers had, and “how that problem would be pervasive across all mid-range to large enterprises over the next decade.” To start with, he set an incredibly narrow customer focus on photo-sharing and streaming media websites, and media companies.

Isilon’s technology approach was to cluster together a large number of storage “bricks”—each one includes disks, memory, processing, and networking—into a single storage unit. It was a novel approach in the field of network-attached storage, which today is a $4 billion industry with big players like NetApp, EMC, and Hewlett-Packard. Isilon’s technology requires solving some very tough software problems, but the payoff is better storage performance that is also cheaper and easier to manage, for companies dealing with huge amounts of unstructured data. “We can build one gigantic network drive, and we can scale it as the customer’s needs change over time,” Patel says.

Venture capitalists were sold. In August 2001, Isilon closed an $8.4 million funding round … Next Page »

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Boston is an international hotbed of biotech research. So why would a company called Boston BioCom specialize, as it does, in bringing biomedical discoveries to the Hub from Russia?

To hear the folks at Boston BioCom tell it, Russia has some biotech brawn of its own. New York-based drug giant Pfizer (NYSE:PFE) invested $10 million in the Boston-based firm in summer 2008 to help it tap Russia for life sciences discoveries that could be commercialized in the US and elsewhere. And the company has already established two programs to bring science from Russian institutions to market.

Why Russia? Jeffrey Gelfand, chief scientific officer of Boston BioCom and a physician at Massachusetts General Hospital, said that the U.S. State Department began pumping hundreds of millions of dollars into Russian institutions after the fall of the Soviet Union to redirect the efforts of former weapons scientists to medical and non-defense pursuits. Though the U.S. has wound down this funding as the Russian economy has strengthened, the resulting biomedical discoveries from the research makes Russia a viable source of medical technology.

Gelfand isn’t making this up. In San Francisco, a biotech called Medivation (NASDAQ:MDVN) is in late-stage clinical development of an antihistamine drug from Russia to treat Alzheimer’s disease. Also, ProTom International, based in Flower Mound, TX, is developing next-generation proton therapy systems for cancer treatment based on technology licensed from the Lebedev Physics Institute in Moscow. ProTom researchers have collaborated with scientists from MIT’s Bates Linear Accelerator Center in Middleton, MA, to enhance the system.

“I think [ProTom] is a perfect example of what we hope to do ourselves,” Gelfand said.

Boston BioCom has three main biomedical technologies in development, two of which stem from discoveries in Russia, while the third is from Gelfand’s own lab at MGH. The Russian-born technologies include a laser energy system, which is designed to boost immune responses in the skin, and an antibacterial therapy program, which is focused on using molecules called bacteriocins as drugs. (In nature, bacteria produce bacteriocins to fend off attacks from other bacteria.) The firm’s program from Gelfand’s lab involves the use of engineered antibodies—in this case, monoclonal antibodies fused with recombinant heat shock proteins—to treat cancer and infectious diseases.

The firm licensed the bacteriocin technology from … Next Page »

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Follica, the Boston-area startup out to bring a scientific approach to helping hair-loss sufferers re-grow their locks, is preparing for some new growth of its own. The firm, run since its late 2006 inception by founding CEO Daphne Zohar of Boston’s PureTech Ventures, announced today the hiring of a new president and CEO, William Ju, a biopharmaceutical veteran with experience in an array of therapeutic arenas, including dermatology (he is a board certified dermatologist). The selection of Ju seems to position the firm to move out of the purely research-focused stage and closer to becoming a drug development company.

“There’s just a lot of excitement with regard to the science, and to the progress that’s been made,” Ju says of Follica’s work to date. “When I heard about the opportunity, I was really delighted with it, given my background as a dermatologist, given what I think is really breakthrough research.” And he says he looks forward to “bringing the company through to its next developmental stages.”

For her part, Zohar put it this way in a statement: “We are thrilled to welcome Bill Ju as the CEO of Follica. He brings the ideal blend of dermatology and drug development experience, creativity and leadership skills to Follica in this next exciting phase of development.”

What, exactly, Follica’s next step is—and when it will occur—is of intense interest to many of Xconomy’s readers, who struck up an often-spirited conversation on the site after we reported Follica’s $5.5 million Series A round in January 2008 and continued the discussion after the startup’s $11 million Series B funding last August. A lot of the talk in these comments has been centered on a 15 to 20 patient proof of concept study that Follica launched to put its follicle-generating approach to the test. Zohar confirmed the study’s existence last August, but the company has not provided other details on its progress—other than to stick to a general timeline laid out in January 2008 that no results would be available for at least a year. Depending on how you count, and when exactly the trial began, that year is either up or close to being up.

Which might or might not have something to do with Ju’s hiring. When I asked him about the trial, Ju, who started on May 1 and is still getting up to speed, was understandably vague. “The trial is … Next Page »

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Chandigarh, Sunday, December 7—I drove straight north from Delhi to Chandigarh about 300 km, on a much improved four-lane highway. Chandigarh is a planned city that was designed by the French architect Le Corbusier in the late 1950s. It remains a delightfully livable city that the rest of India has failed to emulate. I am attending the wedding of my cousin’s daughter, a recent dental school graduate, to a young engineer who works with Tata. The local TiE chapter has also invited me to speak to their members tomorrow.

I have met several entrepreneurs who have returned from the U.S. to take care of aging parents and then set up businesses here. Chandigarh is considered to be a tier 2 city (tier 1 being Delhi, Mumbai, Bangalore, Kolkata, and Chennai), in the same league as Pune and Ahmedabad. In reality those cities are far more industrial, including technology-related industry, than Chandigarh. There is a nascent life sciences industry forming, especially around agricultural products: Chandigarh is the capital of Punjab, India’s bread basket. However, most of the entrepreneurs I met had small outsourced information technology businesses with customers primarily from the U.S..

There is an excellent engineering college in Chandigarh, and I had the chance to meet with the director of the college, Manoj Datta. He is busy setting up new degreed programs to respond to industry needs. For example, he was evaluating a graduate program in biomedical instrumentation in conjunction with a local biological institute. We had a vigorous debate about the viability of that degree, along with the head of Philips Labs from Delhi. Philips Labs are creating new products for emerging markets by launching them first in India; they support all Philips divisions, including the medical division in Andover, MA. For instance, they recently launched a UV water purifier that is more effective than charcoal filters. Tainted water is a big problem in India, as many tourists have found. The public water supply is invariably contaminated and almost everybody has a water purifier at home. Boston University has a world-renowned public health department that has projects in India; I need to connect them to Philips Labs and Punjab Engineering College.

I had an interesting conversation with the CEO of the Usha Group, which has been making ceiling fans and air conditioners for many years. He showed me a cell phone that they have launched in tier 3 and 4 cities in India. The cell phone is manufactured by an ODM (Original Design Manufacturer) in China to their specifications and distributed via thousands of cell phone retail distributors. Usha has been struggling to differentiate itself on grounds other than price. To illustrate how powerful this can be, the CEO told the story of an upstart competitor that had inferior products but had stumbled onto a need in the rural marketplace for phones that had long battery life. Electricity is not readily available in most India villages and is unreliable when it is.

I asked him if he had considered differentiating on the cell phone user interface, perhaps by using the Google Android operating system and then customizing the UI for rural India consumers. I will discuss this further with him when I return to Delhi.

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Earlier this month, I had the tremendous honor of being asked to discuss Senator Ted Kennedy’s remarkable contributions to biomedical science at an event celebrating The Edward M. Kennedy Institute for the United States Senate that was organized by The Massachusetts healthcare and life sciences communities. Following are my comments:

As I studied the record of the Senator, it became apparent that few national leaders have had as significant impact on the current state of biomedical science and healthcare delivery. He has been foresighted in his leadership by championing inclusion of the disadvantaged into the healthcare system and at the same time strengthening biomedical research that advances the range and quality of treatments available.

Senator Kennedy was first elected to the Senate 46 years ago in 1962. Relating this tenure to my own experiences in science, he was a Senator when I graduated from high school and has shaped many of the opportunities in my life, even though at the time I was unaware of it.

The center of biomedical research and innovation in healthcare in the world is now in Massachusetts. This epicenter has grown over the 40 years of Senator Kennedy’s tenure and will create a large part of the future of healthcare. The foundations of this epicenter, with the addition of biotechnology in the 70s, were the universities such as Harvard, MIT, BU, Tufts, BC, and others—and the great hospitals such as MGH, Brigham and Women’s, Dana Farber Cancer Institute, Children’s Hospital, and many others.

Senator Kennedy’s leadership in encouraging advances in biomedical research began with his election as Chairman of the Senate Health Subcommittee in 1971. In this capacity, he helped pass the National Cancer Act that established the modern National Cancer Institute and quadrupled the funds supporting cancer research. Senator Kennedy stated his support of biomedical research at the time as: “The conquest of cancer is a special problem of such enormous concern to all Americans.” In relating his feelings to those of the country, he further stated, “We can quote statistics. But I think every one of us in this body, and most families across the country have been touched by the disease one way or another.” I am sorry to say that this has certainly been the case for the Senator’s family.

The National Cancer Act has been important for biomedical research across the country and particularly here in Boston. It greatly strengthened the already-strong cancer research and treatment programs at the Dana Farber, MGH, and Children’s Hospital. In addition, this act radically changed the course of research in life sciences at MIT. For example, Professor Salvador Luria, subsequently a Nobel Laureate, convinced MIT to support his application to NCI for funds to establish a new center dedicated to research into fundamental aspects of cancer. David Baltimore took leadership in recruiting the staff of the center; this included yours truly, who joined MIT in 1974.

Research from the Center has been important in the development of several highly successful new targeted therapies. Perhaps more important in terms of the region, the success of MIT’s Center for Cancer Research either directly or indirectly led to the establishment of the Whitehead Institute, the Broad Institute, and the Koch Institute. These institutes, along with MGH and Harvard, have shaped the Kendall Square area with a large concentration of biotechnology companies. There are similar stories about the importance of the National Cancer Act at other universities and hospitals in Massachusetts. This act passed with Senator Kennedy’s leadership clearly initiated a revolution in cancer research and treatment across the country.

Funds for cancer research have grown over the intervening years with Senator Kennedy’s support ,and we pray that he will benefit from these advances in his current struggle. Although no one is satisfied with current treatments of cancer, significant progress has been made. The rate of age-dependent death due to cancer has fallen over the past decade by 25 percent. There are more promising new drugs and treatments under development now than at any time in history. We are making significant … Next Page »

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The nascent New England Biotech Association, an umbrella group comprised of trade associations from all six New England states, held its first board meeting yesterday, the Boston Globe reports. The group is chaired by Paula Newton, President of the New Hampshire Bio/Medical Council. According to its website, “NEBA is committed to ensuring the region remains a global leader in biotechnology and the life sciences.”

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Heading into Election Day (have you voted yet?), the deal flow has really picked up in the Northwest. Cleantech and energy were the big winners this week, followed by Web software and biomedical hardware.

—Xconomy broke the news of Seattle-based EnerG2, a startup out of the University of Washington, raising an $8.5 million Series A round led by Kirkland, WA-based OVP Venture Partners and Palo Alto, CA-based Firelake Capital Management. EnerG2 is an advanced materials company focused on energy storage technologies. We plan to bring you the full story when the parties agree to talk.

—Mercer Island, WA-based Napera Networks closed a $6 million round led by OVP Venture Partners, which had provided seed financing for the company as well. The terms of the deal had not been announced previously. Napera develops network-security technologies for businesses.

—Ascentium, a Bellevue, WA-based Web design and marketing firm, raised additional funds from WestRiver Capital, based in nearby Kirkland. The amount of the funding was not disclosed, but Ascentium said it’s continuing to invest in talented workers and business expansion worldwide.

—Kashless, the Seattle-based startup from ex-Imperium Renewables CEO Martin Tobias, raised a $5 million Series A round from RRE Ventures. Tobias hasn’t said much about what Kashless is doing, but it seems to involve recycling, reuse, and sharing online. He emphasized RRE’s forward thinking in cleantech-meets-software, and said we’re heading into a “nuclear winter” for funding.

—Not technically a Seattle deal, but Kissmetrics, a Web analytics startup founded by Neil Patel, raised $800,000 from Silicon Valley-based True Ventures and other investors. Patel, who’s based in Orange County, CA, is an investor in several Seattle-area companies and is on the board of BuddyTV, ICanHasCheezburger, CultureMob, LiquidPlanner, and Optify.

—Sonosite (NASDAQ: SONO), a Bothell, WA-based maker of portable ultrasound machines, bought back $60.3 million worth of convertible notes it owes investors, as Luke reported. The notes give investors the option of getting their returns through debt payments from the company, or by converting the notes into stock.

—NxtGen Emission Controls, a Burnaby, BC-based “syngas” company focused on reducing emissions and optimizing the burning of fuels, closed a $15.4 million Series B round led by the Altira Group. Other investors included Itochu, an unnamed Japanese auto maker, and returning investors Yaletown Venture Partners, GrowthWorks Capital, BC Advantage Funds, and Polygon Financial Investments.

—Seattle-based Second Avenue Partners participated in a $33 million Series B funding of Ice Energy, a Colorado-based cleantech company that helps manage air-conditioning electricity usage. Second Avenue was an original investor in the firm. The Series B round was led by Energy Capital Partners, based in Short Hills, NJ, and San Diego, CA.

—InEnTec, a waste-to-fuels company based in Bend, OR, received a $150 million equity commitment from Lakeside Energy and American Securities to build a waste gasification plant in Michigan, as Luke reported. InEnTec’s technology originally comes from MIT and the Pacific Northwest National Laboratory.

—Luke also reported that Vancouver, BC-based Yaletown Venture Partners raised $65 million in the initial close of its second fund (which it says will grow to $100 million in the next 12 months). The money will be used for cleantech and info-tech investments in Canada and the U.S. Pacific Northwest.

—Glassdoor, the Sausalito, CA-based online job site co-founded by Zillow CEO Rich Barton, raised $6.5 million in Series B funding from Sutter Hill Ventures and Benchmark Capital.

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Redmond, WA-based Micronics, a maker of tools for molecular diagnostics and monitoring, announced today it has closed a Series C financing round led by the Southwest Michigan First Life Science Fund. The latest round, combined with a Series B round raised earlier this year from private investors, brings a total of $9 million in capital to Micronics, whose disease detection and diagnostic products are based on microfluidics technologies.

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If only hair could grow as fast as Follica’s pot of money. Just seven months after its $5.5 million Series A financing round, the Boston-based startup today announced it has raised an additional $11 million to bolster its efforts to develop new methods of treating male- and female-pattern baldness and other hair-follicle disorders such as excessive hair growth and acne. Follica, which confirmed a human pilot study of its hair-regeneration technique is underway, also added several new team members, including veteran life sciences and biotech executive G. Kirk Raab, former CEO of Genentech, who joined the company’s board as chairman.

The Series B round was led by Polaris Venture Partners of Waltham, MA (Polaris partner Kevin Bitterman also took a seat on the board), and joined by existing investors Interwest Partners of Dallas and Menlo Park, CA, (which led the Series A round); and founding investor PureTech Ventures, in whose offices Follica is headquartered.

Follica’s main initial focus is developing a treatment for the extremely common form of hair loss called androgenic alopecia—better known as male pattern baldness or female pattern baldness. “This financing will enable us to build out the company and move well down the path towards [regulatory] approval,” says Daphne Zohar, managing director of PureTech Ventures (and an Xconomist). “Our research has been progressing in a very positive way. We have had significant interest from the venture community and while we just closed the Series A round a few months ago, and weren’t planning on bringing in more money for a couple of years, we recognize that additional funds enable us to move more quickly. We have worked with Polaris before and they have been a great partner to us which is why we accelerated the Series B round.” Zohar added that Follica is in the process of transitioning to its own office space, and that it already has independent lab space.

My story about Follica’s debut last January and its quest for a baldness cure sparked a long-running (440 comments and counting as of this writing) conversation among the startup’s would-be customers that’s still quite lively all these months later. This highlights the intense interest in—and vast potential market for—an effective treatment for hair loss. Follica, for its part, claims treatments for conditions of the follicle represent a $10 billion-plus annual market. As Zohar said of the general field of aesthetic medicine back in January: “There’s huge markets, and most of the technologies and things that are out there don’t come from real academic science. A lot of them are this late-night infomercial type of thing.”

Aiming to inject some credible science into the field, Follica was formed in late 2006 by PureTech and a roster of leading researchers that includes University of Pennsylvania stem cell biologist George Cotsarelis, Harvard Medical School dermatologist Rox Anderson, and Vera Price, director of the University of California, San Francisco (UCSF) Hair Research Center. As part of today’s announcement, Follica said it has bolstered this scientific firepower with the addition to its scientific advisory board of Samir Mitragotri, an expert in transdermal drug delivery at the University of California, Santa Barbara.

At the root of Follica’s approach to hair loss is Cotsarelis’s discovery (made after the company was formed) that when the skin’s uppermost layers are removed some cells within the wound revert to a more basic state from which they can develop into either skin or hair—and that he could actually direct cells in this “embryonic window” to form new … Next Page »

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In March, we wrote about local investment firm Allied Minds, which has a strategy of investing very early in technology developed in university research labs. Today, Allied Minds announced that it has invested in CryoXtract, a startup launched by researchers from Harvard University and Northeastern University.

The inventors of the technology around which CryoXtract was formed, Dale Larson and Jeffrey Ruberti, have developed a new way to take out small portions of frozen liquid biological samples like whole blood or sperm. Instead of first thawing the liquid, withdrawing a part of it, and the refreezing it, Cryoxtract uses a very small, hollow drill to extract a frozen core. This avoids the risk of degrading the samples by repeated thawing and refreezing and takes less time to carry out.

“We are looking for cutting-edge technologies, and this one is quite enabling, there’s nothing remotely similar in the market,” Allied Minds director Vincent Chung told Xconomy. “The market opportunity includes any organization that has a need to take aliquotes [small portions] from frozen samples.”

According to CryoXtract’s webpage, there are more than 500 million stored frozen biological samples in the U.S.. So while the samples are small, the market seems big.

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Medical device and diagnostics company Hologic (NASDAQ: HOLX) of Bedford, MA, hopes to accelerate its growth in the diagnostics market. To that end, the company today announced an agreement to put up $580 million to buy Third Wave Technologies (NASDAQ: TWTI), which develops molecular diagnostics, especially for HPV, human papilloma virus.

Hologic specializes in women’s health products, including mammography systems, instruments for gynecological surgery, and diagnostic tests for cervical cancer—so called Pap smears. This is also where the Third Wave acquisition fits in, as infection with human papilloma virus can lead to cervical cancer. At present, the Wisconsin-based company has two HPV tests waiting for approval.

“If and when Third Wave’s HPV tests receive FDA approval, expected sometime in the first half of calendar 2009, we will be well-positioned to take these products quickly and effectively to market. We expect the integration process to be smooth and seamless,” Hologic CEO Jack Cumming said in a statement.

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HyperMed, a medical imaging company based in Burlington, MA, announced it has completed a $4 million round of funding from Greenwich, CT-based GBP Capital. The proceeds will support marketing and sales of HyperMed’s lead product, a spectroscopic imaging device that probes tissue metabolism.

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