People in the biotech business (most, anyway) aren’t delusional. They know the odds are stacked against anybody who dares to develop a new drug. But even during the darkest days of recent economic history, December 2008, I heard a seasoned executive explain why the U.S. was, and would remain, the leading place in the world for biotech.

It was about attitude.

“Europeans always want to focus on the 100 reasons why something won’t work,” Bruce Carter, the British-born former ZymoGenetics CEO said. Americans, he went on, know the 100 reasons why a drug probably won’t work, yet “are willing to look at the one reason why it will.”

I’ve been wondering lately whether this is still true, whether biotech has lost its nerve, its anything-is-possible swaggering attitude. Sure, everybody tries to cast their companies and products in the best possible light, that will never change. But deep down, there’s a lot of lingering insecurity. People (me included) keep saying things like the venture capital model for biotech is broken, the IPO market is cruel, Big Pharma is slowly imploding, everything must be outsourced to China and India, young scientists can’t find jobs, drug price controls are inevitable, and the FDA is smothering life sciences innovation.

My job as a journalist requires me to have a well-tuned BS detector, to be skeptical of those who say they can overcome all the odds. But lately I can’t help but wonder, where are the biotechies today who really believe in themselves, and are willing to bet everything that they will beat the odds and do something remarkable?

There is a lack of scientific courage running through biotech today. That’s what Steve Ertel, a senior vice president at Cambridge, MA-based Acceleron Pharma, said on a panel that I moderated last month at the Biotechnology Industry Organization convention in Washington, D.C. Carl Weissman, a Seattle-based VC who invests in biotech startups with disruptive potential, gave an emphatic “yes” when I asked him if he thinks the industry is lacking in guts. Kevin Starr, a partner with Third Rock Ventures in Boston, made this basic point in a different way a few weeks ago, when he talked about the kind of culture Third Rock has worked hard to instill in the more than 20 biotech startups it has founded in the past four years.

“What you need to create is life in an enterprise where there’s a ‘nothing is impossible’ attitude, and that assembles the right set of complementary people together to turn an idea into something that’s great,” Starr says.

Kevin Starr is a partner with Third Rock Ventures

It struck me as kind of an odd thing to hear from a venture capitalist. I’ve covered the industry for the past 10 years, so I’ve only heard tales about biotech culture from the years before then. But my sense is that investors didn’t need to instill a “we-can-do-anything” attitude in the DNA of biotech companies. The entrepreneurial spirit was driven partly because of the exciting new technologies of the day, coupled with charismatic industry founders, and an only-in-America appetite for high degrees of investment risk and reward.

What’s really ironic here is that some of the most truly exciting things in biotech’s 35-year history are happening right now—at the precise moment when there’s so much timidity flowing through the business. Scientists are sequencing entire human genomes for $5,000 and the price is only going down, clearly paving the way for a new wave of more predictive diagnostic tests. The biology of cancer is getting much clearer, and the drugs are starting … Next Page »

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This week we had a couple of notable personnel moves, a big clinical trial result for a drug with local roots, and some sobering commentary about how this crazy biotech business keeps getting harder by the day.

—Seattle-based Immune Design, the developer of new vaccine technology, hired a big fish to be its new CEO. Carlos Paya, the former president of Ireland-based Elan, is taking over from founding CEO Steve Reed, who will keep working with the company and juggle his other responsibilities at the Infectious Disease Research Institute. Bruce Carter remains as executive chairman.

—Seattle Biomedical Research Institute secured another big new grant of $8.9 million from the Bill & Melinda Gates Foundation to support some systems biology-style research which ought to help speed up the hunt for a new malaria vaccine.

—This week’s edition of the BioBeat column talked about how quite a few VCs from around the country are mobilizing in Washington, DC, to put pressure on the FDA to get faster and more predictable, especially in the review of new medical devices. Normally I’d pay little attention to this sort of self-serving rhetoric, but in this case, the FDA has made some public statements that suggest it is listening to the critics who say its risk-averse stance is forcing medical device companies and jobs to go overseas.

—Acucela, the Seattle-based developer of drugs for eye diseases, hired a new chief financial officer, David Lowrance, who was previously the CFO at Nashville, TN-based Cumberland Pharmaceuticals (NASDAQ: CPIX). Sort of makes me wonder if Acucela could have some bigger plans up its sleeve, which require the services of a CFO with public company experience.

—Amgen (NASDAQ: AMGN) made some news last week that investors mostly ignored, but I’m sure generated a lot of chatter in these parts. The company said its AMG-785 drug for osteoporosis met its goal of improving bone mineral density for post-menopausal women, in a study of 400 patients. Key early work on this program was done at what used to be known as Celltech R&D in Bothell, WA—and many of the key people who did that are now at Alder Biopharmaceuticals. Most Amgen investors are fixated on the FDA-approved osteoporosis drug denosumab, but researchers are keeping very close tabs on AMG-785, Amgen has said.

—Sean Tunis, the former chief medical officer of the Centers for Medicare and Medicaid Services, offered up some plain talk this week about how biotech companies today have to think about proving their products are not just safe and effective, but how they will also lower healthcare costs. Tunis was in town this week for a WBBA event to deliver this sobering message, about how life sciences entrepreneurship has gotten harder in the new era of cost controls.

—Lastly, we had a thought-provoking guest post from Todd Smith, the founder of Seattle-based Geospiza, about how scientists need to change their culture to make big discoveries that improve healthcare. This was written after Smith attended the Sage Commons Congress, organized by Seattle-based Sage Bionetworks.

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Immune Design aspires to become a bigger company, and now it has recruited a CEO from a bigger company.

The Seattle-based vaccine developer is announcing today that its new chief executive is Carlos Paya, the former president of Elan, the Ireland-based biotech company which has significant operations in South San Francisco. Paya is replacing Immune Design’s founding CEO, Steve Reed, who will continue to serve on the company’s executive management team and board. Bruce Carter, the executive chairman, is staying in his position.

“We are fortunate to have someone of Dr. Paya’s caliber joining Immune Design,” Reed said in a statement.

Paya’s prior job was at Elan, the company known for developing the hit multiple sclerosis drug natalizumab (Tysabri). He oversaw commercial, marketing, R&D, and clinical operations there since November 2008. Before that, he was with Indianapolis-based pharma giant Eli Lilly (NYSE: LLY), as vice president of Lilly Research Laboratories. Paya, an immunologist by training, was a member of the faculty at the Mayo Clinic before going into the pharmaceutical industry.

Immune Design was founded in 2008 with technology from the Caltech lab of Nobel Laureate David Baltimore, and from Reed’s team at the Seattle-based Infectious Disease Research Institute. The technology is based on a vector from Baltimore’s lab that makes it possible to specifically stimulate dendritic cells of the immune system, which are known for sending sentinel warning signals about pathogens to other cells of the immune system. That targeting ability is being combined with synthetic chemical compounds called adjuvants, which are used to boost the effectiveness of vaccines.

The adjuvants from Reed’s lab, when combined with Baltimore’s precise delivery system, offer an opportunity to trigger highly potent, more specific immune responses in the body than vaccines from the past, according to Rick Klausner, a partner with The Column Group, one of the company’s founding investors.

The company has raised $50 million in two rounds of venture financing, and last year struck its first major partnership with AstraZeneca’s MedImmune unit to develop new vaccine candidates.

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Yesterday, we broke the news here at Xconomy that ZymoGenetics CEO Doug Williams has left the company now that it has been taken over by Bristol-Myers Squibb. He is now officially scoping out his next gig. This is news, because he’s one of the few people that national life sciences VCs would back in a heartbeat around a new company with big-time potential.

There were a lot of things I wanted to cover during my phone interview on Sunday with Williams, 52. I asked him about the lessons he learned from his turbulent experience in a 22-month run as ZymoGenetics CEO, and what he really wants to do next. He was much more relaxed and candid than the last time I talked with him in September. That was a tense moment when the venerable biotech—which has long sought to be the Northwest’s biotech bellwether—stunned its employees, and many in the community, by saying it had agreed to be sold to New York-based pharma giant Bristol-Myers Squibb for $885 million. ZymoGenetics had essentially thrown in the towel on its dream to become the next great biotech company from the Northwest.

Here’s what Williams had to say about that decision and his future plans. The interview is edited for length and clarity as always.

Xconomy: What are you considering doing next?

Doug Williams: I’m looking at a number of different opportunities, both here in Seattle and more broadly. I’d obviously love to stay in Seattle. My girls are both native Washingtonians, and this is home for us, but I am looking at some things outside the Seattle area as well. I haven’t really made any decisions, other than to decide I’m not ready to hang up the cleats just yet.

X: You’re 52, now, right, so what’s the right analogy here? You still have some mileage left on the tires?

DW: I like to think so. 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. It’s a real gift to be able to work around a bunch of smart people and do things that are ultimately good, in the sense we develop important drugs.

X: Who else has left from the senior management team at Zymo, and might you work with them again in some other capacity?

Doug Williams

DW: The only other one that I’m aware of who has left is Stephen Zaruby, who was the president. He and I both left at the same time. The remainder of the senior management team is still there. I’d love the opportunity to work with any or all of them again; we forged a pretty strong bond as a management team and enjoyed working with each other. I’m not sure what the long-term issues are with some of the senior managers—I’m sure some of them will be offered positions with Bristol. I don’t know if all of them will be.

X: Do you have any role in the decision-making process anymore in terms of what happens to the people and facilities at ZymoGenetics, or is this a clean break for you?

DW: I made a clean break. It was sort of a mutual decision on the part of Bristol and me that having the old CEO rattling around in the building didn’t make a whole lot of sense. I left on Day 1. I certainly left having given them my impressions on what they ought to do, and I hope they will take some of that advice. They see there is a lot of value in the site. They are just trying to get their arms around … Next Page »

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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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Immune Design has struck its first big deal with a Big Pharma company.

The Seattle-based vaccine developer has agreed to provide a license to an immune-boosting compound, called an adjuvant, to the MedImmune unit of London-based AstraZeneca. The pharma giant plans to use the compound as a key ingredient in potent new vaccines it has in the works. In return, Immune Design will get undisclosed upfront cash, future milestone payments worth up to $212 million based on development and sales goals, plus “mid-single digit” percentage royalties if the vaccines become marketed products, according to Bruce Carter, Immune Design’s executive chairman.

Today’s deal is the latest step forward for Immune Design, a company founded two years ago by a trio of scientific heavyweights—Nobel laureate David Baltimore of Caltech, Larry Corey of the Fred Hutchinson Cancer Research Center, and Steve Reed of the Infectious Disease Research Institute (IDRI) in Seattle. Immune Design raised $32 million its second round of venture capital in July, bringing its total fundraising haul to $50 million.

Back in July, Reed said in an Xconomy exclusive he was following the playbook of his old company, Corixa, which sought to build a foundation in the first couple years and start doing deals by year three. It’s an important point in the evolution for a biotech startup with a lot of proprietary technology that few people have really seen yet up close.

“The money is important, but what’s more important is that someone very interested in developing new vaccines recognizes the necessity of putting our adjuvant in their vaccine,” Carter says.

Bruce Carter

MedImmune is paying to get ahold of Immune Design’s synthetic chemical adjuvant, called glucopyranosyl lipid A (GLA). This compound is supposed to boost the effectiveness of vaccines in a cheaper, more reproducible, and more scalable fashion than previous generations of adjuvants that were derived from natural products. Reed and his teams at Corixa and IDRI did pioneering work on a natural product adjuvant, known as Monophosphoryl Lipid A (MPL), which is now a critical component of GlaxoSmithKline’s vaccine for cervical cancer, called Cervarix.

While this deal for Immune Design isn’t huge by biotech standards, it is intentionally limited in scope, Carter says. MedImmune has obtained the rights to use the GLA adjuvant to enhance experimental vaccines for respiratory syncytial virus (RSV), Epstein-Barr virus, and cytomegalovirus (CMV) infections.

MedImmune, of course, is well-known for its expertise in respiratory syncytial virus, since its fortune was built on the success of palivizumab (Synagis), which generated $1.23 billion in sales in 2009. Instead of just treating RSV, MedImmune now has its sights set on developing a potent new vaccine … Next Page »

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The big question these days in Seattle biotech is about people. What will happen to the 320 people who work at ZymoGenetics (NASDAQ: ZGEN), now that the pioneering company has agreed to be taken over by pharmaceutical giant Bristol-Myers Squibb for $885 million?

Given the history of takeovers like this, the safe bet is that many employees, especially those on the administrative and business side of the house, will lose their jobs. But ZymoGenetics CEO Doug Williams insists that “no decisions have been made,” yet, and that it could take a couple months for executives from both companies to make the hard choices.

While everyone waits for those answers, the takeover has also created uncertainty about the future of one of Seattle’s important historical landmarks. It’s the old City Light Steam Plant, designated as a city landmark in 1988. It’s the place that generated electricity back in the city’s early days, fell into disrepair, and was reinvented into a modern gem of biomedical research in the 1990s. Even Northwesterners who know nothing about biotech know that this landmark at 1201 Eastlake Avenue East, with the restored smokestacks, is one of the city’s iconic locations, seen by thousands every day as they drive down Interstate 5.

There’s some fascinating recent history to this building, first built in 1914. The power plant was de-commissioned in 1987, declared a landmark the following year, and sat vacant for several more years. By 1993, ZymoGenetics, which was owned by Danish drug giant Novo Nordisk, bought the building and the adjacent Hydro House, and agreed with developer William Justen to spend $25 million to transform them into a biotech center. The following year, the city passed an ordinance which essentially mandated that anyone who wanted to alter the exterior of the building would need approval from the city’s Landmarks Preservation Board.

ZymoGenetics, which lived large for many years as the research wing of Novo, turned it into one of the iconic headquarters buildings in Seattle. It took a ton of work—ZymoGenetics chairman Bruce Carter called it “the mother of all fixer-uppers” in this post at HistoryLink.org. I’ve done many interviews there over the years with Carter and others at Zymo. It’s hard not to admire the tasteful art collection on its walls, the central foyer decorated with flags that represent the multi-national heritage of its employees, and the gorgeous views of Lake Union for its scientists. The place even has kayak access along the lake, and employees are known to sometimes do a little rowing during breaktime.

The old Seattle City Light Steam Plant

“It’s an awesome space,” says Bob Mooney, managing director of Jones Lang LaSalle in Seattle, who represents ZymoGenetics in its effort to sublease part of the facility.

ZymoGenetics spokeswoman Susan Specht had no comment about what might happen to the facility as part of the transaction, and a Bristol-Myers Squibb spokeswoman said “no decisions have been made” about the people or the site. The owner of the building, Alexandria Real Estate Equities, didn’t respond to a request for comment. (Disclosure: Alexandria is an underwriter of Xconomy, and is also our landlord in Seattle, San Diego, and Boston.)

Since ZymoGenetics and the Steam Plant’s developer struck their agreement with the city, a lot has changed. ZymoGenetics agreed to sell the headquarters to Alexandria for $52 million in October 2002, as part of an agreement to lease the space for another 15 years (a story which I covered for The Seattle Times.) The deal was later extended another two years, and the total value ballooned to … Next Page »

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Steve Reed is following a tried-and-true road map for building a biotech company. First year, build the team. Second year, gather some data to support the founding idea. Third year, prove it in clinical trials. Then start coaxing Big Pharma to open up its checkbook and do deals.

“This is when it gets exciting,” Reed says. “That’s just what happened at Corixa.”

Reed was talking about the growth strategy at his latest startup, Seattle-based Immune Design. The company made news yesterday when it raised $32 million in its second round of venture financing, from a big name crew of investors outside the Northwest—ProQuest Investments, The Column Group, Alta Partners, and Versant Ventures.

Immune Design was founded with an $18 million venture round from the last three investors a little more than two years ago, in June 2008. The company’s vision is to create a new generation of more specific, potent vaccines. In theory, these vaccines could provide lasting protection against infectious diseases with a single shot, or could be used to re-direct the power of the immune system toward an internal invader like cancer cells.

The technology builds on research from the Caltech lab of Nobel Laureate David Baltimore, who created a viral vector that makes it possible to specifically stimulate dendritic cells of the immune systemare known for sending sentinel warning signals about pathogens throughout the immune system. That targeting ability is being combined with synthetic chemical compounds called adjuvants, which boost the effectiveness of vaccines. These adjuvants from Reed’s lab at the Infectious Disease Research Institute (IDRI), when combined with Baltimore’s precise delivery system, offer an opportunity to trigger highly potent and specific immune responses in the body, as I described in yesterday’s breaking news story.

Steve Reed

Immune Design plays its cards very close to the vest, so I was eager to stop by Reed’s office yesterday for a download on the company’s progress the past couple years, and what enabled them to raise a healthy sum like $32 million.

Reed, of course, has been here before. He founded the nonprofit IDRI in 1993 to pursue his dreams of fighting global health scourges. Soon thereafter, he connected with Immunex co-founder Steve Gillis to start a for-profit venture, Corixa, with the idea of raising private money and bringing business discipline to some of his vaccine work. Corixa struggled to market its lone cancer drug, although it successfully developed adjuvants that are now incorporated into GlaxoSmithKline’s vaccine for cervical cancer, marketed as Cervarix. Corixa was ultimately sold to pharmaceutical giant GlaxoSmithKline for about $300 million in 2005.

While Corixa went away, Reed went back to innovating in the adjuvant world with his team at IDRI. The earlier generation of adjuvants, known as MPL, were made from natural products, which made them a little more tricky and expensive to manufacture. The next step was to isolate the specific component of the MPL compounds that appeared to be closely related to sparking an immune response, and then make that component through a synthetic chemical process that would be cheaper, consistently reproducible, and scalable. That technology was went into Immune Design, through what it now calls GLA.

Like in the early days of Corixa, Reed sensed … Next Page »

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Seattle-based Immune Design has raised $32 million to develop a new generation of vaccines. It’s the second big round for the company, founded in 2008 with an $18 million investment.

The latest financing was led by ProQuest Investments, and included Immune Design’s previous investors—The Column Group, Versant Ventures, and Alta Partners. The new investment is the second-biggest venture deal in Washington state this year, trailing a $40 million round for Seattle-based Calistoga Pharmaceuticals.

Immune Design was founded in 2008 with technology from the Caltech lab of Nobel Laureate David Baltimore, and from Steve Reed’s team at the Seattle-based Infectious Disease Research Institute. The technology is based on a vector from Baltimore’s lab that makes it possible to specifically stimulate dendritic cells of the immune system, which are known for sending sentinel warning signals about pathogens to other cells of the immune system. That targeting ability is being combined with synthetic chemical compounds called adjuvants, which are used to boost the effectiveness of vaccines. These adjuvants from Reed’s lab, when combined with Baltimore’s precise delivery system, offer an opportunity to trigger highly potent, more specific immune responses in the body than vaccines from the past, according to Rick Klausner, a partner with the Column Group, in an interview with Xconomy last August.

Vaccines, which were once a backwater of the pharmaceutical industry because of their low profit margins and high potential legal liability, have made a comeback in recent years. Pfizer’s pneumococcal vaccine (Prevnar) and Merck’s human papillomavirus vaccine (Gardasil) have shown vaccines can command premium prices and reach billion-dollar blockbuster status.

Immune Design isn’t revealing much about its progress in today’s financing announcement. It now has cash to advance clinical studies of a synthetic adjuvant that stimulates Toll-like Receptor 4, which is being used in “multiple internal and partnered programs,” the company said. Another program, DC-NILV, is designed to stimulate dendritic cells against cancer—which is similar in concept to what Seattle-based Dendreon (NASDAQ: DNDN) does with its marketed product, sipuleucel-T (Provenge). Today’s statement didn’t make any mention of adjuvants to boost the potency of flu vaccines for elderly people, a program for which the company has performed clinical testing.

Reed, the company’s CEO, is well known in biotech circles as a co-founder and former chief scientist at Seattle-based Corixa. The company also last year recruited Bruce Carter, the chairman of ZymoGenetics, to serve as its executive chairman.

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I was happy to meet many regular readers during a two-day frenzy of networking, reporting, and writing at the Life Sciences Innovation Northwest meeting. Sleep is now moving up the priority list, so my conference wrap up will have to wait a few more hours. But until then, here’s a recap on the last week in Seattle biotech.

—Most of Seattle’s biotech companies are in the wrong business, if you believe industry maven Steve Burrill. Seattle doesn’t have much action in diagnostics, but in the future, personalized medicine and genomic diagnostics (Dx) will become more valuable than prescription pharmaceuticals (Rx), Burrill said in his opening keynote talk at the conference. If you have a break, you can click through the whole 146-slide PowerPoint deck that Burrill zipped through in a little more than 40 minutes.

—Seattle’s biotech VC godfather, Bob Nelsen of Arch Venture Partners, offered his view on some of the hypocrisy he sees among elected officials who say they are for innovation, but then push for policies that will strangle it. You can read more here to see what he means specifically about some state tax proposals in a guest editorial he wrote earlier. But I have one question for readers to consider: If you were in office, how would you balance the budget?

—I did a quick interview with Rajiv Shah, the new administrator of the United States Agency for International Development, who was in town to talk to biotechies about how he hopes to use USAID’s purchasing power to buy some of the innovations for global health that he sees emerging in Seattle and around the world.

—One biotech startup managed to pull down some significant cash, and time it for the first morning of the conference. This was Presage Biosciences, a spinoff from the Fred Hutchinson Cancer Research Center, which raised its first $3.1 million from angel investors. The company has developed a tool that it offers to large pharmaceutical companies, which it says should be able to boost the success rate of experimental cancer drugs from 1 in 10 to about 1 in 2. If proven over time, that’s the kind of thing pharma companies might pay for to help solve their atrocious R&D productivity problem.

—We rolled out a big announcement about another event Xconomy is organizing. This one is about innovations in healthcare information technology, way beyond what you hear about electronic medical records. It’s going to be from 2 pm to 6:30 pm on May 12 at the Frye Art Museum on Seattle’s First Hill. Swedish Medical Center CEO Rod Hochman, Sage Bionetworks founder Stephen Friend, Canary Foundation founder Don Listwin, and Microsoft HealthVault’s David Cerino are among the stellar cast of speakers we have assembled to talk about how … Next Page »

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Well, 2009 did not turn out to be the biotechnology disaster here in Seattle that many people had predicted.

By my reckoning, only four of the local biotech companies that I track on my website went bust in 2009 (Eden Biosciences, VizX Labs, Northstar Neurosciences, and Rosetta Inpharmatics). This last blow was softened when Microsoft bought some of Rosetta’s assets from Merck (it’s biosoftware division) and hired a number of its employees. Many of the VizX employees (along with its GeneSifter software) were absorbed by Geospiza. The loss of four companies put Seattle on a roughly equal footing with Boston, which saw at least five companies fold, and San Diego, where at least six companies went under.

Although we didn’t lose quite as many companies, it was still a very tough year locally for those employed in the biotech sector. At least nine companies reported significant layoffs, including Cardiac Science, CMC Icos, Trubion Pharmaceuticals, Cell Therapeutics, Poniard Pharmaceuticals, Amgen, Targeted Genetics, ZymoGenetics, and VLST.

On the positive side, Dendreon moved much closer to being able to sell sipuleucel-T (Provenge), their novel treatment for prostate cancer, and has been on a hiring frenzy. OncoGenex Pharmaceuticals had a breakout year with its own prostate cancer treatment. Partnerships were both formed and broken at a dizzying pace, with Seattle Genetics, ZymoGenetics, MDRNA, Alder Biopharmaceuticals, Arzeda, Ikaria, Kineta, Trubion, and Nanostring among the notable participants. Amgen won its long running patent fight with Roche and was able to block them from selling generic erythropoiesis stimulating drugs in the U.S. Some top executives moved around, with Immune Design gaining part-time help from ex-Zymo CEO Bruce Carter, and with Peter Thompson leaving Trubion and Stewart Parker departing Targeted Genetics.

Other notable events: PATH won the $1.5 million Hilton Prize, the world’s biggest humanitarian award, for it’s work improving health in poor countries, and local biotech Omeros was successful in launching their IPO (although the stock price has dropped some 25 percent since then).

A number of new companies launched or moved into the area, including Arrowsmith Technologies, Beat Biotherapeutics, Qwell Pharmaceuticals, ImaRx, Novo Nordisk, AVI Biopharma, Covance, Arzeda, Xori, Presage Therapeutics, Integrated Diagnostics, Sage Bionetworks, and Genzyme (via its acquisition of Leukine from Bayer). Chris Rivera got off to an excellent start as he took over the head job at the Washington Biotechnology & Biomedical Association. The State’s Life Sciences Discovery Fund expenditures were cut by 41 percent to help balance out the state budget deficit.

In 2010, at least three companies that operate in Seattle will hope to have their drugs approved: Dendreon’s sipuleucel-T (Provenge) for prostate cancer, Amgen’s denosumab (Prolia) for osteoporosis, and Cell Therapeutics’ pixantrone for non-Hodgkin’s lymphoma. Here’s hoping that they all fair well.

Health care reform is sure to bring numerous changes to the industry. One key change likely to be enacted via legislation in 2010 will define a regulatory pathway for the approval of follow-on biologics, which are generic versions of biologic-based drugs. This has the potential of providing significant savings for consumers, although such benefits will depend on the period of market exclusivity awarded to innovator drugs.

Continuing economic problems indicate to me that 2010 will also be a very challenging year for biotech companies in Seattle and beyond. I expect to see many more deals for the acquisition of product candidates, but not so many acquisitions of companies. I wish all of you on the local biotech scene a productive and successful year in 2010.

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A flurry of Seattle biotech news kept us very busy around here right before the holiday.

—The parents of Amazon.com founder Jeff Bezos made one of the largest private donations ever to the Fred Hutchinson Cancer Research Center this week, when they pledged $10 million to support immunotherapy research.

—Seattle-based Bio Architecture Lab, the developer of biofuels from seaweed, said it has completed an $8 million Series A venture round that included investment from Statoil, the world’s largest producer of offshore energy. The University of Washington spinout also formed a collaboration with chemical giant DuPont, which has secured $9 million in federal support.

—One of Seattle’s leading biotech entrepreneurs, Bruce Carter, announced he was retiring from ZymoGenetics about a year ago, but now he’s found a new challenge as the executive chairman of Immune Design, a Seattle-based vaccine developer.

—Dendreon (NASDAQ: DNDN), the Seattle-based developer of a treatment to stimulate the immune system against cancer, said the FDA has set a deadline of May 1 to complete the review of its application to market sipuleucel-T (Provenge) in the U.S. for men with terminal prostate cancer.

—Seattle Genetics said it secured a $12 million upfront licensing fee from Agensys, an affiliate of Japan-based Astellas Pharma, to pursue multiple targets in an expanded partnership to develop targeted cancer drugs. The Bothell, WA-based company (NASDAQ: SGEN) is collaborating with Agensys on what it calls “empowered antibodies” that seek out tumors while unloading a toxin to give them extra tumor-killing punch.

—Omeros (NASDAQ: OMER) said it expects to file an application for FDA approval in the second half of next year, for clearance to start marketing its first product, an anti-inflammatory treatment to help people recover faster from arthroscopic knee surgery. CEO Greg Demopulos made the comments in the company’s first conference call as a public company.

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One of Seattle’s leading life sciences entrepreneurs, Bruce Carter, is back in the saddle. Carter has agreed to take an active management role as executive chairman of Seattle-based Immune Design, a year after he announced he was retiring as CEO of ZymoGenetics (NASDAQ: ZGEN).

Carter has agreed to work about three days a week at the startup vaccine developer as executive chairman, while co-founder Steve Reed will stay as full-time CEO. Carter’s top three goals are to bring in “money, money, and more money,” he says, by tapping his global network of investment and pharma industry contacts who might be interested in what Immune Design has started, he says.

“I got seduced by the science and the idea of learning something new,” Carter says. He added: “I was a little afraid I’d get bored.”

The addition of Carter is just the latest in a string of big names who have aligned themselves with Immune Design. The company got started in June 2008 with an $18 million venture financing led by Rick Klausner of The Column Group, Ed Penhoet of Alta Partners, and Brian Atwood of Versant Ventures. They bet on technology from the Caltech lab of David Baltimore and Reed’s team at the Infectious Disease Research Institute in Seattle. The vision is to create the first generation of vaccines that can be designed to stimulate specific cell types needed to prevent an illness, fight off an existing infection, or possibly even kill tough cancer cells.

As many people in Seattle biotech know, Carter is one of the big personalities of the local cluster. He is the British-born microbiologist who is essentially the founder of the modern version of ZymoGenetics. He first joined the company in 1986, and later oversaw the operation when he became chief scientific officer of Novo Nordisk, which acquired Zymo in 1988. He led ZymoGenetics’ transformation from a U.S. research wing of Novo into a standalone private company in 2000, and then took Zymo public in 2002. He retired on Jan. 1 of this year.

Bruce Carter

Since then, Carter has stayed busy through serving as chairman of ZymoGenetics; as a director of India-based Dr. Reddy’s Laboratories, a generic drugmaker; and of the nonprofit TB Alliance. At first, he wasn’t really that interested in joining the board of Immune Design.

“I got a call from the chairman of the board, Ed Penhoet, and he asked me, ‘How are you enjoying your retirement?” Carter says. “I told him, ‘I’m really enjoying it, I haven’t been bored a single day.’”

Even so, Carter agreed to listen to Penhoet’s proposal about Immune Design. The two have known each other for more than two decades dating back to when Carter was at Novo and Penhoet was one of the biotech industry’s pioneers at Chiron. Carter says he was impressed by the group of people who have coalesced around the new company. “There were some heavy hitters involved,” Carter says.

But vaccines were out of Carter’s comfort zone, so he has had to learn some new things.

Carter says he plans to concentrate on external partnership talks and fundraising for Immune Design. Carter will use some of his business experience to help “do a little organizing” of the staff, which … Next Page »

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Seattle might never have gotten its newest biotech research center if not for a historic corporate blunder from 30 years ago, according to Lars Rebien Sorensen, the CEO of Novo Nordisk.

Novo, the Danish drugmaker that is the world’s biggest producer of insulin for treating diabetes, was approached then by a small biotech company from California that thought it could help Novo come up with a better way to treat diabetes. This little company had an idea for making genetically engineered copies of the human insulin protein, which would be more effective, and less likely to provoke an immune system reaction in patients than the standard insulins of the day, which were derived from animals. Novo was satisfied with what it had, and politely said no thanks, according to Sorensen.

That little company was South San Francisco-based Genentech. It went on to form a partnership with Eli Lilly to make genetically engineered human insulin in the early 1980s, which soon made animal-derived insulin completely obsolete, and directly threatened Novo’s core business. Novo Nordisk was forced to play catch up, and it found a little biotech partner from the 1980s in Seattle—ZymoGenetics—that helped it create a human form of insulin that was able to become a dominant player.

Sorensen told this little parable this morning at the grand opening of Novo Nordisk’s brand new research center in Seattle’s South Lake Union neighborhood. This event drew a lot of the who’s who in Seattle biotech, and Sorensen told this little parable to make a point. Novo doesn’t want to be that short-sighted again, and while it’s prospering with its treatment for the global diabetes epidemic, it wants to spend some of that money planting seeds for the future opportunities in biotech that it doesn’t want to miss.

Lars Rebien Sorensen

After considering what it knows from its years of partnership with ZymoGenetics, and watching Immunex create a breakthrough for rheumatoid arthritis that now generates $7 billion a year in sales, Novo has reached two conclusions: Autoimmune diseases are said to affect one out of every 12 Americans, and represent a big unrealized opportunity for the future of pharmaceuticals. Seattle is one of the best places to tap into scientific know-how that has a shot to create the next generation of medicines for those patients, Sorensen said.

“We do not want to make the same mistake again,” Sorensen said this morning at the grand opening.

Novo is putting its money where its mouth is, investing while others are cutting in the recession. It proudly showed off its facility at this morning’s event. The research center at the corner of Mercer and Fairview Avenue North, is led by former ZymoGenetics scientist Don Foster. It currently employs 35 people, and is expected to grow to 60 people by the end of 2010.

The company definitely wants to make inroads with the local VIPs in Seattle. Mayor Greg Nickels showed up to deliver some welcoming remarks, and some big names from local biotech were there to mingle—VLST’s Marty Simonetti and Paul Carter, ZymoGenetics chairman Bruce Carter, Seattle Biomedical Research Institute president Ken Stuart, and Washington Biotechnology & Biomedical Association president Chris Rivera. They were there to mix with some very well-dressed Danish business executives, including Sorensen and Novo’s chief scientific officer Mads Krogsgaard Thomsen.

Foster—who looked just like a classic American scientist a little uncomfortable in a suit, speaking in front of an audience—actually delivered a pretty forceful case for why he’s excited about the opportunity to create new drugs with Novo. He railed against the trend in the industry toward creating “me-too” products that attempt to make money by piggybacking on truly groundbreaking discoveries like Immunex’s etanercept (Enbrel), but that don’t really add much benefit for patients. Novo, he says, is going to stick its neck out and collaborate with innovative biotechs like VLST that can help it discover promising new avenues for therapy, and then put its corporate horsepower in manufacturing back in Denmark to work.

“I can remember saying to my wife a year ago that I wanted to find a place with the will, the resources, the fortitude, and the patience to come up with new biologic therapies,” Foster told the audience. “We will not be a me-too company. We will make a difference.”

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ZymoGenetics isn’t giving up on its sole marketed product, and it’s playing some hardball to fight for it. The Seattle biotech company said today it is asking the FDA to yank its top competitor’s drug off the market because, it contends, it’s not safe enough.

Thrombin-JMI, made by Bristol, TN-based King Pharmaceuticals (NYSE: KG), is derived from clotting proteins called thrombins in cow blood. Since that’s from a foreign source, the human immune system recognizes it as such, and can spark a reaction that can lead to severe bleeding and death, ZymoGenetics says. The company says it has found more than 25 published cases of patients who developed blood clotting disorders after they were given cow-derived thrombin products.

ZymoGenetics (NASDAQ: ZGEN) has a major dog in this fight, because its only marketed product—a genetically engineered copy of human thrombin—is a direct competitor to the King product. Both are approved by the FDA to control bleeding during surgery. Zymo won FDA approval to market its recombinant thrombin (Recothrom) in January 2008. Zymo has been arguing for years that its version of thrombin is less likely to spark an immune reaction than animal derived-ones, and that it’s therefore safer. But the argument hasn’t done much to sway doctors. The ZymoGenetics drug generated just $8.8 million in sales last year, and the company predicts it will generate $25 million to $35 million this year. Thrombin-JMI, the established player hospitals have used for years, had $255 million in sales a year ago.

Now, ZymoGenetics is clearly going on offense to get a bigger piece of the market. The drugs for bleeding products are used in an estimated 1 million surgeries a year in the U.S.

“Serious adverse events, including death, linked to bovine thrombin continue to be reported to the FDA,” said George Rodgers, a pathologist at the University of Utah, and medical director of the coagulation laboratory at Salt Lake City-based ARUP Laboratories, in a ZymoGenetics statement. “These adverse events are a serious, ongoing safety issue for patients undergoing surgery.”

ZymoGenetics CEO Doug Williams says the company remains committed to boosting sales of its drug in its second year on the market, as part of an overall strategy to reduce its cash spending rate and stabilize the company in a bad financing market. ZymoGenetics struggled in its first year to get hospitals to try the product, because many didn’t consider the bleeding drugs they use to be a problem, Zymo chairman Bruce Carter has said.

Via a citizen petition to the FDA, ZymoGenetics argues that the risks of treating people with the King product outweigh the benefits, and it should be pulled from the market. Physicians don’t have a readily available diagnostic test for when patients have developed antibodies to previous doses of the drug, and therefore don’t know when a follow-up treatment has the potential to cause a bleeding disorder, the company argues.

King Pharmaceuticals, when confronted in the past by ZymoGenetics’ arguments that its product isn’t safe enough, has generally dismissed them as exaggerations. I’ll add any comments here if the company responds to the latest salvo in the thrombin battle.

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Johnson & Johnson, the diversified healthcare giant, is forming a partnership with the nonprofit TB Alliance to share expertise and resources needed to finish clinical trials aimed at developing the first new drug for tuberculosis in more than 40 years.

The announcement from J&J (NYSE : JNJ) is being made this morning in Seattle at the Pacific Health Summit, the invitation-only gathering of 250 of the world’s leading scientists, public health officials, and businesses focused on global health. This is the first big announcement to come from this event, known as the “Davos” of global health, which I previewed yesterday.

J&J’s Tibotec division and the TB Alliance will focus their energy on a drug called TMC207. This product recently passed a mid-stage clinical trial of 47 patients, in which almost half of people with multidrug resistant forms of TB had no evidence of the bacterial invader in their mucus or phlegm after eight weeks of treatment, compared with one out of 10 who did that well on placeo (9 percent). The findings, published recently in the New England Journal of Medicine, suggest the treatment may have what it takes to be the first approved drug with a new way of working against the disease since the 1960s.

About 1.5 million people worldwide die each year from TB lung infections, making it one of the world’s deadliest diseases, along with HIV and malaria. Drug companies traditionally haven’t invested much in the field because it offers far less profit potential than diseases that are more common in wealthy countries, like cancer and diabetes.

“We see tremendous potential in this collaboration and in the future of TMC207 as part of a critically-needed new TB regimen,” said Mel Spigelman, president and CEO of the TB Alliance.

The TB Alliance, based in New York, generated $30.8 million in public support and other revenue in 2007, according to its annual report. It has partnerships … Next Page »

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(Updated) Angel investors and biotech companies don’t usually mix. Most biotech startups begin with university research, and embark on a decade-long quest of product development, all while inhaling several hundred million dollars of capital, and carrying the burden of a 90 percent failure rate. This is where deep-pocketed, risk-seeking venture capitalists and public equity investors tread, not angels who are long on experience and short on dough.

So I was curious why, in the teeth of a recession, and as many biotech companies are facing extinction, the Seattle-based Zino Society chose to organize its first Life Sciences Investment Forum. This event, held yesterday at the Pan Pacific Hotel in Seattle, drew 12 determined startup companies from around the country, developing drugs, diagnostics, or medical devices. They all lined up to make their best 7-minute pitch to attract angel investment bucks.

The event drew some of the pioneers of Seattle biotech, including Bruce Montgomery of Gilead Sciences, Bruce Carter, the former CEO of ZymoGenetics, and H. Stewart Parker, formerly the CEO of Targeted Genetics. They were there to listen and to offer advice to the entrepreneurs, and maybe more than anything, provide a pep talk for people willing to try to do this innovative work. In his keynote, Montgomery outlined four ways he sees businesses have historically made money in the past. The first was centralization of small businesses like coffee (Starbucks); second was becoming the low-cost provider (Wal-Mart); third was leveraging or securitizing assets (Wall Street); and fourth is through innovation. Guess which one he believes has a future?

“Innovation is the only way to have a true win-win for our society and make us competitive with foreign competitors,” Montgomery said. “Innovation still actually has a chance.”

Zino Society did its best to make this a bit fun, and a bit competitive, with awards. The award for best presenter, as voted by the audience of about 100 Seattle-area angel investors, was given to Douglas Turnquist of Salt Lake City-based ThermImage. The prize for best investment opportunity went to Malvern, PA-based Carbon Nanoprobes. One big winner will be selected in coming weeks by the Zino Society for a $50,000 investment, and the right to make a presentation next month on a bigger stage at Invest Northwest, the regional life sciences investing conference.

So what were some of these innovative companies about? Here were a few of the highlights:

—Carbon Nanoprobes CEO Brian Ruby had one of the best opening gambits in his presentation. “We take pictures of tiny things. We’re like the paparazzi of atoms and molecules,” he said. Essentially, his company’s nanotech materials are used to provide high-resolution images for customers who need to look at small things in the semiconductor, basic research, and biomedical research businesses. It has raised almost $1 million from about 30 investors in Seattle, and is moving into manufacturing its disposable product before the end of March. He said the company has sales leads from big-name customers like IBM, Intel, and Harvard University, among others, although I didn’t hear him say he had booked sales or delivered any just yet. “People are lining up to buy the product before it’s off production line,” Ruby said.

—Oasis Diagnostics. This Vancouver, WA-based company is attempting to develop precise diagnostic tests that extract tiny bits of DNA from saliva, instead of blood. CEO Paul Slowey showed a picture of a young girl grimacing after getting stuck with a needle, stacked next to a photo of her smiling while sticking what looks like a power toothbrush inside her cheek. “A picture paints a thousand words,” Slowey says.

OK, but he had more than just fluff in his quick talk. The saliva diagnostics technology has improved enough in recent years that it can detect minute amounts of a foreign invader, like HIV virus, which has 1,400 times less concentration in saliva than in blood. The company is developing tests for tuberculosis, anthrax immunity, diabetes, and breast cancer. Slowey has experience at two other saliva diagnostics companies, Saliva Diagnostic Systems and OraSure Technologies.

—Calcionics. This Seattle-based company, which spun out of technology developed at the University of Washington, is aiming to develop a drug to prevent and treat cardiovascular disease, particularly hardening of the arteries. CEO Chip Jacob is working with Cecilia Giachelli of the UW, who discovered osteopontin, a naturally occurring protein that breaks down calcified tissue that makes arteries harden. “It’s the body’s natural response to hardening of arteries, we augment it,” Jacob says. This drug has a long way to go through animal and human clinical trials, but Calcionics has no intention of commercializing it alone.

It plans to raise $35 million in three investment rounds over the next five years, and then cash out through getting acquired by a larger drug company for around $350 million. It would be tempting to scoff at this idea in the downturn, but Jacob pointed out it’s been done, and not long ago. Santa Clara, CA-based Ilypsa, which developed a phosphate binding drug for kidney-dialysis patients, raised $45 million before it was sold to Amgen for $420 million in 2007.

What Jacob didn’t mention is that when Amgen took the drug into further clinical trials, it failed. But that’s life in biotech—I’m pretty sure the people at Ilypsa were pretty happy with the returns, and willing to do it again, regardless of whether the drug ever made it on the market.

(Update: The original version of this story left out one of the finalists for the $50,000 investment prize, Inson Medical Systems. The finalists were Oasis Diagnostics, Calcionics, and Inson. Here’s a glimpse of what Inson had to say.)

—Inson Medical Systems, a Bellevue, WA-based is developing polymer-based materials from the lab of UW bioengineering professor Buddy Ratner. As CEO Tracy Klein explained, these materials are supposed to allow a constant dose of a drug over time. The first product is being developed as an eye implant to treat cataracts in animals.

Inson is going after the veterinary market before humans, because it’s easier and faster, Klein says.  But that doesn’t mean Inson has written off the human market. About 14.6 million people worldwide have cataract surgeries each year, and Inson says its technique could help many of them avoid infection, inflammation, and secondary cataracts that can crop up after surgery. If it can capture any significant piece of that market in the next few years, I’m sure this is a story we’ll hear more about.

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Techies, with their cool iPhone apps and Internet software, get all the attention. So a couple of Seattle biotechies squawked at me a couple weeks ago when the Washington Technology Industry Association unveiled an academic study that traced the origins of the “Puget Sound Tech Universe” over the past three decades.

The WTIA study examined the career paths of company founders who started at a place like Microsoft or the University of Washington before they gained critical experience and inspiration to go off and create something new. The analysis purposely left out biotechs—after all, they had to draw the line somewhere at 711 companies. Nothing quite like this visual poster has ever been done for the Puget Sound’s life sciences community, but Sanjaya Joshi reminded me of an analysis of Seattle’s biotech roots that he drew up in a 2004 paper, and updated in 2007.

Joshi, president of Kirkland, WA-based Userspace, runs an IT services company for biotech organizations that have extreme data needs, like the Institute for Systems Biology in Seattle. His paper identified three critical anchors of biotech’s early days in the Puget Sound region, which have served as critical training grounds for biotech entrepreneurs: the Fred Hutchinson Cancer Research Center, the University of Washington, and Seattle-based Immunex. It shows how the “Hutch” served as a base of operations for immunologists Christopher Henney and Steve Gillis, who went on to co-found Immunex in 1981. Immunex veterans went on to start notable operations like Icos, Corixa, Dendreon, Targeted Genetics, Frazier Healthcare Ventures, and Trubion Pharmaceuticals.

Joshi’s boxy flowchart that shows these and many other connections looks kind of confusing to my eye, especially compared with the slick astronomy-inspired depiction of Washington’s tech companies.

Even though his chart can appear disorganized at times, Joshi makes some interesting observations based on his exercise in connecting the dots over a 25-year period. He did interviews with many prominent players in the region, including Bruce Carter, former CEO of ZymoGenetics, Tom Clement of Pathway Medical Technologies, Chris Elias of PATH, Bruce Montgomery of Gilead Sciences, and Clay Siegall of Seattle Genetics.

Based on those interviews and other research, Joshi concludes, Seattle has become a second-tier life sciences hub behind the leaders in Boston and the San Francisco Bay Area. He dubbed it the “BioForest.” The key ingredients that went into the mix for Seattle: excellent academic research centers, a critical mass of talented people and connections formed over the years, a mix of startups and mid-sized companies in different stages of development, and an attractive outdoor lifestyle that helps with recruiting.

This blend has led the region to build up strengths in immunology, cancer biology, ultrasound, and cardiac management technologies like defibrillators, Joshi says. He notes that his analysis isn’t fully up to date and, for example, doesn’t account for the loss of Merck’s Rosetta Inpharmatics division—which spun out of the founding efforts of Stephen Friend and Lee Hartwell at the Hutch, as well as Leroy Hood of the Institute for Systems Biology. Of course, the loss of Icos a couple years ago led to the creation of Seattle-based Calistoga Pharmaceuticals, and an intriguing TB Drug Discovery Initiative inside the Infectious Disease Research Institute. Sounds like it may be time for somebody to do an update on what important new projects will emerge from the scattering of the Rosetta talent pool.

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ZymoGenetics is enduring one of the ugliest stretches in its 28-year history. Now the Seattle-based biotech company is hoping that Doug Williams, an executive who lived through both the darkest days and finest moments at Immunex in the 1990s, will be able to engineer one more turnaround.

Williams, 50, took over as CEO of ZymoGenetics (NASDAQ: ZGEN) last week after Bruce Carter, one of the region’s biotech pioneers, retired. Williams inherits a company that has fallen short of investors’ expectations with its first marketed product, a treatment for surgical bleeding. And that’s not all. One of ZymoGenetics leading candidates in its pipeline, atacicept, failed in a clinical trial for lupus of the kidneys when it raised the risk of infections. The setbacks, combined with a bad overall market, wiped out 76 percent of the company’s value in the year.

When we spoke by phone on a snowy day before Christmas, Williams was keeping the faith, and I didn’t get the sense he was being Pollyannish or trying to pull some sleight of hand. He said he sees a historic parallel with ZymoGenetics of 2009 to the predicament Seattle-based Immunex faced with a hostile takeover bid from Wyeth in 1995. Immunex was then limping along after its first marketed product, GM-CSF (Leukine), was crushed by a competing drug from Amgen. In that vulnerable period, Wyeth brass met Immunex CEO Ed Fritzky at the Four Seasons hotel in downtown Seattle, and handed over an offer of $14.50 a share to buy the company, which was then trading at about $12. The Immunex directors were furious, swearing, wondering whether they could turn down what they saw as a low-ball offer.

That night, Williams, Immunex’s chief technology officer at the time, was lying in bed reading the still-confidential Phase II study report on the company’s drug for rheumatoid arthritis. The results showed etanercept (later named Enbrel) had an unprecedented effect on the disease. That gave Immunex the guts to refuse the offer and remain an independent company.

“ZymoGenetics now feels a little like Immunex did before Enbrel,” Williams says. “We have great scientists, a fabulous pipeline, and the market’s not recognizing it. It took time for things to fall into place, and for Enbrel to show it was real and that it would transform the company.”

The hidden gem at ZymoGenetics, Williams says, is pegylated interferon lambda, or IL-29. This experimental drug is made to treat hepatitis C, and bring all the viral killing power of standard interferon drugs, without the nasty flu-like side effects that force many people to quit taking their meds. Preliminary results released in November, from 18 patients, support the assertion, but the drug still has to pass much bigger and more rigorous studies before investors will start to believe this is really a blockbuster-in-the-making.

While ZymoGenetics trudges forward through the lean times, investors have to bank heavily on Williams’s word. Stephen Graham, the managing partner at Fenwick & West in Seattle, who represented Immunex during its turbulent days, said this about Williams: … Next Page »

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OK, I’m not usually a big fan of end-of-the-year lists. But given that Xconomy Seattle has been up and running for almost exactly six months (since June 16), Luke and I thought it would be fun and informative to share our site’s top 10 most-read stories so far—and why we think they were important or special.

The list is an interesting mix of stories that captures the spirit of what we’re doing here at Xconomy, and it also gives a pretty balanced retrospective on the events of the past half-year. The stories represent our commitment to cover all sorts of innovation in the Northwest, spanning technology, life sciences, breaking news (both good and bad), and in-depth features and analysis.

So, without further ado, here are the 10 most-read Xconomy Seattle stories of the past half-year:

10. Microsoft’s BizSpark Reaches Out to Startups

This piece covered how Microsoft relates to the startup community, through a review of the first 30 days of its BizSpark program.

9. It Came From the Hutch

The untold story of how Tysabri, the most effective multiple sclerosis drug on the market, was invented in a lab right here in Seattle.

8. Immune Design Raises $18M to Build Vaccine Company

Readers were excited to hear about one of the bigger venture financing deals of the year in Seattle, led by a team of superstars in immunology.

7. Heller Ehrman Dissolves

This was bad news based on a layoff filing from Washington State’s Employment Security Department. A global law firm with a large Seattle office, known for its work in the tech and life sciences community, has left the scene.

6. Amgen Scientist Vs. Bone Cancer

The story of a 13-year quest: how the persistence of a Seattle scientist at Amgen may pay off in the coming year, through a new drug for bone loss called denosumab.

5. Nathan Myhrvold Holds Court

An exclusive, in-depth interview with Nathan Myhrvold of Intellectual Ventures. The former Microsoft chief technology officer and founder of Microsoft Research covered everything from ping-pong with … Next Page »

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