Bad news out today from Infinity Pharmaceuticals. The Cambridge, MA-based biotech company said it is halting a mid-stage clinical trial of its drug for pancreatic cancer early after learning that patients were living longer in the placebo comparison group. Infinity (NASDAQ: INFI) shares fell more than 30 percent after the news.

The trial of 122 patients showed that when patients got Infinity’s saridegib (IPI-926) in addition to gemcitabine chemotherapy, they were living less than the six months they were expected to based on historical studies with the chemo drug alone. No unexpected side effects were seen among patients on the Infinity drug or in the control group, the company said.

This is a painful setback for Infinity. The company just last week released some more encouraging data from an early-phase study of the drug in 16 patients, which suggested it offered a benefit by shrinking tumors and helping them live a median time of about 10 months. The plan for this year was to wait for the results from the more rigorous study of 122 patients, to get a firm answer on whether it could help pancreatic cancer patients live more than the expected six months. Even though the drug failed in that study, Infinity said it still believes in the drug’s potential because it inhibits a pathway known as hedgehog that plays a role in multiple cancers. Infinity currently is testing the new compound in mid-stage trials against myelofibrosis and chondrosarcoma. Those studies are continuing, the company said.

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[Updated] Aveo Pharmaceuticals is starting the New Year with news that it has passed the most important clinical trial in company history, although it appears to have barely eked out the victory, which disappointed investors.

Cambridge, MA-based Aveo (NASDAQ: AVEO) said today that its lead experimental drug reached its goal in a pivotal clinical trial known as TIVO-1. The study showed Aveo’s drug was able to keep kidney tumors from spreading for a longer period of time than another drug in its class, sorafenib (Nexavar) from Bayer and Onyx Pharmaceuticals. The trial of 517 kidney cancer patients showed that Aveo’s tivozanib was able to keep tumors from spreading a median of 11.9 months, compared with 9.1 months for the existing drug. The study was designed to show the Aveo drug could keep tumors from spreading about an extra three months, so it barely passed.

Today’s statement didn’t say anything specific about the new therapy’s side effects, although CEO Tuan Ha-Ngoc said the study showed a “favorable safety profile” for the Aveo drug. More details on safety and effectiveness will be presented in June at the American Society of Clinical Oncology’s (ASCO) annual meeting, Aveo said in a statement. And importantly, Aveo and its partner, Japan-based Astellas Pharma, said they now plan to file applications for approval from regulators in the U.S. and Europe this year to start selling the new treatment.

Despite reaching the study’s main goal, Aveo shares fell today, possibly because investors were expecting to see the Aveo drug demonstrate a bigger advantage over the competition. Aveo stock fell $2.13, or about 12 percent, to $15.07 at 10:20 am Eastern.

[Update: 11:50 am Eastern] If there was one surprise in the results, it was that patients on the competing drug did a bit better than expected, Ha-Ngoc said by phone this morning. Patients on Onyx and Bayer’s sorafenib have typically been able to live for five to nine months without their tumors spreading, so today’s result of 9.1 months was on the high end of the expected range, creating a higher-than-expected hurdle for Aveo to clear. But Ha-Ngoc said the result definitively shows Aveo met its goal of demonstrating superiority over an active drug, unlike other experimental cancer treatments in this class, which have typically been tested against placebos. He added that Aveo’s drug was able to keep tumors from spreading for a median of 12.7 months for patients getting their first round of treatment, which is the largest benefit ever shown for patients in that group, he says.

“We are extremely happy today. It’s a fantastic way to start the year for us,” Ha-Ngoc says. Given the drug’s advantage in its safety profile, and its ability to delay tumor progression, tivozanib “should be in position to be the first-line treatment of choice,” Ha Ngoc says.

He added that the result is just the first time Aveo has passed a pivotal trial, and it is looking forward to additional studies of tivozanib as a treatment for other tumor types, and to help provide momentum for the rest of its pipeline. “We are here to build a real company,” he says.

The Aveo drug is an oral pill designed to cut off the blood supply that nourishes tumors, by specifically blocking three different forms of VEGF receptors that are on the surface of cancer cells. Aveo’s tivozanib is supposed to be a more selective blocker of VEGF than two currently marketed drugs that work in a similar way-Pfizer’s sunitinib (Sutent) and Bayer and Onyx’s sorafenib. Researchers hope that more selective VEGF receptor can more completely shut off blood flow to tumors, and also avoid blocking similar receptors on healthy cells-which can cause side effects.

The market for treating kidney cancer is significant. About 61,00 new cases of kidney cancer were diagnosed in the U.S. last year, and 13,000 people died from the disease, according to the American Cancer Society. Pfizer’s sunitinib, first approved in January 2006, generated $1.06 billion in sales in 2010. Bayer and Onyx’s sorafenib generated $934 million in sales the same year

Investors, and researchers, have had high hopes for the Aveo drug since it passed a mid-stage study of 272 patients, which was presented at the ASCO meeting in June 2009. The Aveo drug showed in that study it was able to keep tumors from spreading a median of 11.8 months, with mild side effects reported, including high blood pressure and hoarseness of voice.

So today’s TIVO-1 study essentially confirms what researchers had seen in the prior study.

Aveo didn’t provide detailed breakdowns of how the drug performed in various patient demographic groups, although it did suggest the drug’s advantage was more pronounced in patients getting their first round of therapy. The Aveo drug kept tumors in check for a median of 12.7 months compared with 9.1 months for those on the competing drug who were previously “treatment naive.” About 70 percent of the patients in the study fit this description, Aveo said.

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Aastrom Biosciences (Nasdaq: ASTM), a developer of experimental therapies for severe, chronic cardiovascular diseases, announced yesterday that it had achieved positive 12-month final results from a Phase 2 clinical trial testing ixmyelocel-T as a treatment for critical limb ischemia (CLI) patients with no revascularization options.

CLI is a severe form of cardiovascular disease in the legs, known as peripheral artery disease, in which blood vessels get so clogged up that doctors are forced to amputate. Aastrom’s approach involves drawing out a patient’s bone marrow cells, incubating them in a proprietary process at Aastrom’s Ann Arbor facility, and spurring growth of adult stem cells and progenitor cells that promote healing. Those revved up cells get re-infused into the patient, where they are supposed to foster the growth of new blood vessels to improve circulation.

Patients treated with Aastrom’s ixmyelocel-T in the RESTORE-CLI Phase 2 clinical trial showed a 62 percent reduction in the risk of treatment failure, which included outcomes such as amputation, death, increasing wound size, or gangrene, when compared to those given the placebo. It also showed no difference in safety in comparison to the placebo.

“We’re very happy with the results,” said Aastrom CEO Tim Mayleben. “In particular, the safety of our product is very strong. More important to investors and physicians, are the efficacy results, and we feel great about that.”

Mayleben pointed out that the results scored a high P value, which is a statistical term that measures the likelihood that any given finding is due to chance. Aastrom’s results reflect the findings aren’t a matter of chance, Mayleben said.

The results were presented Monday by William Marston, M.D., chief, Division of Vascular Surgery, and professor, Department of Surgery, University of North Carolina, in an oral presentation at the 2011 American Heart Association Scientific Sessions in Orlando, FL.

The RESTORE-CLI Phase 2 clinical trial involved 72 CLI patients treated 18 locations throughout the United States. Patients were randomized, with a two to one treatment vs. placebo ratio. Patients were treated with a one-time course of 20 intra-muscular injections in the lower thigh, calf and foot and were then followed for 12 months.

Mayleben said Aastrom is “weeks away” from initiating the REVIVE-CLI Phase 3 clinical trial for ixmyelocel-T.

“I tell my team internally that we are one of the few companies in biotech that had even made it to a Phase 3,” Mayleben said. “We feel very fortunate.”

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New England area biotechs had news this week on stock price, clinical data, new financings, and more.

—AMAG Pharmaceuticals of Lexington, MA, saw its stock shoot up 18 percent to $16.21 on Monday after announcing its CEO Brian Pereira’s departure and its plans for reducing operating expenses. AMAG (NASDAQ: AMAG) has struggled in transitioning from a diagnostic-imaging product maker to a drug developer, with its shareholders recently voting down a plan to merge with Allos Therapeutics (NASDAQ: ALTH).

—An early analysis of a pivotal study of Cambridge, MA-based Ariad Pharmaceutical’s experimental drug ponatinib showed the treatment may be safer than it was originally thought to be. A previous trial of the drug showed that about 12 percent of patients developed an adverse event known as pancreatitis, but Ariad (NASDAQ: ARIA) lowered the dose for the second trial and the rate of pancreatitis decreased to 3.7 percent of patients.

—Lebabon, NH-based PharmaSecure inked a $3.9 million investment late last month to put towards its technology for more cheaply preventing the sale of counterfeit drugs in markets like India. The money came from Innovation Endeavors—the fund led by former Google CEO Eric Schmidt—as well as Gray Ghost Ventures, Healthtech Capital, and TEEC Angel Fund.

—Cambridge-based Vertex Pharmaceuticals (NASDAQ: VRTX) saw its stock drop 17 percent over two days after other biotechs developing rival hepatitis C drugs shared promising data at the American Association for the Study of Liver Disease (AASLD) annual meeting in San Francisco this week.

—Rhythm Pharmaceuticals, a Boston startup developing experimental obesity and diabetes treatments, hired Keith Gottesdiener, a veteran of the pharmaceutical giant Merck, as its new CEO.

—Dusa Pharmaceuticals plans to begin Phase 2 clinical testing later this month of its drug-device combination for preventing the recurrence of pre-cancerous skin growths known as actinic keratoses (AK). The company has sold the treatment, Levulan Kerastick, as a method for removing existing growths, but dermatologists have reported success preventing their recurrence by applying the product for longer than initially directed. Wilmington, Ma-based Dusa (NASDAQ: DUSA) is seeking FDA approval to market the product for that purpose.

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

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

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

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

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

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This week’s deals news in New England was dominated by cleantech and life sciences firms.

—Quincy, MA-based Bluefin Robotics, a maker of  autonomous underwater vehicles, acquired the assets of Hawkes Remotes for an undisclosed sum. Hawkes Remotes is a spinoff of Hawkes Ocean Technologies, a Bay Area developer of deep-ocean explorer vehicles.

—Providence, MA-based NABsys, a developer of gene-sequencing technology, raised $10 million in a Series C financing led by its return investor Stata Venture Partners. That brings NABsys’ total funding pot to $21 million. The startup said it will put the money toward developing and commercializing its solid-state electronic systems for single-molecule DNA sequencing and analysis.

—Mascoma, a Lebanon, NH-based biofuels developer, filed for a potential $100 million initial public offering, which is being underwritten by Morgan Stanley, UBS Investment Bank, and Credit Suisse. As of fall 2009, the company had raised $100 million in private equity and about another $100 million in government grants and loans.

—Massachusetts startups collected $156.5 million in equity-based funding in August, continuing to dip from the dollars raised in earlier months of the summer, according to data from CB Insights Funding Flash.

—My hunch is that this month’s Bay State funding numbers will turn out better; Westborough, MA-based cleantech startup Boston-Power announced Tuesday that it had raised $125 million in funding, led by Beijing firm GSR Ventures. Return Boston-Power backers Oak Investment Partners and Foundation Asset Management also provided funding, along with the Chinese government. As a result, the developer of lithium-ion battery technology will shift its operations and manufacturing to China. Boston-Power has now raised more than $316 million.

—Cambridge, MA-based Tokai Pharmaceuticals took in a $23 million third tranche of its Series D round from existing investors Novartis Venture Fund, Apple Tree Partners, and angel investors. The money will go to Tokai’s prostate cancer drug galeterone (TOK-001), as it moves into the second of three clinical trial phases needed for FDA approval.

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San Diego-based Zogenix says its late-stage efficacy study of hydrocodone bitartrate (Zohydro) met the company’s intended goal, with patients reporting improved chronic pain relief compared to a placebo. The study also demonstrated that the drug candidate was safe and well-tolerated. If federal drug regulators approve the drug for the U.S. market, Zogenix says it could be the first extended-release hydrocodone treatment available without acetaminophen, which has been linked to an increased risk of liver damage when used in high doses over time. Zogenix has been developing a series of drugs, each paired with its needle-free injector system, and plans to seek regulatory approval for each drug-and-device combo.

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Bothell, WA-based AVI Biopharma (NASDAQ: AVII) said today it has started dosing patients in a mid-stage trial of eteplirsen, an experimental RNA-based therapy for Duchenne Muscular Dystrophy. The study is expected to enroll 12 patients at Nationwide Children’s Hospital in Columbus, OH. Patients will get once-weekly intravenous infusions of the new drug, or a placebo, for 24 weeks, AVI said.

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[Update: 11:30 am] San Diego-based Meritage Pharma set out a few years ago to develop a unique drug for people who suffer from a dangerous allergy that causes swelling and narrowing of the esophagus. Now it has some hard data to suggest that it’s on the right track.

Meritage (pronounced MARE-uh-tazh) is announcing today that its experimental drug for a little-known condition called eosinophilic esophagitis (EoE) passed a mid-stage clinical trial of 71 children ages 2 to 18. The study found that a medium and high dose of the Meritage drug reached the main goal, reducing inflammation and symptoms by half or more, when compared to a placebo. The new drug was well-tolerated, and there were no unexpected adverse events, Meritage said in a statement. Details are being presented today at a medical meeting—Digestive Disease Week in Chicago. [The update includes a reduction in inflammation, which was one of the study goals.]

“The profound reduction of esophageal eosinophilia after treatment with [the Meritage drug] is exciting because, in my experience, patients with reduced eosinophilia will have a better long term prognosis,” said Sandeep Gupta, a professor of clinical pediatrics at Riley Hospital for Children, Indiana University School of Medicine, in a company statement.

Meritage, which I profiled in these pages in December 2008, estimates that about 90,000 children and 110,000 adults in the U.S. are diagnosed with EoE in the U.S. each year. Patients with the condition typically complain of difficulty in swallowing, chest pain, or heartburn-like symptoms. Sometimes patients get misdiagnosed and put on proton-pump inhibitor drugs like omeprazole (Prilosec), which reduce stomach acid with heartburn, Meritage CEO Elaine Phillips has said.

Meritage, which raised its first $22.5 million in March 2008 from Domain Associates, Latterell Venture Partners, and The Vertical Group, has been pursuing a new approach by turning budesonide, an immune-suppressant commonly used as an inhalable asthma drug, into a thick-liquid formula that can be delivered orally, so the medicine where it can be most effective—in the lining of the throat. At the time of the earlier feature, Phillips said the company was making the new formulation “like molasses,” to get the optimal effect.

You can see in Meritage’s statement today how patients responded to the placebo, as well as a low, medium, and high dose of the new drug. About 5.6 percent of patients on the placebo were classified as responders, while about 52.6 percent met that criteria on the medium dose, and 47.1 percent on the high dose did that well. When researchers analyzed cells from the esophagus, they saw that 5.6 percent on the placebo were responders, while the response rate climbed to 52.6 percent for those on the medium dose, and 94.1 percent for those on the high dose.

Phillips, Meritage’s CEO, said her company now has “clear guidance” from the FDA on what it wants to see the company do in the third and final phase of clinical trials to further confirm the results. The company is “eager to advance this therapeutic option to enable EoE patients to thrive, despite their disease,” Phillips said in a statement.

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Investors are rewarding Bluebird Bio for wracking up accolades with its experimental gene therapies for serious genetic diseases. The Cambridge, MA-based biotech firm has brought in $30 million in a Series C round of funding, just over year after investors pumped $35 million into the firm in its second-round financing.

ARCH Venture Partners joined the investor syndicate at Bluebird, and Steven Gillis, a managing director at ARCH, took a seat on biotech’s board of directors. The new round also drew investments from previous Bluebird backers Third Rock Ventures, TVM Capital, Forbion Capital Partners, and Easton Capital Investment Group. Nick Leschly, president and CEO of Bluebird, says that the company hadn’t exhausted its cash from its previous financing prior to closing this latest round of funding, but the additional capital will help the firm advance its clinical development plans, as well as invest in its technology.

Bluebird (formerly Genetix Pharmaceuticals) has helped change the headlines about gene therapy, from those of yesteryear that highlighted dangerous side effects, to ones describing renewed promise in the field. In September, the prestigious journal Nature ran an article about how the company’s gene therapy for an inherited blood disorder called beta-thalassemia provided significant benefits for a man in his early 20s with the disease. There are also four patients who have been treated with a version of the firm’s therapy for childhood cerebral adrenoleukodystrophy (CCALD)—a genetic brain disorder also known as “Lorenzo’s Oil” disease. And the firm revealed data in May 2010 that showed its treatment had stabilized CCALD in two patients who had been treated three years earlier.

With its new financing in hand, Bluebird is planning to increase enrollment in an ongoing Phase I/II trial for its beta-thalassemia treatment over the next 12 months to about 10 patients. The treatment might also be effective in treating sickle cell anemia, and the firm plans to test it in people with that disorder too. Toward the end of the year, Leschly says, the firm aims to begin a clinical trial in the U.S. and Europe for a CCALD treatment. The trial would follow the ongoing pilot study in CCALD patients. In the meantime, the company plans to invest further in its core gene therapy technology, which Leschly says could be used to treat a variety of severe genetic diseases.

“The idea here is really to accelerate our … Next Page »

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San Diego-based Sangart, which has been developing an oxygen-carrying compound to counter blood loss in traumatic injuries, says today it has raised more than $50 million in a Series G round of new equity funding. That’s a big deal these days in San Diego, which raised a total of slightly more than $100 million in venture capital for 22 deals of all kinds during the first quarter of 2011

Sangart says the funding, which was led by Leucadia National (NYSE: LUK), the diversified New York holding company, also includes warrants that could provide an additional $50 million in future funding. The G Series round brings the company’s total funding to more than $230 million since Sangart was founded 13 years ago.

Sangart CEO Brian O’Callaghan told me five months ago that he was looking ahead to the possibility that the company would eventually proceed to Phase III trials of both MP4OX, the company’s oxygen-carrying blood adjunct, and MP4CO, a related product developed to carry carbon monoxide to patients suffering a sickle cell crisis. In its statement today, the company says only that the funds will be used to advance the development of both products.

Using a novel pegylation approach, Sangart has designed its MP4 molecule for optimal oxygen affinity, diffusion potential, and molecular size to perfuse capillaries and target oxygen delivery to oxygen-deprived tissue. The company also uses its MP4 molecule to deliver precise amounts of carbon monoxide to help stabilize the hemoglobin of patients with sickle cell disease. Once the carbon monoxide has been delivered, Sangart says its MP4OX compound is used to oxygenate the lungs and to carry oxygen to tissues.

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Researchers have halted a study of Gilead Sciences’ emtricitabine tenofovir (Truvada) after it failed to show in a study that it can help prevent HIV infections among women in Africa, according to a report from the Associated Press. The finding was disappointing, the AP notes, because a previous study showed that the drug from Foster City, CA-based Gilead (NASDAQ: GILD) was able to prevent HIV infections in gay and bisexual men when it was given with condoms, counseling, and other prevention services.

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The biotech and pharmaceutical industry is full of people who went to the top universities, live in the fanciest neighborhoods, and work for brand-name companies. But this industry needs to start thinking more about millions of people who are mostly an afterthought today. I’m talking about people who live in America’s small cities and rural areas.

This isn’t something I’ve personally thought about very much, since I spend most of my time zipping between the toniest ZIP codes in the U.S., where most healthcare innovation occurs. But the idea dawned on me this past week after I traveled to a place just 270 miles from home, yet a world away—Spokane, WA (population 208,000). It became even clearer over the next couple days during a trip to one of the top biotech clusters—San Francisco.

The way things work today, people in the top biotech clusters don’t talk to folks from small cities and rural America. Companies developing new drugs, devices and diagnostics tend to congregate in a few hubs like San Francisco, Boston, and San Diego. Folks in these places cultivate relationships with “thought leaders” at major urban medical centers like Massachusetts General Hospital in Boston, UC San Francisco, or Memorial Sloan-Kettering Cancer Center in New York. The companies hope that these thought leaders will run a stellar clinical trial of a new drug, tout the result at medical meetings, and influence peers to prescribe it once it reaches the market. Patients with money and good health insurance are often the ones fortunate enough to see these doctors, and get access to treatments that offer new hope.

It doesn’t have to always work this way. Having so many trials routed through the major urban medical centers is expensive. It also taxes the time and attention a given “thought leader” can provide to the testing of any one product. And it puts drugmakers in a fierce competition with one another for a finite number of patients who can enroll in a study, of, say, a new lung cancer treatment. When drug companies think about alternatives to those bottlenecks, such as ways to speed up clinical trial enrollment and save money, they often think first about going to China, India or Eastern Europe—not places closer to home like Spokane.

But guess what? There are good reasons for biotech and pharma companies to take a closer look at lower-cost “second cities” in the U.S. The doctors who live and work there, and who often serve rural communities, may not get their names in the New England Journal of Medicine like the big guys. But the small city doctors often did get their training at top-notch medical schools, and know what they are doing. Many of them have long-term, trusting relationships built up with their patients, who have long-term roots in their communities. These doctors regularly see patients who struggle with the major epidemics on the radar of Big Pharma—conditions like diabetes, obesity, cardiovascular disease, cancer, autoimmunity, and neurological disorders.

It stands to reason that U.S. doctors off the beaten track are both willing and able to conduct good clinical trials. And if they are included in clinical trials early on, the odds are high they will champion new treatment strategies pushed by the drugmakers.

Still, I rarely if ever hear biotech leaders talk about engagement with small towns and rural areas. So I checked around to see if maybe there’s some level of engagement in small cities and rural areas that I’m not aware of. I asked Maureen Cronin, the senior vice president of R&D at Cambridge, MA-based Foundation Medicine, about the extent of engagement between drug companies and small cities. She knows something about this question, having spent nine years previously at Redwood City, CA-based Genomic Health (NASDAQ: GHDX) where part of job involved outreach to marginalized communities in the U.S., including Spokane, WA, Eureka, CA, and rural areas near Kansas City.

Cronin, who got her doctorate from UC San Diego, described her small town outreach efforts as an eye-opening experience.

“The doctors there are savvy, up-to-date on information about genomics, the latest tools, and targeted therapy,” Cronin says. “The problem is that mostly they are struggling to get access to basic resources.”

For example, Cronin says she has gotten to know three bright young oncologists in Humboldt County, in far northern California, who trained at … Next Page »

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In a scintillating report released today, the Public Policy Institute (PPI) of New York blasts the state’s leaders for failing to support the local biotechnology industry. New York ranks fifth in the nation in biotech employment, for example, and sixth in total capital expenditures made by the industry. And despite churning out more college graduates than any other state in the nation, New York’s biotech firms don’t provide enough high-paying jobs to get them excited about working in the industry, the PPI says.

The report’s authors declare that New York’s stance towards biotech is “severely anemic in its care for its people, support for entrepreneurship, and economic development strategies.” Furthermore, they say, because of rapidly growing competition from other states—not to mention China, India, and Brazil—”the biopharmaceutical ecosystem in New York is growing weaker, and Albany and major local governments must act before the equivalent of a climatic cataclysm strikes the state.”

Ouch.

But the PPI’s goal isn’t to bully New York’s leaders. Rather it’s to present a plan of action for turning New York from a perennial also-ran to a world capital of biotech. “Our report makes specific recommendations of how to get us out of 38th place in annual growth,” said Heather Briccetti, the PPI’s acting president, during a panel discussion at the annual meeting of the New York Biotechnology Association (NYBA), just a few days before the report’s release. “We’ve identified this sector as one that the state needs to make a strong commitment to.”

The PPI lays out some compelling and often disturbing numbers to support its thesis, which is reflected in the report’s title: “New York Must Step Up its Game.” For example, every life-science research job that biotech and pharma companies create in New York spawns an additional 3.46 support jobs—double the effect of a new Wall Street position, the PPI says. Every manufacturing hire translates to 9.36 additional jobs. So when 3,000 pharmaceutical manufacturing positions were eliminated from the state in 2010, a staggering 30,000 other New Yorkers lost their jobs.

In virtually every category it tracked, the PPI found New York to be an embarrassing laggard. New York employs 10,320 scientists, far fewer than California (41,200), Pennsylvania (15,920) and Massachusetts (15,300). The average wage in the biopharmaceutical sector … Next Page »

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Biogen Idec is the world’s biggest maker of multiple sclerosis drugs, and today it just cleared a hurdle that might help it stay at the top of the heap for years to come.

The Weston, MA-based biotech giant (NASDAQ: BIIB) said today that its oral MS drug candidate, dimethyl fumarate (BG-12), met its main goal of reducing MS flare-ups over two years, when compared with a placebo, in a pivotal study of 1,200 patients known as DEFINE. The drug was found effective when given either twice a day or three times a day, Biogen Idec said. The Biogen treatment also met all of its secondary goals, such as reducing the number of new or enlarging brain lesions, and slowing the rate of disability from the neurodegenerative disorder—which, often over a period of years, robs people of their ability to walk.

“We are very pleased with these data and believe that BG-12 has the potential to offer MS patients a highly effective oral treatment option with a strong safety profile,” said Doug Williams, Biogen Idec’s executive vice president of research and development, in a statement.

Today’s statement from Biogen didn’t disclose any specific details about the safety profile, or the magnitude of the benefit patients experienced. The data is still being analyzed, and will be presented at a future scientific meeting, the company said. Plus, Biogen Idec needs to reproduce the benefit of the oral drug in one more ongoing pivotal trial, known (naturally) as CONFIRM.

The new oral drug is critical for Biogen’s competitive position. Biogen is the world’s largest maker of MS drugs on the strength of its injectable therapies interferon beta (Avonex), and natalizumab (Tysabri). But each of these products has its weaknesses—patients tend to relapse on interferons over time and grow weary of the injections, while Tysabri is dogged by a dangerous side effect known as PML. Many of the 400,000 U.S. patients with multiple sclerosis have long desired oral pill alternatives, and haven’t had one until recently. Swiss pharmaceutical giant Novartis won FDA approval back in September for fingolimod (Gilenya). Another oral MS drug candidate from Germany-based Merck KGaA failed to win FDA clearance in February.

There’s no way to know how the Biogen oral drug stacks up with Novartis’s treatment until more complete data sets come out at scientific meetings, but optimism is in the air among Biogen shareholders this morning. Biogen stock climbed more than 5 percent to $77.37 at the opening bell of trading this morning.

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Lots of little blurbs crossed the desk this week, along with one major blowup for a drug in the third and final stage of clinical trials.

—Seattle-based Omeros (NASDAQ: OMER) said it failed in a series of pivotal clinical trials with its anti-inflammatory drug to help patients undergoing arthroscopic knee surgery. The trials, which enrolled more than 1,000 patients from 2004 through 2010, were a big reason investors bought into the Omeros IPO of October 2009. The stock is down 39 percent since the news broke.

—An individual shareholder in Kansas kicked up a debate online after calling for a boardroom shakeup at Seattle-based Dendreon (NASDAQ: DNDN). Brad Loncar accused the company of failing to properly look out for the interests of small shareholders, and encouraged fellow readers of a popular stock message board, InvestorVillage.com, to urge the company to add one or two new board members to represent those interests. Loncar says he has received some support in his effort, along with plenty of vocal criticism.

—Bothell, WA-based Halosource, the maker of technology for purifying drinking water in the developing world, introduced three new products that consumers use at home. These are powered-water pitchers, or a gravity-based water container that use Halosource’s technology for killing viruses and bacteria. The company made its initial inroads into developing world markets by selling a replaceable cartridge with its technology that works with devices made by other companies.

—Vancouver, BC-based Tekmira Pharmaceuticals made headlines a few weeks ago when it accused its partner, Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY) of misappropriating trade secrets related to the delivery of RNA interference drugs into cells. Now Alnylam has formally responded to the allegation in court, saying it plans to fully defend itself.

—Seattle-based Oncothyreon (NASDAQ: ONTY) said this week it has started a mid-stage clinical trial of drug for brain cancer, PX-866, which is designed to work against one of the high-profile molecular targets in cancer biology—the PI3 kinase. The study is enrolling 30 patients at seven sites in Canada.

—This week’s BioBeat column was about antibiotics, and why more biotech entrepreneurs should take this field seriously. I listed a few promising companies I’ve covered in this business all over the country, but couldn’t think of a single example of an antibiotics company from Seattle. If any readers out there have an idea why that is—or can alert me to some promising company I overlooked—please enlighten me at ltimmerman@xconomy.com.

—The University of Washington’s Center for Commercialization said last week it has added five new people to its roster of entrepreneurs-in-residence, who scout for university technologies with business potential. Ron Berenson, the former CEO of HemaQuest Pharmaceuticals, and Stephanie Amoss, formerly of Pathway Medical Technologies, are a couple of the new additions with expertise in biotech and medical devices, respectively.

—Bothell, WA-based AVI Biopharma (NASDAQ: AVII) said it has raised $30 million through a stock offering. The company followed up a few days later to say its underwriters exercised their options to buy extra shares, meaning that AVI netted about $32 million after paying expenses. AVI said previously that it entered this year with about $34 million of cash in the bank, and a plan to spend about $23 million to $28 million of its cash on operations.

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There’s some bad news from Cambridge, MA-based Tolerx today. The venture-backed biotech firm and its partner GlaxoSmithKline (NYSE:GSK) reported that their experimental drug for Type 1 diabetes failed to meet the main clinical goal of a late-stage study, called Defend-1.

The 272-patient Defend-1 study was designed to measure how well newly diagnosed adult patients were able to improve production of insulin a year after an 8-day course of the treatment, a monoclonal antibody called otelixizumab. The main goal or endpoint of the study was for patients treated with the eight-day course of the drug to show a change in a measure of insulin production called C-Peptide, but the results showed that that goal was not met. And while the companies are reviewing the results of the study, they have suspended recruitment and dosing of a separate late-stage trial of the treatment, called Defend-2.

Otelixizumab, which is the most advanced drug in Tolerx’s pipeline, is supposed to protect insulin-producing cells in the pancreas from immune system attacks that destroy their function in patients with Type 1 diabetes, ultimately hampering the body’s natural ability to control blood sugar levels. In October 2007, the company and Glaxo formed an alliance that could be worth as much as $760 million to develop otelixizumab for Type 1 diabetes and other diseases. Tolerx has no approved drugs on the market. Yet the company has several other drugs in its pipeline for cancer and other diseases in which the immune system plays a major role.

“Clearly these are disappointing data, but we are committed to working with Tolerx to better understand the results of this study and determine the way forward,” Jackie Parkin, medicines development leader at Glaxo, said in a statement.

Tolerx, founded in 2000, had attracted more than $150 million in investments as of last March when my colleague Luke Timmerman profiled the company. The company’s venture investors include HealthCare Ventures, Skyline Ventures, and Sprout Group. And the biotech has received support from the Juvenile Diabetes Research Foundation and, of course, Glaxo, through its major collaboration with the London-based drugmaker.

There have been high hopes for otelixizumab, which was licensed from London-based drug developer BTG, to offer a new way to treat patients with Type 1 diabetes, which is also called insulin dependent and juvenile diabetes. (The disease, which is far less common than Type 2 diabetes, affects about 5 percent of the more than 20 million Americans who have diabetes, according to the American Diabetes Association.) The standard way to treat the patients today is regular injections of insulin and closely monitoring their blood sugar levels.

In October 2010, Eli Lilly and MacroGenics announced that their comparable experimental antibody for Type 1 diabetes also did not meet the primary endpoint of a late-stage trial.

Despite the bad news about the Defend-1 study, Tolerx co-founder and CEO Doug Ringler sounded upbeat about the other drugs in his company’s pipeline. “While we are disappointed in the Defend-1 results of otelixizumab, we remain committed to the development and commercialization of the candidates in our pipeline, each of which has a distinct mechanism and target for correcting abnormal immune responses,” Ringler said in a statement.

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This week we’ve seen news of financings for device makers and drug developers, as well as reports from clinical trials from New England area life sciences firms and their rivals.

—Daniel Junius, CEO of Waltham, MA-headquartered ImmunoGen, talked to Ryan about the antibody-based drugs the company is developing that aren’t generating as much noise as the ImmunoGen technology used by Genentech to create a more powerful breast cancer drug. ImmunoGen is working on two new treatments that each link an antibody with anti-cancer toxins, for treating non-Hodgkin’s lymphomas, and breast, lung, and ovarian tumors.

—The FDA did not grant approval to a drug produced by Israel-based Protalix Biotherapeutics that rivals Cambridge, MA-based Genzyme’s treatment for Gaucher’s disease. Regulators raised questions about clinical matters, chemistry, manufacturing, and controls related to taliglucerase alfa, developed by Protalix in partnership with Pfizer.

—Speaking of rivals to Boston biotechs, Germany-based Merck KGaA failed to garner FDA approval for its experimental MS pill cladribine because the regulators wanted more safety data on the drug. The news comes as Weston, MA-based Biogen Idec (NASDAQ: BIIB) is testing its own oral MS treatment, dimethyl fumarate (BG-12).

—Marlborough, MA-based med device developer CardioFocus raised $30.6 million in financing from new investors First Alliance & Capital Invest, Fletcher Spaght Ventures, and Manatuck Hill Parnters, as well as all previous investors. The firm is developing a system for laser ablation procedures used in treating an irregular heart rhythm known as atrial fibrillation.

—Cambridge drug developer NeuroPhage Pharmaceuticals said it raised $12.4 million in a Series B financing led by Mérieux Développement, the healthcare investment arm of French firm Institut Mérieux, with backing from Irish biopharma company Shire (NASDAQ: SHPGY). The deal represents the firm’s first institutional financing; the cash will go toward funding NeuroPhage’s clinical trials of its lead drug candidate NPT001, a treatment for Alzheimer’s disease.

—RXi Pharmaceuticals (NASDAQ: RXII), a Worcester, MA-based developer of … Next Page »

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—Cambridge, MA-based Quanterix partnered up with Novartis Diagnostics, the unit of healthcare giant Novartis that tests the safety of 80 percent of the U.S. blood supply. Novartis will run tests to see how effective Quanterix’s device is at pinpointing a protein biomarker in the blood that is linked to an undisclosed neurological disorder. Terms of the arrangement weren’t disclosed.

—New York pharmaceutical company Forest Laboratories (NYSE: FRX) paid $1.2 billion ($30 per share) upfront to acquire Newton, MA-based Clinical Data (NASDAQ: CLDA), a drug developer that won FDA approval last month for its anti-depressant. Forest could pay another $6 per share to Clinical Data shareholders if the drug, vilazodone, hits certain sales goals over the next seven years.

—Watertown, MA-based Athenahealth (NASDAQ: ATHN) formed an alliance with Microsoft (NASDAQ: MSFT) to make the companies’ systems more compatible and easier for healthcare professionals to use together to get a single view of patient records for hospital and outpatient visits.

—Cambridge-based Vertex Pharmaceuticals (NASDAQ: VRTX) announced it had passed a pivotal clinical trial of 161 cystic fibrosis patients who were randomly assigned to the company’s VX-770 pill or  a placebo. Those who received the Vertex drug showed a 17 percent relative improvement in their ability to force out air from their lungs in one second (a measure of lung function). Vertex’s stock shot up 15 percent the morning of the news, to hit $44.03 per share at 10:14am.

—Greg took a look at iAMscientist, a Brookline, MA-based startup developing a global community and resource site for researchers and institutions in science, technology, and medicine. The company has raised $1 million in seed funding from a group that includes famed Harvard chemist George Whitesides, and more than a dozen companies, such as Genzyme.

—Cambridge-based Metamark Genetics is moving out of stealth mode, wrote my colleague Ryan, who caught up with the company’s relatively new CEO Mark Straley. The startup—which was founded by top scientists at Harvard and elsewhere—is out to release a molecular test to provide prognostic information that will help physicians make better treatment decisions.

—Waltham, MA-based lab instruments and services provider Thermo Fisher Scientific (NYSE: TMO) announced it had sold off its Athena Diagnostics and Lancaster Laboratories units for a total of $940 million in cash, to boost shareholder value. Madison, NJ-based lab testing firm Quest Diagnostics is paying $740 million for Athena, and Eurofins Scientific of Brussels, Belgium, will shell out $200 million to acquire Lancaster, a provider of contract testing and analysis services to pharmaceutical companies.

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Vertex Pharmaceuticals has been moving in this direction for a long time, but it can now say with confidence that it is on its way to shaking up the standard of care for not just one disease this year, but two.

The Cambridge, MA-based biotech company (NASDAQ: VRTX), which has operations in San Diego, is announcing today it has passed a pivotal clinical trial of 161 patients with cystic fibrosis who were randomly assigned to get the company’s VX-770 pill or a placebo. The study found that patients on the Vertex drug had a 17 percent relative improvement in their ability to force out air from their lungs in one second—a common measure of success in treating lung disease—compared with those on a placebo. The effect lasted over the entire 48-week course of the study. Side effects included headache, upper respiratory tract infections, nasal congestion, rash, and dizziness, although more patients on the placebo group dropped out of the study early because of side effects, Vertex said.

While 17 percent relative improvement in breathing capacity for people with a deadly lung disease might not sound like much, this result represents a watershed for a portion of the 30,000 people in the U.S. with cystic fibrosis. Vertex is valued primarily for a drug (telaprevir) that has shown an ability to double the cure rate for patients with hepatitis C liver infections, but the company could have a similar life-changing effect for many patients with this genetic disorder. Cystic fibrosis, the result of a genetic mutation, causes the buildup of thick, sticky mucus in the lungs, which suffocates people over time, allowing a typical life expectancy of about 37 years. Doctors currently treat the symptoms of the disease, but Vertex’s drug could become the first FDA-approved therapy that works by altering an underlying faulty protein at work in patients with cystic fibrosis.

This drug isn’t for everybody—it was tested in a subpopulation of just 4 percent of cystic fibrosis patients with an abnormality known as G551D—but it’s the kind of result that scientists hope they will be able to build on to expand treatment to more patients with the deadly lung disease.

The results Vertex is releasing today from a study called Strive, which will be discussed later this year at a medical meeting, are “far beyond our expectations,” Vertex said in a statement. The firm plans to put together an application before the end of this year to seek regulatory clearance in the U.S., and Europe, to start marketing VX-770.

“The results from Strive are highly encouraging for the CF community and provide scientific evidence supporting our long-standing belief that targeting the underlying defect of CF may have a profound effect on the disease,” said Robert Beall, the president and CEO of the Cystic Fibrosis Foundation, in a company statement. “We have much more to do to eliminate this disease, but these data are extremely exciting.” (The CF Foundation helped develop VX-770.)

Vertex’s trial would have been deemed a success if it delivered just 4.5 percentage points of absolute improvement in patients’ breathing, as measured by the standard clinical trial goal (forced expiratory volume in one second, or FEV1). The actual result, in absolute terms from the beginning … Next Page »

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