Seattle-based Dendreon Corp. (NASDAQ: DNDN) said today it has named John Johnson to the position of president and CEO, succeeding longtime CEO Mitchell Gold. Johnson was previously the CEO of East Brunswick, NJ-based Savient Pharmaceuticals (NASDAQ: SVNT).

The appointment comes after a difficult run for Dendreon. In 2010, the company won approval for sipuleucel-T (Provenge), the first in a new class of immune-boosting therapies for prostate cancer. But the product has been slow to take off, causing the company to fall short of Wall Street expectations. On January 5, Dendreon surprised investors by announcing that it sold $228 million of the drug in 2011—better-than-expected results—but it hasn’t been enough to sway shareholder sentiment.

Today’s news was welcome on Wall Street. “I am very pleased to hear this morning about Dendreon’s succession plan for its CEO and Chairman,” wrote shareholder activist Brad Loncar in a statement.” In August, Loncar sent a letter to Dendreon chairman Richard Brewer expressing concerns about poor management at the company. “After joining together and asking for this change, this is a big win for Dendreon’s shareholders and for corporate governance in general.”

Dendreon’s shares rose 6 percent to $14.40 in pre-market trading.

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Prostate cancer was once a backwater for innovation, but suddenly it’s become one of the most competitive battlegrounds in all of biotech. And one of the darkhorses in this race, Bothell, WA and Vancouver, BC-based OncoGenex Pharmaceuticals, is getting ready to show next week whether it has another contender in the pipeline.

OncoGenex (NASDAQ: OGXI) is preparing to release interim results next week from a clinical trial that could offer a hint of effectiveness of a prostate cancer drug called OGX-427. If OncoGenex can show in this 72-patient study that its compound is slowing the spread of tumors, and lowering prostate-specific antigen (PSA) scores, then it could be in position to run a more meaningful trial that asks whether it can prolong lives, or work well in combination with other therapies. The preliminary data are expected Feb. 2 at the American Society of Clinical Oncology’s Genitourinary Cancers Symposium in San Francisco.

Results from this trial, and another study among patients with bladder cancer, mean a lot for OncoGenex during what has been a long period without much big news for investors and researchers to chew on. The company is now enrolling 800 patients into a pivotal study of its lead prostate cancer drug, custersin, but expects it will have to wait until the fourth quarter of 2013 to find out whether that treatment can extend lives of prostate cancer patients. While OncoGenex makes that long slog through development, it has seen companies like Dendreon, Johnson & Johnson, Medivation, Bayer, and Exelixis continue to jockey for position at various stages of therapy, each with distinct modes of treatment, for men with prostate cancer. The disease kills about 30,000 men in the U.S. each year.

“A lot of focus for us is on custersin, but while that’s going on, we continue to mature our OGX-427 data,” Michelle Burris, OncoGenex’s executive vice president of operations, said during a meeting at the JP Morgan Healthcare Conference earlier this month. While she notes the second OncoGenex drug has shown encouraging ability to work on its own in small studies, she acknowledged it will have to find a niche in a competitive landscape—and says that it can. “It plays nice with a number of different therapies,” she says.

Michelle Burris, OncoGenex's executive vice president of operations

The OncoGenex drug, given through an IV infusion, is designed to work by blocking a biological target known as heat-shock protein 27 (Hsp27). That protein is believed to play a role in helping cells survive under stressful conditions. It’s supposed to help stabilize proteins that keep cells from committing suicide. By inhibiting its activity, you could in theory allow cancer cells to naturally undergo the cell death (apoptosis) process. But there’s also another mechanism of hsp27 that researchers find interesting. It is thought to work as a “chaperone” molecule that helps shuttle in male hormones that fuel prostate tumors.

Researchers believe that could be useful because hormone deprivation therapies have long been standard treatment for prostate cancer, and patients end up developing resistance over time. Two new hormone-blocking therapies, Johnson & Johnson’s abiraterone (Zytiga) and Medivation’s MDV-3100, have both been shown in clinical trials to extend lives of men who resist conventional treatments by blocking male androgen receptors in a different way. OncoGenex’s bet is that even while those drugs are doing their thing, Hsp27 is operating as a chaperone that allows some residual androgens into the tumor, which help provide it with some sustenance.

This theory of cancer biology is being tested in a trial sponsored by the British Columbia Cancer Agency, and led by Kim Chi. The key study enrolled 72 patients with prostate cancer that … Next Page »

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[Update: 6:58 am PT] Dendreon greatly disappointed investors in 2011, but it ended up closing the year out on a stronger note than expected.

The Seattle-based biotech company (NASDAQ: DNDN) said today it generated $82 million in fourth quarter gross product revenues for sipuleucel-T (Provenge), its immune-boosting therapy for prostate cancer. The company hasn’t yet disclosed its net revenue, which subtracts rebates and chargebacks, although that number has been close to gross revenue in past quarters. Today’s announcement isn’t a fully audited financial statement, but Dendreon said it ended up generating $228 million in gross product sales for Provenge during 2011.

That performance surprised investors, who were only told to expect “modest quarter over quarter” growth from Dendreon, which reported $65.8 million in gross revenues in the third quarter. Shares of the company shot up $1.98, or 26 percent, to $9.58 shortly after trading opened this morning.

[Updated comment] Analyst David Miller of Biotech Stock Research, a longtime Dendreon bull, said on Twitter that he was only expecting $75 million in fourth-quarter sales from the company.

Still, the overall year is one that most Dendreon followers would like to forget. The $228 million in product revenue is far short of the $350 million to $400 million sales forecast that Dendreon put in front of investors at this time a year ago, and which helped drive its market valuation beyond $5 billion during the spring and summer of 2011. The company lost most of that value, more than 60 percent in one day, when it said in August that it would fall short of its forecast, citing concerns among physicians about whether they’d get full and prompt reimbursement for a drug that costs $93,000 per patient. The stumble caused Dendreon to lay off 500 workers in September.

Dendreon didn’t offer any specific guidance to investors in today’s statement about what to expect for 2012, other than commentary about how things are improving.

“Given our results for the past two quarters, physician and patient interest in Provenge clearly continues to grow. We believe that the improved reimbursement landscape, along with our improved sales execution and physician education initiatives, are contributing to the increased use of Provenge in the community urology and oncology settings,” said Mitch Gold, Dendreon’s CEO, in a statement. “We had a strong fourth quarter that exceeded our expectations. As we look to 2012, we expect modest quarter-over-quarter growth while we focus on bringing additional clinics on board and converting them into steady prescribers.”

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It’s Editor’s Picks time at the end of the year, which is a sure sign that your local journalists are looking to stick something on the site you can read during a slow week so we can spend time with our families.

Seriously, this has been a fascinating and typically frenzied year for us at Xconomy Seattle. The biggest story for me personally has been the hiring of our new senior editor Curt Woodward. I introduced him in these pages as “one of the best all-around reporters in our state” when he joined us in mid-February, and he has delivered the goods on the local technology beat. You can see for yourself by checking out Curt’s 2012 preview story, which ran yesterday.

The other significant news for us is that we are planning to move into new digs in early 2012, at 1551 Eastlake Avenue East, the former headquarters of the Bill & Melinda Gates Foundation. Curt and I are psyched about this move into the high-rent district, from our (cough, cough) humble startup abode. We are looking forward to inviting readers over for a happy hour/open house once we are settled in, probably sometime in February.

With that, I thought it would be worth reflecting a bit on the biggest life sciences stories of the year in Seattle. These aren’t necessarily the biggest traffic generators, or the biggest earth-shaking events of the year. Instead, these picks represent the kind of original, in-depth coverage that we believe makes us a must-read for news and analysis in the local innovation community. These are my personal favorites from the biotech side of this operation in 2011—see Curt’s story to get a feel for his faves on the tech beat.

As always, if you have ideas of interesting people and companies that I should check out, just send me a note at ltimmerman@xconomy.com. See you out there in biotechland in 2012. And above all, thank you for reading.

“Dendreon Wounds are Self-Inflicted, Not the Start of a Biotech Industry Virus“

“Lady Gaga’s Favorite Seattle Tech Startup, Clarisonic, Cracks Big-Time With $100M Sales“

“Gates Foundation Makes First Equity Investment in a Biotech Startup, Liquidia Technologies“

“How ZymoGenetics Coulda Been a Contender: The Big Break That Came Too Late“

“Ken Stuart, the Working Class Kid Who Built a Global Health Hotspot at Seattle Biomed“

“Seattle Genetics: The Next Big Litmus Test for High-Priced Cancer Drugs“

“NanoString Nails Breast Cancer Prognosis Study, Challenging Genomic Health“

“Exclusive: Pathway Medical Technologies to be Acquired by Bayer’s Medrad Unit for $125M“

“Light Sciences Oncology Stumbles in Clinical Trial, Layoffs Loom“

“Mobisante Wins FDA Approval for Ultrasound on a Smartphone Technology“

“Blaze Bioscience, Fred Hutch Spinoff With Zymo Vet at the Helm, Seeks to Paint Tumors“

“The Immunex Alumni: Where Are They Now?“

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This was a great year for Seattle biotech if you measure success through sheer number of acquisitions. But if you prefer to measure the health of an innovation community by the number of exciting new startups it hatches, then this was most certainly a down year.

That’s the mixed bag of returns that I saw when looking back at the news of 2011 from the Seattle life sciences scene. This was the year of the acquisition for Calistoga Pharmaceuticals, Pathway Medical Technologies, Calypso Medical Technologies, SonoSite (NASDAQ: SONO), Amnis, Geospiza, and Pacific Biosciences Labs (the maker of the Clarisonic skin brush.)

While those companies got harvested, not a whole lot of new seeds got planted. The list of notable Seattle biotech startups this year includes Cardeas Pharma, Oncofactor, Blaze Bioscience, Aquedect Neuroscience and Cardiac Insight.

Who else made headlines in Seattle biotech in 2011? Seattle Genetics emerged. Dendreon crashed. Marina Biotech, Omeros, and AVI Biopharma all had years they’d like to forget. Cell Therapeutics somehow managed to stay in business. New leaders emerged at the global health nonprofits, as Alan Aderem moved in to run the Seattle Biomedical Research Institute, Stewart Parker took over at the Infectious Disease Research Institute, and Chris Elias created a vacancy at the top of PATH by leaving for a new gig at the Bill & Melinda Gates Foundation. The foundation’s head of global health, Tachi Yamada, left for a new venture capital gig, and was replaced by a former Novartis executive, Trevor Mundel.

Here’s a company-by-company rundown of the major events at Seattle biopharmaceutical and global health organizations we keep tabs on here at Xconomy. Tomorrow, I’ll follow up with the rundown of rundown of medical device, diagnostic, and others in fields like Bio-IT or Health IT.

Seattle Genetics (NASDAQ: SGEN). This was a transformative year for Seattle Genetics. The company broke through in August by winning FDA approval of its first product, a souped-up antibody for rare lymphomas. The drug validated a new target on the surface of cancer cells, CD30, and provided hard proof that Seattle Genetics’ proprietary chemistry can successfully link toxins to antibodies—a feat that has eluded scientists for 30 years. Big Pharma companies have beaten a path to Bothell to get licenses to the antibody-drug linking technology, and Seattle Genetics has exceeded Wall Street expectations in the early days of its drug rollout.

Dendreon (NASDAQ: DNDN). Dendreon was the star of local biotech in 2010, and this year it fell flat on its face. The company failed to live up to its first full year sales forecast with its immune-boosting drug for prostate cancer, and burned its shareholder base in the process. The company lost more than $3.5 billion in market valuation, and had to cut 500 jobs, largely because it sparked controversy and confusion by pricing its cancer drug too high—at $93,000 per patient. It remains to be seen this year whether Dendreon can pick up the pieces, as the disastrous screw-up of 2011 has created a gaping opportunity for emerging competitors like Johnson & Johnson’s abiraterone (Zytiga) and Medivation’s MDV-3100.

Amgen (NASDAQ: AMGN). The Thousand Oaks, CA-based biotech company, which has significant R&D in Seattle, said at the end of the year that longtime CEO Kevin Sharer … Next Page »

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Dendreon has never lifted a finger to develop any new drugs for hepatitis C, but now the Seattle cancer drug developer is getting $125 million in cash for its stake in the emerging market for the chronic liver infection.

The company (NASDAQ: DNDN) said today it made the money by selling off the rights to its royalty stream related to boceprevir (Victrelis), a new hepatitis C drug. Dendreon sold the royalty rights to CPP Investment Board.

While Dendreon has always invested its time and money in developing cancer drugs, it obtained the hepatitis C intellectual property through its 2003 acquisition of San Diego-based Corvas International. Corvas had licensed its IP to Schering-Plough, which used it in part to develop boceprevir, a protease inhibitor for hepatitis C. Schering-Plough is now owned by Merck, and Merck started generating revenue from the intellectual property in May when it won FDA approval of the new drug. Dendreon didn’t disclose what percentage it gets from worldwide sales of Victrelis, but the company said it collected $2.9 million in royalties from Merck in the three-month period that ended Sep. 30, according to its most recent quarterly report.

“The sale of the Victrelis royalty interest allows the company to strengthen our cash position, and enables us to further invest in our core business initiatives,” said Greg Schiffman, Dendreon’s chief financial officer, in a statement.

Dendreon certainly has found itself in a position where it needs to scrape together cash any way it can. The company is on track to fall way short of the $350 million to $400 million sales forecast it had this year for its lone marketed product, sipuleucel-T (Provenge) for prostate cancer. The sales shortfall prompted Dendreon to lose more than 60 percent of its market valuation, and prompted Dendreon to cut 500 jobs back in September. Despite the cost cuts, the company still burned through $106 million of cash in the most recent quarter. It had $568 million in cash and investments left in the bank at the end of September.

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[Updated: 7:10 am PT] San Francisco-based Medivation has some big news to report today with a prostate cancer drug candidate that has been shown to prolong lives.

Medivation (NASDAQ: MDVN) and its partner, Japan-based Astellas Pharma, said today that their experimental drug MDV3100 was able to prolong lives of men with advanced prostate cancer by a median time of 4.8 months compared with a placebo. The results were from a study called Affirm that looked at 1,199 men, and the results were taken from an interim analysis after 520 of the patients had died. Men on the new Medivation/Astellas drug lived a median time of 18.4 months compared with 13.6 for those on placebo, which prompted an independent data monitoring committee to recommend the trial be halted early for ethical reasons, so all patients could start getting the new drug.

Full analysis of the data, including the product’s safety profile, will be released at a future medical meeting. Shares of Medivation skyrocketed after the opening bell, rising $20.52 to reach $37.05 a share.

The Medivation drug, an oral pill, is designed to target prostate cancer cells that become resistant to standard hormone-deprivation therapies, which are supposed to cut off the fuel that testosterone provides tumors to grow. The drug is supposed to hit three different molecular targets which the company hopes will give it an advantage over recently FDA-approved prostate cancer drugs like Johnson & Johnson’s abiraterone (Zytiga), Sanofi’s cabazitaxel (Jevtana), and Dendreon’s sipuleucel-T (Provenge). About 30,000 men in the U.S. die each year from prostate cancer, and the numbers are expected to increase as baby boomers get this common disease of aging.

“MDV3100 was rationally designed to target androgen receptor signaling, a key driver of prostate cancer growth, and the overall survival benefit the compound demonstrated in the AFFIRM interim analysis is significant,” said Howard Scher, a prostate cancer specialist at Memorial-Sloan Kettering Cancer Center, and the co-principal investigator of the Affirm study, in a statement. “If approved, MDV3100 will be a welcome option for men with prostate cancers that have progressed on hormones and initial chemotherapy.”

[Updated comment from analyst] JP Morgan Geoff Meacham that Wall Street was expecting the Medivation drug to extend survival by a median of about three months, according to Reuters. The data that arrived today stacks up favorably with Johnson & Johnson’s abiraterone (Zytiga), Meacham said.

“MDV3100 does look better than Zytiga from an efficacy perspective,” Meacham said in a note to clients.

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This was a week of volatile ups and downs in Seattle biotech. Yeah, I know, what’s new?

—Seattle-based Dendreon (NASDAQ: DNDN), the cancer drug developer that so many people love to hate, gave its critics some more ammunition in its quarterly financial report. The company reported $64.3 million in third quarter sales, which slightly edged Wall Street expectations. But the company still only projects “modest” quarter-over-quarter sales growth for its prostate cancer drug—which isn’t what investors expected earlier this year when they gave Dendreon a market valuation of more than $5 billion. And the company is burning capital like a Ferrari goes through fuel. Dendreon vaporized $106 million of cash in the third quarter, and had $568 million left on the books at the end of September. Dendreon stock fell 20 percent in after-hours trading.

—Bellevue, WA-based Cardiac Insight is the latest University of Washington spinoff to leave the nest, with a technology license and $700,000 in a Series A financing. We had the inside scoop this week on how this company, led by CEO Tom Clement, seeks to detect a common cause of stroke with a low-cost, disposable adhesive device.

—Did you know that Al Gore came this close to being a VIP scientist for a day at Immunex? That was one of the fun bits of trivia I discovered as Immunoids have been coming forward with bits of memorabilia to display at our next big Xconomy event in Seattle on Dec. 1. If you’ve got some piece of Immunex swag, photos, papers, etc. that you think would be fun to share with the wider biotech community, please let me know at ltimmerman@xconomy.com. And please, tell me the backstory, which is always more fun than just looking at an old lab coat.

—Seattle Children’s Hospital had some big news: a $50 million anonymous donation to support its research efforts. The hospital also got another $15 million donation from Jean Reid to support nursing education and clinical care.

—PATH CEO Chris Elias, the guy who led the global health nonprofit to prominence over the past decade, is moving on to a new challenge. Elias said this week he’s resigning from his job at PATH to become the new president of the Bill & Melinda Gates Foundation’s anti-poverty efforts. Elias starts the new job in February. PATH is now looking for a successor.

—”The Cancer Drug Dark Ages are Coming to an End.” That was the optimistic headline I slapped on this week’s BioBeat column, which talked about big leaps forward in personalized cancer medicine that all came in succession back in August. I think there’s strong evidence to support being optimistic, but for those of you out there who think I’m missing the boat, please post a comment at the end and let me know.

—Emerald Biostructures, which I think is the first and only company from Bainbridge Island, WA to get covered in these pages, had some good news to report. Emerald got a three-year contract extension from UCB, its largest customer, to deliver 3-D structures of biological targets that UCB wants to develop drugs against.

—Last but not least, we had a guest post from Stewart Lyman about how “Biopharma Industry Meetings Could Use Some Fresh Voices.” Lyman points that if the pharma industry is in crisis, it’s odd that everybody still looks to the same old folks from Merck, Pfizer, Novartis et al. for answers on how to get out of the mess.

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[Update: 2:55 pm PT] Seattle-based Dendreon deeply disappointed investors with its last quarterly financial report, but today it reported sales of its prostate cancer drug continued to grow in the third quarter, slightly exceeding Wall Street forecasts. Shares fell about 20 percent in after-hours trading, though, as the company said it expects to see “modest” quarterly sales growth in the foreseeable future.

Dendreon (NASDAQ: DNDN) said today it generated $64.3 million in net product sales in the quarter that ended Sept. 30, which beat the $59.5 million average estimate from analysts, according to Bloomberg. The company still reported a net loss of $147.1 million in the third quarter as it continued to spend big bucks on the sales push for sipuleucel-T (Provenge), its lone marketed product.

“We have made important progress this quarter with the launch of Provenge that is foundational for the long-term success of Dendreon,” said CEO Mitch Gold, in a statement.

The company lost more than two-thirds of its market valuation back in August when it said second-quarter sales fell short of expectations, and when it withdrew its highly-publicized full-year sales forecast of $350 million to $400 million. Dendreon has been tripped up this year by uncertainty among physicians about whether they will get reimbursed for prescribing the company’s product, which costs $93,000 per patient. After getting blindsided by the reimbursement concern—which many analysts thought had been fully laid to rest by a national policy determination by Medicare—forecasts have generally backed off into the $200 million range for the full year 2011. Dendreon responded by cutting 500 jobs from its payroll, largely in manufacturing, to control costs until it can assure more doctors to start prescribing the product with confidence they will get timely reimbursements.

Through the first nine months of the year, Dendreon said it has generated $139.5 million in net revenues.

Dendreon’s product is a first-of-its-kind treatment that stimulates a patient’s own immune system to fight cancer cells as if they were an invading virus. The product was first cleared for sale in the U.S. by the FDA in April 2010.

[Update 2:55 pm PT] Dendreon shares initially climbed in after-hours trading after the press release, but then fell about 20 percent following the company’s conference call with analysts. Gold said analysts should continue to expect “modest” quarter-over-quarter sales growth, and cautioned that there could be dips in sales for the infusion-based medicine around the upcoming holidays.

Dendreon also said it burned through $106 million of cash in the most recent quarter, and that it had $568 million in cash and investments left in the bank at the end of September.

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Only a couple stories in the past decade have given advocates of personalized cancer medicines much to brag about. There was Genentech’s Herceptin for a form of breast cancer in 1998, and Novartis’ Gleevec for chronic myeloid leukemia in 2001.

But just a few short weeks ago, in August, we saw a flurry of FDA approvals that I believe will go down as a turning point in the history of personalized medicine. Industry has paid lip service to this idea for years, but I’m starting to believe that many in pharma and biotech are getting real about changing their ways, and making drugs that are superbly effective in small niches of patients, rather than settling for mediocre advances for the masses.

Even with an explosion of knowledge in biology over the past 40 years, most of the new cancer drugs produce humbling results. Many drugs shrink tumors for one-fourth or one-third of patients, and nobody knows (or at least not enough have seriously bankrolled efforts to find out) how to pick which patients would fall into the lucky few. These drugs might extend lifespan a couple months, but there’s so much variability it can look like a roll of the dice—sometimes the drug could provide zippo benefit for you, or, it might extend your life a few years.

Two things, though, were certain. Patients would endure some significant side effects, and insurance companies would get some extremely high drug bills.

That’s why this past August was so important, and why people in biotech are still buzzing about what happened. Consider this string of FDA approvals, which the agency granted ahead of its usual legal deadlines, so it could get these life-saving therapies to patients sooner.

—On August 17, Roche’s and Daiichi Sankyo/Plexxikon’s vemurafenib (Zelboraf) was cleared for sale as a new treatment for a deadly form of melanoma that has spread through the body. This drug is tailored to treat about half of melanoma patients with a mutated form of a protein called BRAF. Clinical trials showed this treatment reduced the risk of death by 63 percent in this distinct genetic population, when compared to standard chemo. Researchers are still following patients to see how much longer people can expect to live with the new drug. Importantly, the treatment was approved with a companion diagnostic test that will help doctors determine whether patients should get the drug or not. The diagnostic test costs $150, and the drug will go for the premium price of $56,400 for a six-month course of therapy.

—On August 19, Seattle Genetics (NASDAQ: SGEN) won FDA approval for brentuximab vedotin (Adcetris) for patients with a couple of rare lymphomas—Hodgkin’s disease and anaplastic large cell lymphoma. This is a targeted drug that acts like a “smart bomb” by delivering a potent dose of chemotherapy directly to cancer cells that carry a signature marker known as CD30, while mostly avoiding healthy cells. The treatment was able to significantly shrink tumors for about 75 percent of patients with Hodgkin’s disease that had relapsed, and it produced an even better 86 percent response rate for very sick patients with anaplastic large cell lymphoma. Researchers are still following patients to see how long they are living, beyond the 2-3 year life expectancies they were given at the outset of the trial. Doctors can easily figure out which patients should get this drug based on their CD30 status, before they prescribe a product that is expected to cost about $108,000 per patient on average.

—On August 26, Pfizer showed that even though it made its fortune on mass-marketed blockbuster drugs like Viagra and Lipitor, a significant part of its future will depend on a so-called “nichebuster” in cancer. This one is called crizotinib (Xalkori), which is designed to treat about 3-5 percent of patients with non-small cell lung cancer that overexpresses a protein called ALK. The drug showed it was able to shrink tumors in a majority of patients—50 to 61 percent—and the spread of tumors was halted for close to a year. The responses have been so encouraging for this specific group of lung cancer patients that researchers, again, will have to follow patients for an extended time to get an accurate read on how long it will help patients live. Abbott Laboratories has agreed to sell the companion diagnostic test to determine a patient’s ALK status, so doctors can see which patients should get this $9,600-a-month treatment.

There’s a pattern here. These drugs are going after … Next Page »

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Christopher Henney, the immunologist who co-founded three of Seattle’s most successful biotech companies from the past 30 years, has made it into the industry’s Hall of Fame.

Henney, 70, was given the Hall of Fame award for outstanding individual contributions to biotech at the annual Biotech CEO Meeting in Laguna Beach, CA. He’s currently the chairman and interim CEO of Seattle-based Oncothyreon (NASDAQ: ONTY), the chairman of Hayward, CA-based Anthera Pharmaceuticals (NASDAQ: ANTH) and the vice chairman of Berkeley Heights, NJ-based Cyclacel Pharmaceuticals (NASDAQ: CYCC).

Henney, one of the speakers at “The Immunex Impact” event Xconomy is organizing on Dec. 1, co-founded Immunex in 1981 before moving on to help start Icos in 1989 and Dendreon in 1995. He stepped down as CEO of Dendreon at the beginning of 2003. Those companies are best-known for developing drugs for autoimmune diseases (Immunex’s Enbrel); erectile dysfunction (Icos and Eli Lilly’s Cialis); and prostate cancer (Dendreon’s Provenge). While Henney played a key role in building all three companies, the FDA approvals of all those products came years after he left.

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Listen to enough biotech industry leaders talk in public, and you’ll hear a lot of carefully scripted comments. Everyone can list off their corporate milestones on a PowerPoint slide, and utter some politically correct platitudes about novel technology, helping patients, having a “good working relationship” with the FDA, constructive partnership talks.

Blah, blah, blah.

Rarely do you see an executive really willing to stir the pot. This can be risky (look at Yahoo CEO Carol Bartz), but if more people were willing to break out of their “let’s not offend anybody today” communications rut, the biotech industry would be better off and would enjoy a broader following in the business world.

This has been on my mind for some time, but especially in the past few weeks since I wrote a BioBeat column which took Seattle-based Dendreon (NASDAQ: DNDN) to the woodshed. That column generated way more readership than I thought it would, but curiously, far fewer published reader comments—only eight. Yet privately, at networking event after networking event, and in my e-mail inbox, I’ve gotten at least five times as many “attaboys” from readers. These people—including many industry leaders—all want to express privately that Dendreon screwed-up big time, and it was about time someone stood up and forcefully said so. Yet they are afraid to say so in public.

This past week, the sheer timidity of public discourse in biotech popped up again. It came when Vertex Pharmaceuticals CEO Matt Emmens dared to challenge an analyst with Morgan Stanley at his own firm’s investment conference, probably right in front of his bosses, in New York.

Here’s what Emmens had to say, as first reported by Peter Loftus of Dow Jones, and later picked up by FierceBiotech.

“Do you understand this company? I don’t think so,” Emmens said on stage to Morgan’s David Friedman. “By what I read, I don’t think you understand our company. I’m going to do the best I can to prove you wrong again and again, and it’s been fun, but when does it stop?”

It should be noted that the tone of this exchange, when I listened to the audio, sounded like one of gentle (but firm) ribbing from Emmens. It sounded like he was trying … Next Page »

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Immunoids, and friends of Immunoids, listen up. Come December, it will be 10 years since Immunex agreed to be acquired by Amgen. I figure it’s the perfect time to reunite the people who lived through the exhilarating, and sometimes terrifying, experience of building Seattle’s first major biotech company.

So I’m super-psyched to say that we are bringing together a dream team of Immunex alumni for Xconomy’s next big event in Seattle, called “The Immunex Impact” on December 1.

Here are the confirmed speakers who will be there to tell a few war stories from their Immunex days, and to connect with lots of friends old and new:

—Steve Gillis, Immunex co-founder, now managing director, Arch Venture Partners

—Christopher Henney, Immunex co-founder, now chairman and interim CEO, Oncothyreon

—Doug Williams, Immunex chief technology officer, now executive vice president of R&D, Biogen Idec

—Stewart Parker, Immunex’s first employee, now CEO, Infectious Disease Research Institute

—Steve Graham, Immunex’s longtime corporate attorney, now co-chair of life sciences, Fenwick & West

—Janis Wignall, Immunex scientist and science education leader, now a consultant

—Dave Urdal, Immunex president of manufacturing, now chief scientific officer, Dendreon

I plan to make sure the speeches are short and sweet, leaving plenty of time for what this event is really about. It’s a chance to connect and re-connect with the Immunex network that continues to make a big impact on Seattle biotech every day.

Steve Gillis

This event will be from 6 pm to 8:30 pm on December 1 at the Institute for Systems Biology’s new headquarters in South Lake Union. ISB president Lee Hood (not a co-founder of Immunex, but a biotech industry godfather nonetheless) is planning to provide some opening remarks. I’m going to encourage him to reminisce a bit about what he was doing in 1981 when this whole biotech business started really taking off.

As if you couldn’t already tell, I’m chomping at the bit to get this event started. To get your tickets, check out the new “Immunex Impact” registration page here. See you there at the ISB on December 1.

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The writing was on the wall at Dendreon for weeks, but that didn’t make the bad news of layoffs any easier to stomach.

—Seattle-based Dendreon (NASDAQ: DNDN) said this past week that it is cutting 500 jobs, including about 100 locally, as it seeks to conserve cash in the wake of its sales and marketing stumble. Nothing much more to say other than this hurts those people, especially in a tough job market.

—The new head of global health over at the Bill & Melinda Gates Foundation was named this week, and it’s Trevor Mundel. He’s a former Novartis executive, so his pedigree is similar to that of his predecessor Tachi Yamada, who now works in venture capital with Frazier Healthcare Ventures.

—A couple of sizable financings crossed my desk this week. Seattle-based Theraclone Sciences, the company working to discover new antibody drugs, raised another $10.6 million. And across the lake, Bellevue, WA-based RF Surgical pulled in $12 million for its technology that’s supposed to help surgeons avoid leaving behind sponges inside patients.

—Remember Bothell, WA-based Liposonix, the developer of the ultrasound body sculpting machine? It has been pretty quiet in the three years since it was acquired by Scottsdale, AZ-based Medicis Pharmaceutical for $150 million. But now Liposonix has a new corporate parent in Hayward, CA-based Solta Medical, which paid $35 million in upfront cash and near-term milestones to see what it can do with this technology.

—Seattle-based VentiRx Pharmaceuticals is now just that, Seattle-based. The company said it is closing down its San Diego operations and consolidating its work here around an immune-boosting compound for cancer. Co-founder Rob Hershberg has moved up to the role of president, and remains the chief medical officer.

—This week in BioBeat I tried to show what biotech pros are missing by avoiding the daily conversation on Twitter. So far, at least one local CEO, PhaseRx’s Bob Overell, agreed to give it a shot, and you can follow his comments at @Robert_Overell on Twitter. If there’s more interest among our readers, I might be willing to help with a free Twitter tutorial at one of the local coffee shops. Ping me the old-fashioned way—ltimmerman@xconomy.com—if you’re interested.

—Seattle-based Oncothyreon (NASDAQ: ONTY) said this week that CEO Bob Kirkman is taking a temporary medical leave of absence, and will be replaced on an interim basis by chairman Christopher Henney. Kirkman is expected to return to work in the fourth quarter, a company spokeswoman says.

—Lastly, Bob Nelsen of Arch Venture Partners unloaded on the elected officials in Washington D.C. who voted in favor of a patent reform bill that he says will hurt the little guy inventors out there. There’s a really good thread of comments at the bottom of this post, which I’d encourage you to check if you haven’t already.

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Employees at Seattle-based Dendreon (NASDAQ: DNDN) have been on pins and needles for five weeks since they heard layoffs were in the works, and when the bad news came today, few parts of the company were spared.

Today’s layoffs of 500 employees, about one-fourth of the workforce, were spread among all functions within the company, except for those who generate demand for its prostate cancer drug (i.e., the sales and marketing team). About 80 percent of the job cuts are being concentrated at its manufacturing plants—in New Jersey, Atlanta, and Los Angeles—with the rest coming at its Seattle headquarters. Dendreon made the cost cuts after it said there was no way it could live up to its forecast of $350 million to $400 million in sales for 2011.

“It’s incredibly difficult,” CEO Mitch Gold said in an interview today. “It’s always hard to let good people go.”

He added that the manufacturing group performed exceptionally well in keeping supplies of sipuleucel-T (Provenge) flowing to doctors and patients, even during Hurricane Irene. All three factories were approved by the FDA on schedule.

Dendreon, as reported here earlier today, said it ended August with about $600 million in cash left on the books. By making these cuts, which are supposed to save about $120 million a year, Dendreon said it should be in position to reach break-even once it ramps up Provenge sales to $500 million a year. The company didn’t say how long that might take. But so far, here’s what’s known for sure: The drug has generated almost exactly $100 million in sales this year through August 31, with $22 million of that coming in the month of August.

Shares of Dendreon climbed 47 cents, or about 4.3 percent, to $11.35 in after-hours trading after the cuts were announced.

Dendreon CEO Mitch Gold

As part of the job cuts, Dendreon provided investors with other updates on how its commercial rollout is going. Here are some of the highlights from today’s conference call, and from a follow-up interview I did later with Gold:

—The company has reorganized its sales and marketing team to put more emphasis on “community” oncology and urology medical practices, as opposed to the big-time academic medical centers that are more familiar with the product. Through additional market research, Dendreon has identified 1,000 target accounts, which it says are responsible for 80 percent of the prescriptions written for prostate cancer drugs, Gold said. The sales team has now come up with tailored marketing messages for both cancer physicians (oncologists) and urologists who aren’t as familiar with prescribing infusion-based medicines like sipuleucel-T (Provenge.)

—Chief operating officer Hans Bishop is leaving the company, effective Sept. 30. Dendreon isn’t saying whether he was terminated or resigned. But Gold did say that Dendreon is now looking for a new COO, and in the meantime, the senior vice president in charge of commercialization, Rob Rosen, will report directly to the CEO. Gold didn’t say much in the follow-up interview about the circumstances around Bishop’s departure, other than, “I’m really respectful of Hans. He accomplished a lot in his two years at Dendreon. I wish him the very best.”

—Some signs are emerging, Gold says, that the reimbursement climate is improving. Dendreon sales reps are now communicating to physicians how the FDA-approved prescribing information for Provenge is now much more in sync with the reimbursement protocol that was approved by Medicare in June. On average, physicians are now getting reimbursed for the $93,000 product in about 30 days, Gold said. Still, many physicians won’t believe it until they see it, Gold said, so it will take time before docs get really comfortable, he says.

—When asked if there was one thing he wishes he could do over about the Provenge launch, Gold said he wished he hadn’t given Wall Street the sales forecast of $350 million to $400 million for 2011. “If there’s anything we’d change, it would be not giving guidance so early on, when we needed to better understand the launch dynamics,” Gold says. But since Dendreon put out that bullish sales forecast, investors were deeply disappointed when the company fell so far short. Gold stressed that despite the shortfall, the drug still has all the potential that got investors excited over the past couple years. He pointed out that the average analyst estimate is that Dendreon will reach about $219 million in sales this year, Gold said. If that happens, Provenge will still end up being one of the top five cancer drug introductions of all-time, Gold said.

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[Updated: 1:15 pm PT] People at Seattle-based Dendreon (NASDAQ: DNDN) have been waiting for five weeks to find out how many employees would lose their jobs, after the company said it was falling short of its sales forecast for 2011.

Now the other shoe has dropped.

Dendreon said today it has cut the jobs of 500 employees, or about 25 percent of the workforce it had at the end of June, as it seeks to conserve cash while it builds up the market for its immune-boosting drug for prostate cancer. Chief operating officer Hans Bishop is among those heading for the door. The company had about $674 million in cash and investments on hand at the end of June, and burned through about $106 million of its cash reserves in the most recent quarter ended June 30 as it continued investing in a national network of unique factories.

While the cash has been diminishing, the company’s headcount has been rising. Dendreon rapidly built up its staff to 1,915 employees at the end of June, from just 200 as recently as April 2009. The company has been on that hiring binge in order to build up sales, marketing, and manufacturing capacity to capitalize on what many analysts projected would be a multi-billion dollar drug.

Dendreon’s forecast for this year was that it would sell $350 million to $400 million in sales, but it only sold $77.6 million of the drug in the first six months of the year. It now projects just “modest” quarter-over-quarter sales growth in the foreseeable future as it seeks to iron out concerns among physicians about how to properly use this first-of-its-kind, infusion-based medicine, and whether they will get reimbursed for a product that costs $93,000 per patient. Medicare, the government agency that covers most of the elderly men who are candidates for Provenge, recently agreed to a new national reimbursement protocol after it concluded a yearlong review of the product’s safety and effectiveness.

Getting spending under control has been a pretty obvious imperative since Dendreon announced its troubles with sales and reimbursement. The announcement of the missed sales forecast greatly damaged the company’s credibility on Wall Street, which erased more than $3.5 billion worth of the company’s valuation. That, in turn, makes it much more difficult for Dendreon to raise more cash at favorable terms—hence the need for cost cuts.

It will be interesting to see how Wall Street reviews this latest round of cuts and restructuring at Dendreon, in terms of whether it can restore some faith. Many observers were skeptical heading into today’s announcement. “It’s not good enough for management to just tell investors that they think that can do X, Y or Z,” Eric Schmidt, a veteran biotech analyst at Cowen and Co, told Reuters in a story posted earlier today. “If Dendreon wants to convince us they can improve their margins to levels more in line with the industry, they are going to have to make actual progress before many of us buy in.”

[Updated info on August financials.] Dendreon said it generated about $22 million in sales of its prostate cancer drug in August. It had $600 million of cash left in the bank at the end of August, which it says should be enough to reach cash-flow break even once its drug reaches about $500 million a year in sales.

“While the last month has been difficult for our employees, these cost reductions are necessary to ensure the long-term growth of our company,” Dendreon CEO Mitch Gold said in a statement.

Dendreon management plans to discuss the restructuring in more detail on a webcast conference call at 4:30 pm Eastern/1:30 pm Pacific. I’ll have more to add in real-time during the call on Twitter at @ldtimmerman and more follow-up here later today on Xconomy.

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[Updated: 10:28 am PT] Seattle-based Oncothyreon (NASDAQ: ONTY) is getting some new executive leadership, at least for a while, anyway.

CEO Bob Kirkman is taking what the company calls a “temporary medical leave of absence,” starting Monday, Sept. 12, according to a regulatory filing. While Kirkman is away, chairman Chris Henney will step in to take Kirkman’s place, according to the regulatory filing. The company didn’t say what kind of medical issue Kirkman is dealing with, or how long the leave of absence might last.

[Updated comment from company]. Kirkman is expected to return to Oncothyreon sometime in the fourth quarter of 2011, says Julie Rathbun, a spokeswoman for the company. The company isn’t disclosing Kirkman’s diagnosis out of respect for his privacy, she says.

Henney, who turns 70 this year, is well known as the co-founder of three of Seattle’s biggest biotech successes—Immunex, Icos, and Dendreon. The idea at Oncothyreon (on-koh-THEAR-ee-on) is similar in concept to what is being pursued at Dendreon. Oncothyreon is seeking to stimulate a patient’s immune system against cancer through a product known as Stimuvax. That drug is being developed in partnership with Germany-based Merck KGaA, and is expected to generate interim results from a pivotal lung cancer trial in the first quarter of 2012. Oncothyreon also has another cancer drug in its pipeline at an earlier stage of development.

Kirkman, who was listed at age 62 in the company’s most recent proxy filing, has been Oncothyreon’s CEO since September 2006. He previously worked at Seattle-based Xcyte Therapies, where Henney was also a member of the board.

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

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

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

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

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

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

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

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

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

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

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

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Football season is getting started this week, and I’m pumped. This is the time millions of people test their wits against friends (and strangers) in fantasy football. For fellow biotech nerds who aren’t familiar, this is a little bit like the stock market—you try to pick a diversified portfolio of pro football players who you think are going to have great seasons. And you try to avoid the losers.

Since I just finished drafting my fantasy team, I thought it would be fun this week to evaluate biotech a bit like I analyze football players. So here goes, with a somewhat tongue-in-cheek set of awards and predictions about the ups and downs to watch this season among the companies, players, and drugs that make biotech so darn interesting.

Reggie Bush don’t-believe-the-hype award: Brisbane, CA-based Intermune (NASDAQ: ITMN). The former Heisman Trophy winner from USC had a dazzling college career, but has been a dud in the pros. Intermune, too, saw a monster wave of enthusiasm earlier this year, and its stock briefly topped $50 in April. The company has already dropped back into the mid-$20s, but it still has a market valuation of about $1.5 billion. All of this excitement has been for one new drug that was rejected by the FDA, and then approved in the European Union for patients with idiopathic pulmonary fibrosis. It all looks to me like investors have gotten carried away. This disease is a rare condition, Intermune is blazing a new trail on its own with physicians and patients, and quite a few European countries are basically broke.

LaDainian Tomlinson fading superstar award: Amgen’s erythropoietin anemia drug franchise. The future Hall of Famer did amazing things for the San Diego Chargers, but now he’s 32, near the end of his career. He’s given up the starting tailback job with the New York Jets to Shonn Greene, which means LT won’t have to carry the load all by himself, which could lengthen his career. Thousand Oaks, CA-based Amgen (NASDAQ: AMGN) had a similarly spectacular run with its erythropoietin anemia drug franchise, but after battling years of safety controversies, this product’s best years are behind it. Fortunately for Amgen, it has the equivalent of Greene’s fresh legs with its new antibody drug denosumab, which it is marketing as Prolia for osteoporosis and Xgeva for cancer-related bone loss. But just like Shonn Greene is no LT, d-mab is no EPO.

Packers-Bears best rivalry: Vertex-Merck. The Green Bay Packers and Chicago Bears have the oldest and one of the most intense rivalries in football, and there are few things I enjoy more than watching my World Champion Packers beat the Bears. I don’t have a rooting interest in the battle between Vertex Pharmaceuticals and Merck in the hepatitis C field, but this has the elements of a great rivalry. Vertex has superior data for its drug from clinical trials, but Merck’s drug is also a big step up over the old hepatitis C regimen, and it has money, manpower, and sales history with doctors that can’t be dismissed. To add another layer of intrigue, Vertex founder Josh Boger and CEO Matt Emmens both worked earlier in their careers at Merck, so these are familiar enemies.

Tom Brady sleeper pick of the year: Richmond, CA-based Sangamo Biosciences (NASDAQ: SGMO). The legendary 3-time Super Bowl-winning quarterback was the ultimate sleeper pick coming out of college, and the New England Patriots were able to grab him in the sixth round of the 2000 draft. Sangamo has been around for a long time with a technology for specifically silencing genes, which investors aren’t giving much value. But Sangamo is expecting some clinical trial results this fall from a mid-stage clinical trial of its new drug for patients with diabetic neuropathy. If the data are positive, it could propel this company from the bench to stardom.

Tedy Bruschi comeback player of the year: South San Francisco-based Exelixis (NASDAQ: EXEL). The former Patriots linebacker and 3-time Super Bowl champion suffered a rare heart condition that caused a stroke, which looked like it would send him into retirement in 2005. But he beat the odds, coming back to play some more great football. Exelixis, too, looked like it was in big trouble just a year ago after it made some big layoffs, one of its partners (Bristol-Myers Squibb) threw in the towel on its lead drug candidate, and its CEO left for a new job. But Exelixis’ lead drug, cabozantinib, has shown an impressive ability to treat the debilitating bone pain that strikes men with advanced prostate cancer. Investors have heard researchers rave about this drug, and have pumped new life into the stock, which enabled Exelixis to raise a lot more money. Now Exelixis needs to prove the results in more rigorous studies, but it is certainly back in the game.

Baltimore Ravens defensive team of the year: The FDA’s division that reviews obesity and diabetes gets this award in a landslide. Like the NFL’s notoriously violent defender, Ravens linebacker Ray Lewis and his teammates, the FDA has … Next Page »

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Seattle-based Dendreon has stumbled in early sales and marketing of its new prostate cancer drug, but the company has gone 3-for-3 in its effort to build a national network of manufacturing centers for the novel product.

Dendreon (NASDAQ: DNDN) said today it has received FDA clearance to start producing sipuleucel-T (Provenge) from a new factory in Atlanta. The new facility completes Dendreon’s national network of manufacturing plants, providing regional balance in addition to factories in New Jersey and Los Angeles. The company said it plans to scale up the new Atlanta operation “in a staged approach.”

Winning FDA clearance for all three factories has been critical to Dendreon’s growth plan all along. Dendreon won FDA approval for its new drug in April 2010, and has been working feverishly ever since to hire hundreds of people and invest hundreds of millions of dollars in a network of factories to carry out Dendreon’s unique process. Manufacturing has been especially important to Dendreon, because its drug works unlike any other on the market today, by using a genetically engineered drug to “teach” a patient’s white blood cells to recognize and fight prostate cancer.

While manufacturing has been limited in scale until now, putting a limit on Dendreon’s sales in the first year, investors only recently learned that manufacturing isn’t the only limitation holding back the company’s sales trajectory.

Earlier this month, Dendreon disclosed that physicians are reporting concerns about whether they will get reimbursed by Medicare after they prescribe a product that costs $93,000 per patient. Those concerns prompted Dendreon to withdraw its 2011 sales forecast of $350 million to $400 million, and announce plans to lay off some workers. More than $3 billion of the company’s market value was lost after the announcement.

Dendreon stock closed at $11.86 a share today, up 7 cents.

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