Seattle-based Dendreon (NASDAQ: DNDN), the developer of what it hopes will be the first FDA-approved treatment to actively stimulate the immune system against cancer, said today the U.S. regulatory agency has received its amended application and set a deadline of May 1, 2010 to complete its review. The company is seeking clearance to start selling sipuleucel-T (Provenge) for men with prostate cancer that’s no longer controlled by standard chemical castration therapies. The application includes data from a 512-patient study which showed the drug could extend lives by a median of four months when compared with a placebo.

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This was the week that a little biotech company in Bothell that few of the locals have ever heard of, burst onto the national stage.

—Bothell, WA-based Alder Biopharmaceuticals had its breakout moment this week when it pulled in $85 million in upfront cash, and stands to gain more than $1 billion over time from a partnership with Bristol-Myers Squibb to co-develop a new drug for rheumatoid arthritis. Clinical trial data on this drug hasn’t yet been released publicly, but CEO Randy Schatzman says it’s good enough to give market-leading drugs from Amgen and Abbott Labs a “run for their money.” Seattle Genetics CEO Clay Siegall, an Alder director, says it is now a “force” in regional biotech.

—Over in Seattle’s South Lake Union, another little-known private company called Kineta said it is splitting a little more than half of a federal contract with the University of Washington worth $13 million over the next five years. The goal will be to develop new chemical compounds, called adjuvants, that can boost the effectiveness of a wide variety of vaccines.

—The Institute for Systems Biology is continuing to net a lot of grant money, this week announcing that it has pulled in $8 million from the National Institutes of Health to contribute to The Cancer Genome Atlas. This is a genomic effort to identify potential new targets for cancer drugs.

—The battle between Seattle-based ZymoGenetics (NASDAQ: ZGEN) and Bristol, TN-based King Pharmaceuticals is heating up in federal court in Tennessee. If you’ve missed any of the back-and-forth, or how this ball really got rolling back in August, here’s a quick summary.

—Bellevue, WA-based Light Sciences Oncology, another private company that keeps a low profile, revealed in a regulatory filing that it has lined up another $35 million to support its drug-device combination therapy for cancer. The money is available in the form of a line of credit, and if investors choose to exercise warrants.

—Bothell, WA-based Verathon, the maker of a simple ultrasound tool for diagnosing bladder disorders, was acquired by Sarasota, FL-based Roper Industries (NYSE: ROP) as part of a pair of transactions valued at $356 million. The companies aren’t saying how much of that is going to the Verathon shareholders.

—Seattle-based Dendreon (NASDAQ: DNDN), the king of the moment in Seattle biotech, issued a pretty vanilla quarterly report with the Securities and Exchange Commission. One point worth noting was that it burned $28 million of its cash reserves in the three-month period ending September 30. It ended that quarter with $259.6 million in cash and investments left in the bank as it prepares to manufacture and market sipuleucel-T (Provenge) next year for men with terminal prostate cancer.

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BioVex, the Woburn, MA-based company aspiring to create the first FDA-approved cancer-killing virus, has raised an additional $30 million in private financing to finish off a pivotal clinical trial needed to prove the virus is good enough to reach the U.S. market.

This latest round brings BioVex’s grand total of financing this year to $70 million; the firm nailed down $40 million in March. Participants in the new round include Morningside Venture, Ventech, MVM Life Science Partners, Sectoral Asset Management, and Ysios Capital Partners.

This batch of investors is betting on an idea that has fascinated cancer researchers for decades—oncolytic viruses. These are everyday viruses that are genetically modified to replicate inside tumors, provoking the immune system to mount an attack in the cancerous growth itself, while sparing healthy tissue. The BioVex treatment, OncoVex GM-CSF, takes one such virus and attaches it to GM-CSF, an immune-boosting drug. The combination is supposed to work by penetrating tumor cells and causing them to burst from the inside, while also sparking the immune system to hunt down any cancer cells that have spread throughout the body.

“If this is approved, it will be paradigm-changing,” says Philip Astley-Sparke, BioVex’s CEO.

BioVex has attracted the interest of researchers, and the investment capital, based largely on one study of 50 patients with forms of melanoma, a deadly skin cancer, that have spread through the body. That study found that 13 of the 50 patients (26 percent) had their tumors shrink after they got the BioVex treatment. More interesting, eight of the 13 responders had their tumors completely disappear, and their responses were long-lasting. Although patients who entered the trial had terminal diagnoses, usually giving them six to nine months to live, according to Astley-Sparke, more than half of patients were alive after one year (58 percent) and two years (52 percent), according to data presented at the American Society of Clinical Oncology in June. Side effects were mostly mild-to-moderate flu-like symptoms, researchers said.

“What’s really most impressive is the durability of the response,” Astley-Sparke says.

Those who follow cancer drug development know that melanoma is very tough to treat and has long been a graveyard for once-promising biotech drugs. So BioVex has to prove …Next Page »

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Prostate cancer has been one of the hot fields for new biotech drug development this year, and now Cambridge, MA-based Tokai Pharmaceuticals is getting into the game with a drug that it hopes will someday help men live longer and push the boundaries of science even further.

Tokai, which raised $22 million in May from Novartis Venture Funds and Apple Tree Partners, has been pretty quiet about what it is up to until today. The company is starting its first clinical trial in 50 patients to test the safety of—and look for some early signs of anti-tumor activity in— a once-daily oral pill it calls TOK-001. I heard about the concept of the drug and the company from R. Bruce Montgomery, a clinical investigator at the University of Washington, and Seth Harrison, the managing partner at Apple Tree, who’s serving as acting CEO of Tokai.

Tokai is getting into the prostate cancer field with a drug that it says is the only one of its kind to fight cancer cells simultaneously with three modes of action. The Tokai drug is building on some of the science that San Francisco-based Medivation has used to secure a partnership with Japan-based Astellas Pharma worth up to $655 million, and which prompted Johnson & Johnson to acquire Los Angeles-based Cougar Biotechnology for $894 million earlier this year. Using a completely different way of fighting tumors, by stimulating the immune system to fight cancer cells like a virus, Seattle-based Dendreon (NASDAQ: DNDN) showed it could extend lives of terminal prostate cancer patients by a median of four months time with minimal side effects, and its stock boomed nearly 10-fold this year. All of the companies have their sights set on treating a disease that kills about 30,000 men each year in the U.S.

“For the sake of people with prostate cancer, we really hope we have something,” says Tokai’s Harrison.

Scientists have known for decades that prostate cancer cells thrive on testosterone and one of its byproducts in the body, so standard treatment has long been focused on shutting down the production of tumor-fueling testosterone, Montgomery says. This treatment, known as chemical castration, usually works for about five to 10 years. But all men eventually develop resistance to the hormone-blocking therapy, Montgomery says.

Researchers have been trying to sleuth out how this can be, and it now appears that the cancer cells are clever at finding new ways to grow. Tokai is zeroing in on blocking three of the ways tumors use to grow, even when they are deprived of most of the usual testosterone they need.

One way is by blocking a receptor prostate cancer cells have for efficiently picking up …Next Page »

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Dendreon (NASDAQ: DNDN), the Seattle-based developer of a new treatment to stimulate the immune system against prostate cancer, said today in its quarterly financial report that it ended September with $259.6 million in cash and investments. That means it burned through about $28 million in cash during the last three months, based on its previous quarterly report, in which it said it finished the month of June with $287.5 million in the bank. The company is preparing to manufacture and market sipuleucel-T (Provenge) for men with terminal prostate cancer. Dendreon raised $221 million in May to pursue that goal.

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The local life sciences scene was pretty quiet this week, although we heard more than usual from medical device companies.

—Paul Yager, the University of Washington’s chair of bioengineering, offered a detailed status update on a tool called the DxBox his lab has been developing the past four years in collaboration with Redmond, WA-based Micronics, Seattle-based PATH, and Bothell, WA-based ELITech Group, all with the support of the Bill & Melinda Gates Foundation. They are seeking to develop a portable, fast, accurate, and rugged diagnostic tool to help doctors in the developing world, and while there’s been a lot of progress, it’s entered the “put up or shut up” phase, Yager says.

—Seattle-based Dendreon turned in its complete application to the FDA for clearance to start marketing its first drug, sipuleucel-T, (Provenge) in the U.S. This filing came a bit earlier than Dendreon had forecasted, but it’s also a lot later than the company originally hoped when it first asked the FDA for approval, which you can read more about in this Dendreon history piece I did back in April.

—The Institute for Systems Biology said it has commissioned Mountain View, CA-based Complete Genomics to sequence the full genomes of 100 individuals as part of a Huntington’s disease experiment. This experiment is said to be the largest ever to use full human genome sequences.

—We’ve seen a few medical technology companies that are seeking to repair damaged tissues without leaving behind any implantable devices, and Bothell, WA-based QuantumCor is the latest. CEO Vern Dahl described his company’s plan to do this for a form of heart failure known as mitral valve regurgitation.

—Seattle-based Calypso Medical Technologies, the maker of a device to pinpoint radiation therapy for prostate cancer to minimize side effects, formed a collaboration with Siemens Healthcare. The companies will seek to develop the technology for pancreas and lung tumors.

—We also had an insightful guest editorial from Anthony Rodriguez, a Ph.D. bioengineering student at the University of Washington and an aspiring entrepreneur. He contends that it takes a village to raise an entrepreneur, and that while a few organizations have made some effort to cultivate young entrepreneurs at the UW, the business community could be doing much more.

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Seattle-based Dendreon said today it has completed all the necessary paperwork for its lead drug candidate, and handed over the amended application for approval to the FDA. The company had told investors to expect this milestone by “mid-November,” so this application came in a few days or even a few weeks ahead of schedule.

Investors have been antsy for months about Dendreon (NASDAQ: DNDN) turning in its amended application to start marketing sipuleucel-T (Provenge) as the first treatment of its kind to actively stimulate the immune system to fight prostate cancer like a virus. That’s because Dendreon reached its goal in a 512-patient study, known as Impact, back in April, generating the sort of evidence of safety and effectiveness that it will need to pass muster.

The FDA will now have a deadline of 180 days to finish its review of the application, although the FDA has to formally accept the application for review before it assigns itself a deadline, says Dendreon spokeswoman Katherine Stueland. Dendreon has said it expects to win approval by mid-2010.

This deadline matters a lot to Dendreon and prostate cancer patients. Dendreon’s stock has boomed this year from as low as $2.55 to as much as $30 on the assumption that its drug is a slam dunk with the FDA because of the results from the Impact study, and it has raised $221 million from investors to build up the manufacturing and marketing muscle it needs to make it a success. The company has also gone on a hiring binge this year as it seeks to make sure it has the talent to make the most of this drug, recently saying it plans to double in size to about 600 employees. If approved, the drug would be the first option of its kind for a disease that kills about 30,000 men in the U.S. each year, and an alternative to Sanofi-Aventis’ docetaxel (Taxotere) a chemotherapy that has been shown to extend lives, but also to cause nasty side effects.

Shares of Dendreon climbed 5 percent at the opening bell to $26.60 on the news.

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I’ve heard about serial entrepreneurs who start a company, build it up to a certain point, sell it to someone bigger, and then repeat the whole cycle again. But I had never heard of a true biotech sequel until I met Randall Woods a couple weeks ago.

Woods is the CEO of San Diego-based Sequel Pharmaceuticals, and a well-known entrepreneur who’s also the chairman of Biocom, the local biotech trade association. The two-year-old startup is literally the sequel to his previous company, Novacardia, a company that Woods led until it was sold for $350 million to Merck on Sept. 6, 2007.

Sequel came less than 24 hours later. The same nine employees, in the same office, with the same management team, and the same board (except for one), set their sights on a new goal. The idea was to take a drug in the early stage of development, steer it to the later stage of trials until the concept is more proven, and then sell it for a bundle to big drugmaker. Novacardia took a drug into pivotal studies for congestive heart failure, then passed the baton to Merck for the final phase of development. Sequel aspires to do the same thing with a different drug for a different heart ailment—atrial fibrillation.

“We didn’t even have a 24-hour break,” Woods says. “We just changed the sign on the door.”

This group of people clearly has skill in cardiovascular disease, so it knows something about the new problem. Atrial fibrillation is an abnormal heart rhythm that can cause acute attacks, or a chronic condition whose symptoms include shortness of breath, chest pain, or stroke.

Randall Woods

About 2.2 million people in the U.S. are estimated to be affected, and it caused 470,000 people to be hospitalized in 2003, according to the American Heart Association. The incidence is thought to be increasing as the Baby Boomers get older. There haven’t been many new developments in treatment either, except Sanofi-Aventis’ dronederone (Multaq), which first won FDA approval in July. That drug showed it could reduce hospitalizations from cardiovascular disease and deaths from all causes by 24 percent when compared to a placebo. Other than that, patients sometimes take beta-blockers to slow down their heart, or warfarin to thin their blood, Woods says. Another treatment from Vancouver, BC-based Cardiome Pharma is seeking FDA approval.

Sequel’s drug, called K201, is designed …Next Page »

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The news has been breaking fast and furious here at Xconomy, just as we are putting the finishing touches on a terrific event on Monday that will explore the 20-year outlook for the Seattle region as a life sciences hub.

—Xconomy dug up an exclusive late Friday afternoon from a couple SEC filings that showed Seattle-based Dendreon has added two heavy hitters to its board of directors. They are Ian Clark, the incoming CEO of the Genentech unit within Roche, and Pedro Granadillo, the former senior vice president of manufacturing at Eli Lilly. Dendreon (NASDAQ: DNDN) announced the move officially, and the wire services picked up the report, on Monday.

—Amgen generates $15 billion a year in revenue, and plows back 20 cents on the dollar, or about $3 billion, back into research and development. But what does it really do with that money, and what ideas does it have to improve on the industry’s abysmal 1-in-10 average success rate for new drugs entering clinical trials? Senior vice president Joe Miletich offered up some fascinating insights on what Amgen is trying to do, and how Seattle and Boston teams contribute, in an exclusive interview.

—Leroy Hood, the biotech pioneer who has started more than a dozen companies, announced this week that he has raised another $30 million to launch a startup that embodies his latest vision—Integrated Diagnostics. This company will seek to develop instruments that can detect cancer and Alzheimer’s disease by looking at concentrations of proteins from a tiny droplet of blood.

—Seattle-based Omeros (NASDAQ: OMER) pulled off the first IPO of a true biotech company anywhere in the U.S. since February 2008. The company netted about $62 million, part of which will go to support pivotal trials of its treatment to help improve recovery from knee surgery. But other biotechs watching this as a bellwether have to be a little concerned after seeing Omeros price its offering at $10 a share, the low end of its forecasted range. The stock has been heading downhill ever since it started trading, to $7.44 at yesterday’s close.

—Chris Henney, the co-founder of Immunex, Icos, and Dendreon, offered up a very entertaining list of six tips for investors on how to spot a winning biotech company. He made these remarks at a luncheon event organized by the CFA Society in Seattle, in front of about 100 investing professionals.

—Medical device startups are feeling a lot of pain this year, for a lot of reasons, and it was all laid bare this week in a sobering report by Ernst & Young.

—One of the more fortunate medical device companies in Seattle, Uptake Medical, secured an additional $1.2 million in equity financing, meaning it has now raised $4.6 million out of a venture round that could be worth as much as $13.3 million. The company is developing a minimally invasive technique for treating chronic lung diseases by using hot vapor to seal off damaged parts of the lung so air doesn’t get trapped there.

—Lots of people are wondering whether Roche will retain most of the talent at Genentech in the wake of its acquisition this spring. Bothell, WA-based Seattle Genetics (NASDAQ: SGEN) pried loose at least one important player from the industry’s pioneering company, naming Bruce Seeley to the newly created position of executive vice president, commercial, with responsibility for future sales and marketing. Seattle Genetics will lean on him to spearhead what it hopes will be a successful commercial rollout of its “empowered antibody” for Hodgkin’s disease.

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Yesterday, we provided a rundown of the six hallmarks of a successful biotech company, according to Christopher Henney, the biotech pioneer who co-founded three of Seattle’s top biotechs—Immunex, Icos, and Dendreon. He made his remarks to an audience of about 100 investing professionals at the CFA Society meeting on Oct. 8 in Seattle.

Today, we follow up with the five red flags Henney advised investors to watch for when they evaluate biotech investments. Here’s what he singled out as warning signs:

—Top management without a scientific background. It’s not impossible for a biotech to succeed with a non-scientist at the helm, Henney said, but a smart investor must ask this non-scientific manager where the science comes from at the company. “The good answer would be, ‘It comes from my team of wonderful scientists who I recruited.’” A bad answer would be something like, “It comes from my scientific advisory board, which has two Nobel Laureates.” Henney added, “If you need to make an appointment to meet the guy who’s bringing you your science, then you don’t have much of a business.”

Henney wanted to make sure he wasn’t making a broadside attack against all non-scientific managers. One of his favorite biotech CEOs isn’t a scientist, but he adds, “You wouldn’t know it from talking to him.”

—No worries. An investor should ask what the management loses sleep over. “If they say, ‘I sleep like a baby,’ that’s a big red flag,” Henney said. All companies have their problems, and top management had better know them inside out.

—Hard-to-understand science. Ask the management to explain the science of their product in detail. “If they say something like the science is hard to explain, they can’t really explain it to you, that’s a big red flag.”

—Geographic remoteness. This provides some insight into Henney’s thinking on why two of the companies for whom he serves as chairman—Oncothyreon and AVI Biopharma—recently moved their headquarters from Edmonton, Canada, and Portland, OR, respectively, to the Seattle area. “You need a quorum of players,” Henney said. “You need access to talent, you need to be able to recruit people.” Seattle has more talent than the other places, and an ability to recruit more people, he said.

—Too many VCs. The board should be loaded with people that have experience running companies. “You shouldn’t have a board full of venture capitalists,” Henney said.

—Family members in key roles. “These aren’t family businesses. If you see a board dominated by siblings, or a couple of siblings in key management roles, I’d run, not walk.”

While those things might scare people away, Henney was hoping to drive home the message that investing in biotech actually isn’t that dangerous—if people know the right questions to ask. Despite the industry’s tough odds, he says he knows of people who make money in biotech year in and year out. He may have already been preaching to quite a few of the converted—I saw more than a few familiar biotech investors in the room—but Henney was hoping to light a spark for at least a few money managers to try their hand at something new.

“It’s a space that I wish more people would look at as an investment opportunity,” Henney said. “It can be really rewarding, and a lot of fun.”

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Investing in biotech can be scary. Only one out of 10 new drug candidates ever makes it through the gauntlet of clinical trials to become an FDA approved product, and it usually takes hundreds of millions of dollars and a decade or more of research to separate the winners from the losers. Investors usually can’t bother asking serious questions about profit-and-loss statements, or price-to-earnings ratios, until a company is 15 years old or more. And the hype—from gene therapy, to stem cells, to you fill in the blank—can be quite distracting.

So Christopher Henney, 68, who has seen it all in a 30-year career in biotech as co-founder of Immunex, Icos, and Dendreon, knew he had his work cut out yesterday. He was trying to convince a crowd of 100 financial pros at the CFA Society meeting in Seattle that biotech, the classic boom-or-bust industry, is really a good place to invest.

“I want to de-mythologize the scariness,” Henney said at the outset.

Henney started off his talk by reminding the audience how he and Steve Gillis, a pair of immunologists at the Fred Hutchinson Cancer Research Center, went on to start Seattle-based Immunex, one of the members of what he called “the class of 1983.” These were the second-generation companies, following industry pioneer Genentech, that all went public back in a great wave of enthusiasm for biotechnology. The class included Amgen, Biogen, Cetus, Chiron, Genzyme, and Immunex. Seven of the 10 to 12 biotech companies (Henney didn’t name the losers) that went public in that early wave went on to create market valuations that exceeded $1 billion, Henney said.

But even during that great wave of optimism about the power of new genetic engineering technologies for creating new drugs, there were prominent skeptics. Henney told the story of how he and Gillis had a meeting in the early days of Immunex with “one of the doyennes” of the Seattle investment community, whom he didn’t name. Henney and Gillis told their story with great enthusiasm, and got a rude awakening.

“At the end, I remember him saying, ‘I don’t think it’s a scam, but I won’t introduce you to anybody, either,’” Henney recalled.

Both of them were academic scientists who “had a fair amount of hubris about our self-worth. To be told that what we’re doing was a scam, it wasn’t something I wanted to tell my Mom about,” Henney said.

He added, “It was our welcome-to-the-NFL moment.”

Still, the investor taking that position would have been right for the first 15 years or so. It took 17 years from Immunex’s founding before it struck gold with etanercept (Enbrel), a drug for autoimmune diseases that now generates more than $7 billion a year in worldwide sales for Amgen and Wyeth. It took much longer, and hundreds of millions of dollars more than industry pioneers like Henney thought it would, to create blockbuster drugs like that. “If you had thought about that beforehand, nobody would have given us any money at all,” Henney said.

But they got the money, and learned a lot of lessons along the way. In his talk last week, Henney distilled them into six hallmarks of a successful biotech that investors should look for, along with five red flags to watch out for as well (which I’m going to save for another story).

So, here are the six hallmarks to look for in a successful biotech …Next Page »

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Seattle-based Dendreon recruited some serious industry experience in marketing and manufacturing today to its board of directors. The company has added Ian Clark, the CEO of Roche’s Genentech unit and former head of Genentech’s commercial operations, along with Pedro Granadillo, a former senior vice president of manufacturing at Eli Lilly, according to two separate regulatory filings released late Friday.

Clark was in charge of commercial operations at Genentech when it was the largest U.S. maker of cancer drugs, marketing blockbusters like bevacizumab (Avastin), and trastuzumab (Herceptin). He is now CEO of the Genentech unit in South San Francisco that’s owned by Switzerland-based Roche. Granadillo, who also has extensive experience in human resources, also serves on the boards of Haemonetics, Nile Therapeutics, and Noven Pharmaceuticals, according to a profile page on the Forbes website.

Dendreon (NASDAQ: DNDN) is seeking to add expertise throughout its organization as it hopes to win FDA approval and start marketing its first product, sipuleucel-T (Provenge) for men with terminal prostate cancer. The company’s stock has boomed this year, and it has raised $221 million from investors, after showing that this first-of-its-kind immune-boosting treatment was able to help men live longer with minimal side effects. The company has also gone on a hiring binge this year as it seeks to make sure it has the talent to make the most of this drug, recently saying it plans to double in size to about 600 employees.

Dendreon lists seven board members on its website, and there were no associated filings that said anyone has vacated a seat. A spokeswoman for Dendreon didn’t immediately respond to a request for comment about why the company added the new directors.

Both Clark and Granadillo were awarded 4,994 shares in the company in connection with joining the board, according to SEC filings. The shares are worth about $137,000 at today’s closing stock price of $27.48.

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The biotech industry enjoys a lot of political clout in Washington D.C. and state capitals largely because it attracts highly educated people into high-paying jobs. But I spotted an intriguing bit of data this week that suggests biotech workers aren’t really taking home nearly as much money as some of the industry’s lobbyists and political allies would like people to believe.

The median salary for biotech jobs in the Pacific Northwest was $60,520 in 2008, according to data collected by Phil Ness, the owner of Seattle-based Info.Resource, a company that operates websites for biotech associations in all 50 states. That’s nowhere near the $81,499 average annual salary figure for Washington state biotech workers that was touted earlier this spring by a group sponsored by the Pharmaceutical Research and Manufacturers of America (PhRMA).

The higher of the two wage figures, as you might expect, gets a lot more publicity from industry advocates, although Gov. Chris Gregoire has recently started backing off on her public statements about biotechnology as a regional catalyst for high-wage jobs. Even so, her Web site still states, “This industry will offer many Washingtonians family-wage jobs while finding cures for some of the world’s most dreaded diseases.”

The savvy reader will notice immediately that I’m comparing two different surveys with different methodologies, which is an apples-and-oranges comparison. Fair point. But it’s still worth hearing about the Ness study, especially since the higher salary figure tends to get so much more mainstream press attention.

Ness used a simple model to arrive at his median salary figure of about $60,000. His websites provide links to open job listings in Washington, Oregon, Idaho, Montana, and the Canadian provinces of British Columbia and Alberta. He asked the employers in those places to voluntarily provide him an actual salary range of the open job, as long as he kept the employer’s name blinded in the analysis. Only a small percentage—less than 10 percent—agreed to provide the range, but when they did, Ness settled on the midpoint within the range that was provided, and pooled together data from 360 actual job openings. Although his survey cast a wide net across states and provinces, about 90 percent of the openings were in Washington state, Ness says.

He also found some interesting disparities in terms of what skills are in demand, and which ones aren’t. Essentially, people with more commercial skills, like quality assurance for manufacturing, can make significantly more than entry-level scientists with pricey graduate school educations. Here are some average salaries Ness found for common biotech jobs:

—Clinical research associate—$69,278 …Next Page »

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Dendreon watchers got all hyped up in anticipation of the company’s analyst day in New York, but there really wasn’t much in the way of news. So I dug up some other stuff for your reading enjoyment.

—The biggest piece of news out of Seattle-based Dendreon’s analyst day was that the company says it plans to file its application by mid-November to seek approval from the FDA to start selling Provenge in the U.S. Dendreon (NASDAQ: DNDN) had already said this was coming in the fourth quarter, so this added specificity is nice, but not exactly big breaking news. But the company is still hiring quite a bit, which you can read about how much here in case you missed it.

—Dendreon’s former CEO Christopher Henney has moved on to other endeavors, one of which involves being the chairman of AVI Biopharma (NASDAQ: AVII). So it shouldn’t have been a big surprise when this developer of RNA-based therapies recently moved headquarters from Portland, OR to Bothell, WA, under Henney’s watch. I checked out the company’s new digs in person with AVI Biopharma CEO Les Hudson, who’s enjoying his new surroundings, even while he’s trying to find out how to run the building’s HVAC system.

—ZymoGenetics (NASDAQ: ZGEN) released some bad news first thing Monday morning in an SEC filing, in which it said its partner, Merck KGaA, pulled the plug on a couple of trials for an experimental drug for multiple sclerosis called atacicept. This is just the latest in a string of setbacks for this drug, which was once the shining star in the Zymo pipeline.

—Charlotte Hubbert, a Kauffman Fellow at Seattle-based Accelerator, wrote a downright funny and insightful guest editorial for the Xconomist Forum on her journey from academic science to the supposed “dark side” of biotech and venture capital. I can only imagine what her parents think about the remark she made about hosiery.

—Fate Therapeutics, the La Jolla, CA-based company that counts Xconomist and University of Washington stem cell scientist Randall Moon as one of its big-name co-founders, has been on a growth spurt over the past year, as I discovered on an in-depth tour of the company’s labs.

—Redmond, WA-based Spiration, the maker of a minimally invasive device for treating chronic lung diseases, raised another $7 million in debt financing to keep supporting its work to commercialize the device in Europe and complete a pivotal trial in the U.S.

—Larry Corey, a scientist at the Fred Hutchinson Cancer Research Center and world leader in the quest to develop an HIV vaccine (he’s also an Xconomist), weighed in this week with an editorial about why he’s encouraged by findings of a clinical trial of a vaccine that protected about one out of every three people tested.

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This week featured the best run of positive news for Seattle biotech I’ve seen this year.

—Seattle-based Calypso Medical Technologies raised the biggest venture capital round of the year in the Northwest, pulling in $50 million. Calypso, which sells a device that pinpoints radiation therapy for prostate cancer so it doesn’t go off track and cause impotence, is gearing up for an international commercial push and expanded uses against other tumor types. Xconomy got the scoop from CEO Eric Meier on what the company did to convince the VCs to open up their checkbooks.

—Biotech legend Leroy Hood has secured $7.5 million in venture capital out of a $30 million offering, to launch a new company that aims to fulfill his vision for P4 medicine—predictive, preventive, personalized, and participatory. This company, Integrative Diagnostics, isn’t saying yet who invested or exactly what it aims to accomplish, but Hood told me in an interview a year ago that it seeks to create machines that can spot signs of cancer in a pinprick of blood, at the earliest and most treatable stage of disease.

—Novo Nordisk is the world’s largest maker of insulin for diabetes, and it is now looking to Seattle in a big way to help it forge the new frontiers of autoimmune disease. Novo CEO Lars Rebien Sorensen told a fascinating little story about how Novo’s short-sightedness three decades ago led it to Seattle, and how the company hopes to get ahead of the curve now by setting up its own research center here, and forming partnerships with the world-class scientists who live here.

—Seattle’s biotech companies, as a group, are in much better financial shape than they were at the beginning of the year. Essentially, 10 of the 12 companies Xconomy follows in Seattle are in better shape now than they were on New Year’s Day, based on our analysis of quarterly financial reports and some more recent news. This is a much better performance than I see in San Diego, where 15 of the 27 public companies we follow there were in a stronger cash position on June 30, according to the latest batch of quarterly SEC filings.

—Gov. Chris Gregoire was rumored to skip out on her own Governor’s Life Sciences Summit this year, apparently because she’s so busy working with power brokers in DC on healthcare reform. But she showed up in Seattle for the summit anyway, and insisted she remains “committed” to the state’s Life Sciences Discovery Fund, mainly for its ability to produce promising new treatments for disease.

—I sat down for an extensive interview with Steve Gillis, one of the founders of the biotech industry both nationally and in Seattle. Gillis talked about how life is different for him as a venture capitalist at Arch Venture Partners, and how he hopes to make a broad impact on a new generation of entrepreneurs, and help them avoid some of the mistakes he made in his past life as a co-founder of Immunex and Corixa.

—Dendreon (NASDAQ: DNDN) has been pretty quiet for the past couple months, but it is showing off its game plan for the commercial rollout of sipuleucel-T (Provenge) today on Wall Street. I previewed this event with five key questions the Seattle-based company will have to answer.

—One prominent veteran of Dendreon, former chief medical officer Rob Hershberg, provided an in-depth update on his latest venture, VentiRx. Hershberg has become an evangelist for the lean-and-mean virtual company model that’s in vogue, and talked about how much progress his little band of 12 has made with two drugs in early-stage clinical trials.

—Of course, no week can go by with all the news being good. One disturbing trend we spotted was that some of the Seattle companies that have been fortunate to raise the most venture capital this year have still been cutting jobs or putting a lid on hiring. That’s something to consider when you hear the economists talk about the “jobless recovery.”

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Dendreon has been saying for months that it plans to file its amended application to the FDA in the fourth quarter, and today it got a little more specific, saying it expects to complete that job by mid-November. That means it should be on target to start selling sipuleucel-T (Provenge) to U.S. prostate cancer patients by the middle of 2010.

That was the closest thing Seattle-based Dendreon (NASDAQ: DNDN) released to news at a relatively ho-hum analyst day this morning in New York. The company is now taking some investors on a tour of its nearby New Jersey factory, where it uses its unique process to create a personalized drug that “teaches” a patient’s own immune system to recognize and fight prostate cancer cells.

Dendreon did release a few more kernels of information this morning, but it didn’t have anything big to say about a commercial partner in Europe or the price projection for its drug—and it didn’t have any new head of sales and marketing to introduce. Those are a few of the big questions on the minds of investors, which the company will surely have to address some other time. The stock was down this morning around 5 percent while the company delivered its presentation.

Here were a few other notable items the company disclosed this morning.

—Dendreon has 290 employees now and will double headcount in time for the Provenge market introduction, said Greg Schiffman, the company’s chief financial officer.

—The company’s New Jersey factory will have room to make $500 million to $1 billion worth of Provenge annually, while the Atlanta and Los Angeles area factories will be smaller, each with the capacity to produce $375 million to $750 million worth of the drug per year.

—Dendreon has a goal of moving forward one new Provenge-like candidate each year, for other cancers, to prove that Provenge isn’t a one-hit wonder—and that it really has a demonstrated an immunotherapy platform approach to cancer. The company plans to go ahead with another clinical trial of lapuleucel-T (Neuvenge) for bladder cancer in late 2010 or early 2011.

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Dendreon shocked the cancer research world back in April, proving for the first time in a major clinical trial that a drug which actively stimulates the immune system can be effective against tumors. Now the Seattle-based company has to wrestle with a whole new set of challenges to make sure it fully exploits the potential of its drug, sipuleucel-T (Provenge), which most analysts say has potential to easily top $1 billion in annual sales for patients with prostate cancer.

The company (NASDAQ: DNDN) has put off answering a few important questions about how it plans to accomplish that via manufacturing, partnering, pricing, and marketing strategy until its analyst day today in New York. I will not be attending this meeting, but I thought it would be useful, for Dendreon watchers, to provide a bit of a preview on the key issues the company will have to address at this forum. Investor expectations are running high, as the company touched a 52-week high of $30.42 a share on Tuesday.

Here are some key issues the company will be prepared to discuss:

—FDA Timelines. While Dendreon clearly reached its goal of helping men live a median of four months longer than a placebo in its trial of 512 men with prostate cancer, it still needs to put together an airtight application to win FDA approval to start selling Provenge in the U.S. Dendreon has said it plans to gather all the data for its amended application, and turn the whole thing in to the FDA in the fourth quarter of this year. Since Dendreon already filed an application based on earlier data in 2007, and it really only needs to add the database from the latest big trial, this process shouldn’t drag on into 2010.

Dendreon has said it expects a six-month review of its Provenge application, so investors will set their calendars for that future date the minute Dendreon files its application. If Dendreon turns in its application in October, it could get FDA approval as soon as March.

—Manufacturing. Putting together an airtight application to the FDA has to be a top priority, but manufacturing is right up there on the list. This is especially critical for Dendreon, because …Next Page »

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Seattle’s biotechnology industry is in significantly better financial shape than it was six months ago. The turnaround has been nothing short of amazing, thanks to a frantic run of dealmaking, cost-cutting, and remarkable clinical trial results that have made local companies some of the best-performing stocks this year on the NASDAQ.

Indeed, while our first analysis of the Northwest’s public life sciences companies, published last November, showed that six of 10 companies had less than a year’s worth of cash on hand at that point, only one—Seattle-based Northstar Neuroscience—actually folded.

And when we took a look at the most recent quarterly reports filed with the Securities and Exchange Commission by the 12 companies we’re following right now (11 of them public, one preparing for its IPO), we found that seven of them were actually in a stronger position at the end of June than they were at the start of the year. What’s more, three of the companies that were classified by this analysis as worse off (Seattle-based Trubion Pharmaceuticals and Targeted Genetics and Bothell, WA-based OncoGenex Pharmaceuticals) have recently struck partnerships or completed financings that aren’t yet reflected in the federal filings, but have clearly improved their financial futures.

Read on for a complete rundown of all 12 companies, listed in alphabetical order. To purchase a much expanded version of this report, in PDF format, click the “Add to Cart” button below. The expanded version, available for $95,* includes an assessment of each company’s financial position at the end of June compared to six months earlier, the projected length of time it can survive on its existing cash reserves, and an analysis of the strategic moves it has made to stay afloat in the current environment. Click here to see a sample entry. *Price is subject to change without notice.

We intend to repeat this analysis regularly to monitor the financial health of the life sciences companies we follow in San Diego, Seattle, and Boston. Please send feedback to editors@xconomy.com.

AVI Biopharma (NASDAQ: AVII)
Cash on hand: $20.2 million
Related Xconomy coverage:
“AVI Biopharma Bolts from Portland to Seattle to Tap Biotech Talent”
“AVI Biopharma Out to Reinvent Itself, Making RNA-based Drugs for Ebola and Other Nasty Things”
“Ebola Fighter AVI Biopharma Gears Up for Biodefense Contracts”

Cell Therapeutics (NASDAQ: CTIC)
Cash on hand: $12 million
Related Xconomy coverage:
“Cell Therapeutics Teeters on the Brink as Cash Runs Out on Promising Cancer Drugs”
“Cell Therapeutics Taps Stock Market Again, Seeks $40M or More”
“Cell Therapeutics Files Cancer Drug Application, In Nick of Time”
“Cell Therapeutics Lymphoma Drug Boosts Remissions, Shares Boom”
“Cell Therapeutics Reports Severe Cardiac Events in Drug Trial”
…Next Page »

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Somebody forgot to tell the Northwest biotech community this is the height of vacation season. Our pages this week were packed with stories on financings, clinical trials, exclusive interviews and more.

—Rick Klausner, the former leader of the National Cancer Institute and the global health wing of the Bill & Melinda Gates Foundation, provided some intriguing insights on cutting-edge biology that he’s been following in his new job as a venture capitalist. Deep into this story, Klausner explains why he thinks Seattle-based Dendreon (NASDAQ: DNDN) is just scratching the surface of what immune-stimulating therapies will be able to do in the future.

—Targeted Growth gets its share of publicity for its camelina seeds that are used to make jet fuel, but further in the future, Targeted Growth envisions making a bigger impact with genetically modified algae that can be made to compete on price with petroleum. We got the story from a conversation with Targeted Growth’s Margaret McCormick.

—Seattle-based Cell Therapeutics (NASDAQ: CTIC) raised about $40 million last month, and lo and behold, this week it found yet another lone institutional investor willing to wager another $30 million that this company has brighter days ahead. Cell Therapeutics has asked the FDA to approve its experimental pixantrone therapy for patients with non-Hodgkin’s lymphoma.

—PATH, the Seattle-based nonprofit that works to improve health in poor countries, won the closest thing the humanitarian field has to the Nobel—the Conrad N. Hilton Humanitarian Prize. PATH president Chris Elias envisions using the $1.5 million cash award as seed capital for a five-year, $25 million plan to support innovative new global health technologies, and to support geographic expansion in Africa.

—Amgen scientists in Seattle had something to celebrate a week ago, but just one week later the picture has gotten a little muddier. Earlier, we reported that the first big prospective clinical trial confirmed the company’s hypothesis that panitumumab (Vectibix) can slow the spread of tumors for colorectal cancer patients with normal forms of the KRAS gene (and that the drug doesn’t help those with mutated forms). This week a second clinical trial in a sicker patient population found the same pattern with respect to slowing the spread of tumors, although the treatment didn’t actually help normal KRAS patients live any longer.

—Seattle Genetics put the finishing touches on its big stock offering, which ended up generating a grand total of $136 million. The Bothell, WA-based developer of cancer drugs (NASDAQ: SGEN) said its underwriters exercised all their options to buy an extra 1.65 million shares. JP Morgan and Goldman Sachs were joint book-running managers of the offering. (Apparently Seattle Genetics saw fit to use at least a little money to spiff up its website, too.)

—Seattle-based biotech consultant Stewart Lyman submitted another intriguing editorial for the Xconomist Forum on why Big Pharma companies have many reasons to make biologic drugs. Some of this is about science, but there’s politics and business to consider, too.

—Mukilteo, WA-based CombiMatrix (NASDAQ: CBMX), the maker of genetic analysis tools, is looking to hire an investment bank to consider whether the time is right to sell the company. Back in June, after it got crushed by bigger competitors selling DNA microarray tools, I profiled the company’s attempt to reinvent itself around cancer diagnostics.

— Light Sciences Oncology isn’t just about oncology anymore. The Bellevue, WA-based company said it has started enrolling patients in a clinical trial to see if it can treat benign prostatic hyperplasia, otherwise known as an enlarged prostate. The company’s technology uses light-emitting diodes, threaded into localized tissue, to activate a drug within a certain wavelength.

—Seattle-based Sound Pharmaceuticals, the developer of treatments for hearing loss, said this week it nailed down a $2.1 million contract from the U.S. Navy to continue developing its lead therapy. It’s the third grant the company has gotten from the Navy since 2005, and will enable it to beef up its pipeline of experimental treatments, says CEO Jonathan Kil.

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Quite a few publicly traded biotechs released quarterly financial statements this week, but we arranged some fascinating conversations with entrepreneurs and researchers to offset the necessary number-crunching.

—Seattle Genetics is having a breakout year, and one sure sign is that it has enrolled cancer patients in a clinical trial much faster than the industry norm. That was one big reason why the Bothell, WA-based biotech company (NASDAQ: SGEN) was able to sell 11 million new shares to investors this week, in an offering that raised a cool $118 million. Usually these offerings dilute the value of existing shares and drive down the stock price, but Seattle Genetics actually climbed 5 percent the following day.

—Amgen has spent five years researching biomarkers that might provide clues as to which cancer patients will respond to a drug, and which won’t. Much of the “personalized medicine” work, performed at research centers in Seattle and Cambridge, MA, was validated last week in the first big prospective clinical that showed patients with a normal form of the KRAS gene were more likely to benefit from taking panitumuab (Vectibix) than those with a mutated form.

—I had a fascinating conversation this week with Bonnie Ramsey, one of the world leaders in research and treatment of cystic fibrosis. Ramsey, who’s affiliated with Seattle Children’s Hospital and the University of Washington, talked in great depth about the surprising extent to which research has improved the outlook for CF patients over the past 30 years, and the significance of an emerging treatment from Cambridge, MA-based Vertex Pharmaceuticals (NASDAQ: VRTX).

—Stephen Friend is best known in Seattle as the founder of Rosetta Inpharmatics, and now he’s back in Seattle, dreaming big again. Friend described his vision, and progress during the early days, at the nonprofit genomics collaborative he’s leading called Sage Bionetworks.

—We published a couple of guest editorials this week that are of interest to biotechies. The first was from Jim Thomas, a vice president at Amgen in Seattle, on how he says lawmakers can provide a way for “biosimilars” to enter the marketplace without undermining incentives for companies like his to develop innovative new medicines. The next piece on national policy was from Ryo Kubota, CEO of Bothell, WA-based Acucela, who advised policymakers not to reform healthcare in any way that dampens the entrepreneurial spirit that makes America the best place for developing new drugs.

—Seattle-based Dendreon is starting to branch out across the U.S. map. The company (NASDAQ: DNDN) confirmed this week that it is planning to add two new manufacturing plants for its prostate cancer drug, sipuleucel-T (Provenge) in the greater Atlanta area, and in Orange County, CA. The company also reported that it had $287 million in cash and investments when the second quarter ended on June 30, helped along by a $227 million infusion it got from investors after Provenge passed its pivotal clinical trial in April.

—AVI Biopharma, the RNA-based drug developer that’s moving its headquarters from Portland, OR, to Bothell, WA, said it ended the second quarter with $20 million in cash. AVI (NASDAQ: AVII) has been strengthening its financial position for months, and predicted that it will pull together more funding this year from governments and other sources.

—Seattle-based Oncothyreon (NASDAQ: ONTY) said it ended June with $22.7 million in cash, which—hold on here for a double-take—was actually $3.5 million more than it had at the beginning of the year. The company has fattened up its balance sheet with another $14 million through a stock offering this month, giving it more breathing room in its quest to develop cancer drugs.

—The financial prospects looked a lot dimmer this week for Seattle-based Targeted Genetics (NASDAQ: TGEN). The gene therapy stalwart, which has been warning of its possible demise since May, said this week that it “must raise additional capital” if it is going to remain in business beyond the end of this month.

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