TEDMED had Martha, Goldie, and other celebrity speakers, but San Diego-based Amylin Pharmaceuticals broke this week’s big news when it signed up a big Japanese partner to develop its line of obesity drugs. It’s all part of your regular dose of San Diego biotech news, and it’s ready now:

—Amylin Pharmaceuticals, the San Diego-based diabetes drug specialist, announced that it has formed a partnership with Japan’s Takeda Pharmaceuticals, which agreed to carry most of the development costs for Amylin’s weight-loss drugs. In return, Takeda gets a worldwide exclusive license to eventually commercialize Amylin’s experimental obesity drugs, including the combination of pramlintide and metreleptin, and davalintide.

—After a five-year hiatus, TEDMED founder Richard Saul Wurman, and president, Marc Hodosh (who also is an Xconomist), brought the conference on medical technology, entertainment and design to San Diego’s Hotel del Coronado. TEDMED announced during the conference, which included presentations by Boston Scientific co-founder (and Xconomist) John Abele, Martha Stewart, and Goldie Hawn, that the conference will return to the same location next October.

—I only had time to attend a fraction of the presentations at TEDMED last week. One of my favorites talks, though, was delivered by Bill Davenhall, who leads the health and human services marketing team at ESRI, the Redlands, CA, giant in geographic information systems. Davenhall talked about the importance of including patients’ “place histories” as part of their medical records and raised an interesting question: Will the electronic health record systems being created today have the capability to add data in new categories—such as “geo-medicine”–that aren’t typically included in today’s patient records?

—New York-based Xenomics filed a lawsuit against San Diego-based Sequenom that alleges Sequenom misrepresented the progress in its development of a prenatal test for Downs syndrome. Xenomix says it would not have licensed its patents to Sequenom had it known the truth.

—Denise profiled San Diego-based Sirigen, an early stage medical diagnostic company that is developing technology that uses light-emitting polymers to detect bits of DNA. Sirigen founder Brent Gaylord developed the technology at UC Santa Barbara, extending the significance of UCSB physicist and Nobel laureate Alan Heeger’s discovery of conductive polymers.

—The FDA told San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN) and its partner Eli Lilly the companies can now market exenatide (Byetta) as a frontline, standalone therapy for diabetes. The drug was previously approved for use with other drugs, or as a fallback option when other tretments failed.

—Vertex (NASDAQ: VRTX), the Cambridge, MA, biotech with operations in San Diego, said the latest trial of its telaprevir treatment for hepatitis C was able to attain the clinical definition of a cure in more than 80 percent of patients who got the drug. The finding is part of the mounting evidence Vertex is gathering on its quest to develop the first-of-its-kind protease inhibitor for the chronic liver disease.

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San Diego-based Amylin Pharmaceuticals, the dark horse in the race to develop a new breed of weight-loss drugs, has struck a partnership with Japan-based Takeda Pharmaceuticals that could be worth more than $1 billion over time if the drug reaches certain goals in development and in the marketplace.

The agreement calls for Amylin (NASDAQ: AMLN) to hand a worldwide exclusive license to Takeda to co-develop Amylin’s experimental obesity drugs, including the combination of pramlintide and metreleptin, and davalintide. In return, Amylin will get $75 million in upfront cash, milestone payments based on clinical and commercial goals that could top $1 billion, and royalty payments worth a double-digit percentage of worldwide sales if the Amylin drugs ever make it onto the market.

This is a big deal for Amylin, which has been toiling in the shadow of three other companies trying to blaze a new trail in the treatment of obesity this year—San Diego’s Arena Pharmaceuticals, San Diego-based Orexigen Therapeutics, and Mountain View, CA-based Vivus. While Amylin has attracted less attention, and it is a little further behind the others in the race to the market (as I pointed out in a September feature story), it may have the most effective drug of all. Amylin is betting it has found a way to breathe new life into one of the most overhyped biotech drugs of the 1990s—Amgen’s leptin—by packaging it in combination with its own pramlintide drug for diabetes. While the Amylin drug needs to be taken by injection and its rivals are oral pills, it has shown some strong promise that it can help people shed pounds in clinical trials, and the market has big potential. About two-thirds of people in the U.S. are considered overweight or obese, according to estimates from the Centers for Disease Control and Prevention.

“Amylin and Takeda are excited about working together to address the significant unmet need for the millions of patients who need better solutions to manage obesity,” said Amylin CEO Dan Bradbury, in a statement.

Data on the Amylin drug combo is still preliminary, but it is encouraging. The company looked at a variety of doses in a study of 608 overweight or obese patients, and has reported preliminary results after a little more than six months of observation. Patients on the highest doses, and who had body-mass indexes of less than 35, lost 11 percent of their body weight on the Amylin drug combo, compared with 1.8 percent average body weight loss in the placebo group.

Still, there are caveats in the data. Patients who are more severely overweight, with a body-mass index of greater than 35, saw some benefit on the Amylin combo, but not as much as less-obese patients. And the Amylin combination still has to be injected twice daily, while other drugs can be taken as oral pills, so it remains to be seen how many injections obese patients will be willing to put up with.

But apparently Takeda liked what it saw enough that it made some big commitments to the Amylin pipeline, which is interesting given that none of the other three biotech companies with weight-loss drugs have yet been able to rope in a Big Pharma partner. Under the terms of the deal, Amylin will be responsible for all development work through Phase II in the U.S., while Takeda will handle pivotal trials in the U.S., and all phases in the rest of the world. Takeda will pay for 80 percent of the development expenses in the U.S., while Amylin picks up the rest in the U.S. and Takeda pays for all development costs outside the U.S. Takeda will pay for all of the commercialization costs worldwide, and Amylin will have an option to co-market the two lead drugs or any follow-ons that contain their active ingredients.

Takeda and Amylin are familiar with each other as contenders in the diabetes drug market. Amylin gets 90 percent of its revenue from exenatide (Byetta) for diabetes, while Takeda’s biggest profit driver is pioglitazone (Actos) for diabetes. Since many diabetic patients also struggle with obesity, both companies have had their eye on expanding into that larger market for some time.

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San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN) and its partner Eli Lilly got some positive news late Friday from the FDA. The agency now says the companies have clearance to market exenatide (Byetta) as a standalone therapy for diabetes, which means doctors won’t need to combine it  with other common drugs, or hold it in reserve as a second option in case other drugs fail.

Exenatide is Amylin’s biggest selling product, generating $678.5 million in revenue last year, accounting for about 90 percent of its sales. An estimated 23.6 million people in the U.S, or almost one out of every 12 people, is estimated to have diabetes, so the expanded approval of Amylin and Lilly’s drug may allow the companies to capture a larger percentage of patients. The one downside is that exenatide currently requires twice-daily injections, so it’s hard to say how many new patients who are eligible for the drug will opt to take it instead of cheaper and more convenient oral pills.

“The expanded indication gives physicians the option to prescribe Byetta as a first-line treatment, increasing the number of patients who may benefit from the medication and providing an opportunity to treat patients with Byetta earlier in the disease,” said Orville Kolterman, Amylin’s senior vice president of research and development, in a company statement. “Type 2 diabetes is a complex disease, so it is essential that healthcare professionals and their patients have a wide array of treatments that can effectively control blood glucose levels.”

A more important milestone for Amylin and Lilly will come in March, when the FDA has a deadline to complete its review of a once-weekly injectable version of exenatide. That’s the next version of the diabetes franchise at Amylin that analysts say has blockbuster sales potential.

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San Diego’s Novocell has received a disease team award totaling $20 million from the California Institute for Regenerative Medicine (CIRM) to fund work on its cell therapy for type 2 diabetes. The team includes scientists at the University of California, San Francisco, which will receive $2.8 million. Novocell’s research involves transforming embryonic stem cells into insulin-secreting beta cells that can be implanted into patients as an alternative to insulin injections. Novocell, a venture-backed company, told CIRM it would be ready to begin clinical trials in three years, but CIRM scientific reviewers said a more realistic estimate was four years.

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From Australia comes word that San Diego-based Amylin Pharmaceuticals’ biggest drug, exenatide (Byetta), has been caught up in a controversy over a diabetes report co-sponsored by Amylin’s marketing partner, Eli Lilly & Co.

The study, compiled by researchers at the University of Canberra’s National Centre for Social and Economic Modelling (NATSEM), warned that 1.6 million Australians would be diagnosed with diabetes by 2050, according to an account in The Australian. Over the next 40 years, according to the study, people with type 2 diabetes would have 270,000 heart bypass operations, 250,000 strokes, and 750,000 cases of kidney complications.

Although the study mentioned exenatide, the generic name for Byetta, only in a footnote, it asserted that drugs in the same class as exenatide could produce greater health improvements for diabetic patients than exercise or existing drugs. And that seems to have sparked a bit of a controversy Down Under.

The newspaper reports that some experts were concerned that the report was part of a marketing push to win public subsidies for the medication. Australia’s Public Benefits Scheme recommended the drug for inclusion last year, but the federal government has yet to respond. This means exenatide is available only on private prescription at a relatively high cost. Consequently, it is not widely used.

NATSEM defended the integrity of the research, saying the projected increase in type 2 diabetes was a legitimate concern. Lilly was one of seven organizations to support the research. “As an independent research organization, the last thing we want to do is compromise our position, and for people to regard the position we are taking as biased towards the funding body,” NATSEM research director (health) Laurie Brown told the newspaper. The account came to my attention through the Pharmalot blog.

Lilly is responsible for developing and commercializing Amylin’s diabetes drug outside the U.S. The partnership agreement calls for Lilly to pay Amylin a royalty on non-U.S. sales after a one-time cumulative gross margin threshold amount is met. Amylin told investors in June that it expected to begin receiving royalty payments in 2010. Operating profits from exenatide sales in the U.S. are shared equally by the two companies. Amylin reported exenatide sales of $503.9 million for the first nine months of 2009, compared to $515.9 million during the same period a year earlier.

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A quiet epilogue to last spring’s heated Amylin proxy battle was the lead story in an otherwise slow week for San Diego life sciences news.

—Eastbourne Capital, which won a partial victory in a proxy fight against Amylin Pharmaceuticals earlier this year, sold its entire stake in the San Diego diabetes company. The San Rafael, CA-investment firm owned 12.5 percent of Amylin (NASDAQ: [[ticker: AMLN]]) during the proxy contest. One of its three nominees, Kathleen Behrens, was elected to the Amylin board.

—San Diego ranked second last year to Cambridge, MA, in total venture capital investment in medical technology firms, according to a report from Ernst & Young. San Diego saw $151 million invested in 15 deals, compared to $169 million in nine deals for Cambridge. E&Y said 2008 was tough for medical device companies, in part because of the economy and concerns about health care reform. Southern California, which E&Y defines as San Diego and Orange County, has 82 venture-backed and 41 public medical technology companies, one of the highest concentrations in the country.

—Illumina (NASDAQ: ILMN) acquired worldwide rights to commercially develop Orchid Cellmark’s (NASDAQ: [[ticker: ORCH]]) single base nucleotide extension technology for forensics and diagnostics. Under the deal, Illumina paid Princeton, N.J.-based Orchid $850,000 up front and agreed to pay $150,000 in milestone payments.

—Avanir (NASDAQ: AVNR), which is located just across the San Diego border in Orange County, said its experimental drug for treating unprovoked emotional outbursts reached secondary endpoints in a clinical trial of people who had either multiple sclerosis or amyotrophic lateral sclerosis. Data presented at the annual meeting of the American Neurological Association in Baltimore showed that patients diagnosed with pseudobulbar affect experienced a statistically significant improvement in their mental states. Avanir previously announced that the drug dextromethorphan/quinidine, or DMQ, met the primary endpoint of reducing PBA symptoms—episodes of uncontrollable laughter or crying—by a clinically meaningful 30 percent. The drug could receive FDA approval during the second half of 2010.

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[Updated: 10/9/09, 3:51 pm Pacific] Eastbourne Capital, one of the powerful dissident shareholders who won a partial victory in a proxy fight this spring against San Diego’s Amylin Pharmaceuticals, has sold its entire stake in the company, according to a regulatory filing released late today.

Eastbourne unloaded all of its holdings in Amylin (NASDAQ: AMLN) about four months after one of its nominated directors, Kathleen Behrens, was elected to the company’s 12-member board, along with Alex Denner, a nominee put forward by billionaire shareholder activist Carl Icahn. San Rafael, CA-based Eastbourne, led by founder and portfolio manager Rick Barry, held a 12.5 percent stake in Amylin during the spring proxy contest. Eastbourne had nominated three directors to the Amylin board, while Icahn had nominated two more, in their quest to shake up the board.

Today’s filing doesn’t say what price Eastbourne sold its shares at, or how much it generated in the stock sales, but Amylin closed this week at $14.20, not far from the company’s 52-week high of $15.90. Amylin, the developer of a novel treatment for diabetes, came under fire from Eastbourne and Icahn, who argued that it underperformed when compared to its peers, failed to control spending, and operated under unfavorable partnership terms with drug giant Eli Lilly.

A spokesman for Eastbourne declined to comment on the stock sales, and so did a spokeswoman for Amylin.

[Updated with added context from my colleague Bruce Bigelow.]

Eastbourne’s Barry indicated some frustration to Bruce in early August about the board’s slow pace in choosing a new chairman after the new directors were elected in June. Later in August, the board named former Novartis CEO Paulo Costa as chairman.

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The first half of this year, Amylin Pharmaceuticals CEO Dan Bradbury was absorbed in the closest thing corporate America has to political warfare—a boardroom challenge from billionaire Carl Icahn and another unhappy shareholder, Eastbourne Capital. The second half has been more about doing the basics Amylin (NASDAQ: AMLN) must do if the San Diego diabetes specialist is ever going to enter the top tier of big, profitable biotech companies.

Now that the dust appears to finally have settled on the proxy fight—new director Paulo Costa was elected the chairman last month—Bradbury has been back hammering away at the company’s need to make sure it nails the potential blockbuster diabetes drug in its pipeline. Yesterday, he was happy to talk about it by phone while he visited Amylin’s new biotech drug factory in West Chester, OH.

The importance of Amylin’s new factory to its future is hard to overstate, so there’s good reason for the CEO to drop in and make sure the troops keep their collective eye on the ball. Amylin and its partner Eli Lilly have made a $500 million investment in the factory, dating back to December 2005, in order to meet market demand for what they hope will be the next big thing for diabetes, exenatide once-weekly. This plant, which now has 250 employees, is getting ready to undergo an FDA inspection in the next six months as Amylin and Lilly seek clearance to start selling the drug in the U.S. It’s the only place in the world with the expertise, and capacity, to meet the first three years of market demand for exenatide once-weekly, which will seek to grab big market share among the 25 million people in the U.S. with diabetes.

To hear Bradbury tell the story, this is the time to execute on the fundamental game plan with things like manufacturing, and not for Monday morning quarterbacking about whether the coach is calling the right plays.

Dan Bradbury

“Certainly in the first half of the year there were a lot of distractions for me. I have more time now to focus on actually running the business as opposed to board issues,” Bradbury says, during a break from meetings with Amylin’s Ohio staff. “It’s all about execution at the moment.” He adds,”We need to make sure everyone is fully on board with where we are as a company. The launch of exenatide once-weekly next year is critical to the future of the company.”

Why does getting this new drug right matter so much? Amylin generates almost 90 percent of its revenue from exenatide (Byetta), a novel peptide drug that was first approved by the FDA in April 2005 for patients who weren’t able to control their blood sugar with existing meds. The drug has gone on to become a commercial success, generating $678.5 million in sales last year, just its third full year on the market.

But the existing product has its limits, partly because it must be injected twice-daily. So Amylin and Lilly have sought to make this drug a lot more appealing to millions of patients by obtaining a license to drug delivery technology from Cambridge, MA-based Alkermes (NASDAQ: ALKS). That technology encapsulates the same peptide in a polymer microsphere that slowly dissolves in the bloodstream, so patients only need to get stuck with a needle once a week, not twice a day.

This new-and-improved drug has generated clinical trial data so far that Bradbury says are good enough to beat the biggest selling drugs in the diabetes market—Merck’s …Next Page »

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Health care reform discussions almost always revolve around health insurance, as if care and insurance are synonymous. Understanding the difference can lead to the delivery of better care for less money, and help break the health care reform logjam in Congress.

An amendment introduced this week by U.S. Senator Maria Cantwell to America’s Healthy Future Act, currently being considered by the Senate Finance Committee, understands the difference. Senator Cantwell’s amendment would provide for coverage in a ‘direct primary care medical home’ plan, provided that plan is coupled with a quality wrap-around insurance program to cover non-primary care services.

What are direct primary care medical homes? They are primary care practices offering patients comprehensive primary care coverage outside of the traditional insurance system. They provide preventive and primary care, as well as chronic disease management and coordination of care with specialists and hospitals. Patients who elect this health care delivery model pay a flat monthly fee (ranging from $49 to $79 at my affiliated practice, Seattle-based Qliance Medical Group) for unlimited access to a primary care physician. This monthly fee covers everything from regular check-ups, women’s health exams, sprained ankles and broken arms to flu shots, and arthritis or diabetes management.

Direct primary care medical homes are already accomplishing what everyone wants health care reform to do:

• Lower costs

• Improve access

• Increase the quality of care

As a nation, we spend over $2 trillion a year on health care. We want to improve access, lower costs and expand quality coverage to the almost 50 million people who are currently uninsured – but we need to find a way to do this without breaking the bank.

There are ways to lower the overall cost of health care. An astonishing 40 percent of every dollar spent on primary care goes toward paperwork – either on the provider or insurer side – to complete the insurance reimbursement process. By eliminating the insurance payment mechanism and forming a direct relationship between a provider and patient, direct primary care medical homes have more resources available to spend on patient care.

The savings allow practices to offer more providers and longer office hours, even opening seven days per week. Smaller patient loads enable …Next Page »

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

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

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

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

Lars Rebien Sorensen

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

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

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

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

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

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

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The competition to create new obesity drugs is usually portrayed as a three-way battle royal among San Diego’s Arena Pharmaceuticals, crosstown rival Orexigen Therapeutics, and Mountain View, CA-based Vivus. Yet there’s one more San Diego biotech company with a drug in an earlier phase of development, Amylin Pharmaceuticals, which may just have the most effective weight loss drug of the bunch.

This is the story of Amylin’s effort to resurrect one of the biotech industry’s notorious flame-outs of the 1990s—leptin. We first told the tale back in October of how Amylin plucked this drug from Amgen’s scrap heap, reimagined it in tandem with its diabetes drug pramlintide (Symlin), and took another shot to see if leptin would ever live up to all that misplaced hype from years ago.

Obesity is one of the nation’s biggest public health problems, and drug companies know the winner in this category might dominate the biggest pharmaceutical market ever. In this couch-loving, junk-food eating culture, health officials now say two-thirds of U.S. adults have become overweight or obese. Yet Big Pharma has been gun shy about this market opportunity since Wyeth was burned by the multi-billion legal payments related to heart damage patients suffered from the fen-phen drug combo in the 1990s, and Sanofi-Aventis failed to win approval two years ago for a drug that was linked to rare cases of suicidal thoughts. If any of the new contenders can assure the FDA their drugs are truly safe, obesity drugs will again become a popular culture tsunami, and will be pitched as a catch-all for illnesses related to obesity—like diabetes, high blood pressure, high cholesterol, and depression.

Leptin was once hailed as the magic bullet for obesity based on rat studies in the 1990s. Amylin (NASDAQ: AMLN) isn’t ready to make any breathless claims yet, but its combination of pramlintide and a genetically modified form called metreleptin has shown far more convincing evidence from human trials that it has discovered something potentially big. It’s also an injection designed to melt away fat in a different way than the others, which mainly hit receptors in the brain that control the body’s feeling of fullness.

“This is a big deal,” says Amylin’s Christian Weyer, the company’s vice president of corporate development for diabetes and obesity.

Data on the Amylin drug combo is still preliminary, but they are encouraging. The company looked at a variety of doses in a study of 608 overweight or obese patients, and has reported preliminary results after a little more than six months of observation. Patients on the highest doses, and who had body-mass indexes of less than 35, lost 11 percent of their body weight on the Amylin drug combo, compared with 1.8 percent average body weight loss in the placebo group.

There are caveats in the data. Patients who are more severely overweight, with a body-mass index of greater than 35, saw some benefit on the Amylin combo, but not as much …Next Page »

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San Diego-based Arena Pharmaceuticals has spent a dozen years, and raised almost $1 billion from investors and partners, to create a new drug that helps millions of people lose weight. This month, the company will find out whether the time and money was well spent.

Arena (NASDAQ: ARNA) plans to unveil results of a 4,008-patient clinical trial in September that will answer vital questions about its experimental pill, lorcaserin. The study, called Blossom, is designed to see whether a high or low dose of the treatment can help patients lose weight over a full year compared to a placebo. The study will also look at whether the Arena drug helps with many ailments that stem from obesity—high blood pressure, cholesterol, high blood sugar, and inflammation, to name a few.

If this clinical trial confirms the findings of another major trial from earlier this year, Arena will bundle the data together and ship it to the FDA by the end of this year for approval to start selling lorcaserin in the U.S. Arena will have a very busy fall, as the results are scheduled for a full presentation at The Obesity Society’s scientific meeting in October. If the results withstand all that public scrutiny, the company hopes to entice a Big Pharma company with the muscle to put together a mass marketing campaign aimed at the roughly two-thirds of people in the U.S. who are considered overweight or obese.

“It’s an exciting time,” says Arena CEO Jack Lief. “It’s been a long time. I can’t wait.”

Any drug for obesity has to have a squeaky clean safety profile because it would potentially be taken by millions of people without an imminently life-threatening condition like cancer.
While the bar is high, obesity represents a potentially gigantic market. The leading treatment on the market is a four-decade old generic amphetamine, called phentermine, that most people avoid because it causes insomnia and high blood pressure.

Arena really has not taken any interim peeks at the clinical trial results while the study is ongoing, so it will have a motherlode of raw data to sift through for the first time. When I spoke with Lief and Arena’s chief scientific officer, Dominic Behan, last week, they were optimistic as usual that this study would confirm the safety and effectiveness they saw earlier this year in the 3,182-patient clinical trial known as Bloom. “We don’t expect any bad stuff to come out, because Bloom was so robust,” Lief says.

Based on those results, and assuming that Blossom provides the added confirmation the FDA wants to see, Arena has clearly been sharpening up its marketing strategy and competitive position against rival treatments from San Diego-based Orexigen Therapeutics (NASDAQ: OREX) and Mountain View, CA-based Vivus (NASDAQ: VVUS).

Both Arena and Orexigen underwhelmed investors …Next Page »

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San Diego’s Metabasis Therapeutics (NASDAQ: MBRX), which warned in May that it might have to cease operations, says it has hired a financial advisory firm to help the company evaluate its strategic options. Metabasis said earlier this week that Mark Erion, the company’s CEO, chief scientific officer, and director, has resigned to join Merck & Co. as a vice president overseeing work on diabetes and obesity. Erion was among a handful of executives remaining at Metabasis, which named chairman David Hale as executive chairman.

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San Diego’s Orexigen Therapeutics looked like just another biotech on the verge of collapse at the beginning of the year. Its CEO was diagnosed with a terminal case of leukemia and soon died. Three other senior executives had just quit. The company halted development of two experimental drugs to conserve cash.

Orexigen (NASDAQ: OREX) sought salvation from a long-running clinical trial, and didn’t find it. Results from a 793-patient study of obese patients on its experimental weight-loss drug fell short of what Wall Street was expecting, and the stock dropped 15 percent the next day to $5.10.

Then Mike Narachi saw something the market didn’t see at the time. Narachi, a former vice president in charge of Amgen’s multi-billion dollar anemia drug business, heard about the Orexigen CEO opening and decided to think about it. He spent six weeks doing his homework on the obesity market, Orexigen’s pipeline, competition, and its clinical trial results.

The market potential is clear. Obesity is one of the nation’s biggest public health problems, with two-thirds of U.S. adults considered overweight or obese. There’s not a lot of great pharmaceutical competition—Big Pharma has been gun shy about this field since Wyeth was burned so badly by the multi-billion legal settlements related to fen-phen heart damage, and Sanofi-Aventis failed to win approval two years ago for a drug that was linked to rare instances of suicidal thinking. In contrast, the Orexigen drug looked like a contender. It was made through a novel combination of two existing drugs with decadelong safety records, with no evidence of heart trouble or suicidal thinking. Orexigen owned 100 percent of the worldwide rights to a drug in the final phase of clinical trials.

He came to a conclusion: I want this job.

“Here was a company that needed leadership for a product in late-stage development that can address a huge unmet medical need,” Narachi says. “Most people misunderstood it. I saw it as a unique opportunity.”

The announcement of Narachi’s hiring crossed the wire March 31, when the company was limping along at $2.61 a share. Since then, Orexigen has looked like a different company. …Next Page »

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Fallout from two of the proxy battles we followed earlier this year has become more apparent on the boards at San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN) and Cambridge, MA-based Biogen Idec (NASDAQ: BIIB), which has operations in San Diego. We’ve got that and more life sciences news.

—Diabetes drug maker Amylin Pharmaceuticals said its board selected newly elected director and former Novartis CEO Paulo Costa as chairman, a move that was supported by dissident investor Eastbourne Capital Management. At Biogen Idec, longtime R&D president Cecil Pickett decided to retire from the company and to relinquish his board seat. He’s the second director to resign from Biogen Idec’s board in two months.

—After merging in June with VGX Pharmaceuticals of Blue Bell, PA, shares of San Diego’s Inovio Biomedical (AMEX: INO) have climbed in value. But in talking with Inovio CEO J. Joseph Kim, Luke reported that Inovio’s good fortune has less to do with the synergies of combining with VGX than with Inovio’s announcement about its vaccine for the H1N1 “swine flu.”

—Lately, a number of San Diego’s drug development companies are focused on reviving or repurposing older drugs, including Cadence Pharmaceuticals, Somaxon Pharmaceuticals, and Victory Pharmaceuticals. But Denise found that getting a head start with compounds that already passed regulatory muster doesn’t necessarily reduce the odds of failure.

—San Diego’s Ligand Pharmaceuticals (NASDAQ: LGND) has agreed to acquire Neurogen in a mostly stock deal valued at $11 million, resulting in a 3 percent ownership stake for Neurogen shareholders.

—AltheaDx, a San Diego startup that provides services and technologies to streamline drug development, intends to raise $6 million in fresh venture capital, according to a recent regulatory filing. AltheaDx has raised almost $3.6 million so far.

—San Diego-based Enterprise Partners Venture Capital has renewed its commitment to Complete Genomics of Mountain View, CA. The VC firm is participating in the company’s latest $45 million venture round, along with OVP Venture Partners of Kirkland, WA. Complete Genomics intends to use the proceeds to build its own proprietary genome sequencing machines, and plans to provide its services to researchers who send in their samples.

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Amylin Pharmaceuticals’ board of directors has unanimously elected former Novartis CEO Paulo Costa as chairman, an appointment that was supported by Eastbourne Capital Management of San Rafael, CA, an institutional investor that had voiced concerns about the vacancy in the chairman’s role. An Eastbourne spokesman says the firm supported Costa’s election to Amylin’s board and that Costa “is an excellent choice for chairman.” The former Novartis CEO was elected to Amylin’s board two months ago from the company’s slate of candidates, and James Gavin, who heads the board’s corporate governance committee, said in a statement released by the company, “Paulo brings a fresh perspective to all aspects of Amylin’s business at this important time for the company.”

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After a bruising proxy battle ousted Amylin Pharmaceuticals’ chairman and lead outside director, the San Diego biotech issued a statement on June 2 that seemed to signal a cease-fire with dissident shareholders (including Carl Icahn). “We look forward to working with all our new directors to bring transformational medicines to patients and to drive sustainable and profitable growth,” the company said.

But have the directors of the San Diego diabetes drug developer really been able to bury the hatchet?

One sign they may not have is the fact that in the two months since shareholders ousted chairman Joseph Cook and director James Wilson—and elected four new directors to Amylin’s 12-member board— Amylin has yet to announce a new chairman. Two of Amylin’s longtime directors, founding CEO Howard “Ted” Greene and Ginger Graham, another former CEO, were more or less forced to resign in April to make room for the company’s slate of new board candidates. Votes were cast on May 27th at Amylin’s annual shareholders meeting.

Whether that’s enough time for a corporate board to choose a new chairman is a matter of debate. Aside from telling me the company has no information concerning a new chairman, Amylin didn’t have much to say. When asked if continuing dissension is prolonging the board’s deliberations on the matter, spokeswoman Anne Erickson e-mailed this statement to me:  “Our Chairman of the Board is elected each year following our Annual Meeting of Stockholders by the newly-elected Board. With four new Directors, the Board is working together to make a thoughtful decision about this very important role to the organization. Amylin welcomes all four new Directors to the Board and looks forward to a productive working relationship.”

Those four new directors include two who were elected from the company’s slate of nominees—former Icos chairman and CEO Paul N. Clark and former Novartis CEO Paulo F. Costa. The other new directors came from the dissident camps—Alex Denner has served as a portfolio manager for Icahn, and Kathleen Behrens, a consultant and former managing director of RS Investments, was nominated by Eastbourne Capital Management of San Rafael, CA.

Since Eastbourne Capital holds a 12.5 percent stake in Amylin, I checked in with the firm’s founder and portfolio manager, Rick Barry, via e-mail:

Xconomy: Is Amylin’s board having difficulty electing a new chairman?

Rick Barry: We don’t know, but it has been over two months since the annual meeting and there is no announcement regarding a new Chairperson. This concerns us and is likely to concern all other Amylin shareholders.

X: Can you tell me which Amylin directors Eastbourne views as appropriate candidates for board chairman?

RB: Of the four newly elected independent directors, Paul Clark and Paulo Costa were selected after a rigorous process by the Company’s corporate governance committee. They were shown to have excellent qualifications and Amylin deemed them desirable additions to maximize value for all Amylin Shareholders. We too supported their election, as did an overwhelming majority of the other shareholders. We believe that either of these two individuals would be an excellent choice for Chairperson.

X: Are there any current directors that Eastbourne is unwilling to support?

RB: We believe the Board needs to be lead by someone who has a fresh perspective, unburdened by past decisions with ample time and a successful track record. We would support any of the four newly elected independent directors.

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Health care reform took a turn for the better when members of key committees in both the U.S. Senate and House of Representatives recently recommended an approval pathway for biosimilars—products that attempt to be similar to an innovator biologic drug—while also preserving the hope for future medical treatments. Specifically, the committees agreed that to preserve medical innovation, biotech medicines should receive a reasonable 12 years of exclusive rights to their research data (also called “data exclusivity”) before a biosimilar may reference it for their own abbreviated approval. This period of time will act to preserve the research and development of breakthrough therapies for diseases like cancer, Alzheimer’s, and multiple sclerosis.

This is not simply a technical policy matter, but an important aspect of health care reform that is vital to the future development of new and better medicines. Amgen recognizes and supports a responsible, science-based regulatory pathway for biosimilars that ensures patient safety, follows sound science, demonstrates comparable efficacy — and as currently recognized by the Senate Health, Education, Labor and Pensions (HELP) Committee and House Energy and Commerce Committee — provides fair incentives for continued development of treatments for serious diseases.

We believe that a reasonable approval pathway for biosimilars will have a positive impact on our local and national economies. Washington state is a leader in biotechnology, and a biosimilar policy that preserves incentives for innovation will help ensure that our state can continue to be a leader in breakthrough medical innovation. Amgen is the largest private biotech employer in the region, providing approximately 900 jobs. The workforce we employ is highly educated, passionate about our mission to help patients, and dedicated to enriching the communities in which we live and work. Amgen’s Seattle-area laboratories are the largest commercial biotech facilities in the Pacific Northwest, representing a more than $600 million investment in biotechnology infrastructure.

The recent Senate and House committee decisions are also positive news for patients suffering from many types of crippling and life-threatening conditions who depend on the scientific breakthroughs that can only come from continued biotechnology research. As we frame changes to our health care policies, we must take care to preserve the innovation in biotechnology that holds the promise for future treatments for these patients.

Congress must also be mindful of the patient safety issues that are also at the heart of the biosimilars debate. It is essential that a scientifically-sound process is in place at the FDA to approve drugs that are similar, but not identical, to existing biotechnology medicines. Biologics are large, complex molecules, much larger and more complex than chemical molecules found in pills. You might visualize …Next Page »

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Alexis Borisy stepped down from his chief executive role at drug developer CombinatoRx (NASDAQ:CRXX) last week after nine years on the job. His departure was revealed on the same day as the planned merger between Cambridge, MA-based CombinatoRx and Vancouver’s Neuromed Pharmaceuticals. I caught up with Borisy, an Xconomist, on the heels of the merger announcement to hear his thoughts about the deal and to discuss his plans for the future.

Borisy isn’t saying what his next move will be, but he sounds optimistic about his career prospects and the CombinatoRx-Neuromed merger. The merger deal initially gives owners of each of the two firms a 50-percent stake in the combined operation. Neuromed chief executive Christopher Gallen is expected to become CEO of CombinatoRx after the planned completion of the merger in the fourth quarter of 2009. Borisy credits Gallen with leading efforts at Neuromed to develop its lead anti-pain drug, called Exalgo, which is an oral, extended-release version of the opioid drug hydromorphone. The FDA is expected to say whether it will approve the drug on Nov. 22.

It’s been a difficult year for CombinatoRx and Borisy. The company’s stock lost three-quarters of its value when it reported early last October that its experimental osteoarthritis drug, Synavive, failed in a mid-stage clinical trial. To conserve cash, Borisy cut about two-thirds of the company’s staff, or about 100 workers, last year alone. He says that was a “miserable” experience to go through, especially after spending the previous nine years of his life founding and building the company. Also, Borisy says activist investors such as the Biotechnology Value Fund have bought up large stakes in CombinatoRx since the steep decline in its stock price last October.

“After we had the setback late last year,” Borisy tells me, “I felt an obligation, one, to …Next Page »

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