It’s hard for any company to raise capital in this recession, but several San Diego life sciences startups disclosed last week they had done just that. A few bright spots also appeared during a local seminar on mergers and acquisitions—so let the news light your way.

—A big deal on the other side of North America last week may bear some significance for San Diego’s Anadys, which has been developing a new treatment for hepatitis C. Cambridge, MA-Vertex Pharmaceuticals said it was buying ViroChem Pharma of Laval, Quebec, for about $375 million. Vertex, which has about 200 employees in San Diego, is adding some punch to its own hepatitis C drug by acquiring ViroChem.

—Qualcomm took another step in its succession plan last week when CEO Paul Jacobs added board chairman to his title, a job that was held by his father, Qualcomm co-founder Irwin Jacobs. The San Diego wireless chipmaker also disclosed that Paul Jacobs and company president Steve Altman took 25 percent pay cuts last month when the company froze the salaries of all employees.

—In an unrelated development, Qualcomm recently acquired the key assets of Digital Fountain, a Freemont, CA, startup that has developed software to optimize digital media transmitted over any network. The assets include a team of seven engineers led by Digital Fountain’s founder and CTO.

—The lore of technology innovation is replete with stories of iconic hits and misses, of Googles and Pets.coms. Xconomy added a new chapter to the literature last week with a tale about Erwise, an Internet browser invented by four Finns before Netscape changed the online world as we know it. It also was the first Xconomy story written by Juha-Pekka Tikka, a veteran newspaper reporter from Helsinki who is Xconomy San Diego’s Innovation Journalism Fellow through June.

—Regulus Therapeutics, the Carlsbad, CA-based joint venture formed in 2007 by Alnylam (NASDAQ: ALNY) of Cambridge, MA, and Carlsbad’s Isis, got $20 million in a first step toward independence. Alynlam and Isis each contributed $10 million to Regulus, which has developing microRNA-based drugs and now intends to continue that work as an independent company.

—A new life sciences company has come to light in San Diego. Evoke Pharma has been developing a new drug treatment for diabetic gastroparesis, a gastrointestinal disorder. Evoke Pharma has been operating in stealth mode since it was founded two years ago, but a financial filing that surfaced recently shows the biotech has raised almost $12.3 million in venture funding since 2007.

—While the overall market for mergers and acquisitions remains gloomy, John Stiska of Agility Capital says he sees a few signs of encouragement. Stiska, who spoke last week at an M&A workshop in San Diego, says mid-market equity funds are still buying stable, well-run companies. And Stiska says small-to-mid-size defense contractors throughout Southern California represent ideal targets for acquisition.

—San Diego’s Optimer Pharmaceuticals, which has two antibiotics for treating diarrhea in late-stage clinical trials, raised $32.9 million in a registered direct offering to institutional investors. Optimer (NASDAQ: OPTR) says it plans to use the proceeds for ongoing drug development and general corporate purposes.

—Lou Ryan, chairman of San Diego’s St. Bernard Software (OTCBB: SBSW) has stepped in as CEO with plans to expand the company’s line of Internet-filtering network security products. I spoke with Ryan, a software industry veteran and former venture partner at Menlo Park, CA-based Sand Hill Capital, about the firm’s new strategy.

—Jay Lichter, a San Diego venture capitalist and founder of Otonomy, told Luke his goal is to someday make the specialized drug developer for hearing disorders as big as Alcon, the Swiss eye care company. One of Otonomy’s early drug candidates is aimed at Meniere’s disease, an imbalance of inner ear fluid.

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Three quiet and unknown Finnish engineers in their late thirties, Kim Nyberg, Kari Sydänmaanlakka, and Teemu Rantanen, have spent their working careers at the engineering software company Tekla in Finland. Their clients have used the software they created to model several well-known buildings, including Frank Gehry’s Walt Disney Concert Hall in Los Angeles, New York’s Hearst Tower, the famous ‘Bird’s Nest’ that is Beijing’s Olympic Stadium, and the world’s tallest building, Burj Dubai.

But if matters had turned out a little differently, these men—and a former colleague named Kati Suominen (now Kati Borgers) who could not be present at the interview—might have become known as the Fathers and Mother of the World Wide Web browser.

[Editor's note: This article is our first from Juha-Pekka Tikka, Xconomy's new Fellow from Stanford University's Innovation Journalism program. "JP," a reporter at Ilta-Sanomat, a major national newspaper in Finland, will be based in our Xconomy San Diego offices.]

According to the trio, whom I met earlier this year in Finland, the Internet’s rise and emergence as a daily working tool might have happened a year earlier than it did had their group been able to complete their project.

The four Finns developed a graphical, point-and-click Internet browser a year before the pioneering Mosaic browser on which Netscape Communications was based: the historical Netscape IPO in August 1995 is widely credited with starting the Internet boom.

“Our 1991 X Window system browser, ‘Erwise,’ showed that a net browser was possible. We were ahead of the times. The next step, to commercialize it, did not happen,” Kim Nyberg says.

Aside from some local media, the Finns have never before been interviewed about this remarkable story. But Erwise has an important place in the Internet’s birth history. And its fate offers a case study of what happens when invention and innovation are not accompanied by funding, talent infusion, and a strong venture capital market or angel investor presence—all ingredients that Silicon Valley (where Mosaic was funded and developed) takes for granted.

In the U.S., commercialization of the browser, now so much a part of our everyday lives, began in 1994, after Marc Andreessen left the National Center for Supercomputing Applications at the University of Illinois, where he and Eric Bina had developed the Mosaic browser the previous year. Andreessen had moved to California following his December 1993 graduation and teamed up with Silicon Graphics founder Jim Clark, backed by venture capital powerhouse Kleiner Perkins Caufield & Byers, to form Mosaic Communications, later renamed Netscape Communications. Europe was quickly left out in the cold.

But for a few key factors, it didn’t have to be that way. In 1991, Nyberg, Sydänmaanlakka, Rantanen, and Suominen were young IT undergraduate students at HUT, Helsinki University of Technology. The campus is actually located in Espoo, just a few miles from Helsinki and only half a mile away from the headquarters of Nokia Corporation. At that time, Nokia was not internationally known.

The four were about half-way through their studies when they met that September at a HUT course on designing and coding software.

In Switzerland, meanwhile, Tim Berners-Lee had just laid the groundwork for the World Wide Web at the European Organization for Nuclear Research (CERN). He thought the Web would be a useful tool for researchers and others but was frustrated at its pace of growth, which he partly attributed to the lack of a point-and-click browser. As he notes in his 1999 book Weaving the Web, “We were so busy trying to keep the Web going that there was no way we could develop browsers ourselves, so we energetically suggested to everyone everywhere that the creation of browsers would make useful projects for software students at universities.”

How did this project end up in Finland? It was largely because … Next Page »

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