The price of shares at San Diego’s Gen-Probe, Amylin Pharmaceuticals, and Optimer were clipped for various reasons over the past week, but several local startups successfully raised capital. Our good news, bad news briefing begins here.

—Rempex Pharmaceuticals, a San Diego biopharmaceutical startup developing a new approach to antibiotics resistance, said it raised $67.5 million in Series B venture funding—bringing total funding for the company to $76 million since its founding less than five months ago. The startup is on a fast track, and plans to use the capital to accelerate the commercialization of its therapies for treating gram-negative bacterial infections. Rempex said it plans to file a new drug application for its first drug candidate in the second half of 2012. New investors Frazier Healthcare Ventures and Vivo Ventures joined existing investors SV Life Sciences, OrbiMed Advisors, and Adams Street Partners in the latest round.

—Cambridge, MA-based Vertex (NASDAQ: VRTX) has held the high ground in hepatitis C therapies since the FDA approved its protease inhibitor drug telaprevir (Incivek) last year. But two rivals are gaining ground. The price of Vertex shares have fallen with the rise of Alpharetta, GA-based Inhibitex (NASDAQ: INHX) and Princeton, NJ-based Pharmasset (NASDAQ: VRUS). Vertex, which has operations in San Diego, hit a 52-week high of $58.87 on May 12, but it has been trading around $31 in recent days.

—Adding to the competition in hepatitis C drugs, San Diego-based iTherX Pharmaceuticals raised almost $3.2 million to advance its development of a prophylactic treatment for Hepatitis C, according to a regulatory filing earlier this week. The startup said in March that its drug candidate TX-5061 appears to prevent the hepatitis C virus from entering liver cells, and has shown “potent preclinical antiviral activity against all HCV genotypes.” Former UCSD virologist Flossie Wong-Staal is a co-founder and chief scientific officer. The company raised $2.8M in 2010.

—San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN) agreed to pay Eli Lilly more than $1.5 billion as it gradually reassumes responsibility for global commercialization of its best-selling diabetes drug in a deal that ends its 10-year partnership with Lilly. Under their agreement, which also ends litigation with Lilly, Amylin will take over sales of exenatide (Byetta) in the U.S. by the end of this month—and global sales of both Byetta and an experimental, extended release version (Bydureon) over the next two years. Amylin shares, which hit a 52-week high of $16.65 on Jan. 27, have been trading around $10 a share over the past few weeks.

—Xconomy east coast biotechnology editor Arlene Weintraub profiled PharmaSecure, a four-year-old startup in Lebanon, NH, with operations in San Diego, Michigan, and India. The company provides machines to drug-makers that print unique bar codes and serial numbers on drug packaging. PharmaSecure raised $3.9 million last month from Innovation Endeavors, Gray Ghost Ventures, Healthtech Capital, and angel investors. The Tech Coast Angels (TCA) participated in … Next Page »

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If there’s a common thread in San Diego’s biotech news over the past week, it would be perseverance. If you can persist with our briefing, you’ll see what I mean.

—Cambridge, MA-based Vertex, (NASDAQ: VRTX), which has a sizable presence in San Diego, said it generated $74.5 million in second-quarter sales of telaprevir (Incivek), its new drug for treating hepatitis C. Wall Street analysts had expected the number would be less than half that.

—San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN), Indianapolis-based Eli Lilly (NYSE: LLY), and Waltham, MA-based Alkermes (NASDAQ: ALKS) re-submitted an application to the FDA to market exenatide, its new, once-a-week version of Bydureon.

—San Diego-based Arena Pharmaceuticals, (NASDAQ: ARNA), which sustained a major setback last October when the FDA refused to clear its obesity drug, reported results from a recent study that could address part of the FDA’s objections. Arena said its weight-loss drug lorcaserin (Lorqess) was found in cerebrospinal fluid at much lower concentrations in human beings than in rats. The company plans to address each of the concerns raised by the FDA about its drug.

—San Diego-based BrainCells Inc., which has raised at least $77 million in venture capital since it was founded in 2003, has raised nearly $1 million in a planned financing of $14 million. But BrainCells is moving forward without CEO James Schoeneck, who joined the company more than five years ago, and Carrolee Barlow, who was the chief scientific officer. Consultant Robert Williamson has been serving as the company’s acting CEO.

—There’s a new venture firm in town, called Moore Venture Partners. Terry Moore told me he can make a difference in helping San Diego’s underserved startup community with even a small fund of $10 million to $15 million. Moore plans to invest in both tech and life sciences startups, and participated in last year’s $26.5 million Series B financing at San Diego-based Astute Medical.

—San Diego-based Illumina (NASDAQ: ILMN) said it is working with the University of Oxford to sequence the whole genomes of 500 people with a range of life-threatening genetic diseases or disorders that pose major challenges in diagnosis, treatment, and care. The team plans to recruit patients from Oxford’s clinical community in an effort to identify genetic mutations that could be used to diagnose their diseases and optimize treatment.

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Against a backdrop of rising worries over the U.S. economy, we saw San Diego life science companies forming new partnerships, raising new funding, and closing some new deals over the last week. We also saw drops in share prices at two of our biggest life science companies. Your briefing is ready now.

—San Diego’s Trius Therapeutics (NASDAQ: TSRX) agreed to an exclusive licensing agreement that gives Germany’s Bayer rights to market its new torezolid phosphate antibiotic in most of Asia, Africa, Latin America, and the Middle East. Bayer agreed to pay Trius $25 million upfront and to provide $69 million in future milestone payments, along with lucrative royalty payments. Trius retained ownership of the drug in the U.S., Canada, and Europe.

—Chelmsford, MA-based Brooks Automation (NASDAQ: BRKS), which makes a variety of semiconductor-based equipment, paid more than $79 million to acquire Nexus Biosystems of Poway, CA. Nexus makes automated equipment used to handle chemical and biological sample in laboratories worldwide.

—Chemist Peter Schultz, who was director of the Genomics Institute of the Novartis Research Foundation until a year ago, is listed as a co-founder and scientific adviser at Wildcat Discovery Technologies, a San Diego startup specializing in cleantech materials development. Wildcat, which just raised $7.5 million, is applying high-throughput screening technologies to synthesize and test thousands of new materials for potential use in batteries and elsewhere.

—Shares of Illumina (NASDAQ: ILMN), the San Diego maker of genetic diagnostic equipment, plunged by nearly 18 percent yesterday, after the company’s revised 2011 forecasts fell short of Wall Street estimates. Illumina’s stock closed last night at $57.33 a share, down $12.32 from the previous day’s close of $69.65. The company estimated its profit will increase this year by 33 to 36 percent over 2010 and revenue should rise by 24 to 26 percent. Both estimates are less than analysts were expecting, however.

—The price of shares in San Diego’s Amylin Pharmaceuticals (NASDAQ: ALMN) lost almost 10 percent after the diabetes drug developer reported a bigger loss Tuesday than analysts were expecting. In a conference call with investors, Amylin CEO Dan Bradbury led with positive news out of Europe, where regulatory agencies gave marketing authorization for the long-acting version of exenatide (Bydureon). Amylin’s partner, Eli Lilly, recently launched the product in the United Kingdom.

—San Diego-based ResMed (NYSE: RMD) agreed to give San Diego-based CareFusion (NYSE: CFN) a license that gives CareFusion exclusive rights to distribute two of ResMed’s non-invasive ventilators and accessories in the United States. ResMed has not previously sold these ventilators here, and expects to gain a marketing advantage by using CareFusion’s extensive sales contacts at hospitals, acute care, and nursing facilities.

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The American Diabetes Association begins its 71st annual scientific conference today at the San Diego Convention Center, drawing more than 13,500 endocrinologists, scientists, and others involved in diabetes research and health care.

You could argue that in the comfort of the modern world, the twin epidemics of diabetes and obesity have replaced famine among the four horsemen of the apocalypse. The ADA says diabetes affects almost 26 million children and adults in the United States, and contributes to the deaths of over 230,000 Americans each year. In the United States alone, the association estimates the total cost of diagnosed diabetes at more than $174 billion.

As we’ve previously reported, San Diego is an innovation hub for diabetes research, ideas, and new therapies, so I checked to see what local companies would be presenting during the hundreds of scientific sessions scheduled to take place over the next four days. It’s not intended to serve as a comprehensive rundown, but rather as a sampling of what’s happening among San Diego’s diabetes specialists:

—Amylin Pharmaceuticals (NASDAQ: AMLN), a big kahuna in San Diego’s war on diabetes, won a much-needed vote of confidence earlier this week when the European Union’s executive body, the European Commission, approved its once-weekly injectable version of exenatide (Bydureon) as a diabetes treatment. The FDA told Amylin in October it wanted additional studies of how the drug might affect the heart. Amylin says it plans to present new data about the long-acting version of exenatide, as well as its twice-daily version of exenatide (Byetta) and another diabetes drug, pramlintide acetate (Symlin), through two oral presentations and 17 poster sessions. The company also plans to make a presentation for investors on its findings in a webcast set for Sunday evening, and to post highlights on its recently launched corporate blog.

—San Diego-based Arena Pharmaceuticals, (NASDAQ: ARNA) and Eisai of Woodcliff Lake, NJ, plan to release data from their late-stage clinical trial (dubbed “BLOOM-DM”) of lorcaserin, Arena’s investigational weight-loss drug. Arena also has been regrouping since October, when the FDA raised questions about the “marginal” effectiveness of the drug. Arena’s scientists are scheduled to present their lorcaserin data in three poster sessions on Sunday.

—Halozyme Therapeutics (NASDAQ: HALO), a San Diego specialty drug developer, plans to deliver three presentations concerning its work, including a late-breaking abstract on its formulation of recombinant human hyaluronidase in treating type 1 diabetes.

—San Diego-based Cebix plans to present data on the company’s C-peptide replacement therapy for treating microvascular problems associated with type 1 diabetes, such as peripheral neuropathy, retinopathy, nephropathy and erectile dysfunction. C-peptide is a naturally occurring product formed when insulin is cleaved from pro-insulin in the body, and has been shown to play a role in keeping the smallest blood vessels healthy in different tissues. Earlier this month, Cebix said it had begun an early stage trial to evaluate its proprietary long-acting form of C-peptide.

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It was not a week for a lot of life sciences news, but what we’ve got is pretty interesting. Judge for yourselves; our roundup begins now.

—A global survey of venture capitalists released this week reveals substantial pessimism among VCs about venture investment levels in U.S. life sciences startups over the next five years. The annual survey by The National Venture Capital Association and Deloitte shows that 81 percent of the VCs polled expect biopharmaceutical investments in the U.S. to stay the same (51 percent) or decrease (30 percent) through 2016. In the medical device and equipment sector, 76 percent anticipate funding will stay the same (52 percent) or drop (24 percent). Their attitude toward China is just the opposite; with 100 percent of the VCs polled saying biopharmaceutical investments in China will rise (83 percent) or stay the same (17 percent). Nobody thought biopharma funding will decline in China. On medical devices and equipment, 93 percent anticipate investment levels will increase (77 percent) or stay the same (16 percent.)

—European Union drug regulators approved the once-weekly injectable version of exenatide (Bydureon) for treating type-2 diabetes, providing a shot in the arm to San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN) and its partners-Indianapolis-based Eli Lilly (NYSE: LLY) and Waltham, MA-based Alkermes (NASDAQ: ALKS). The FDA declined to approve Bydureon for the U.S. market eight months ago, asking the companies to run a thorough study that evaluated effects of bigger doses on patients’ heart rates.

—Peppi Prasit, who left Amira Pharmaceuticals in November, appears to have started another San Diego biotech, Inception 1, which has raised $5 million in venture funding, according to a recent regulatory filing. Prasit, who was Amira’s co-founder and chief scientific officer, is identified in the filing as an executive and director. There isn’t much additional information disclosed. Versant Ventures partner Bradley Bolzon is listed as a director and San Diego’s Thomas Coll is listed as an executive.

—San Diego’s industrial biotech, Genomatica, received the EPA’s annual Green Chemistry Challenge Award. Genomatica has genetically engineered a type of bacteria to consume sugar in fermentation tanks and produce 1,4-Butanediol (BDO), an intermediate “building block” chemical needed to make spandex and various plastics.

—Carlsbad, CA-based GenMark Diagnostics (NASDAQ: GNMK) said it arranged a secondary offering of its stock to the public at a price of $4.25 a share that was intended to raise at lease $30 million. The company makes automated DNA and RNA diagnostics testing systems.

—San Diego’s Anaphore named former Fate Therapeutics CEO and Sanderling Ventures managing director Paul Grayson as its new CEO. He replaces founding CEO Kathy Bowdish, who will stay on as an Anaphore consultant.

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As if to make up for the previous week, there’s been a lot of news from local life sciences companies over the past week. So let’s get started.

—San Diego’s Orexigen Therapeutics (NASDAQ: OREX) said it would halt U.S. development of its experimental diet pill, a combination of naltrexone and bupropion (Contrave) after regulators rebuffed the company’s latest proposal. After the Food and Drug Administration rejected Orexigen’s new drug application in February, Orexigen sought approval to sell Contrave in a niche of patients with low cardiovascular risks until a long-term heart study could be completed. The FDA shot that down too, telling the company a large, long-term study of associated heart risks would be required before the drug could be approved.

—At the Third Annual Consumer Genetics Show in Boston yesterday, Illumina (NASDAQ: ILMN) CEO Jay Flatley chopped the price of the San Diego company’s Individual Genome Sequencing (IGS) service in half, from $19,500 to $9,500. Flatley said the company also would subsidize sequencing for some patients with life-threatening diseases. The CEO said Illumina was taking the measures to increase access to genetic information and to accelerate the adoption of individual genome sequencing.

—A San Diego federal judge yesterday lifted a temporary restraining order issued two weeks ago against Indianapolis, IN-based Eli Lilly (NYSE: LLY), and denied a request for a preliminary injunction against Lilly that was sought by San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN). Amylin recently sued Lilly after the pharmaceutical company unveiled plans to use the same sales team to market both Amylin’s diabetes drug, exenatide, and Boehringer Ingelheim’s rival diabetes drug, linagliptin. Both Amylin and Lilly issued statements on the ruling.

—Ambit Biosciences, a San Diego biotech developing small-molecule, anti-cancer compounds, withdrew its plans for an initial public offering. Ambit said market conditions were not sufficiently attractive to continue with its IPO, which was a discretionary financing. The company has raised … Next Page »

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A San Diego federal court granted a temporary restraining order sought by San Diego diabetes drug developer Amylin Pharmaceuticals (NASDAQ: AMLN) against Eli Lilly. Amylin sued Lilly a few week ago for violating their joint marketing agreement for exenatide. The court ordered Lilly to halt its plans to use the same sales force to sell both Amylin’s exenatide and linagliptin, a rival diabetes drug from Germany’s Boehringer Ingelheim. The order also prohibits Lilly from disclosing any confidential information about exenatide to any of its sales representatives or employees who are marketing linagliptin.

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Our roundup of San Diego’s biotech news is short, but we had some important developments over the past week. Your update begins now.

— Westport, CT-based Advanced BioHealing, which makes Dermagraft bio-engineered skin patches in San Diego, agreed to a $750 million buyout offer from Shire (NASDAQ: SHPGY), the Irish pharmaceutical drug maker. The deal was announced the day before Advanced BioHealing was scheduled to go public through an initial public offering.

—San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN) filed suit in federal court in San Diego against Eli Lilly (NYSE: LLY), claiming that Lilly violated the companies’ 2002 agreement covering the marketing of the diabetes drug exenatide (Byetta). Amylin filed the suit a few months after Lilly formed a new partnership with Boehringer Ingelheim to market a rival diabetes drug. Lilly says it remains committed to its Amylin partnership and will vigorously defend itself against the lawsuit.

—Xconomy New York editor Arlene Weintraub talked with Pacira Pharmaceuticals (NASDAQ: PCRX) CEO Dave Stack about the turnaround at the company, which is based in Parsippany, NJ, with manufacturing and R&D operations in San Diego. Stack, an MPM Capital partner, hopes to emulate the success he had at The Medicines Company at Pacira with a long-acting version of the painkiller bupivacaine (Exparel), although he says this has been his most-difficult job, ever. Pacira is the latest reincarnation of DepoTech, a San Diego company that developed a controlled-release drug-delivery technology called DepoFoam.

—Xconomy national med tech editor Tom Lee reported on the changing global market for implantable cardio-defibrillators (ICDs). He found the pacemakers have matured into a commodity market, where price/volume players like Germany’s Biotronik and Italy’s Sorin Group, are challenging traditional players like Medtronic, Boston Scientific, and St. Jude Medical.

—Carlsbad, CA-based AutoGenomics withdrew its nearly three-year-old IPO filing. The company says it might now raise capital through a private stock placement.

—Luke’s BioBeat column featured a talk with Stelios Papadopoulos, the longtime life sciences investment banker, who explained that investor expectations for life sciences deals have been tempered through years of experience. “We have a pretty good idea of what can happen, in terms of how much money it takes, how long it takes, what the FDA process is about,” Papadopoulos says. “It’s a pretty difficult proposition. There was a time in the early ’90s, people believed every year there would be one or two new Genentechs. They were looking for it. Now we realize the next Genentech occurs maybe once every 10 years, not once a year. People have come to accept that.”

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[Updated: 8:55 am PT] Amylin Pharmaceuticals is hauling one of its big partners, Eli Lilly, into court.

San Diego-based Amylin (NASDAQ: AMLN) said today it has filed a suit in the U.S. District Court for Southern California, that accuses Lilly of anticompetitive behavior and violating a 2002 agreement between the companies that covers the marketing of exenatide (Byetta) for patients with diabetes.

The tension arises from Lilly’s relationship with a new partner, Boehringer Ingelheim. Lilly formed that deal back in January (a few months after the FDA delayed approval of a much-anticipated once-weekly version of Amylin’s exenatide called Bydureon). Boehringer Ingelheim’s once-daily pill, linagliptin (Tradjenta), was approved by the FDA earlier this month. Each of the products angles for a piece of the massive market for treating the more than 25 million people in the U.S. who have diabetes.

Amylin is asking the court to provide a preliminary and permanent injunction to block Lilly from helping sell linagliptin, which it says is a direct competitor with Amylin’s exenatide products.

“Amylin selected Lilly as a partner to promote development and maximize sales of Amylin’s exenatide products. We are disappointed that we could not resolve this matter amicably and that we were forced to bring legal action to protect our rights, our products and our shareholders,” Amylin said in a statement. “Amylin is committed to exenatide, a franchise that we believe provides important treatment options for the millions of patients around the world with type 2 diabetes. Notwithstanding this litigation, we intend to continue to collaborate with Lilly in the development and commercialization of exenatide products.”

[Updated comment from Lilly] Lilly said in a statement, picked up by the Associated Press, that the lawsuit is without merit, and the company will “vigorously defend its position.” The company also said it remains committed to its partnership with Amylin.

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We saw some in-depth profiles of New England-area biotechs’ drug development strategies, as well as breaking news on financings and partnership deals.

—While Bay Area biotech startup Gatekeeper Pharmaceuticals, Boston’s Dana-Farber Cancer Institute, and Novartis continue their legal wrangling over a potential lung cancer drug, Waltham, MA-based Avila Therapeutics is working on its own treatment for the disease. The biotech is using its covalent drug technology in a partnership with Boulder, CO-based Clovis Oncology to discover treatments for non-small cell lung cancers that are resistant to existing drugs.

—Ryan took a look at how Waltham-based biotech Alkermes navigated the aftermath of a negative regulatory decision. The firm’s operations have stayed the same and it has not made any layoffs, despite its request for approval of a once-weekly version of the diabetes drug exenatide (Bydureon) being shot down by the FDA.

—Cerulean Pharmaceuticals, a Cambridge, MA-based developer of nanoparticle drugs, brought in a $24 million Series C funding round, led by Lilly Ventures, the venture arm of drug giant Eli Lilly (NYSE: LLY). The startup will put the funding, which also came from existing backers Bessemer Venture Partners, Lux Capital, Polaris Venture Partners, and Venrock Associates, toward a mid-stage clinical trial of its lead drug, CRLX101, for patients with lung cancer.

—Verastem, a Boston-based startup out to develop cancer-fighting drugs that target cancer stem cells, kicked off with $16 million in Series A funding. The startup was founded with investments by Longwood Founders Fund, and the Series A round also includes Bessemer Venture Partners, Cardinal Partners, and MPM Capital. Founded by MIT biologists Robert Weinberg and Eric Lander, Verastem has developed a … Next Page »

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It was a busy New England area life sciences news week, with headlines of drug collaborations, failed applications with the FDA, clinical trial results, plus some lengthier profile stories.

—Providence, RI-based Shape Up The Nation is using social networking to invite people’s friends to encourage them to eat better and make healthier choices, Ryan wrote. The four-year-old startup raised $5 million earlier this year from Excel Venture Management and Cue Ball Group, landed CVS Caremark (NYSE: CVS) as its first big customer, and is adding other Fortune 500 companies to the list.

—The diabetes drug developed in a collaboration by San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN), Waltham, MA-based Alkermes (NASDAQ: ALKS), and drug giant Eli Lilly (NYSE: LLY) failed to garner FDA approval, the companies announced on Tuesday. The regulatory agency is requiring a new study looking at whether the drug—the once-weekly injectable version of exenatide (Bydureon)—is connected to irregular heartbeat in trial patients. The application for FDA approval of the drug was delayed earlier this year, due to manufacturing questions and the agency’s request for a risk mitigation strategy of the drug. By Wednesday morning Amylin’s and Alkermes’ share prices had fallen 50 percent and 29 percent, respectively. Lilly, with a more diversified drug pipeline, saw its shares drop by about 5 percent.

—Cubist Pharmaceuticals (NASDAQ: CBST), a Lexington, MA-based maker of acute care drugs, announced it had priced a $400 million offering of convertible notes, which have an annual interest rate of 2.5 percent and mature on November 1, 2017. The deal underwriters have the option to purchase $50 million in additional notes. Cubist will put the proceeds toward repurchasing about $191 million in notes that carry a 2.25 annual interest rate and are due June 15, 2013, as well as its investing in its pipeline products, corporate expenses, and acquisitions.

—Cambridge-based Genzyme (NASDAQ: GENZ) reported data from a late-stage clinical trial comparing its drug clofarabine (Clolar) in combination with chemotherpy to treatment with chemotherapy and a placebo. Those treated with the drug did not live longer than those only given the placebo, but the clofarabine group saw its remission rate double, to 47 percent, Genzyme said. The firm will … Next Page »

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The sector was firing on all burners in the past week with fresh developments in devices, drug development, wireless health, and weight loss (just ask Larry Smarr). You can catch all the latest here.

—Sequenom (NASDAQ: SQNM), which scrubbed the launch of its diagnostics test for Down syndrome a year ago over “mishandled data,” is resuming development on a new testing schedule. The company also raised $51.6 million for R&D, commercial product development and general corporate purposes.

—Cytori Therapeutics reported (NASDAQ: CYTX) announced encouraging results from two small, placebo-controlled studies of its fat-derived regenerative cell therapy in cardiac patients. The double-blind studies, which were conducted in Europe, should pave the way for a larger test in 150-250 heart attack patients, the company said.

—Pathway Genomics fired the next salvo in the personal genome-testing wars with its announcement that it will begin selling genetic tests this week at 80 percent of Walgreens stores nationwide. Consumers can choose the $249 test that looks for a total of 46 genetic and health conditions, or a $179 test  that will look for either 23 genetic conditions or 23 health conditions.

—Sotera Wireless CEO Tom Watlington told me the company is preparing to test the ViSi, a wireless device that continuously monitors blood pressure, respiration, temperature, blood oxygen levels and heart rate, at five Southern California hospitals. If ViSi works, Sotera could begin marketing the device to hospitals during the first quarter of 2011, he said.

—Two San Diego companies were recognized for their innovations at the Wireless Life Sciences Investor Meeting in La Jolla, which was attended by 200 people, nearly double last year’s number. CortiCare, of San Diego, which provides remote and continuous electroencephalography monitoring of patients admitted to a hospital intensive care unit for signs of micro-seizures, was a finalist in the Best Clinical Applications category. Great Connections, which just moved to San Diego from Sweden, has technology that transmits ultrasound and X-ray medical images to any mobile device.

—Luke chatted with Internet pioneer Larry Smarr about his personal … Next Page »

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It was a big news week for the intersection of information technology and healthcare, with our first ever forum completely dedicated to the topic, and a few startups in the space nabbing funding. Headlines from big pharma companies rounded it out for us, too.

—Athenahealth (NASDAQ: ATHN), the Watertown, MA-based maker of electronic health records software systems, announced it has hired IBM’s Managed Process Business Services unit for IT and administrative support. The deal with IBM (NYSE: IBM) will allow Athenahealth to focus on improving the administrative and reimbursement aspects of its products, it said in an announcement.

—Waltham, MA-based drugmaker Alkermes (NASDAQ: ALKS) revealed its royalty rate for exenatide once-weekly (Bydureon), a diabetes drug from Eli Lilly and Amylin Pharmeceuticals that uses Alkermes’ chemistry technology. The Waltham company will take in 8 percent of sales of the first 40 million units of the treatment sold per year, which could bring in about $160 million if Bydureon is priced comparably to an existing twice-daily version of exenatide. Alkermes would also take a 5.5 percent royalty rate on sales beyond those first 40 million units.

—Novartis exercised its option to buy 55,223 more shares of Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY), for a total of about $1 million. The deal allows pharmaceutical giant Novartis to maintain its 13.4 percent stake in the company, which is developing treatments using RNA interference technology.

—Charles River Laboratories International plans to buy Chinese R&D services firm WuXi PharmaTech for $1.6 billion in cash and common stock, the companies announced on Monday. The $21.25-per-share deal, which is subject to shareholder approval, represents a 28 percent premium over WuXi’s closing stock price on Friday.

—Ryan caught up with the CEO of Cambridge’s Gene Network Sciences, a startup that’s out to match patients with the drugs that best suit them, and help prevent the wasteful spending that results when insurance companies reimburse for treatments that just don’t work. The company formed in 2000 and is widely know for its computer-simulated drug research for big pharma companies, but its new GNS Healthcare subsidiary will attempt to tackle these inefficiencies in the healthcare market.

—We held our first ever event dedicated solely to exploring the role information technology will play in improving the quality of patient care. Our Healthcare In Transition forum featured speakers from … Next Page »

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News of financings, partnerships, royalties, and acquisitions among New England’s video game, transportation, biotech, and energy companies have kept us buzzing in the last week.

—Westwood, MA-based online games maker Turbine was purchased by the Home Entertainment Group of Warner Bros. Interactive Entertainment, a unit of Time Warner (NYSE: TWX). Turbine produces the massively multiplayer online game franchise Lord of the Rings Online, based on the books by J.R.R. Tolkien. Time Warner didn’t disclose the terms of the deal, but a source in a Boston Globe story pegged the transaction at $160 million, which would represent a modest return for Turbine investors, who have put slightly more than $100 million into the 16-year-old company.

—Zipcar, the Cambridge, MA-based car-sharing service, announced it had acquired Streetcar, a U.K.-based company with a similar business model. The terms of the deal weren’t disclosed, but Zipcar said it brought the companies’ combined memberships to more than 400,000 and gives it the opportunity to further expand in Europe.

—Qualtré, a Marlborough, MA, maker of motion sensors for consumer electronics, announced it closed an $8 million Series B round of funding, which included contributions from Matrix Partners and Pilot House Ventures. The money brings the company’s total funding pot to $13 million, and will go to operations, sales, and development of its products, which have applications in cellular handsets, navigation devices, and gaming controllers.

—France-based bioMérieux shelled out $5 million for an equity stake in Cambridge-based genomics analysis company Knome, as part of a partnership deal in which it will use Knome’s technology to develop diagnostics. BioMérieux appointed its CEO Stéphane Bancel as a director on the Knome board as part of the deal.

—I rounded up the top 10 largest venture deals inked in the first three months of 2010, with data from Dow Jones VentureSource, CB Insights, and the MoneyTree Report. Healthcare companies took seven of the 10 top slots, with the biggest transaction going to Andover, MA-based TransMedics at $36 million.

—Pluromed, a Woburn, MA-based maker of medical devices designed to stop bleeding during surgery, raised $1.1 million of a planned $3.9 million equity offering. Last year the company received a $500,000 loan as part of a Massachusetts initiative to further the life sciences industry in the state.

—Lebanon, NH-based Mascoma, a company developing methods for converting wood fiber and other non-edible plant material into ethanol, has raised $3.4 million of a planned $10 million round of convertible debt, an SEC filing showed. The company received a $15 million grant from the Michigan Economic Development Corporation in June 2008 to build an ethanol plant in Kinross, in Chippewa County, and the state later pledged another $8.5 million toward the site. The new funding, which came from … Next Page »

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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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There was a lot of life sciences news over the past week in San Diego, with much of it coming out of the American Diabetes Association annual meeting in New Orleans.

—At a time when San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN) doesn’t need more challenges, Denmark’s Novo Nordisk announced that liraglutide, its once-daily diabetes drug, is substantially better at controlling blood sugar in type 2 diabetes than Amylin’s exenatide, which is injected twice-daily.

—If Amylin Pharmaceuticals’ rivals are targeting the diabetes specialist, at least the San Diego biotech is a moving target. Amylin says the latest clinical data for the new formulation of its exenatide diabetes drug (which only has to be injected once weekly instead of twice daily) shows patients were able to maintain control over blood sugar for two years, helped them lose weight, and lowered their blood pressure.

—San Diego’s Orexigen Therapeutics (NASDAQ: OREX) posted new results of its late-stage drug for treating obesity, showing that 41.5 percent of patients on the drug lost 10 percent of their body weight. That compared with 20.2 percent who did as well taking a placebo.

—Another San Diego drug developer, Arena Pharmaceuticals, (NASDAQ: ARNA) says patients on its lorcaserin treatment for a year generally had reduced their risk of heart attacks.

—San Diego’s Anadys Pharmaceuticals (NASDAQ: ANDS) is cutting its workforce by 40 percent and focusing its remaining resources on its lead drug candidate for treating the hepatitis C virus. The company also says it’s raising $17.5 million.

—Trius Therapeutics, a San Diego biotech developing a new antibiotic against deadly MRSA bacterial infections, said a study showed 98 percent of patients on the lowest dose of its new compound achieved a clinical cure. 

—Raj Krishnan, a bioengineering Ph.D candidate at UC San Diego, began entering student entrepreneur and business contests as a way to raise money for Biological Dynamics, the cancer diagnostics company he co-founded. It worked. He has now won 13 awards, and his most recent win included a check for $40,000. Krishnan, 27, says his research is focused on technology to identify a key biomarker for almost every type of cancer.

—After getting a $20 million infusion from investors last month, San Diego’s Vical (NASDAQ: VICL) says it has enough resources to continue operating through the end of 2011, which should be enough time to complete its clinical study of an immune-stimulating therapy for metastatic melanoma. Vical also is developing a vaccine to prevent life-threatening cytomegalovirus infections in bone marrow transplant patients.

—Bothell, WA-based Sonosite (NASDAQ: SONO) says it’s acquiring San Diego’s CardioDynamics International (NASDAQ: CDIC) in a deal valued at about $10 million. Sonosite makes portable ultrasound machines and CardioDynamics makes noninvasive medical diagnostic tools for cardiovascular disease.

—San Diego-based Tocagen, which is developing gene therapy treatments for terminally ill cancer patients, was among three biotechs that raised cash recently. Tocagen has raised $10.8 million in an $11.2 million equity offering that began in September. The startup was founded in 2007 by Harry Gruber, who previously founded Gensia Pharmaceuticals, Viagene, Aramed, and Metabasis, among others.

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San Diego-based Amylin Pharmaceuticals has witnessed an extraordinary struggle for control of its board of directors in which a key turning point came when founding CEO Howard “Ted” Greene publicly switched sides and urged shareholders to vote for the dissidents’ nominees.

So what does Greene have to say about the results of the shareholder vote that Luke reported this morning? I caught up with Greene this afternoon by telephone in northern Michigan, where he’s on vacation. He says the changes give the San Diego diabetes drug developer a fresh opportunity.

Greene sounds generally upbeat about the results, in which four new directors are joining Amylin’s 12-member board—two dissident nominees, and two new company nominees. From the dissidents’ camp, shareholders elected Alex Denner, a fund manager for billionaire investor Carl Icahn, and Kathleen Behrens, a consultant nominated by Eastbourne Capital Management. From the company’s own slate of candidates, shareholders elected two new independent directors, former Icos chairman and CEO Paul N. Clark and former Novartis CEO Paulo F. Costa.

“One-third of the board has turned over,” Greene says. “So the new board is going to take a hard look at the company’s performance and the way they do some of the marketing and sales.”

One of the extraordinary aspects to the outcome of the board election is not merely that the dissident faction gained two board seats in the May 27 shareholder vote. It’s that they dethroned the two most prominent incumbents—Amylin chairman Joseph Cook and lead independent director James Wilson—in an election that was a pure popularity contest. The 12 nominees elected to Amylin’s board are the ones who received the most shareholder votes. Cook and Wilson, who were the public faces of the company’s defensive reaction to the shareholder activists, were the ones who became least popular in the end.

Icahn and Eastbourne, which together hold about a 22.5 percent stake in Amylin, were targeting Cook and Wilson in their call for a board shakeup and improved performance at Amylin. But Greene, who is Amylin’s biggest individual shareholder and a leading figure in San Diego’s biotech community, clearly helped tip the balance.

When Greene was asked to resign from Amylin’s board in April, he groused in an open letter filed with the SEC that “the obvious and appropriate choice to not … Next Page »

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Although the financial meltdown has hit San Diego’s venture community pretty hard, Lux Capital’s Larry Bock says he made his most-successful investments during the biotech nuclear winter of the early 1990s. So what areas of venture innovation seem promising today? That’s what Xconomy is here for, my friends. Read on.

— Serial healthcare entrepreneur James Sweeney sees a wave of innovation coming in the field of wireless healthcare, and it might be worth listening to what he has to say. As Xconomy’s Juha-Pekka Tikka reported, one of the eight healthcare companies he founded was CardioNet, which is now regarded as the first commercially successful wireless health company in the United States. Sweeney will discuss his vision for wireless healthcare this Thursday morning at the Convergence Summit organized by San Diego’s Wireless Life Sciences Alliance at the Estancia La Jolla Hotel & Spa.

—For a company locked in a proxy fight, San Diego’s Amylin Pharmaceuticals (NASDAQ: AMLN) did a good job last week of showing it doesn’t need billionaire investor Carl Icahn to cut its costs or to advance new drug products. Amylin said Monday it plans to lay off 200 sales reps, or 11 percent of its global workforce, as part of a sales reorganization. On Tuesday, the diabetes drug developer said it had submitted a new drug application to the U.S. Food and Drug Administration for exenatide, its once weekly drug for type 2 diabetes.

—The price of shares in Acadia Pharmaceuticals (NASDAQ: ACAD) more than doubled on Monday, when the San Diego biotech said it stands to get as much as $395 million in milestone payments from Biovail, Canada’s largest publicly traded pharmaceutical. Acadia’s stock lost some of its altitude through the week, closing at $1.81 a share on Friday, after trading above $2.60 a share Monday. Acadia has scheduled a conference call this afternoon to discuss its Q1 financial results and drug development programs.

—San Diego’s Vical (NASDAQ: VICL) said it is nearly ready to begin producing a prototype vaccine for the H1N1 influenza, aka swine flu . In a Q1 conference call Thursday, Vical CEO Vijay Samant said the company should be ready to start making vaccines this week that are suitable for clinical trials. “We are talking of production time of six to nine weeks rather than six to nine months with conventional vaccines,” Samant said.

—Spectrum San Diego is ready to introduce its CarScan technology next week at the Force Protection Equipment Demonstration conference in Stafford, VA. Spectrum’s founding CEO Steven W. Smith, who is an expert in digital signal processing and ultra-low level X-ray emissions, told me the car-scanning technology he developed produces clearer images of interior compartments by combining two different types of ultra-low level X-ray emissions. Motorists can remain in the car while it’s being scanned.

—Reva Medical, which got $42 million in venture capital in 2007 after clawing its way back from near death when the market for its metal stent collapsed, is preparing to move to human studies of its fully dissolvable cardiac stent. CEO Robert Shultz told Xconomy’s Denise Gellene the clinical trial will likely include 300 to 500 patients and take two … Next Page »

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Amylin Pharmaceuticals (NASDAQ: AMLN), which is engaged in a proxy fight, has submitted a new drug application to the U.S. Food and Drug Administration for exenatide, its once weekly drug for type 2 diabetes. The San Diego biotech made the announcement today with Eli Lilly (NYSE: LLY), its marketing partner, and Cambridge, MA-based drug developing company Alkermes (NASDAQ: ALKS).

Amylin, Lilly, and Alkermes have been working to develop a new version of Byetta, the diabetes drug developed by Amylin, as a once-a-week injection based on Alkermes’ proprietary technology for long-acting medications.

“The clinical data supporting this submission highlight the potential of exenatide once weekly to significantly advance the treatment of type 2 diabetes,” says Amylin’s president and CEO Daniel Bradbury, according to the companies’ joint statement. “If approved, exenatide once weekly would be the first and only once-a-week therapy for the treatment of type 2 diabetes,” says David Vondle, Lilly’s global brand development leader.

Billionaire investor Carl Icahn and Eastbourne Capital Management, who together hold a 22 percent stake in Amylin, have targeted the San Diego biotech’s financial performance (and lagging Byetta sales) in their quest to gain more control on the company’s board. Amylin said yesterday it plans to lay off 200 employees in a restructuring of its sales force.

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Amylin Pharmaceuticals (NASDAQ: AMLN) became one of San Diego’s Cinderella success stories in 2005, when the U.S. Food and Drug Administration approved two of its diabetes drugs—some 18 years after the biotech was founded. But the company has been buffeted by some unusual challenges in recent months.

Demand for exenatide, Amylin’s lead diabetes drug, has slumped since last summer, when the FDA reported that six patients using the drug marketed as Byetta had developed pancreatitis, an inflammation of the pancreas that in some cases can be fatal. The agency didn’t link those cases to exenatide, in fact, diabetic patients are at greater risk for such infections. But the warning put a big question mark over Amylin, which gets almost 90 percent of its product revenue from this drug. The price of Amylin shares have tumbled by two thirds since Aug. 18, when the FDA issued its warning .

Since then, a more significant question has arisen, which is whether the pancreatitis issue will affect Amylin’s request for FDA approval of a longer-lasting version of exenatide that requires injections only once-a-week, instead of twice daily. The company has been working on winning FDA approval with Eli Lilly(NYSE: LLY), which also markets Byetta in a partnership with Amylin. The progress of their application once seemed assured, but now the course is much more uncertain. After a setback with the FDA in November, when the price of Amylin shares fell to a seven year low, the company cut 340 employees, or 16 percent of its workforce. Amylin said the move was intended to save about $100 million and put the company in a stronger financial position for 2010.

In the meantime, the decline in Amylin’s stock price also stoked trouble on a different front with a couple of dissident shareholder groups, including one headed by Carl Icahn, the billionaire investor and corporate raider. Icahn began to significantly increase his stake after Amylin’s plunge last August, and now owns a 9.4 percent stake in the company.

In January, Icahn disclosed plans to nominate five directors to Amylin’s board. That was a sign to some analysts that Icahn wants to shake up Amylin and possibly even push … Next Page »

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