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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“The Immunex Alumni: Where Are They Now?“

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Yesterday, we ran the first half of the Seattle life sciences year in review, which focused on biopharmaceutical companies and global health organizations. Today’s rundown will cover the medical device, diagnostic, and health IT side of the local life sciences cluster.

Medical devices may not fare so well in a glamour contest, but this year the Seattle device community had more success stories, more acquisitions, upheaval, and even a couple of controversies. SonoSite was the biggest acquisition of the year, and although terms weren’t disclosed, it was almost surely followed by Pacific Bioscience Laboratories (the maker of the Clarisonic skin brush you see prominently displayed at Nordstrom). Calistoga Pharmaceuticals, you had a great year, but your deal is probably the third-biggest of the year in Seattle biotech. Sorry.

For the highlights from Seattle med-tech, diagnostics, and various Bio-IT operations, read on:

Sonosite (NASDAQ: SONO): The maker of portable ultrasound machines has been relatively stable, and modestly profitable as an independent company for some time, so I was surprised to see it get acquired for $995 million earlier this month by Japan-based Fujifilm. Shareholders can’t complain, given the price represents a 50 percent premium over SonoSite’s prior closing stock price. This is the biggest deal of the year in local life science, by a long shot.

NanoString Technologies. This was a big year for NanoString. The company, a spinoff from the Institute for Systems Biology, developed a second-generation version of its digital nCounter instrument, which measures the extent to which multiple genes are turned on or off in a biological sample. This was part of a bold plan to turn this scientific instrument into a diagnostic tool. By the end of the year, NanoString had raised another $20 million from GE, former Genzyme CEO Henri Termeer, and others, and it presented some important data that suggests it could compete with Redwood City, CA-based Genomic Health (NASDAQ: GHDX) in the breast cancer diagnostic market.

Clarisonic. Terms weren’t disclosed, but this could be the second-biggest acquisition of the year in Seattle’s life sciences community (although this company is hard to really categorize). Pacific Bioscience Labs, the maker of the Clarisonic skin brush, was acquired by cosmetics giant L’Oreal last month. The Clarisonic surpassed the $100 million sales mark in 2010, was highly profitable, and growing by leaps and bounds. My best guess is that Clarisonic sold for about $500 million. It’s the second home run for the same entrepreneurial team who developed the Sonicare toothbrush.

Geospiza. The Seattle-based developer of software … Next Page »

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

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

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

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

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

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

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

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

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I received a call from Steve Duzan in the spring of 1981 saying that he had been offered the position of CEO of a new company, Immunex. If he accepted, he wanted to know if I would be willing to be outside legal counsel. He briefly told me that Immunex was a biotech company being formed by Steve Gillis and Chris Henney, two scientists who had discovered something called IL-2 and were leaving the Fred Hutchinson Cancer Research Center to launch Immunex.

I am not sure whether Duzan or I was the least qualified to be involved in a biotech company. Duzan had been CEO of two small non-tech private companies, Cello Bag Co. and North Star Ice Equipment Corp, which manufactured ice making equipment. I was a corporate/securities lawyer at Perkins Coie mostly handling public offerings for Boeing and Puget Sound Power & Light and the beginnings of an emerging tech practice. I could tell you a lot about aircraft and dams, but nothing about biotech other than that Genentech, founded a few years before, was doing something with DNA and had gone public in 1980, raising $35 million. I don’t think that I was aware of Amgen, which had been founded the year before, in 1980.

Needless to say, Duzan and I both said yes.

I had known Duzan beginning in 1967 when he and I were part of a group called CHECC, Choose an Effective City Council, which had been composed of then Young Turks who banded together to replace a staid city council with reformers Tim Hill and Phyllis Lamphere and later John Miller and Bruce Chapman.

Our first task was to negotiate a license agreement with the Hutch so as to secure the technology that Gillis and Henney had developed. License agreements were novel territory for Duzan and me, but I quickly looked at some treatises and sample license agreements. The Hutch was willing to take stock instead of cash. When we offered 25,000 shares, they countered with 50,000 shares. We accepted. I don’t remember anyone asking about percentages.

Another early task was to negotiate a rental agreement for offices. Immunex had identified some space in a Martin Selig building on Queen Anne Hill near Seattle Center. Duzan and I went to Selig’s office to negotiate a lease with him and after some initial skirmishes, we agreed on the terms. Selig seemed positive, so we were shocked to hear from him a few days later that he couldn’t lease the space to Immunex because his bank, Seattle First, didn’t think Immunex was viable and wouldn’t lend to him against the lease. SeaFirst shortly thereafter lost enormous amounts on its loans in Oklahoma to speculative oil companies and was taken over by Bank of America. Selig has managed much better and today is a friendly landlord to tech companies.

Immunex’s initial equity capital was provided later in 1981 by Cable & Howse, Seattle’s earliest institutional venture capital firm. Tom Cable and Woody Howse were the pioneers of … Next Page »

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This Friday the Washington Biotechnology & Biomedical Association (WBBA) will release findings from its 2010 Economic Impact Report at their Governor’s Life Sciences Summit and WBBA Annual Meeting. With the sometimes volatile ups and downs of our industry, these findings have the potential to propel WBBA forward in both current and new initiatives and strategies to build Washington state’s life sciences sector.

We know the life sciences industry has grown to be a significant part of Washington state’s economy. Even through tough economic times, we’ve seen employment numbers pass many of the traditional resource-based industries on which the state’s economy was founded. The life sciences industry is crucial not only because of its size, but also because of its potential for economic growth and improved health for individuals. As the trade association serving this industry in Washington, WBBA has been effective in supporting its members and companies as they work to translate innovation to realization. As I take over the reins as the next WBBA board chair, our goal will be to continue to advance the agenda that we have established thus far—to help all of our member organizations get access to additional financing to further their product development efforts.

Under Tom Clement and Chris Rivera’s leadership, the WBBA has done a good job of laying a solid foundation for establishing Washington state as a leader in the life sciences and in global health. We have one of the largest, most vibrant industry organizations in the country. However, in order for us to maintain our leadership role globally, we have to take a long-term approach by continuing to make investments in projects that have the potential to grow into bigger and more substantial development projects that benefit our healthcare ecosystem. This will require the help and support of all of our stakeholders—from WBBA members to our affiliate members, to local, state and federal elected officials, to patient advocacy groups, to healthcare providers and any other groups willing to join us. There is much to do in educating both the public and our elected officials so that they understand the long-term benefits of what our industry can provide in terms of hope and in terms of the life-saving healthcare solutions for patients and their families. Working together, we can develop sustainable policies that can be implemented now to support and grow our diverse life sciences sector.

Fundamentally we’ve come out of a pretty tough time. Right now, life science companies are facing substantial risks. The public markets haven’t … Next Page »

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Chronically bad unemployment is the biggest story in the U.S. today, and we had some more bad news about jobs being lost this week in Seattle biotech. But there were a few other good things to report, including a story about a new company being born.

—Amgen (NASDAQ: AMGN), the Thousand Oaks, CA-based biotech giant, said this week it is cutting 380 jobs companywide from its R&D operations, which includes 70 people at its sites in Seattle and Bothell, WA. The company plans to say more about the cutbacks Monday on its quarterly financial conference call.

—GlaxoSmithKline made big news in Seattle this week at the Bill & Melinda Gates Foundation‘s malaria forum. The story was about how GSK’s experimental malaria vaccine, supported by the Gates Foundation through the PATH Malaria Vaccine Initiative, was found to protect about half of African children in a Phase III clinical trial. But there’s an elephant in the room about vaccine cost that nobody is really discussing thoroughly in public.

—The latest biotech startup in town has officially spun out of the Fred Hutchinson Cancer Research Center. The company, called Blaze Bioscience, has raised its first $725,000 in angel financing and recruited former ZymoGenetics dealmaker Heather Franklin as its CEO. The idea, from the lab of researcher Jim Olson, is to “paint” tumors so that surgeons can make sure they get rid of the whole tumor, and not leave behind straggler cells that can lead to a recurrence.

—I’ve had Immunex on the mind lately as we prep for our next big Xconomy life sciences event, “The Immunex Impact“ on Dec. 1 in Seattle. Yesterday, I invited Immunoids to bring some old photos and company memorabilia to the event. I also announced the newest addition to the lineup of speakers—Patricia Beckmann. She will join Steve Gillis, Chris Henney, Doug Williams, Stewart Parker and others in this special confab of Immunex alumni. And speaking of Henney, he was honored this week with a biotech “Hall of Fame” award at an annual industry event in Laguna Niguel, CA.

—Bothell, WA-based Marina Biotech (NASDAQ: MRNA) has been running low on cash lately, but it found some support this week from a single investor who agreed to put as much as $15 million into the company over time.

—From the medical device side of town, we had a couple stories about companies going in opposite directions. Kirkland, WA-based Pathway Medical Technologies, acquired in August by Bayer’s Medrad unit, has allowed a lease extension option to expire on its headquarters, suggesting that it may not be interested in keeping operations in Seattle. On a more positive note, Redmond, WA-based Mobisante talked about how it has received more than 300 sales leads for its ultrasound-on-a-smartphone, even before it’s really ready to capture much of the market for this low-cost diagnostic tool.

—I know people have heard a lot of song and dance about genomics revolutionizing healthcare, and the reports have been greatly exaggerated to date. But in this week’s BioBeat I took a moment to marvel at the truly amazing kinds of experiments that are now feasible as scientists have learned how to sequence entire human genomes for $4,000 or less, in a matter of weeks. I’m going to explore this further next Monday at our next event in San Francisco, “Computing in the Age of the $1,000 Genome.”

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Heather Franklin had a lot to think about in September 2010. She was a senior vice president at Seattle-based ZymoGenetics, when it agreed to be acquired by Bristol-Myers Squibb for $885 million. Now that the big company was calling the shots, it was time to think about a new move in her career.

Jim Olson, a physician/scientist/entrepreneur at the Fred Hutchinson Cancer Research Center, sensed opportunity. Franklin’s name kept popping up at local industry events, when he asked people about the best candidates in town to become biotech CEOs. So he started bending her ear over the phone the day of the Zymo-Bristol announcement, September 7, 2010. The message: Here’s a great new technology that can help cancer patients, which needs a seasoned executive like you to help develop it.

“I quizzed him really hard,” Franklin recalls. “I said ‘It’s 2010, and here’s a paper from 2007. What’s happened since 2007?’ He described work that had been done to take something from a research project and really shape it for further development. After seeing Jim’s enthusiasm and vision, I told him I was enthusiastic about it, but needed to kick the tires.”

Olson, who also founded Seattle-based Presage Biosciences, says he was impressed. “When we met two days later, within 10 minutes I knew that this was the person who was best suited to advance Tumor Paint to help cancer patients,” Olson says.

Those original meetings in the fall of 2010 have culminated in a new Seattle biotech company called Blaze Bioscience. Franklin, the former senior vice president of business development at ZymoGenetics, is the CEO. She’s joined by two longtime colleagues from her Zymo days—Julia Novak as the vice president of research and project management, and Mila Lobanova, the vice president of finance and operations. The company has raised its first $725,000 in angel financing, and has an exclusive worldwide license to technology from Olson’s lab at the Hutch.

Heather Franklin

The big idea for the company is to apply molecular “paint” to tumors, to help surgeons clearly see the difference between cancerous and healthy tissues. Currently there’s no way for a surgeon to see in real time during an operation whether he or she has completely cut out a tumor. Physicians today use MRI scans, after a patient has been sewn up, to check to make sure they got the whole tumor out.

Blaze is seeking to go a step further, helping surgeons get a much better idea if whether they have truly gotten rid of the tumor while the operation is ongoing—which is critical in order to help avoid a relapse. It’s made to work by using a peptide molecule that’s attached to a fluorescent molecule. When a surgeon directs a camera and near infrared light into the surgical site, this should provide a clear picture of what tissue is cancerous, and what’s not. After the tumor is removed, the surgeon takes another look with the camera to see if any straggler cancer cells are left behind.

Olson’s lab has tested this concept in mice, and it will still require … Next Page »

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Seattle-based Immune Design has quietly pulled in another $11 million in venture capital. That new cash represents the second installment of a Series B financing that the company announced last July, when it was said to be worth as much as $32 million total.

Immune Design, the developer of new vaccine technology, disclosed the new financing in a regulatory filing that has been updated to say the Series B round could be worth as much as $34 million over time. Last July, the company pulled in $12 million, and now it has boosted the total financing up to $23.4 million in this round, according to the filing. The company didn’t issue a press release on the financing, but CEO Carlos Paya confirmed that the financing comes as a second tranche of the Series B financing. To date, Immune Design has pulled in $41.4 million between its first two rounds of venture capital.

The company has been one of the best financed biotech startups in Seattle, since it was founded in June 2008. Immune Design was founded by Nobel laureate David Baltimore of Caltech, Steve Reed of the Infectious Disease Research Institute, and Larry Corey, now the president of the Fred Hutchinson Cancer Research Center. It has raised its dough from a big name group of investors, including Versant Ventures, The Column Group, Alta Partners, and ProQuest Investments.

Immune Design CEO Carlos Paya

The vision of the company is based on developing two key technologies for vaccines. First, it’s aiming to create new synthetic compounds, called adjuvants, that boost the effectiveness of vaccines. Second, it is developing delivery technology that’s designed to trigger a specific immune defense against a certain invaders (like flu) instead of a more generalized immune reaction like the ones made by vaccines of today.

Paya, who joined Immune Design in April after a stint at Elan in South San Francisco, didn’t say what milestone the company hit to trigger the second tranche of financing. Immune Design’s biggest deal to date was a partnership struck last year with AstraZeneca’s MedImmune unit, in which the bigger company is getting access to an Immune Design adjuvant to enhance experimental vaccines for respiratory syncytial virus (RSV), Epstein-Barr virus, and cytomegalovirus (CMV) infections.

The late Ralph Steinman, the Rockefeller University biologist who won the Nobel Prize this week for his discovery of dendritic cells that alert other immune system cells to infections, was a member of the Immune Design scientific advisory board.

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We had an unusual mix of headlines this week on RNA interference, biofuels, and a quiet little startup in Bothell with Icos pedigree.

—There weren’t any major life science company financings to report this week, but the state’s academic centers had something to crow about with $80 million in new federal grants going to the University of Washington and Washington State University. The money is intended to help scientists find ways to turn lots of our regional biomass into renewable fuels, and hopefully create a few jobs along the way.

—I’m trying an experiment next week with a “Tweetchat” with one of the industry leaders in the field of RNA interference—John Maraganore of Cambridge, MA-based Alnylam Pharmaceuticals. For those of you interested in RNAi, and who have Twitter accounts, this will be a good opportunity. It will start at 10 am Pacific on October 4th, and go for about 30 minutes. The idea is to have an open conversation about where this whole gene-silencing business is going after a series of well-documented setbacks. For those of you not on Twitter, but interested in sending a question in to Maraganore, shoot me an e-mail. There is no shortage of interest in RNAi here in the Northwest, with Seattle-based PhaseRx, Bothell, WA-based Marina Biotech, Vancouver, BC-based Tekmira Pharmaceuticals, Vancouver, BC-based Alcana Therapeutics, and Seattle-based Groove Biopharma all working on various pieces of the puzzle.

—Cocrystal Discovery, led by a couple former Icosahedrons in Gary Wilcox and Sam Lee, has kept a pretty low profile its first three years in business. But that’s starting to change now that this company struck a new partnership with Israel-based Teva Pharmaceutical, and Wilcox gave me the inside scoop on what this team is setting out to do with antiviral drugs against hepatitis C, flu, and more.

—Adaptive TCR, a spinoff from the Fred Hutchinson Cancer Research Center, named a few familiar local biotech names to its roster of various advisors. Lee Huntsman of the Life Sciences Discovery Fund has joined Adaptive’s board of directors; Cassian Yee of the Hutch has been added to the scientific advisory board; and Carol Gallagher (formerly of Calistoga Pharmaceuticals) and Stewart Parker of the Infectious Disease Research Institute have been named to the startup’s corporate advisory board. Adaptive, for those just tuning in to this story, is using the tools of modern DNA sequencing and computing to help scientists better understand how DNA get shuffled around in B and T cells that make up our adaptive immune systems.

—We had a lot of perspective this week on what it’s like for women in biotech—not something I’ve written much about here the past three years. This week in BioBeat I talked about what looks like a potent new force for closing the gender gap in biotech—a new all-female networking group called Women in Bio. Coincidentally, we also had a guest post from Lisa Suennen, a venture capitalist in San Francisco, who talked about another women-dominated biotech event she recently attended in the Bay Area.

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Seattle-based Presage Biosciences, a spinoff from the Fred Hutchinson Cancer Research Center, has raised $1.6 million out of a new equity financing that could be worth as much as $10.5 over time, according to a regulatory filing. The document doesn’t say who is backing the company, although it says the round includes 20 investors. Presage, which has previously raised at least $4 million, has developed a tool that drugmakers are using to get a better sense of which experimental drugs are likely to succeed in clinical trials.

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I recently organized a MOHAI walking tour of South Lake Union to begin to explore the roots of the museum’s new neighborhood. My original intent was to explain the importance of South Lake Union as a biotech hub but a different theme emerged in the course of my research. It is true that Seattle has some success attracting biotech organizations to the city, and the prospects for our region are promising, but not stellar. Where our city, and the South Lake Union neighborhood in particular are “punching above our weight” is in our contribution to global health.

The most important asset for the city has been the University of Washington, which generates the intellectual feedstock that might foster either biotech or global health. Beginning in the 1960s, the school transformed itself from general education university to a formidable research institution. While the conventional wisdom is that Warren Magnuson funneled money to the school when he was head of the Senate appropriations committee, Lee Huntsman makes the distinction that Magnuson championed the growth in the National Institutes of Health and then informed the UW of what they had to do to compete for those funds. Needless to say, they learned to compete very effectively. UW is consistently among the top recipients of NIH funding.

The relative significance of global health may say more about our culture than our competence. While the UW is adept at winning grant money, it is less well known for launching companies. The saying is that “if you work at Stanford and get an idea, you call a VC. If you work at UW, you write a paper.”

Still, biotech is an attractive economic engine and the idea that biotech should congregate in South Lake Union goes back as far as 1985, according to The Seattle Times. But there is no evidence that when the Fred Hutchinson Cancer Research Center (the Hutch) moved to Fairview Avenue in 1994 they were influenced by the potential for the neighborhood. Most important to them was finding a site that was large enough and inexpensive enough to bring together their research groups. Likewise, when ZymoGenetics moved to the city’s former Steam Plant that same year (the “mother of all fixer-uppers”) it was for flexible space at a low price.

But by the time of the debate over the Commons project in 1995, Paul Allen envisioned the park surrounded by a collection of high-tech and biotech companies. After the failure of two referenda, Allen’s Vulcan Inc. redoubled its efforts to attract biotech facilities and it seemed logical to funnel software profits into the next big knowledge industry. It wasn’t until 2002 that the movement of Merck’s Rosetta Inpharmatics to Terry Avenue provided some validation for the skeptics.

In 2003 the city actively encouraged biotech by altering zoning regulations to allow for the higher ceilings and extra rooftop equipment necessary for laboratories. Yet in 2004, when Seattle BioMed moved to South Lake Union, the community was still less than alluring for many employees. The lingering decay and lack of lunch alternatives made the neighborhood unappealing.

But by the time that PATH was moving from Ballard in 2010, the neighborhood had reached a tipping point. The change was in part because … Next Page »

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This week, all eyes in Seattle biotech are on Seattle Genetics. If you don’t know why, here’s a chance to catch up. If nothing else, this will provide plenty of fodder for conversation at today’s WBBA Summer Social, which I plan to attend this afternoon.

—Seattle Genetics (NASDAQ: SGEN) is making its case today in front of an FDA advisory panel that’s reviewing the company’s lead drug candidate, brentuximab vedotin (Adcetris). If the FDA ends up clearing this drug for sale in the U.S., it will not only be Seattle Genetics’ first marketable product after 14 years in business, it also has a chance to be a trailblazer in a new category of therapy, as the world’s first commercially viable “smart bomb” for cancer. The FDA staff review, in documents posted online Thursday, was benign to say the least. I plan to listen to the proceedings via webcast, and report on the FDA panel’s vote and commentary later today.

—Seattle-based Allozyne is seeking to go public through the backdoor route, a reverse merger with a shell of a public company—Poniard Pharmaceuticals (NASDAQ: PARD). CEO Meenu Chhabra talked about all the steps that she’s taking to generate interest in Allozyne on Wall Street, and how this is different from the traditional IPO route.

—Not all the news this week from Seattle Genetics was of the happy variety. Zishen Fan, the brother of a former Seattle Genetics employee, pleaded guilty to federal charges that he traded on inside information about the company in order to pocket more than $700,000 in profits. Fan could face as much as 20 years in prison, according to a statement from the U.S. Attorney’s Office for Western Washington.

—The Fred Hutchinson Cancer Research Center said this week it has secured a $20 million grant from the National Institutes of Health to investigate a new HIV prevention strategy, along with collaborators at the University of Washington, and Richmond, CA-based Sangamo Biosciences (NASDAQ: SGMO), among others.

—The biotech industry today is facing lots of problems, and one them is a lack of guts. That’s the position I took in this week’s BioBeat column. So far, I can say the response has been overwhelmingly positive to this column—apparently biotechies still have thick skins, which I consider a good thing.

—Fate Therapeutics, the San Diego-based company that was co-founded by University of Washington stem cell researcher Randy Moon, disclosed that it has cut back on its small-molecule discovery work and laid off a handful of employees, to concentrate on developing biotech drugs. John Mendlein, the executive chairman, explained the moves in this Xconomy exclusive report.

—Lastly, we had a couple of guest editorials of interest to the local life sciences scene. Stewart Parker, now the CEO of the Infectious Disease Research Institute, offered up some insights into what she saw during her time as a commercialization consultant at the WBBA. And Melinda Moree, the CEO of BIO Ventures for Global Health, provided a fascinating case study on how biotech and global health organizations can work together in really productive ways.

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The Fred Hutchinson Cancer Research Center has secured a five-year, $20 million research project from the National Institutes of Health to study a method in which a patient’s T-cells can be modified to prevent HIV infections. The Hutch’s Keith Jerome and Hans-Peter Kiem are the lead investigators on the grant, and they are collaborating with scientists at Richmond, CA-based Sangamo Biosciences (NASDAQ: SGMO), the University of Washington, Beckman Research Institute at City of Hope in Duarte, CA, and Seattle Children’s Hospital. The approach seeks to eliminate a protein on immune cells, called CCR5, which the HIV virus uses as a gateway to infect and damage the immune system.

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This week we had news from a couple of Seattle-area life sciences companies who appeared at a big cancer drug conference, a notable financing story, and a couple of in-depth profiles.

—Kirkland, WA-based Pathway Medical Technologies, the maker of a tiny drill that clears out blockages in leg arteries, provided me with a detailed update on how it is doing three years after winning FDA approval. Pathway grew its sales more than 50 percent last year without increasing the size of its salesforce, although the company still hasn’t yet turned the corner to become profitable.

—The American Society of Clinical Oncology, the big annual extravaganza for cancer R&D, came to a close earlier this week in Chicago. The local biotech standard-bearers—Dendreon (NASDAQ: DNDN) and Seattle Genetics (NASDAQ: SGEN) both presented important new findings for their cancer drugs, which I included in this national wrap up story.

—Seattle-based Adaptive TCR, a spinoff from the Fred Hutchinson Cancer Research Center, said it has raised $5.8 million in a new financing round from wealthy individuals. CEO Chad Robins says the goal is to use the money to develop clinical applications around its technology for profiling the immune repertoires of individual patients.

—Is it a nutty idea for biotech drug developers to think they can grow up to become fully integrated, independent, profitable enterprises without selling out to Big Pharma? A couple of years ago, most people would have said yes, but this week in the BioBeat column, I put forward the notion that maybe there is still a way to do this.

—The Bill & Melinda Gates Foundation has been soaking up lots of attention lately for a series of grand openings of its new $500 million headquarters near Seattle Center. I snapped a bunch of photos when I attended an evening reception with lots of local media and politicians.

—I took time to profile Chris Garabedian, the ambitious new CEO at Bothell, WA-based AVI Biopharma (NASDAQ: AVII). AVI may not have a high profile locally or nationally, but this former Gilead and Celgene exec has big plans to make AVI into a much bigger company built on its novel treatment in development for Duchenne Muscular Dystrophy.

—PATH, the Seattle-based global health nonprofit, said it has formed a collaboration with Netherlands-based Crucell and London-based GlaxoSmithKline to see if it can combine a couple of malaria vaccine candidates into a more effective strategy for protecting people from this deadly infectious disease. Terms weren’t disclosed.

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Seattle-based Adaptive TCR, a startup that grew out of immune-system profiling work at the Fred Hutchinson Cancer Research Center, has raised $5.8 million in an equity investment round that could be worth as much as $7.5 million over time.

Adaptive TCR, profiled in these pages back in December, has secured the new financing from a group of wealthy individuals, according to CEO Chad Robins. He’s not naming names, although a filing with securities regulators says that 63 accredited investors participated in the round, and Robins said none are venture capital firms. This is the second notable cash infusion for the company, got up and running with its first $4.5 million in March 2010.

The investors are betting here on a big new idea that uses fast/cheap DNA sequencers, cloud computing infrastructure, and proprietary software. Those tools, taken together, are used to analyze a bewilderingly complex set of data on how a patient’s immune system has gone awry, or how it’s effectively responding to viral or bacterial invaders. So far, Adaptive TCR has found a market for this kind of tool, assembling a roster of more than 50 customers from academic research centers in its first year.

Lately, the business has been adding new customers at the rate of almost one per day, Robins says. That kind of momentum enabled the company to raise the new capital, which it plans to use for developing the technology into a new kind of diagnostic test for various forms of cancer or autoimmune disease.

“What we have is like the MRI for the immune system,” Robins says. The financing, he says, “will allow us to aggressively grow our brand and platform and emerge as a dominant player in the next-gen sequencing immune profiling space.”

Adaptive TCR isn’t disclosing how well it’s doing in terms of sales just yet. It has grown to 14 employees, and, while it isn’t yet profitable, it could get to that point by late 2011 or early 2012, depending on how much it chooses to invest in R&D, Robins says.

Chad Robins

The size of the market is really anybody’s guess since this is a new niche, and there are only a few emerging players besides Adaptive TCR, such as San Francisco-based Sequenta. The opportunity will depend on which diseases Adaptive TCR sets out to diagnose. Robins wouldn’t say which forms of cancer or autoimmunity the company has in mind.

Adaptive TCR’s biggest fans are early adopters in the biomedical research community, Robins says. While the company hopes to publish eight to 10 academic research papers of its own this year, to show what its ImmunoSEQ system can do, the technology could get an even bigger boost from what those scientists do with it on their own, he says. About a half dozen influential scientists have submitted papers to top scientific journals on discoveries they have made with the Adaptive TCR system, and the company has increasingly been cited for its work at scientific meetings, Robins says.

What this tool is supposed to do is something that nobody really thought seriously about until DNA sequencing got super-fast and super-cheap, as did cloud computing infrastructure.

A little science is required to get the gist. While the 3 billion letters of DNA that make up a genome are consistent in almost every cell of the body, the immune system’s B cells and T cells are an exception. In these cells, … Next Page »

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We have many problems in biotechnology but I think Seattle is well positioned to overcome those barriers. Bear with me as I work to one possible approach.

I think there are two problems weighing on the biotechnology industry producing the current melancholy – lack of sustainable employment over a career and the inability to change the drug development paradigm.

On Monday, Luke wrote about the discontented winter the biotech industry finds itself in. The excitement that biotech once had not only came from its possible ability to create new therapeutics. It also came from its promise to sustain a large industry of scientists and their support personal.

A few weeks ago, Luke wrote another article about careers in biotechnology and Ed Lazowska had a comment with a wonderful link to a white paper just released by the President’s office.

It shows that we are training about 10 times as many people in the life sciences as are needed by the open positions.

What are we training all these people for? Academia cannot really take up the slack and for-profit corporations simply do not have the need.

This is not a new problem. In fact, my first column for Xconomy discussed the poor career paths for young researchers today. But these numbers are quite stark.

A company such as Dendreon or Amgen may hire lots of people in the life sciences and may produce some very important therapeutics.

But one single successful company does not make an exciting industry. Twenty might.

Biotech used to have the promise of that twenty.

When I started in the biotechnology industry, there was a clear career path for researchers who wanted to move in a different direction than academia. Biotechnology companies could be well funded based purely on the research from labs.

The goal of many companies was to become a fully integrated pharmaceutical company – a single entity translating their own research through clinical trials and product development to manufacturing and sales.

They could then play with the big boys – the major pharmaceutical companies. With lots of employees and many novel therapeutics on hand.

Immunex was one of the few that actually achieved that goal – thousands of employees with a wide portfolio of therapeutics. Of the multitude of hopeful organizations that started in the 80s, Amgen is perhaps the only one still standing that realized the dream of becoming a major, independent and fully integrated pharmaceutical company.

Biotech today cannot provide long term livelihoods for all the people who want to enter the industry. Many companies are simply looking for an exit strategy and will be gone from the landscape in a few years – whether they are successful or not.

Possibly exciting for investors but not for the general public and not for the people who make up the industry.

In addition, another promise – that biotech would change the paradigm of drug development – has simply not emerged, dampening the excitement further.

A paper in Nature Reviews discusses the ugly numbers. Almost all of … Next Page »

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There might be 100 good energy ideas in the U.S. today, as Bill Gates said last week at a fundraiser for Climate Solutions, but one of the really big ones he’s backing is San Diego-based Sapphire Energy. This company, which has raised more than $300 million to execute on its vision of making algae a practical source of renewable fuel, is either going to make a big difference, or a big flop, in the energy business.

Sapphire doesn’t make a lot of appearances to talk about its work in Seattle, which is partly why I’m looking forward to our next Xconomy event “Separating Hype from Reality in Alternative Fuels” on Thursday. This conference will feature two of Sapphire’s co-founders, Kristina Burow and Ned David. I’ll be moderating a keynote chat between those two, and Margaret McCormick, the founding CEO of Seattle-based Matrix Genetics.

The people on this panel are so dynamic that I could probably sleepwalk through the moderating part and it would still be dazzling. Burow, a partner at Arch in San Francisco in her 30s, has built a portfolio of chemistry-based companies that represent really big ideas, which could end up making her work on Sapphire look small. One of her other early investments is in San Francisco-based Siluria Technologies, which is developing a low-emissions process for converting natural gas into fuel and chemicals that go into plastics.

David is another big-thinking biochemist, who has co-founded five companies that have raised a combined $700 million. His latest venture, San Francisco-based Kilimanjaro Energy, is seeking to capture carbon dioxide from the air to help pop loose trillions of dollars worth of oil trapped underground for starters. If that goes well, Kilimanjaro will capture carbon to help feed all that algae that Sapphire Energy wants to harness for oilmaking. He’s the first to admit this is highly technical and easier said than done, but the payoff if it works will be tremendous, both for business, and the environment.

McCormick, a more familiar face in these parts from her time with Seattle’s Integra Ventures, will be able to talk a bit about what she’s been doing inside Seattle-based Targeted Growth the past few years, which is leading to the spinout of Matrix Genetics. One of her scientific advisors, Jim Roberts of the Fred Hutchinson Cancer Research Center, boldly stated last week that Matrix’s work in genetically modifying single-cell algae for oil production can stack up well against the better-funded, better-known efforts at San Diego’s Synthetic Genomics and Cambridge, MA-based Joule Unlimited. I guess we’ll see about that.

Beyond that trio, the program for this event is loaded with other features to highlight a broad cross-section of what’s going on in alternative fuels here in the Northwest. Here’s the agenda I’ve mapped out for Thursday’s gathering, which will get going at 6 pm at the Institute for Systems Biology.

Tickets are still available, including discounted seats for students, and startups. I’m psyched up to ask the hard questions about the renewable fuels business, and see what all these entrepreneurs have to say. See you there at the Institute for Systems Biology on Thursday night.

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We had one pretty noteworthy acquisition in the Bio/IT community this week, and a smattering of news items from the world of global health, biotech drugs, and biofuels.

—Seattle-based Geospiza, one of the mainstays of the bioinformatics industry, agreed to be acquired by PerkinElmer (NYSE: PKI), the giant life sciences toolmaker in Waltham, MA. Terms of the deal weren’t disclosed, but there were smiles all around, as this company achieved a return for investors after 14 years in business (some of them lean years).

—PATH, the Seattle-based global health hothouse, got some good news this week when the GAVI Alliance said it has committed $100 million to disseminate a new meningitis vaccine through three more countries in Africa. PATH spearheaded the development of this new vaccine over the past decade, with support from a $70 million grant from the Bill & Melinda Gates Foundation.

—Margaret McCormick gave me the lowdown on the new startup she’s leading, Seattle-based Matrix Genetics, which is seeking to genetically modify single-cell algae organisms to make biofuels and specialty chemicals. This company is being spun out of Targeted Growth, where scientific work has been progressing the past three years. Jim Roberts, a professor at the Fred Hutchinson Cancer Research Center who advises the company, said he thinks this effort can compete with well-funded, well-known outfits like Craig Venter’s Synthetic Genomics, and Cambridge, MA-based Joule Unlimited. You can hear more from McCormick about the state of the algae biofuel business at Xconomy’s alternative fuels event on May 19.

—Halosource, the Bothell, WA-based maker of technology for purifying drinking water in developing countries, said this week its technology has secured a first-of-its-kind regulatory approval from health authorities in China. The company is now moving ahead with plans to commercialize its products in China, hoping to build on the momentum it had had in India, which enabled it to go public on the London Stock Exchange last year.

—Why are drugs getting such weird brand names? That was the question that got me started on last week’s BioBeat column, and led me to some pretty interesting answers. This column stirred up lots of votes on the best and worst drug names that have come out in the last year or so. Read on to see how your favorites did in this entirely unscientific poll.

—Speaking of interactivity, I took a little time last week to remind readers to check out our new-and-improved Xconomy fan page on Facebook. We are still experimenting a bit with this other mode of distributing the content we produce each day, and I’d love to hear your thoughts on how we can tailor this page to make it even better for you.

—Seattle Genetics (NASDAQ: SGEN) gave a pretty uneventful update in its first-quarter financial report, although I noted that it ended March with a whopping $456 million in cash and investments in the bank. Investors were probably most interested in the new brand name for brentuximab vedotin (Adcetris), which, frankly, is partly what inspired to write the column about weird drug names. In this case, brentuximab vedotin is the weird scientific name—and there are a lot weirder brand names out there now, in my opinion.

—Lastly, we had another hard-hitting guest editorial from Stewart Lyman, titled “Pharma/Academic Alliances: What the Numbers Don’t Tell You.” Stewart raised some important questions about how these deals get structured, which generated some back-and-forth commentary with Regis Kelly, the director of QB3, the organization that seeks to commercialize inventions from the University of California.

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Margaret McCormick has been dreaming of ways to make microorganisms do big things since her grad school days in biology at MIT. Years later, the scientist-turned-venture capitalist is now in a position to act on those dreams as CEO of a Seattle-based startup called Matrix Genetics.

The idea is about as big as startup visions get: engineering single-cell varieties of algae to become the workhorses that crank out commercial quantities of oil.

“I’ve always been fascinated by the power of single-cell organisms,” McCormick says. “There is so much unlocked potential for them to help us solve big problems.”

McCormick, one of the featured speakers at next week’s Xconomy event on alternative fuels, has led this quiet effort for the past three years inside Seattle-based Targeted Growth. While Targeted Growth grabbed headlines with hybrid camelina seeds that it turned into jet fuel for Boeing planes, McCormick and her team of a dozen scientists plowed away behind the scenes at something they believe has much bigger long-term potential.

The work has been focused on modifying one of the relatively simple genetic strains of algae, known as cyanobacteria, to produce more oils. Now that some critical early tests have been passed, McCormick says this effort is spinning off into a company of its own, which she believes can compete with a couple of the big names in the business of modifying algae strains for fuel. That includes Craig Venter’s Synthetic Genomics (which has a partnership with Exxon Mobil) and Cambridge, MA-based Joule Unlimited.

These are still the earliest of days for Matrix as a company. The company is made up of a team of 12 scientists, eight of them with Ph.Ds, housed inside the Institute for Systems Biology. Jim Roberts, a professor at the Fred Hutchinson Cancer Research Center, and Fred Cross, a professor at Rockefeller University in New York, are a couple outside advisors who have played a key role, McCormick says. So far, Matrix has five patent applications filed, with more to come, and it is on the fundraising trail, with a goal of nailing down its first $10 million to $15 million, McCormick says. But even at this very early point in the company’s development, McCormick says she has already had some preliminary talks with oil companies that she hopes could lead to technology licensing deals over the next couple years.

Roberts, who’s close to the project, has some bullish things to say about its progress. “The future of Matrix is very bright,” he says in an e-mail. “Our progress surpasses other companies that are also interested in developing cyanobacteria as an oil-producing organism, such as Synthetic Genomics and Joule.”

Exciting as it may be in the lab, it’s still quite a long way from being applied in the business world. The global energy and transportation market is staggering in size, worth an estimated $7 trillion a year, and Matrix Genetics has no illusions that it will take over a big chunk of it by itself. The business model depends on making important discoveries for turning cyanobacteria into oil factories, and then licensing the technology to big oil companies that have the money and expertise to refine, distribute, market and sell the energy products. Matrix, at this point, is sticking to its basic science, and isn’t banking on raising a huge amount of capital that would be required to build up its own commercial infrastructure.

“We believe the return on investment for us will be in the genetics. Our expertise has always been in the genetics, and we don’t have the team that will be needed to build out the entire value chain,” McCormick says.

The history of how this came about is pretty interesting. Targeted Growth, a company that’s been around more than a decade, has a lot of experience in using knowledge of genetics to boost crop yields. As years went on, and oil prices went up, Targeted Growth got more interested in … Next Page »

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My head is spinning from the whirlwind of presentations and hobnobbing at this year’s Life Science Innovation Northwest. The regional biotech showcase drew by far the most people in its 11-year history, almost 1,000. More importantly, folks I talked to from outside the region were impressed with the technology here, combined with the community’s can-do spirit.

It could just be that everybody is breaking out of their shells after many years of being beaten down, but whatever it is, there was a really strong vibe at this year’s regional biotech conference.

“You don’t see anything quite like this in the Bay Area,” said Brian Atwood, a managing director at Menlo Park, CA-based Versant Ventures, who I sat next to at lunch on Wednesday.

That’s not to say everything’s peachy. There’s still no IPO market to speak of, the regulatory barriers at FDA are daunting, many VCs are fading away, political and legal uncertainties dog the patent system, and Big Pharma has been, shall we say, stingy in how it values new technologies.

All that said, there are plenty of hungry entrepreneurs out there brimming with optimism about what’s ahead for their companies in 2011. Here are some tidbits I gathered on a handful of interesting small companies at the conference, who often fly below the radar.

—PhaseRx. This Seattle-based company, a spinoff from Patrick Stayton’s lab at the University of Washington, is creating new polymers to help deliver RNA interference drugs to the places they need to go in cells. PhaseRx raised a $19 million Series A venture round in February 2008 from Arch Venture Partners, 5AM Ventures, and Versant Ventures—and has said very little publicly in the three years since.

RNAi is one of the hot fields of pharma R&D, because it has the potential to specifically silence genetic targets of disease that are inaccessible to traditional small-molecule drugs, or protein therapies like antibodies. Delivering these small, interfering RNA molecules has been the primary challenge for this field, since a plain RNAi molecule basically gets chewed up by enzymes and flushed through the kidneys in minutes.

Lots of ideas are percolating to improve RNAi delivery, and one of the more promising is up the road at Vancouver, BC-based Tekmira Pharmaceuticals, which uses lipid nanoparticles to help keep the siRNAs stable in the bloodstream long enough so they can hit the desired target. PhaseRx has taken a different tack, making polymers.

Bob Overell

PhaseRx CEO Bob Overell, a former partner at Frazier Healthcare Ventures, says his company has been working these past three years to show that its polymers can be manufactured in a scalable, reproducible manner—which is vitally important to any prospective Big Pharma partner. The company has shown its delivery system can specifically hit an undisclosed genetic target of interest in mice, that it can make the drug accumulate in tumors, and that anti-tumor responses get better at higher doses.

This year, PhaseRx expects to enter into a “major partnership” with a Big Pharma company to license rights to the delivery technology, Overell said. The company will explore co-development opportunities as well, he said.

One thing Overell didn’t mention in his slidedeck was his existing cash position. He wouldn’t comment on where PhaseRx stands financially, but it sounds like he’s planning for a cash infusion. He said he plans to hire a VP of business development, and … Next Page »

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