Yesterday Saddle Brook, NJ-based CircuLite announced it received a $950,000 grant to develop a device for patients whose hearts have been weakened by pulmonary arterial hypertension, a rare and potentially fatal disease. The award, which came from the Cardiovascular Medical Research and Education Fund, was the latest vote of confidence in CircuLite’s core technology—a miniscule, implantable pump that’s designed to boost the heart’s ability to circulate blood.

The grant followed close on the heels of CircuLite’s latest financing, a $30 million Series D funding round that was oversubscribed. The financing, announced November 30, brought the total amount raised by the device maker to $99 million.

CEO Paul Southworth says CircuLite will funnel the new money into an ambitious list of goals he has established for 2012. The company expects to gain approval for its device, called Synergy, in Europe and to begin marketing it there for patients with chronic heart failure. CircuLite is also planning its first U.S. trials. And it’s developing a second generation of Synergy that can be implanted without major surgery.

CircuLite was founded in 2004 in a startup incubator called Accelerated Technologies Inc. (ATI), which was run by cardiologists. They recognized a hole in the cardiac-devices market: So-called ventricular assist devices were great for very sick patients. But those in the earlier stages of heart failure had no good treatment options. “There was an opportunity to get to patients before they got so sick,” Southworth says. “These are patients who have run the course on drugs or heart-rhythm management. There’s no place for them to go but to continue to worsen and fall into that late stage.”

Synergy works by supplementing the heart’s natural ability to pump blood. The device, about the size of a AA battery, is implanted by heart surgeons in a 90-minute procedure called … Next Page »

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There’s lots of interest in the protein drug engineering crowd to come up with new-and-improved forms of biotech drugs, and today we’re seeing another example in a new partnership between San Diego-based Ambrx, and New York-based Bristol-Myers Squibb (NYSE: BMY).

Under the deal, Ambrx said today it will get $24 million upfront, plus undisclosed milestone payments and royalties if any of its work materializes into marketed products. In return, Bristol-Myers is getting exclusive worldwide commercial rights to a couple of Ambrx’s research programs. One is the Fibroblast Growth Factor 21 (FGF-21) protein, which scientists think might be useful for treating type 2 diabetes, and the other is on the Relaxin hormone, which is being studied as a treatment for heart failure.

Ambrx has been around since 2003, working on some hard chemistry that seeks to make new amino acid building blocks to create new biotech drugs. These drugs are thought to have great versatility to swap in and out certain desirable properties, such as features that make them last longer in the body, or carry potent cell-killing agents. Ambrx has raised more than $100 million in venture capital in its history, and built a broad network of partners that includes Merck, Pfizer, Eli Lilly, and Merck KGaA of Germany.

Even while pharma research budgets have been tightening, there has been increasing interest in some of the new tools startups are developing for engineering protein drugs. South San Francisco-based CytomX Therapeutics, South San Francisco-based Sutro Biopharma, and Cambridge, MA-based Eleven Biotherapeutics are a few of the companies that have raised $30 million or more in venture capital in the past couple years, and Vancouver, BC-based Zymeworks struck a partnership earlier this month with Merck. And the seasoned hands of protein engineering at companies like Amgen, Roche’s Genentech unit, and Biogen Idec are working on all kinds of protein drug configurations, like those that can be engineered to hit two targets instead of just one. Seattle Genetics (NASDAQ: SGEN) recently won FDA approval for an engineered antibody linked to a toxin that makes it a far more potent drug for rare lymphomas, which has prompted multiple pharma companies to license the technology against other tumor types.

Ambrx has been pretty quiet on the news front for the past year, since CEO Steve Kaldor left. Ambrx still doesn’t list a new CEO on its website, although chief business officer Simon Allen was quoted on behalf of the company in today’s deal announcement.

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BG Medicine (NASDAQ:BGMD) took the long road to becoming a public company, scrapping its first attempt in 2008 and then spending just more than a year to wrap up its second IPO campaign this past February.

In a recent interview, Pieter Muntendam, the CEO of the Waltham, MA-based medical diagnostic company, told me how BG Medicine weathered the rough IPO climate and shared the company’s outlook for its main product: a test that assesses the prognosis of heart failure patients.

The public markets seem loath to buy into a life sciences company IPO. The select few firms that have actually completed an IPO have typically had to drop the asking price for their shares before buyers would commit. BG Medicine was no exception. The firm settled for $7 per share in its public debut in February, roughly half of what the company had previously sought for its stock, according to regulatory filings.

There was also some confusion about BG Medicine’s IPO plans in December when the company failed to price its shares on schedule. That sparked at least one media report that BG Medicine had again withdrawn its IPO.

In fact, the company never withdrew its IPO. Muntendam explained that the company decided not to price its IPO in December because of timing, with many people closing their books toward the end of the year.

“The biggest surprise for us was when … Next Page »

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HeartWare International (NASDAQ:HTWR), a Framingham, MA, maker of heart pump implants, said today it has raised $143.8 million in a public offering of convertible notes due in 2017. The firm plans to use the proceeds of the financing for general corporate purposes, including research and development and expansion of its manufacturing capabilities.

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BG Medicine, the Waltham, MA-based diagnostics company, said it has received FDA clearance for its lead product in development, a new test to measure the progress of patients with chronic heart failure. This is certainly the kind of news that can’t hurt for a company that’s trying to pull off an IPO, for the second time.

The company announced that the FDA has cleared its Galectin-3 test to help doctors assess the prognosis of patients with chronic heart failure. Galectin-3 is a protein associated with progressive fibrosis, or stiffening, of the heart muscle that makes it more difficult to efficiently pump blood, the company said. The protein marker is found in about 30 percent of heart failure patients, BG said. It’s the first novel cardiac test the FDA has approved for sale in five years, the company said.

Not surprisingly, BG Medicine updated its latest investor prospectus immediately to reflect the news of its FDA approval. BG said back in January that it hoped to raise as much as $86 million through an IPO, but hasn’t yet updated its plan with details on the share price, or number of shares it plans to sell. Since filing its original prospectus in January, BG now has a new group of underwriters supporting this deal. Led by UBS, they include Lazard, Baird, and Cowen & Co. The January filing said that Jefferies & Co, UBS, Cowen & Co., and Thomas Weisel Partners were the underwriters.

While an FDA approval is always good news for a startup company, BG cautioned in its investor prospectus against expecting too much in the way of sales. The company won approval in Europe in October 2009 for a similar, manual version of the Galectin-3 test that just gained FDA clearance, and has so far generated “only a limited amount of product revenue,” according to the prospectus. The future success of the company will depend on its ability to commercialize a more automated test, the company said in its most recent filing with the Securities and Exchange Commission.

“Although our manual BGM Galectin-3 test is an important element of our commercialization strategy, we believe that automated instrument versions of our test will be required for us to achieve broad customer acceptance and clinical adoption,” BG said.

Flagship Ventures has by far the biggest stake in BG’s ability to fulfill its business ambitions and complete the IPO. Flagship has about 45 percent of BG heading into the offering, followed by Gilde Europe Food and Agribusiness Fund (14.6 percent), and General Electric Pension Trust, Legg Mason Capital Management Special Investment Trust, and Smallcap World Fund, each of which have 7.7 percent.

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The big news came with a guilty plea by Sequenom’s former R&D chief, but it’s just the beginning. In pleading guilty, Elizabeth Dragon agreed to cooperate with a continuing criminal investigation of wrongdoing in the company’s development of a prenatal diagnostic test for Down syndrome. Our weekly wrap-up begins here.

—The former chief of research and development at San Diego’s Sequenom (NASDAQ: SQNM) pleaded guilty yesterday to conspiring to commit securities fraud. Elizabeth A. Dragon, who joined Sequenom in 2006 after 16 years at Roche Molecular Diagnostics, admitted in federal court that she had lied to investors about the sensitivity and accuracy of a prenatal genetic test the company was developing for Down syndrome. Dragon, who has agreed to cooperate with a continuing criminal investigation, also settled a civil suit filed yesterday by the Securities and Exchange Commission.

—San Diego’s DexCom (NASDAQ: DXCM) says it will comply with changes sought by the FDA in the way it labels certain biomedical devices used to monitor blood sugar levels. In a warning letter sent to the company, the FDA says DexCom should have disclosed that its sensor wires sometimes fracture, leaving wire splinters under the skin of some users.

—James Sweeney, who started CardioNet (NASDAQ: BEAT) in San Diego and led its $425 million IPO in 2008, says his advice to startup CEOs about initial public offerings is “to avoid going public at all costs.” Sweeney, who now heads San Diego’s PatientSafe Solutions, talked about IPOs, reverse mergers, and other corporate exits during a meeting of the San Diego Venture Group.

—In a small step for gene therapy, San Diego-based Celladon says its gene therapy treatment for healing patients with advanced heart failure didn’t appear to cause any serious side effects and was more effective than a placebo in a study with 39 patients. The biotech hasn’t yet disclosed exactly how effective its treatment is.

—Carlsbad, CA-based Life Technologies (NASDAQ: LIFE) made an undisclosed equity investment in San Diego’s Synthetic Genomics, the startup co-founded by genomics pioneer J. Craig Venter. Life Technologies makes many of the laboratory instruments and materials that Synthetic Genomics and other biotechs use to sequence the genomes of different organisms.

—Life Technologies also disclosed that it has acquired a 74 percent ownership stake in Germany’s GeneArt, one of five small companies around the world that specialize in synthesizing custom-ordered genes for use in biomedical research.

—Luke profiled Blue Heron Biotechnology, which is the Bothell, WA, biotech that Craig Venter recently turned to in making the first bacterial cell with an entirely synthetic genome. Like GeneArt, Blue Heron is among the five small biotechs that specialize in synthesizing custom-ordered genes for use in biomedical research.

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Gene therapy has never lived up to two decades of hype, but some intriguing new evidence for the technology emerged over the weekend at a medical meeting in Berlin. That was where San Diego-based Celladon unveiled results from a clinical trial—albeit a small one—that offers the first sign that gene therapy might help people suffering from heart failure.

Celladon hinted about what was coming in late April when it issued a vague statement saying that its gene therapy hit the main goal in a trial of 39 patients, demonstrating its superiority over a placebo. It turns out the trial, called “Cupid,” showed that a high dose of Celladon’s gene therapy offered a 50 percent lower risk of serious cardiovascular event like death, or a heart transplant, when compared with those who got a placebo. The Celladon treatment, called Mydicar, didn’t appear to cause any serious side effects, researchers said. Details were presented at the Heart Failure Association of the European Society of Cardiology.

“To see a signal like this in a small number of patients is promising,” says Barry Greenberg, a researcher at UC San Diego and an investigator on the study. “But you have to be realistic and say it is a small number of patients. It still needs to be re-produced in a larger study.”

That said, this data is sure to stir up hope in a long-struggling field. Gene therapy was hyped in the early 1990s as a cure-all for diseases that resisted conventional drug treatment. The idea is to deliver properly functioning copies of genes into cells where they can replace missing or faulty genes at the root cause of certain diseases. The field was plagued by safety concerns, and many companies abandoned the field over the past decade. After all those years, no gene therapy has won FDA approval.

Celladon, as I explained back in April, had a clear strategy on why it thought its approach would work. Older gene therapy techniques used common adenoviruses or retroviruses to deliver genes into cells, which often failed. Celladon sought out what it thought was a better delivery tool with adeno-associated virus technology from Seattle-based Targeted Genetics, which engineered the viruses to shuttle genes into cells without causing illness. Congestive heart failure was thought to be a promising field to study, partly because it’s a gravely serious illness that kills 300,000 people a year, who have few treatment options other than beta-blockers and diuretics. And Celladon’s therapy can be delivered via a direct infusion to the heart, and doesn’t need to circulate through the body-a distribution challenge that has plagued gene therapies before.

So what did researchers really learn from this “Cupid” study? The primary goal of the study looked at a whole kitchen sink of important questions … Next Page »

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NormOxys, the Wellesley, MA-based company on a quest to make a new class of drugs that normalize oxygen levels in deprived tissues, has raised $17.5 million in venture capital to run its first set of tests in people with chronic heart failure and cancer.

The financing was led by a new investor, Princeton, NJ-based Care Capital, and included the company’s original backer, Switzerland-based Index Ventures. NormOxys, founded in 2004, has now raised about $30 million since its founding.

NormOxys, which we profiled when it emerged from stealth mode in December, is certainly pursuing a novel idea. The company’s lead drug candidate is a small-molecule compound that it says can induce tiny oxygen-carrying red blood cells to release a controlled amount of their oxygen payload into tissues that desperately need more oxygen. NormOxys is thinking specifically about heart muscles laboring under the stress of congestive heart failure, unable to pump enough blood to provide the energy people need. This is a tricky thing to do, because delivering too much oxygen too fast can be a bad thing. Other companies have tested drugs that increase the production of red blood cells, or the amount of hemoglobin that carries oxygen, but have led to serious side effects, including heart attack and death.

But if NormOxys can show in a couple early studies over the next year that its controlled release of oxygen works in people like it has in animals, the company could tap into a potentially very big market. An estimated 5 million people in the U.S. suffer from chronic heart failure, a condition that causes severe fatigue and death. NormOxys could offer an alternative therapy to the standard beta-blockers and ACE inhibitors that have a more limited effect in boosting exercise capacity, at least compared to what NormOxys says it has seen in animals so far.

“We can get to proof of concept relatively quickly, and it will have a large impact on our value,” says CEO Martin Tolar. The prize, once the concept is proven, will be a partnership with a big drugmaker or an acquisition, Tolar says.

The NormOxys method is based on biology research from Claude Nicolau, a visiting professor at Tufts University in Medford, MA, and chemistry research from Jean-Marie Lehn, a Nobel laureate at the College de France in Paris. Their approach is to create drugs that work as “oxyrens,” which interact with hemoglobin in a way that allows that protein to release much more than the usual one-fourth of oxygen it binds with. The lead drug candidate is called OXY111A.

Today, NormOxys is also announcing that it has started the first clinical trial … Next Page »

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San Diego-based Cytori Therapeutics (NASDAQ: CYTX) is announcing encouraging results this morning 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 heart attack patients, the company says.

The first study involved 27 chronic heart disease patients; 18 got cell therapy and 9 received a placebo. After six months, the treatment group showed  improvements on key measures of oxygen consumption and aerobic capacity. By contrast, the placebo group’s performance on those key measures declined. The differences between groups are statisically significant, the company says.

Specifically, the treated group showed an average 3.6 percent improvement in maximum oxygen consumption compared to an average 18.4 percent decline in the placebo group. Aerobic capacity in the treated group as measued by metabolic equivalents (METS) rose .2 points compared to a drop of .8 points in the placebo group.

The second study involved 14 heart attack patients; roughly two-thirds received cell therapy within 24 hours after arriving at the emergency room, the remaining patients were in a placebo group. Although the study was too small to demonstrate statistical validity, the treatment group showed a stronger improvement trend.

No serious side effects related to treatment were seen in trials, Cytori CEO Marc Hedrick tells me.

It’s important to note that each study excluded … Next Page »

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Celladon has some tantalizing news today for the world of gene therapy. The San Diego-based biotech company is announcing that its experimental treatment, which delivers a gene to help people with heart failure pump blood more efficiently, has met its primary goal of showing the treatment is more effective than a placebo.

The trial enrolled 39 patients with advanced heart failure who were randomly assigned to get a single-shot infusion of Celladon’s gene therapy, called Mydicar, or a placebo. The study, called Cupid, was designed to compare the drug to placebo on a mixture of important factors, like whether patients on the drug could get out of the hospital sooner, how often they need heart transplants or implants, how far they could walk for six minutes, and how long they lived. Patients were followed for as long as a year.

Celladon isn’t revealing any details in today’s announcement about how much better its treatment performed versus placebo, so it’s impossible to say with certainty how big a deal this is. But CEO Krisztina Zsebo said her company’s drug showed a statistically significant advantage over the placebo group on the study’s primary goal. And there was no greater rate of adverse events among patients who got the gene therapy than those in the placebo. Detailed results will be presented at European Society of Cardiology’s Heart Failure Congress in Berlin on May 30, and will be published soon in a top peer-reviewed journal, Zsebo says.

“We’re very excited. This has been a long, tough program, and a lot of translational science has gone into making it a success,” Zsebo says.

If the European cardiologists agree that this is an important finding, it will be a major milestone for gene therapy and for heart failure patients. Gene therapy was hyped in the early 1990s as a cure-all for diseases that resisted conventional drug treatment. The idea is to deliver properly functioning copies of genes into cells where they can replace missing or faulty genes at the root cause of certain diseases. The field was plagued by safety concerns in the late 1990s, and many companies abandoned the field altogether. Even today, no such treatment has yet won FDA approval.

Krisztina Zsebo

But Celladon likes its chances for a few reasons: Older gene therapy techniques used common viruses as the delivery mode to get those genes inside cells, which often failed. Celladon sought out what it thought was a better delivery tool with adeno-associated virus technology from Seattle-based Targeted Genetics, which engineered the viruses so they would be efficient without causing illness. Congestive heart failure was thought to be an ideal testing ground for gene therapy, partly because it’s a serious illness that kills 300,000 people a year, who have few treatment options other than beta-blockers and diuretics. And Celladon’s therapy can be delivered via a direct infusion into the heart, and doesn’t need to circulate effectively through the body—a distribution challenge that has tripped up other gene therapies of the past.

The Celladon program began about five or six years ago, Zsebo says. The concept was to deliver a gene called SERCA2a into heart muscle cells. Once in the heart cells, it produces an enzyme that improves the heart’s ability to pump blood.

Everything is riding on the outcome of this trial for tiny Celladon, which … Next Page »

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The leading edge of innovation in medical devices is often concentrated on nifty implantable tools that a doctor can insert without a scalpel, as a less-invasive alternative to surgery. But now we’re seeing more startups, like Bothell, WA-based QuantumCor, designing devices to fix what’s broken in the body without even leaving any sort of implant behind at all.

QuantumCor’s vision is to change the way a common type of heart failure is treated, called mitral valve regurgitation. The idea is to allow doctors to heat up and tighten the loose, leaky tissue around the mitral valve that makes it hard for the heart to vigorously pump blood. CEO Vern Dahl told me about this plan, and how the company has secured the lead investor in a $10 million Series B financing, when we met the other day near the Xconomy office on Seattle’s First Hill.

The problem QuantumCor is trying to solve is the same as Kirkland, WA-based Cardiac Dimensions, so that sets up some friendly cross-town competition. Dahl insists there’s plenty of room for new contenders in this space. An estimated 3 million people in the U.S. have a loose mitral valve that allows blood to backflow into the heart. It’s a chronic condition that makes people tired and short of breath, making it hard to climb stairs, but rarely rises to the level of requiring open heart surgery.

Because the problem is so widespread, startups like Cardiac Dimensions have long sought ways to create a minimally invasive alternative like an implantable clamp or cinching device around the valve to make it pump correctly. None of these devices are currently available in the U.S., but the market for such alternatives could exceed $1.6 billion in the U.S. by 2016, according to the Millennium Research Group. While minimally invasive has traditionally been defined as catheter-guided tools like stents that prop open clogged arteries, or the Cardiac Dimensions’ wire clamp, QuantumCor wants to leapfrog ahead by shrinking tissue without implanting anything. This is the same concept driving a couple other device companies that have raised capital this year, Seattle-based Uptake Medical, and Redmond, WA-based CoAptus Medical.

Vern Dahl

“Anytime you can do a procedure and not leave something behind, it’s a plus,” Dahl says.

QuantumCor hasn’t started clinical trials of its device yet, and it still needs to raise more money to pursue its plan, so this isn’t going to appear in a hospital catheterization lab near you anytime soon. The company was formed in 2002 around some patents for using radio-frequency energy (RF), loaded on the tip of a catheter, which is aimed at the collagen tissue around the mitral valve. By using radio-frequency energy to heat up this collagen, the idea is that it will naturally shrink, causing the valve to seal properly and prevent blood from flowing back into the heart, Dahl says.

By naturally shrinking the tissue and not implanting anything, the QuantumCor device won’t create future complications for a doctor who might want to do surgery, it won’t get in the way of other devices, and it leaves open the possibility of future re-treatment, Dahl says.

Dahl has had a long career on the business side of big medical device players … Next Page »

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Krisztina M. Zsebo, CEO of San Diego’s Celladon, went to the annual meeting of the American Society of Gene Therapy to bust some scientific myths about the experimental technology.

The conference is meeting this week in San Diego, and when I caught up with her before her talk yesterday, she wasted no time busting myths about the corporate side of gene therapy as well.

Zsebo rejected the notion that venture financing for gene therapy companies has completely dried up. She pointed out that Celladon, which is working on a gene therapy for heart failure patients, received $9 million in venture funding earlier this year and stands to get $5.6 million more if certain milestones are met. What’s more, Celladon is in discussions with several pharmaceutical companies and expects to announce a development partner in the near future, she said.

Celladon is not an anomaly, she noted. This month, Applied Genetic Technologies, a Florida company working on a gene therapy for age-related macular degeneration with Cambridge-based Genzyme, received $11.8 million in venture funding.

There’s no question the economic environment is difficult, she acknowledged. But, “if you have a solid program, a strong mechanism of action and strong data … there are potential investors out there.”

Not that Celladon is immune to the misfortunes of other gene therapy firms. Seattle’s Targeted Genetics, which faces possible bankruptcy, manufactured Celladon’s drug. But Zsebo said Celladon has stockpiled enough of the drug to complete its clinical trials, and is working with Sigma-Aldrich, a contract manufacturer based in St. Louis, to produce the commercial product.

Gene therapy involves using a healthy gene to replace a defective or missing gene to relieve symptoms and cure chronic disease. A benign virus is used as vector to carry the healthy gene into a patient’s cells.

Celladon’s gene therapy uses a virus to deliver a gene that encodes for the SERCA2a enzyme, a key factor in maintaining a healthy heartbeat that is deficient in heart failure patients. The gene therapy is administered directly to the heart through a catheter that … Next Page »

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Targeted Genetics, one of the diehards in the field of gene therapy, appears to be near the end of the road. The Seattle-based biotech company said if it is unable to improve its finances by the end of next month, “We plan to begin the process of ceasing operations, seeking bankruptcy protection or otherwise winding up our business,” according to its quarterly filing with the SEC.

Based on “considerable efforts” to raise money in recent months, and the short deadline to bring in more cash, “we believe it is increasingly unlikely we will be able to secure additional financial resources in time,” the company said. Targeted, which has no marketed products, has run up a deficit of $322.7 million since its founding in 1992.

Targeted Genetics (NASDAQ: TGEN) has been trying to cut costs and craft a new strategy to build value for the last few months, since it founder, CEO, and spiritual leader H. Stewart Parker resigned in November. The company has worked to advance its programs for heart failure, an HIV vaccine, and a treatment for Lou Gehrig’s disease.

Gene therapy is about modifying viruses to carry copies of genes into cells where they can replace missing or faulty genes at the root cause of certain diseases. This technique was hyped in the early 1990s as a panacea for many ills beyond the reach of conventional medicine. Time magazine published a cover story in 1994 titled “Genetics: The Future is Now.” More than 100 biotech companies were formed with dreams of becoming the next Amgen or Genentech. Targeted Genetics was one of those companies, spun out of Seattle-based Immunex in 1992, during the early booms days. It rode the wave of enthusiasm to an IPO just two years later.

Yet right as the field reached its hopeful peak in 1999—around the time of the dotcom and genomics stock bubble—the field collapsed when Arizona teenager Jesse Gelsinger died of a massive inflammatory response in a gene therapy clinical trial at the University of Pennsylvania. This sparked a global ethical debate about informed consent in clinical trials, prompted the FDA to put all gene therapy clinical trials on hold temporarily, and has scared away many investors to this day.

Through it all, Targeted Genetics has forged on. Gene therapy has always used modified viruses as the most efficient delivery vehicle to shuttle genes into cells. Earlier generations of gene therapy used retroviruses or adenoviruses, which didn’t work, and raised some safety concerns. Targeted Genetics made its bet … Next Page »

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Targeted Genetics said today it has found a way to conserve its remaining cash reserves a few more months, through the first half of 2009. The Seattle-based biotech company (NASDAQ: TGEN) is transferring its manufacturing know-how of AAV viruses for delivering gene therapy drugs to contract manufacturers, and renegotiated its partnership with La Jolla, CA-based Celladon to give that company expanded use to manufacture the AAVs for heart failure. In November, the company said it only had enough cash left to run “into the first quarter of 2009.”

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Medical devices captured more than its usual mindshare in the Seattle life sciences scene this week, with news of a substantial venture deal and a new product that appears to be catching on in the marketplace.

—Pathway Medical Technologies, the Kirkland, WA-based developer of a high-speed drill that removes fatty buildups from leg arteries, revealed it is seeing strong demand from physicians for its device. More than 100 physicians have gotten the Jetstream system installed in its first five months on the market, says chairman Tom Clement.

—Xconomy broke the news that Ekos, the Bothell, WA-based maker of an ultrasound-based device to dissolve blood clots in the legs, raised $12.5 million in venture capital to support a commercialization drive of its device. CEO Bob Hubert hopes to cap off this round with another $2 million to $2.5 million.

—We took an in-depth look at PATH, the hard-driving nonprofit organization that aims to improve the health of poor people around the world. The Seattle-based group has pulled in $1.3 billion in funding from the Bill & Melinda Gates Foundation, making it the second-largest recipient of Gates grants in the world, behind the GAVI Alliance. In an extensive interview, CEO Chris Elias explained what has made PATH so successful.

—ZymoGenetics fell way short of Wall Street expectations in its first year in the marketplace with its first FDA-approved drug, recombinant thrombin for surgical bleeding. Now the man in charge of sales and marketing, Michael Dwyer, is leaving the company, according to a regulatory filing released yesterday. The company didn’t explain the circumstances of Dwyer’s departure.

—Merck snapped up Gary Gilliland, a star researcher from Harvard University, to run its merged cancer research center in Boston. He will replace Stephen Friend, the founder of Merck’s Rosetta Inpharmatics division in Seattle. Friend is leaving the company later this year to start an intriguing open-access system to allow biomedical researchers to better collaborate.

—Cardiac Dimensions, the Kirkland, WA-based maker of an implantable device for congestive heart failure, said it received approval to market its product in Europe. The company still has a ways to go in the U.S., where it hopes to introduce the Carillion Mitral Contour System in 2011 or early 2012.

—MDRNA, the Bothell, WA-based developer of RNA interference drugs, got a bit of a lifeline this week, … Next Page »

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Cardiac Dimensions did what it said it was going to do. The Kirkland, WA-based medical device company, which we profiled earlier this week, has won permission from European regulators to start selling its first product, a minimally-invasive implanted device to tighten up leaky heart valves.

The company has gotten its clearance in Europe through what is known as a CE Mark approval process, said CEO Rick Stewart in an e-mail. Cardiac Dimensions will now be in position to have talks with larger medical device companies that can help it distribute and market the device, called Carillon Mitral Contour System. The product still has a long way to go before getting approval in the U.S. Cardiac needs to run a 300-patient clinical trial starting this year, and if results are positive, it could be on the market by the end of 2011 or early 2012, Stewart says.

The device is made to treat a type of congestive heart failure, known as mitral valve regurgitation, in which the heart is no longer able to vigorously pump blood throughout the body. The reason is that the mitral valve loosens up, meaning that when the heart pumps blood out, some of the blood backflows into the heart. Cardiac Dimensions aims to tighten up the valve, and prevent the backflow, by using a catheter to insert a super-flexible alloy wire around the valve to cinch it up tight again. An estimated 3 million people in the U.S. have the illness, the company says.

Cardiac Dimensions hasn’t published the data that supported its European filing, but Stewart told me it has been tested in 72 patients around the world, and it has reached all of the goals researchers set in studies. Whether the data is actually good enough to convince governments, or insurers, to pay for it will be one of the next big steps the company will have to take.

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The great fear in biotech, one Boston-based executive told me a couple weeks ago, is that the markets have turned so dark that fundamentals no longer matter. The idea is that a company could show its drug really works, but the stock still won’t fly. At least one company in our neck of the woods, Seattle Genetics, showed this week that things aren’t that grim—not yet, anyway.

—Seattle Genetics, the Bothell, WA-based developer of cancer drugs, raised $55.8 million through a stock offering, which could swell to $67.3 million if shareholders agree to allow Baker Brothers Life Sciences to buy a bunch more shares at the same price. The company (NASDAQ: SGEN) is riding high after it released stellar results last month for patients with Hodgkin’s disease.

—Trubion Pharmaceuticals, a Seattle-based biotech company (NASDAQ: TRBN), got a headache this week when news broke that Pfizer bid $68 million to acquire Madison, NJ-based Wyeth this week. This could affect Trubion in a big way, because it has a partnership for its lead drug in development, TRU-015 for rheumatoid arthritis, with Wyeth. The takeover also narrows down the pool of potential dealmakers and acquirers for other little biotechs shopping around their wares.

—We at Xconomy broke the story about how MDRNA is running low on cash and taking drastic steps to slow down the burn. The Bothell, WA-based developer of RNA interference drugs (NASDAQ: MRNA), has asked executives to work for no pay, and frozen employee salaries at a flat $1,250 for the final two weeks of January, according to a source close to the situation.

—Novo Nordisk lost interest in the cancer drug business, so Seattle-based ZymoGenetics (NASDAQ: ZGEN) found a way to get back the full rights from Novo to a cancer drug candidate without forking over any upfront cash. We’ll know by mid-year whether this was a shrewd move, when data comes out showing whether the IL-21 drug treatment holds promise for kidney cancer and metastatic melanoma.

—Speaking of Novo Nordisk, the Danish company that is the world’s largest maker of insulin for diabetics, I profiled the company’s serious move to establish an inflammation research shop in Seattle. The new operation is hiring 80 local workers by 2010, and hopes to scoop up some of the world’s top immunology talent.

—Kirkland, WA-based Cardiac Dimensions is one of the many medical device companies in town that not a whole lot of people know, but is actually doing very interesting stuff. I got the inside scoop of what to expect this year from CEO Rick Stewart.

—The Infectious Disease Research Institute, the Seattle-based nonprofit research center devoted to diseases of the developing world, struck a deal with a partner in Brazil that hopes to develop a marketable vaccine for leishmaniasis. This disease affects about a half-million people worldwide each year, and kills one in 10, so this would be quite a feat if IDRI and Instituto Butantan in Sao Paolo can create an effective vaccine.

—Omeros continues to defy the gravity of the financial markets. The privately-held drug developer in Seattle raised $3.1 million in equity and grants from The Stanley Medical Research Institute to continue developing a drug candidate for schizophrenia. It’s the second dose of cash the company grabbed this month, after getting $465,000 from the Michael J. Fox Foundation for Parkinson’s Research.

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NitroMed (NASDAQ:NTMD), the Lexington, MA-based drug developer that struggled to market a heart failure drug for African-Americans, says it has agreed to be acquired for 80 cents per share in cash by investment firm Deerfield Management. This means NitroMed bailed out of previous agreements to sell BiDil to specialty drugmaker JHP Pharmaceuticals and to merge with Cambridge, MA-based biotech firm Archemix.

Archemix issued a separate statement confirming the terminated deal with NitroMed, and the associated fallout. Now that it’s planning to be independent again, Archemix said CEO Errol De Souza, who negotiated the deal with NitroMed, is resigning from the top job and will remain on the board of directors. Duncan Higgons, who was previously executive vice president of business operations, is replacing him as interim president and CEO of Archemix. De Souza had planned to step down after the merger with NitroMed.

Deerfield’s buyout offer, which is subject to NitroMed shareholder approval and other conditions, came last month after NitroMed announced the previous month that it agreed to an all-stock merger with privately held Archemix. The offer represents a 25 percent premium above NitroMed’s closing stock price yesterday of 64 cents. The Deerfield bid puts NitroMed’s value at about $36.8 million.

In October, before Deerfield made its bid, NitroMed said it would sell all assets related to BiDil (isosorbide dinitrate/hydralazine hydrochloride), its heart failure drug approved by the FDA for self-identified African Americans in 2005, for about $26 million. Now Deerfield’s acquisition of NitroMed is expected to close in April.

Archemix’s and JHP’s breakup fees with NitroMed provide some degree of a silver lining. As part of the firms’ agreements with NitroMed, Archemix is due to get a $1.5 million termination fee from NitroMed and JHP is expected to receive $900,000.

Archemix continues to land lucrative deals related to its drugs called aptamers, which use short pieces of DNA or RNA to bind with disease-related proteins. Last month Archemix received $27.5 million in upfront money in a deal to develop aptamer treatments for London-based drug giant GlaxoSmithKline. Two months before landing the GSK deal, former Archemix CEO De Souza told me that his firm had enough cash to support operations through the middle of 2010.

Also, Archemix says that it has just started mid-stage clinical trials of its lead aptamer drug for treating a rare blood disorder known as thrombotic microangiopathiesement.

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Cardiac Dimensions has a dream of developing the first method for tightening up loose heart valves without requiring a surgeon to touch a scalpel. This year, the Kirkland, WA-based medical device company will get a clearer sense of whether it has successfully created such a device, and whether it will become a practical way to help as many as 3 million Americans who suffer from a common form of congestive heart failure.

The company has somehow managed to keep a low profile in the Seattle innovation community, even though it has raised more than $60 million since 2001 from a venture syndicate that includes MPM Capital, Polaris Venture Partners, Frazier Healthcare Ventures, and Johnson & Johnson Development Corporation. So I tracked down CEO Rick Stewart for an update on what the company has done, and what’s to come.

The problem his company is trying to solve, heart failure, is one of those nagging, chronic diseases that has stumped pharmaceutical and device companies for decades. It occurs when the heart is no longer able to vigorously pump enough blood to circulate through the body. The heart physically enlarges, whether because of high blood pressure, fatty buildups that clog arteries, a heart attack that damages muscle, or all of the above. It’s one of many variations of cardiovascular disease, which has long been the No. 1 cause of death in America, and, not coincidentally, the biggest market opportunity for leading medical device companies like Medtronic, Boston Scientific, and Johnson & Johnson. If things go right for Cardiac Dimensions, it believes it could open up a new market of minimally-invasive implantable devices for heart failure, with multi-billion dollar market potential, like stents that prop open clogged arteries did in the 1990s.

“There’s a lot of energy here, a lot of excited people,” Stewart says. “We’re in for a very interesting year.”

Cardiac Dimensions is specifically focused on one of the more common varieties of congestive heart failure, called mitral valve regurgitation, found in about 2.5 million to 3 million Americans, Stewart says. This is a condition in which the heart enlarges, making it so the valves that usually push blood out no longer form a proper, tight seal, which allows blood to flow back into the heart. This inefficient blood pumping makes people feel constantly out of breath, and unable to walk more than a few blocks. Eventually, the heart fails, organs fail, and people die.

Very little is done to help these patients now. Some patients simply get drugs that lower blood pressure or manage fluid balance, Stewart says. In rare cases, patients will get a surgically-implanted ring around the valve to hold it together, while others with severe disease depend on a heart transplant.

Cardiac Dimensions got its start as one of the three device companies incubated at Kirkland, WA-based Scout Medical Technologies in 2001. Ever since, it has been pursuing a simple idea for how to tighten up the mitral valve so it can open and close more normally and force blood through the body again. The technique is supposed to work by running a flexible catheter down the jugular vein into another coronary vein that has the nifty anatomical virtue of wrapping around the outside of the mitral valve. The cathether is loaded with Cardiac Dimensions’ proprietary six-centimeter nitinol alloy wire that’s super-flexible and remembers its shape. This thin device snakes around the mitral valve. It is made to prop open on both ends, creating a pressure seal against the blood vessel wall, essentially forming an anchor there. The doctor, an interventional cardiologist, then cinches up the tissue tightly to make sure the valves connect right. Everything is watched on a TV monitor, and the procedure generally takes about an hour, Stewart says. (Cardiac Dimensions has produced a video depiction of this procedure on its website.)

“There’s growing evidence if you can just make a small difference in the amount of regurgitation, or even slow down the progression of it, you can have a tremendous impact on quality of life and possibly on mortality of patients,” Stewart says.

Cardiac Dimensions isn’t going into a great amount of detail yet about the data that supports this device, … Next Page »

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The scientific community, and Wall Street, will be buzzing this week about microRNA. That’s because a Carlsbad, CA-based company called Regulus Therapeutics and its collaborators have suggested for the first time that a drug that blocks microRNA can prevent and treat heart failure in animals.

Regulus, a joint venture of Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY) and Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) is breaking the news today online in Nature. The researchers found in a series of experiments that a tiny strand of RNA called mir21 is overactive in heart failure, and contributes to a stress reaction that causes enlargement of the muscle and inefficient blood pumping. When the scientists designed an antisense drug to specifically block mir21, it prevented those changes in the heart muscle of mice, and was able to reverse that condition in mice who already had the disease, researchers said.

MicroRNAs weren’t discovered until 1993 in worms, and not until 2001 in humans. They are thought to have big potential as drugs, because they can affect not just one gene or protein in isolation, but full networks of genes-a strategy which might be useful in treating complex diseases like diabetes or congestive heart failure, where multiple genes can get messed up. Heart failure, which can occur after stress from a heart attack, certain infections, or high blood pressure, affects about five million patients in the U.S.

“This is big news for the field,” says Kleanthis Xanthopoulos, CEO of Regulus. “This is the first time we believe anyone has demonstrated a therapeutic affect of a drug to inhibit microRNA.”

Until this finding, researchers have been only been able to show microRNAs can have an impact on “surrogate” measurements that suggest early promise against a disease but don’t say for sure whether the drug is really altering the disease. Examples are when a treatment lowers cholesterol, it might reduce the risk of heart attack, or when a drug shrinks tumors, it might help cancer patients live longer, Xanthopoulos says. … Next Page »

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