Tandem Diabetes Care, a San Diego medical device maker founded in 2008, has raised $12 million of a financing round that could eventually total nearly $13.7 million, according to a recent regulatory filing. The company has applied to the FDA for clearance for its insulin pump, according to VentureWire.

The company’s website says its wearable insulin pump is an alternative for people with type 1 diabetes who have difficulty managing their diabetes on multiple daily injections. The device features touchscreen controls and a graphical user interface, and can be connected via a USB port to a Web application the company has developed to upload as much as 90 days of insulin pump data or blood glucose meter data.

Tandem Diabetes applied for 510(k) clearance from the FDA, VentureWire reports, meaning it believes its insulin pump is similar to other devices already on the market.

Indeed, as Luke reported last year, the company faces a market with many established insulin pump makers, including Minneapolis-based Medtronic; Bedford, MA-based Insulet; Switzerland’s Roche; New Brunswick, NJ-based Johnson & Johnson; South Korea’s Sooil; and Japan’s Nipro.

The $13.7 million offering described in the new filing is a combination of equity, debt, and options. In January, 2010, Tandem raised $52.3 million from investors that include Delphi Ventures, Domain Associates, HLM Venture Partners, Second Technology Capital Investors and TPG Biotech.

Tandem’s board of directors includes CEO Kim Blickenstaff, who joined the company in 2007, after Inverness Medical Innovations acquired his previous company, San Diego-based Biosite, for $1.8 billion; Amylin Pharmaceuticals founder Howard “Ted” Greene; Dick Allen, a prominent startup investor; John Livingston, a former executive with MiniMed; Tandem founder Paul DiPerna; Jesse Treu of Domain Associates; Keith Grossman of TPG Biotech; Doug Roeder of Delphi Ventures; and Ed Cahill of HLM Venture Partners.

An estimated 23.6 million people in the United States have diabetes, according to the American Diabetes Association. Type 1 diabetes, also known as juvenile-onset diabetes, occurs when the body loses insulin-producing cells in the pancreas.

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

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

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

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

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

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

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

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

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

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

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

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

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The big news in the San Diego biotech community this week came from the boardroom instead of the laboratory. Dissident shareholder factions elected representatives to the boards of both San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN)and Biogen Idec, the Cambridge, MA, biotech that has a significant local presence.

—Amylin’s founding CEO Howard “Ted” Greene, who also is the company’s biggest individual shareholder, may have played a key role in influencing the recent board election. Greene told me he’s optimistic about the outcome, in which a dissident faction of Amylin shareholders gained two board seats and ousted the chairman and lead outside director.

—Meanwhile, in Cambridge, MA, representatives of billionaire investor Carl Icahn claimed victory yesterday in their proxy contest with Biogen Idec (NASDAQ: BIIB) by winning two of four board seats in a recent shareholder election. The company adjourned the annual shareholder meeting without announcing the official results, however.

[Editors note: A previous version of the Targeted Genetics item incorrectly reported that Robin Ali presented results of his research in San Diego.  He did not attend the meeting]

—The potential loss of Seattle’s Targeted Genetics (NASDAQ: TGEN), which is struggling to avoid bankruptcy, will make it harder to bring new gene therapy treatments to market, according to Robin Ali, a University College London researcher.  At the American Society of Gene Therapy meeting in San Diego last week, a colleague of Ali’s presented clinical trial results from Ali’s experimental gene therapy treatment for a rare, genetic form of blindness that was supported by Targeted Genetics. “If they were to close,” Ali told Xconomy’s Denise Gellene by email, “it would leave a gap in the market that would take time to fill.”

—Celladon CEO Krisztina M. Zsebo told Denise at the American Society of Gene Therapy annual meeting that the San Diego gene therapy startup is in discussions with several pharmaceutical companies and expects to announce a … Next Page »

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

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

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

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

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

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

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

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[[Editor's note: Updated today at 10:55 am PT]]

A shareholder vote that could influence the course of San Diego’s Amylin Pharmaceuticals has been completed, but results of the board election were not released during the meeting today. “We do not have an indication [of the outcome] at this time,” Amylin chairman Joseph Cook told shareholders at the end of the company’s annual meeting. “We do not expect a complete preliminary tally of the vote to be available for one to two weeks.”

Amylin spokeswoman Alice Izzo said the process of counting ballots is complicated because of the number of candidates nominated to the board and the variety of proxy ballots. Amylin nominated 12 candidates to the 12-member board. Two dissident shareholder groups submitted two slates: three candidates on one proxy card and two on another. The proxy fight at Amylin Pharmaceuticals last fall.

A proposal by dissident shareholder Carl Icahn to move Amylin’s jurisdiction of incorporation to North Dakota from Delaware failed to receive a majority vote. Shareholders approved three administrative measures at the annual meeting, which called for approving Amylin’s equity incentive plan, increasing the employee stock ownership plan by 1.5 million shares and ratifying the selection of Ernst& Young as Amylin’s independent accounting firm.

In a final get-out-the-vote advisory issued yesterday afternoon, Amylin urged shareholders to vote their blue proxy card in support of the company’s 12 nominees for the 12-seat board. The company’s slate consists of 10 existing directors and two new nominees: Paul N. Clark, former chairman and CEO of Icos, and Paulo F. Costa, the former CEO of Novartis. Dissenting shareholders have nominated five directors to Amylin’s 12-member board in a bid to improve performance.

In pushing to get Clark and Costa onto the board, however, Amylin chairman Joseph Cook apparently pushed too hard for the resignations of former Amylin CEOs Ginger Graham and Howard “Ted” Greene, an Amylin co-founder and local biotech icon. Greene ultimately threw his support to the dissident shareholders, telling Xconomy, “I think certain members encumbered with traditional pharmaceutical dogma and our past mistakes should be replaced.”

Like Amylin, dissident shareholders issued a statement of their own yesterday. Eastbourne Capital Management of San Rafael, CA urged all Amylin shareholders yesterday to vote for the three candidates on Eastbourne’s white proxy card. Eastbourne also supports two board nominees submitted by Carl Icahn’s affiliates on a gold shareholder proxy card. The two dissident groups did not formally join forces to solicit the support of Amylin shareholders because the company has a “poison pill” in effect that is triggered if any shareholder accumulates a stake equivalent to a 20 percent ownership stake. Today Icahn’s affiliated holding companies control about 10 percent of Amylin’s stock, while Eastbourne holds a 12.5 percent stake in the company.

The two dissident groups apparently agreed to support a total of just five nominees for Amylin’s board because of another provision the company has in place. This provision requires Amylin to accelerate the repayment of debt the company issued in 2007 if six or more directors not approved by the board are elected.

As a result, Amylin’s candidates will retain a board majority even if all five dissident candidates are elected. But the dissidents could still gain significant influence if their candidates get seated. Dissident criticism about Amylin’s overhead costs and fumbling sales strategy arguably pushed the company to recently reduce its sales force by 35 percent.

While Amylin’s troubles may have been mounting for some time, the two dissident shareholder groups saw their opening last September, shortly after Amylin’s diabetes drug exenatide (Byetta) came under a cloud of regulatory suspicion. The FDA said in mid-August that two patients who were taking Byetta died of pancreatitis, an inflammation of the pancreas usually caused by gallstones. The drug, available in the United States since mid-2005, is Amylin’s leading drug for treating diabetes. Amylin has insisted that there’s no evidence demonstrating the drug causes pancreatitis, although the FDA warning has certainly spooked some doctors, and demand for the drug has declined.

The price of Amylin’s shares plunged on the news, and within weeks, billionaire investor Carl Icahn increased his Amylin holdings by 50 percent—amassing a 7.3 percent stake in the company by the end of September. Likewise, Eastbourne has been accumulating shares in Amylin for several years. The battle over Amylin has become increasingly bitter, with Icahn calling for the resignation of Joseph C. Cook, the company’s chairman, in a letter to shareholders last month.

Icahn and Eastbourne also gained the backing of four proxy advisory firms: RiskMetrics Group, Proxy Governance, Egan Jones, and Glass Lewis & Co. On Friday, P. Schoenfeld and Associates, which owns approximately a 1.5 percent stake in Amylin, added their support to the rebel cause.

The candidates that Eastbourne nominated to the board are:

—M. Kathleen Behrens, 56, a consultant and former managing director of RS Investments. She was previously a general partner and securities analyst with Robertson Stephens & Co., focusing on life sciences.

—Charles M. Fleischman, 51, retired CFO and COO of Digene, a medical device company.

—Jay Sherwood, 40, a managing director of Eastbourne Capital.

Icahn’s group nominated two candidates:

—Alexander J. Denner, 39, a managing director of Icahn-affiliated entities who has previously served as a portfolio manager of healthcare and biotechnology funds for Morgan Stanley and Viking Global Investors.

—Thomas F. Deuel, 74, a professor of molecular and experimental medicine and cell biology, director of the division of molecular oncology, and director of the vascular biology affinity group at The Scripps Research Institute in San Diego.

In addition to Clark and Costa, Amylin nominated 10 existing directors for re-election: Adrian Adams, Steven R. Altman, Teresa Beck, Daniel M. Bradbury, Joseph C. Cook, Jr., Karin Eastham, James R. Gavin III, M.D., Ph.D., Jay S. Skyler, M.D., Joseph P. Sullivan, and James N. Wilson.

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With the proxy battle for control of San Diego’s Amylin Pharmaceuticals coming to a crucial shareholder vote next Wednesday (and with a similar fight at Biogen Idec coming to a head on June 3), we decided it was an opportune time to launch a life sciences news roundup at Xconomy San Diego. We’ve also wrapped up funding deals and other biotech developments for your reading pleasure.

—San Diego’s Nanogen has agreed to sell its assets to Elitech of Paris, France, for $25.7 million as part of a pre-packaged bankruptcy filing. The bankruptcy court will likely approve the deal unless another buyer comes forward with a better offer for Nanogen, which makes molecular diagnostic kits and chemical reagent lab supplies.

—San Diego’s Victory Pharma just raised $45 million in a secondary venture round less than three months ago. Now Sciele Pharma, an Atlanta, GA, company owned by Japan’s Shionogi & Co., is acquiring Victory for $150 million in a deal intended to get Victory’s line of pain-killing drugs and drug candidates.

—San Diego-based Anaphore is an example of a new trend among venture-backed startups. The biotech founded last year recently extended its existing venture funding round instead of raising funds in a separate round. Anaphore, which is developing a new class of protein thereapeutics, said the $13 million it raised recently brings its total venture capital funding to a total of $38 million.

—James Sweeney, a San Diego serial entrepreneur who has started eight healthcare companies, said it’s becoming crucial for healthcare startups to prove that new technologies can save money for their prospective customers. Sweeney, who was a keynote speaker at a … Next Page »

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Big proxy battles, like the one unfolding at San Diego’s Amylin Pharmaceuticals, have become much like national political campaigns. There’s a media strategy. There are carefully choreographed events. There are war rooms on both sides. When dissident shareholder Eastbourne Capital Management submitted its filing “Amylin Pharmaceuticals: The Case for Change” to the SEC on May 5th, Amylin responded nine days later with its point-by-point response, “Refuting Eastbourne’s Claims.”

So it was both unexpected and a big deal when Amylin’s founding CEO, Howard “Ted” Greene, threw his support to dissident shareholders Carl Icahn and Eastbourne Capital in a letter to shareholders. Greene, who was Amylin’s chief executive from 1987 to 1996, now supports a slate of five new directors nominated by Eastbourne and Icahn, who together own a 22.5 percent stake in Amylin.

Greene made no secret of his unhappiness in April, after it became clear in his resignation letter that Amylin’s board had more-or-less forced him and Ginger Graham, another former Amylin CEO, to resign their longtime board seats. But in an e-mail to me last month, Greene also made it clear that he still supported the company, saying, “I’ll look to find other ways to help my favorite company…”

So what happened? Could there be bad blood in the Amylin boardroom? Has something happened since Greene resigned that prompted him to switch sides? When I asked Greene to explain his change of heart, he responded at length, which I have copied here in its entirety:

“1. In my view, Amylin’s commercialization strategy has been flawed. It was crafted by the current Chairman of the Board (while he was CEO) and his corporate alma mater, Lilly, to make Amylin essentially an equal partner with Lilly in the commercialization process. At the time we believed our products would be so beneficial for patients that revenues would catapult us into the big pharma league and give us the critical mass needed for a large sales force. We were naïve. As we’ve now learned, selling non-insulin injectible products to primary care physicians is a big challenge, and even Lilly—with 80 years experience selling insulin—has stumbled. At this point I think Dan Bradbury has the right ideas for repositioning Amylin with a specialty sales force, and for innovative programs that help patients meet their expectations for our medicines. To ensure board support for these ideas, I think certain members encumbered with traditional pharmaceutical dogma and our past mistakes should be replaced.

2. With Ginger Graham’s and my departure, stock ownership by our board of directors declines by over 60 percent. I believe that our directors who do not own any stock (but just hold options) are dedicated to restoring value for shareholders. But, it’s disappointing to me that many of them have never put a significant amount [of] their own money into our stock, given how undervalued I think it now is. I’ve served on boards for over 30 years, and it’s clear to me that having a lot of skin in the game sharpens one’s strategic priorities and sense of urgency. Given that I’m not on the board anymore, I’ll sleep easier if the next proxy table of beneficial stock ownership by directors will show a much bigger number of shares.

Amylin is a great company with great technology and great employees. But, our board—myself included—using our best judgments at the time went down the wrong path for launching us into the commercial arena. In recognition of this, I think shareholders would be well served by supporting new members on our board.

As I said in my letter yesterday, this is why I plan to vote for the slate proposed by Eastbourne, including Icahn’s candidates.”

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