—It wasn’t exactly news when the board at San Diego-based Illumina (NASDAQ: ILMN) said it had rejected the $5.7 billion hostile takeover offer from Swiss drug maker Roche. Now Wall Street’s arbitragers are placing their bets on whether Roche can prevail. The most intriguing news about the deal, however, came from The Wall Street Journal, which revealed potential conflicts of interests with Illumina’s key adviser, Goldman Sachs.

—A new molecular diagnostics startup stepped into the light in San Diego. Applied Proteomics named Peter Klemm as CEO, and disclosed it raised $22.5 million in venture capital last summer from Vulcan Capital and Domain Associates. Applied Proteomics also said it moved to San Diego last June from the Los Angeles area, and double its staffing over the next year.

—San Diego-based Tocagen and Siemens Healthcare Diagnostics disclosed a partnership that will begin with Siemens’ support of clinical trials Tocagen has planned for its viral gene therapy treatments for primary brain cancer. Siemens said it will help provide companion diagnostics that are intended to help doctors decide the best course of treatments for patients, based on their unique genetic characteristics.

—San Diego’s OncoSec Medical, which was created out of a reverse merger less than a year ago, is beginning mid-stage trials of a treatment that combines electroporation and immunotherapy in patients with three types of skin cancer. Electroporation is a technology that causes cancer cells to take up higher concentrations of anti-cancer drugs by administering pulses of electricity directly to the cancer cells. OncoSec is trying it on patients with metastatic melanoma, Merkel cell carcinoma, and cutaneous T-cell lymphoma.

—Brooks Life Science Systems, a Poway, CA-based division of Brooks Automation, (NASDAQ: BRKS), said it had established a development and commercialization partnership with The Scripps Research Institute (TSRI). Brooks plans to manufacture and commercialize a microplate imaging system under an exclusive licensing agreement with the biomedical research institute.

—San Diego-based Prometheus Laboratories Inc., a specialty pharmaceutical and diagnostic company, said it signed a research and collaboration agreement that provides its proprietary cancer diagnostic technology to an unnamed global pharmaceutical. Financial terms were not disclosed. Prometheus said its technology can detect the activation of specific cancer pathways with high levels of sensitivity and specificity.

—San Diego-based Synthetic Genomics and Ipswich, MA-based New England Biolabs (NEB) said they signed a non-exclusive licensing agreement allowing NEB to commercialize the “Gibson Assembly Master Mix,” a one-step, isothermal approach to enable the rapid assembly of multiple DNA fragments. The companies said Daniel Gibson and colleagues at the J. Craig Venter Institute (JCVI) developed the technology as part of a program sponsored by SGI. Financial terms were not disclosed.

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For us it would be in the area of vaccines first.

The approval of the first cancer therapeutic vaccine from Dendreon in prostate cancer establishes the concept that immunotherapy is a conceptually achievable and clinically useful approach for treating cancer. This allows us and others to develop novel concepts of immunotherapy for cancer.

On another vein is the approval of GlaxoSmithKline’s human papillomavirus (HPV) vaccine both for the continued demonstration of the importance of infectious disease-related cancer and the ability to intervene with a vaccine to prevent such a cancer. The GSK HPV vaccine also includes the first novel adjuvant in a vaccine in the U.S. in the last 30 years and thus allowing the ability of novel adjuvants to enhance immune responses for candidate cancer vaccines or vaccines that are directed at infections in the elderly.

Lastly is the discussion of the complexities that rapid emergence of resistance to cancer therapies is being increasingly noted. There is an ongoing discussion about allowing combination chemotherapy to be utilized early on in the clinical development pathway of cancer therapies as well as complex infectious diseases such as multi-drug resistant tuberculosis.

[Editor's Note: This is part of a series of posts from Xconomists and other technology and life sciences leaders from around the U.S. who are weighing in with the top surprises they've seen in their respective fields in the past year, or the major things to watch for in 2011.]

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Antigenics could easily have thrown in the towel on its immune boosting therapy for cancer. But now the Lexington, MA-based biotech company, with the help of one of its main backers at UC San Francisco, is gearing up to run a significant trial to see if its lead therapy has a shot as a treatment for brain cancer.

The company (NASDAQ: AGEN) is announcing today it is expanding a mid-stage clinical trial of its experimental treatment vitespen (Oncophage) in 50 patients with newly diagnosed brain tumors (glioma). The trial, which started a year ago, was originally set up at three U.S. sites, and was expected to take two years to complete enrollment. Now, based on results that show the first eight patients were relapse-free for more than a year, Antigenics is pooling some of its money and resources to add six new clinical sites to see if it can recruit all the patients it needs a year ahead of schedule.

This could certainly be seen as the last-ditch hope for Antigenics and its personalized immune-boosting treatment for cancer. The treatment failed in a pivotal clinical trial for kidney cancer, although it showed a benefit in a subpopulation of patients that was enough for it to win market clearance in Russia. Still, the drug has been a commercial flop there, and Antigenics has been turned down in its bid to win approval for vitespen in Europe. The company had just $28 million in cash left at the end of its most recent quarter, and has a burn rate of about $15 million per year, says CEO Garo Armen.

With a stock price of less than $1 and limited ability to raise new capital, that meant that Antigenics either had to cut bait on vitespen and place its bet on a second candidate, QS21, or push forward aggressively to see if the early sign in brain cancer patients can be confirmed. And that’s what Antigenics chose—it now hopes to get solid data from this mid-stage glioma trial in the second half of 2011.

“We see this as our rebirth,” Armen says.

The only reason Antigenics is in position to even ask this question is because of the persistence of UC San Francisco neurosurgeon Andrew Parsa. It was Parsa who sought out the company about five years ago, asking for it to supply material to him for a clinical trial, which he said he would get federal grants to pay for. He ended up enrolling 32 glioma patients at UCSF, testing their immune system function as well as the gold standard measurement for any new cancer treatment—their overall survival time. Parsa found that patients had increased immune system activity after getting the Antigenics therapy, and that they lived a median of 44 weeks. There was no control group in the study, so it’s impossible to say how much better that was than no treatment at all, although historical life expectancy for relapsed glioma patients is about 26 weeks, Armen says.

While that’s not iron-clad proof of activity, it’s the sort of thing that sparks further study. So Parsa spearheaded a second trial, in newly diagnosed glioma patients who ought to have a better response to an immune therapy like the one from Antigenics. This study started out at three centers, but is now being expanded to nine centers to speed up enrollment, Armen says.

What makes the Antigenics treatment interesting is that it’s designed to be personalized, made by slicing out a portion of a patient’s tumor—a method unlike anything else on the market today. The tumor tissue is frozen and shipped to the Antigenics plant in Lexington, where it is chopped up, and key proteins filtered out. The protein treatment is shipped back to the doctor, then injected back into the patient to “teach” the immune system to spot the hallmarks of cancer cells and mount a defense against them. Patients usually get their personalized vaccine four to six weeks after tumors are removed, the company has said.

The company is hoping that if it gets more encouraging results by next year, it will be in a better position to move the program forward. The field of cancer immunotherapy—long plagued by anecdotal promise that couldn’t be verified in large, controlled trials—has undergone a resurgence. Seattle-based Dendreon (NASDAQ: DNDN) won FDA approval earlier this year for the first treatment to actively stimulate the immune system against cancer, and Bristol-Myers Squibb has presented promising data on a treatment that disables a defense mechanism tumors use to protect themselves from the immune system.

If Antigenics can stay afloat long enough to see promising results in the study of newly diagnosed glioma patients, it could have more room to maneuver. By that time, Bristol’s treatment, ipilimumab, could be on the market, and useful for a combination study, Armen says.

It won’t be an easy task. Antigenics, at last count, had accumulated a deficit of $576 million since it was founded in 1994, and today has a market valuation of about $95 million. But if Antigenics can get results a year from now that suggest it is keeping glioma patients relapse-free for more than a year, that would be the kind of thing that could spark chatter in the oncology community about another immunotherapy, and maybe help the company raise enough capital to run another test that would be robust enough to give Antigenics a shot with the FDA.

It was either that, or close down the vitespen (Oncophage) program, Armen says.

“The critical decision to be made is do we shut down Oncophage program or not?” Armen says. “Based on everything we’ve seen internal and externally, we are nowhere close to shutting down Oncophage. It will be pursued.”

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We had an unusual grab bag of news and features this week from the Seattle biotech beat, from the worlds of genomics, cancer treatment, stem cells, vaccines, and medical devices.

—Sage Bionetworks, the Seattle-based nonprofit seeking to kickstart an open source movement for biology, said it has secured commitments from a quartet of big-name biologists willing to hand over their precious data to support the cause. The early adopters are Stanford University’s Atul Butte, UC San Diego’s Trey Ideker, Columbia University’s Andrea Califano, and Eric Schadt of Pacific Biosciences (and soon to be on faculty at UC San Francisco.)

—The Fred Hutchinson Cancer Research Center has been pushing hard on the idea of stimulating the immune system to fight cancer like a virus, and this week it secured some significant support for the mission. Martin “Mac” Cheever, a veteran of Seattle-based Corixa now at the Hutch, was awarded a five-year, $14 million federal grant to set up a national coordinating center for clinical trials of promising therapies that boost the immune system to fight cancer.

—VentiRx Pharmaceuticals, the Seattle and San Diego-based biotech company, said this week that its experimental cancer drug candidate passed an initial clinical trial and is being poised to enter the next phase of development.

—I took time to profile Tracy Deisher, the Seattle biotech entrepreneur who made headlines this summer as one of two scientists who, at least temporarily, brought embryonic stem cell research in the U.S. to a standstill through a legal challenge. When she’s not fighting that legal battle, Deisher is working to build what she calls a “pro-life vaccine company” which provides childhood immunizations that haven’t been derived from aborted human fetal cell lines.

—Bellevue, WA-based Innovative Pulmonary Solutions, a stealthy startup founded by the former VP of R&D at Calypso Medical Technologies, secured a $3 million Series A financing that could be worth as much as $8 million. The idea is to create a new treatment for chronic obstructive pulmonary disease that doesn’t need to leave an implantable device behind in the lungs.

—Personalized medicine is starting to get more and more real, according to this op-ed from Don Rule, the founder of Translational Software. As always, we’re happy to take guest editorials like this of interest to innovators at the Northwest. If you have something you’d like to say, send me a note at editors@xconomy.com.

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There’s a changing of the guard happening over at one of the historic addresses in Seattle biotech—1100 Olive Way. This former car dealership, which for more than 15 years was home to Targeted Genetics’ leading-edge gene therapy work, is now going to be the center of a new initiative in pediatric cancer studies at Seattle Children’s Research Institute.

This story jumped out at me literally, as I noticed a brand new paint job and set of Children’s logos plastered on the door, just off the corner of Olive Way and Boren Avenue. (For all of you who wonder where I get my story ideas, this one came from the seat of my bicycle as I pedaled by yesterday morning on my way to the office.)

It turns out that Children’s, which already occupies a state-of-the-art research building at 9th and Stewart just a few blocks away, is spiffing up the former Targeted Genetics facility to turn it into a pediatric cancer research center led by Michael Jensen, a newly recruited scientist from City of Hope in Duarte, CA. Jensen will lead a team there that studies immunotherapy techniques, in which scientists seek to stimulate the body’s own immune system to fight cancer cells as a foreign invader like a virus or bacteria. The old facility, which used to house Targeted Genetics’ gene therapy manufacturing plant, will eventually house new labs. It will also become home for a “T-cell re-engineering and production factory” in which T-cells of the immune system are harvested from the blood and re-programmed to fight cancer, says Teri Thomas, a spokeswoman for Seattle Children’s.

Targeted Genetics, meanwhile, has shrunk down to just four employees and some part-time consultants, with a headquarters downtown at 601 Union Street, the Two Union Square building. The company terminated its lease on the old 1100 Olive Way facility in November, and then consolidated some offices in the neighboring Metropolitan Park West building until the end of July, when it moved its remaining employees to the downtown building.

The 1100 Olive building has a lot of sentimental value to an entire generation of Seattle biotech talent, who learned the industry ropes there under longtime CEO H. Stewart Parker. Targeted Genetics has had well-documented financial struggles the past couple years. It received a critical lifeline last September when Cambridge, MA-based Genzyme (NASDAQ: GENZ) agreed to acquire some of its most valuable intellectual property, used for manufacturing certain viruses for gene therapy experiments, for $7 million.

With no need for its own manufacturing space anymore, Targeted Genetics has been able to downsize further. The company still has a couple of proprietary drug development programs—one for a rare eye disorder called Leber’s congenital amaurosis, and another for Huntington’s disease. The clinical trials for those gene therapy programs are being run elsewhere, at University College London and the University of Iowa, respectively. Another program that Targeted Genetics is watching very closely, and which could generate some milestone payments, is a heart failure treatment in development by San Diego-based Celladon.

Targeted Genetics’ last statement about its financial health came out on June 1, and CEO Susan Robinson told me in a phone call yesterday that she wasn’t going to offer any further update. The company said in that statement it had $5.1 million in cash and investments left on Dec. 31, 2009. In that release, Robinson said she was evaluating options, like selling the company, or liquidating assets while sending future royalty streams to shareholders. Much of the value of that royalty stream will depend on what happens to Celladon’s heart failure program, which yielded some promising results at a medical meeting in May.

Even if that program advances with the key modified viral delivery vector from Targeted Genetics to help heart failure patients, the manufacturing will be done somewhere else. And it’s possible that a new generation of immune-based treatment for kids with cancer will emerge from 1100 Olive Way. It may not be much consolation for Targeted Genetics employees who lost their jobs or shareholders who lost their money, but Robinson saw something positive about that for the Seattle biotech community.

“I’m glad to see that the building is now being occupied by an institution in Seattle that will use it for what it’s been used for the past 15 years, and that’s research and development,” says Robinson.

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Lots of biotech companies around the country are grasping for the title of “the next Dendreon,” including one fledgling startup here in Seattle, Kaleetan Pharmaceuticals.

Dendreon (NASDAQ: DNDN) has become one of the nation’s hottest biotech stories of the year, after it made history in April, winning the first FDA approval for a prostate cancer drug that actively stimulates the immune system to fight the cancer like a virus. This advance came after about a century of research fits and starts, loads of skepticism, 15 years of concentrated effort at one company, and hundreds of millions of dollars. After all that, it has paid off with a company now worth more than $5 billion, and a drug projected to exceed $1 billion in U.S. sales in a few years.

Important as the approval of sipuleucel-T (Provenge) has been for Dendreon’s employees, investors, and prostate cancer patients who might personally stand to benefit, there is still plenty of room left for improvement. That’s the founding idea of Kaleetan (pronounced cal-ee-TANN).

“Dendreon has led the way and shown the importance of dendritic cells in the fight against cancer,” says Kaleetan co-founder Grant Risdon. “You have to give them credit for sticking it out.” But the next logical step is to develop a genetically engineered protein drug that can stimulate the same immune activity, without all the complicated logistics Dendreon has developed over the years, Risdon says. “Ours is more of a classic biotech drug,” he adds.

The startup is long on scientific reputation, and light on capital, at least for the moment. The founders include Jeff Ledbetter and Martha Hayden-Ledbetter, the husband and wife scientific team that co-founded Seattle-based Trubion Pharmaceuticals (NASDAQ: TRBN), as well as Cassian Yee, one of the immunotherapy experts at the Fred Hutchinson Cancer Research Center. The operations in the early days are being headed up by CEO Alan Wahl, a veteran of Trubion and Seattle Genetics, and Grant Risdon, an immunologist-turned-business development guy. Risdon told me about the company’s plans a couple weeks back during a meeting in South Lake Union.

The idea was first described in these pages by my colleague Thea Chard when Risdon presented at the Technology Alliance’s Innovation Showcase event last month. Kaleetan’s idea is to develop a standardized injectable protein drug that works to “teach” dendritic cells to be a lot smarter. These cells are important, because their role is to recognize biological markers of invaders, and process signature bits, and present them to other immune cells that can attack them like a virus. The hope is to pull off this trick with a cheaper and logistically easier way than Dendreon’s method, which requires that blood be drawn from an individual patient, and that the dendritic cells be separated out, incubated with a protein marker found on cancer cells, and then re-infused into the patient a few days later.

What Kaleetan mainly has at the moment is some intellectual property for making genetically engineered fusion proteins. This is a platform it calls ADAPT, which is designed to … Next Page »

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MIT’s famously inventive bioengineering professor, Bob Langer, is lending his expertise to yet another fledgling biotech company. Boston-based Kala Pharmaceuticals, which lists Langer on its board of directors, has secured a $2 million equity financing, according to a regulatory filing.

Kala doesn’t have a website, and I haven’t been able to find any public statements that offer clues on what it is aiming to accomplish. But the filing lists three directors: Robert Paull of New York-based Lux Capital; Justin Hanes, a professor of chemical and biomolecular engineering at Johns Hopkins University; and Langer. The head office is at the Boston law firm of Mintz Levin Cohn Ferris Glovsky & Popeo, according to the filing. There are 10 investors in the company so far, although they aren’t named in the filing. Paull is the founding CEO, and an investor, according to his LinkedIn profile.

“We appreciate the interest and very prompt outreach. We’re not disclosing anything about the company yet,” Paull said in an e-mail when I asked him for comment about the company.

While I can’t say for sure what Kala is all about, the connections between these founders are clear. Hanes goes a long way back with Langer. Hanes got his doctorate in chemical engineering from MIT in 1996, and he co-authored a number of scientific papers with the famous professor in the mid-to-late 1990s, according to his curriculum vitae. Hanes lists his research interests as gene therapy, cancer immunotherapy, pulmonary lung delivery, and hydrogel BIOMEMS devices.

New York-based Lux Capital, where Paull is a co-founder and managing partner, has made connections with some of the more intriguing biotechs in the Boston area, including Cambridge, MA-based Genocea Biosciences, a vaccine developer, and Cambridge, MA-based Cerulean Pharma, a drug developer. Langer serves on the board of Cerulean, while Paull is a board observer.

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[Updated: 2:15 pm Pacific, 12/8/09 with larger fundraising numbers from this year's gala.] The Fred Hutchinson Cancer Research Center, the Seattle-based nonprofit, said it raised $8.85 million at its annual Hutch Holiday Gala on Saturday night. Most of the money, $7.95 million, was directed toward research to boost people’s immune systems to fight cancer cells. The effort was sparked by the parents of Amazon.com founder Jeff Bezos, who agreed to pledge $10 million last month to the immunotherapy effort. The center raised $2.2 million at last year’s fundraiser.

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Research published today has revealed the existence of a new San Diego life sciences company that is working to commercialize anti-cancer technologies intended to boost the immune system to resist tumor growth.

A paper in the journal PloS ONE shows that a gene for a specially engineered form of a protein called CD40 ligand (CD40L), developed by former researchers from UC San Diego, can be used to activate the immune system to fight tumors in mice. The team delivered the gene using nanoparticles created by cancer researchers at the Massachusetts Institute of Technology. The technique can boost the immune response even more when combined with bacterial products called Toll-Like Receptor activators.

The new form of CD40L, called UltraCD40L, is the lead drug candidate for Multimeric Biotherapeutics, a San Diego biotech startup that was founded in February 2008. The startup had made presentations at the Tech Coast Angels’ recent fast pitch competition and Biocom’s investor conference, but was not widely known prior to the publication of the PloS One paper. UltraCD40L was developed at UCSD by Richard Kornbluth, a former associate professor of medicine who left to start Multimeric Bio with Marc Hertz, who is the CEO, and Antonella Vitiello, the startup’s principal scientist.

In an e-mail last night, Kornbluth told me that Multimeric Bio is a pre-seed stage company that has been self-funded by the founders with help from angel investors. (Multimeric refers to a protein with multiple polypeptide chains.)

“From over 9,000 published papers, CD40L has emerged as one of the most powerful immune molecules produced by the body,” Kornbluth says. Researchers haven’t been able to use the molecule as a drug until now because they didn’t realize that it needed to be packaged as aggregated multimeric molecules to be active in the body.

Kornbluth says the easiest way to introduce UltraCD40L, which is a large protein, into the body is to deliver short strands of DNA, called plasmid DNA, that direct its synthesis inside cells. However, the expression of genes from injected DNA is inefficient, especially when the DNA is injected directly into tumors. So the San Diego team collaborated with scientists at MIT’s David H. Koch Institute for Integrative Cancer Research at MIT. The MIT team, which includes Robert Langer (a Boston Xconomist), Gregory Zugates, and Daniel Anderson, have developed biodegradable polymer nanoparticles that encapsulate the DNA and deliver it directly into tumors so that the protein encoded by the gene can be strongly expressed.

The research reported today, Kornbluth says, “describes the use of these polymers to deliver UltraCD40L into large melanoma tumors in mice, causing the tumors to shrink and curing many of the mice completely.”

Kornbluth says the significance of today’s research findings for Multimeric Bio is that it shows the potential application of its UltraCD40L drug candidate in cancer immunotherapy in humans. “The company has applied for grant support to help move this technology to the clinic,” he says, and Multimeric Bio “is especially interested in partnering with a larger company for this purpose.”

Kornbluth says Multimeric Bio is the exclusive licensee of the technology he developed when he was at UCSD. Apart from the cancer immunotherapy work, he says previous reports on UltraCD40L have also shown that is a highly effective vaccine adjuvant, meaning that it can dramatically increase the strength of an otherwise ineffective vaccine. He says it’s currently being tested as part of an HIV vaccine in the monkey model for AIDS.

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MabVax Therapeutics, a San Diego biotech developing novel vaccines and human antibodies for the treatment of cancer, plans to raise $4 million from investors, according to a recent filing with the Securities and Exchange Commission. The company, which has raised about $500,000 so far, was founded in 2006 to develop polyvalent versions of existing monovalent vaccines against small cell lung cancer, sarcoma, melanoma, and other cancers. MabVax says it plans to develop fully human monoclonal antibody products at the same time.

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Dendreon has all the ingredients of a Hollywood thriller: Life and death on the line. Millions of dollars at stake. Fast money in the stock market. Cutting-edge technology that aspires to achieve the impossible.

The Seattle biotech company (NASDAQ: DNDN) has gone through a riveting set of twists and turns over the past two years, and the story may reach its climax within weeks. One day this month, Dendreon plans to rip off the blind from a clinical trial that it hopes will offer convincing proof that its experimental drug helps men with terminal forms of prostate cancer live longer, with minimal side effects.

If this trial of 500 men is successful, Dendreon will dash off to the FDA for permission to start selling this product, called Provenge, in the U.S., possibly by the end of this year. Analysts will rhapsodize about a new drug with $1 billion annual sales potential. Scientists will talk about a new paradigm of cancer treatment that stimulates the immune system to fight cancer cells like a virus. Patient advocates will cheer, as about 30,000 men in the U.S. who die of prostate cancer each year will have a new kind of treatment option. Dendreon stock will rocket from its current plateau of a little more than $4 to more than $20 a share, says Seattle-based biotech analyst David Miller.

If the trial fails, though, things will get ugly. Layoffs will likely follow, and the company’s promising immune-therapy technology will probably go on the back burner. Dendreon will likely fall back on a more conventional small-molecule pill for cancer that’s just entering clinical trials and has years to go before proving its worth. People will be inclined to write off the whole field, given that Dendreon would join a growing list of companies that failed to live up to the promise of cancer vaccines, including Cell Genesys, Genitope, and Favrille.

If there are shades of gray in the Dendreon data, all bets are off.

“We are going to see fireworks,” Miller says.

Like any good story, Dendreon’s tale has a beginning, a middle, and an end (which we haven’t quite gotten to yet). The company was founded in 1992, formed out of technology from Stanford University. From the start, it had a powerful pull on the imagination of scientists, doctors, patients, investors, and journalists. I first started following Dendreon in 2001 while at The Seattle Times.

Dendreon has worked all those years, and burned through more than $563 million of investor money, to develop its active immunotherapy, or cancer vaccine, technology. It doesn’t work like a traditional chemotherapy … Next Page »

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Flameouts are the norm for any company that dares to try to stimulate the body’s immune system to fight cancer cells. Cell Genesys, Genitope, Favrille, and Antigenics have been added to the long list of companies that have stumbled in this promising field that hasn’t yet produced a single FDA-approved therapy. One of the sector leaders, Seattle-based Dendreon (NASDAQ: DNDN), is awaiting critical results next month which could validate, or crush, its immune-booster for prostate cancer, Provenge.

Given the hundreds of millions of investor dollars that have been sunk already into these active immunotherapies—sometimes called “cancer vaccines”—why would anybody listen to another startup pitch? Maybe I’m a glutton for punishment, but since Seattle-based CG Therapeutics has recruited two Dendreon veterans to its board, attracted capital from prominent Seattle investor Robert Arnold, and hired a new CEO, I figured it couldn’t hurt to hear the story.

CG Therapeutics’ new CEO is Denise Harrison, who got her biotech experience as chief financial officer of Seattle-based Illumigen Biosciences. That company was sold in December 2007 to Lexington, MA-based Cubist Pharmaceuticals. She’s getting some advice in this first go-round as a CEO from two new board members: Reiner Laus, the CEO of BN Immunotherapeudics and former vice president of R&D at Dendreon, and Julie Eastland, the chief financial officer of Seattle-based VLST and a former vice president of strategic planning at Dendreon.

CG has fixed its sights on a hormone that inspired the company name—hCG. Scientists have known for decades that this hormone plays a key role in early development, when it protects the fetus from being attacked by the immune system (it’s the thing that confirms when a woman is pregnant, turning the test kit blue). Researchers later came to understand this hormone can appear later in life, playing a more nefarious role. It offers that same brand of protection to tumor cells, cloaking them from an immune system that might otherwise kill them like an invading virus.

The company’s scientific team, led by Immunex veteran Tom Hopp, say they have designed a method to lift that protective veil from tumors. Their drug CG-201 aims to do this by taking some synthetic peptides that train the immune system to recognize hallmark signatures of hCG, and fuses them to a diphtheria toxin like the one found in the common DPT childhood immunization. This is supposed to make the hormone look like a foreign invader the immune system should attack.

By knocking out hCG, the company scientists hope they can attack the tumor’s support network on multiple levels. Besides offering protection from the immune system, the hormone is also thought to play a role in cancer by nourishing tumors through helping grow new blood vessels, and by allowing tissues to break down near the tumor that allows it to spread through the body, Hopp says.

An earlier version of CG-201 showed some positive signs, but not enough to move ahead in development, and besides, that intellectual property now belongs to Portland, OR-based AVI Biopharma, Harrison says. So CG’s scientists cooked up a new version on their own, which they say has been shown to be 10 times more potent, and longer-lasting, than the earlier one in rabbit experiments. It’s now ready to go into clinical trials.

Except there’s one big catch. … Next Page »

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It was a very slow week for deals in the Northwest, with layoffs and other bad news dominating the headlines. But there were still a few deals in biotech, software, and e-commerce.

—The Fred Hutchinson Cancer Research Center in Seattle raised more than $2.2 million in donations for its research programs at its annual holiday gala, as Luke Timmerman reported. More than half the money, $1.2 million, will be used to expand immunotherapy clinical trials in the late stages of disease.

—Seattle-based nonprofit PATH is investing $3 million in a vaccine candidate against pandemic flu, as Luke reported. The vaccine, which is intended to mimic “bird flu,” is being developed by Gaithersburg, MD-based Lentigen.

—Microsoft (NASDAQ: MSFT) and Hopkinton, MA-based storage giant EMC (NYSE: [[ticker: EMC]]) expanded their partnership to improve data security for customers across networks and data centers, as our Boston colleague Ryan McBride reported. The deal, whose financial terms were not disclosed, will put technology from EMC’s security division, RSA, into certain Microsoft products, such as Windows Server 2008.

—Seattle-based Amazon completed its acquisition of Victoria, BC-based AbeBooks, an online marketplace for used and rare books. The deal was originally announced August 1. With this purchase, Amazon (NASDAQ: AMZN) also owns 40 percent of LibraryThing, a literary social site based in Cambridge, MA, that competes with Seattle-based Shelfari (another recent Amazon acquisition).

—Not a deal, but words of wisdom from two of Seattle’s most prominent deal-makers. Luke did an exclusive interview with Alan Frazier, founder of Seattle-based Frazier Healthcare Ventures. Frazier discussed why the traditional venture model is broken, and what companies need to do to adapt. And I sat in on a great talk by Nick Hanauer, founding partner of Seattle-based Second Avenue Partners and an early investor in Amazon, as he spoke about how to spot breakthrough ideas and companies.

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The Fred Hutchinson Cancer Research Center raised more than $2.2 million in donations for its research programs at its annual Hutch Holiday Gala on Saturday night at the Seattle Sheraton. More than half of the money, $1.2 million, was directed toward immunotherapy research, in which scientists try to “teach” the immune system to fight cancer cells like a virus. The money will be used to expand immunotherapy clinical trials in the late stages of disease, said Hutchinson Center President Lee Hartwell, in a statement.

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As Luke reported a couple weeks ago, Seattle-based Dendreon is in the midst of a crucial clinical trial of its cancer drug, Provenge, against prostate cancer. Interim results from 500 patients in the trial, called Impact, are expected in October.

In a conference call this afternoon, Dendreon announced its second-quarter 2008 financial stats, as well as giving a brief update on two other, smaller clinical trials of Provenge. “We’re continuing to make progress on multiple fronts, including our pipeline,” said CEO Mitchell Gold. “Our foremost priority remains advancing Provenge through the approval process.” Indeed, if the drug goes on to gain FDA approval and takes off, the commercialization plan calls for building a sales team in the U.S. and an outside partnership to distribute the drug abroad, said Gold.

Dendreon has just begun enrolling patients in its NeoACT trial, which will involve 40 patients at the University of California, San Francisco, with localized prostate cancer who are scheduled to undergo a prostatectomy. The clinical trial “provides us with an opportunity to look directly at the organ, the prostate, and its immunotherapy response,” said David Urdal, Dendreon’s chief scientific officer.

Another clinical trial of Provenge, called ProACT, is expected to begin later this month. It is a multi-center trial involving about 120 patients with metastatic prostate cancer. The goal, said Dendreon, is to gain new scientific insight into Provenge, and gauge its impact on patients.

In a statement, Dendreon (NASDAQ: DNDN) reported a Q2 loss of $16.5 million (18 cents per share), and its quarterly revenue dropped to $26,000 from $523,000 in Q2 of 2007. The company said it holds $127.3 million in cash, cash equivalents, and investments, including $46 million raised in a stock offering in April.

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