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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Seattle-based NanoString Technologies has made a big bet that the future of the company depends on turning its genetic analysis research tool into a diagnostic workhorse. Today, it presented some hard data that suggests it is on its way.

The company reported today that its instrument, called nCounter, was able to predict whether or not women with early-stage breast cancer were likely to have a recurrence in the future, by looking at an array of 50 genes known as the PAM50 signature. The information went beyond the usual 21-gene analysis done by Redwood City, CA-based Genomic Health (NASDAQ: GHDX). While some women get clear information today from Genomic Health about when they are at “low” or “high” risk of recurrence, doctors and patients often are confused about how aggressive they should be with chemotherapies when the results put patients into the “intermediate” risk group. NanoString’s tool could prove valuable because it classified fewer patients in the “intermediate” risk category.

The findings for the NanoString study were presented today in front of several thousand people at a plenary session of the San Antonio Breast Cancer Symposium.

NanoString CEO Brad Gray

“This is one of the single most important events in NanoString’s history, along with the launch of our first commercial system,” says Brad Gray, NanoString’s CEO, when reached by phone at the conference. “It really validates we can develop diagnostics on the nCounter, and that our first product is likely to be a significant one.”

NanoString, a spinoff from the Institute for Systems Biology in Seattle, introduced the first commercial version of its tool in the summer of 2008, for research purposes only. The technology provides scientists with a digital readout on the extent to which genes are dialed on or off in a sample—what’s known as gene expression analysis. The tool has gained popularity the past couple years with academic customers, especially those at The Broad Institute of MIT and Harvard, because of its ability to help spot patterns in complex diseases like cancer where 50 or 100 genes might be perturbed instead of just one.

But the research market has its limits, and NanoString has been thinking big about the diagnostic potential for the nCounter. In October, the company introduced a second-generation product that’s supposed to have 50 percent higher bandwidth (known as throughput in the genetics business); more flexible software for analyzing the data from the instrument; and hardware that is manufactured in line with more rigorous, consistent diagnostic industry standards. Last month, the company raised $20 million in venture capital from a syndicate that includes GE Healthcare and former Genzyme CEO Henri Termeer, to help pursue its diagnostic opportunity.

NanoString’s vision is to challenge Genomic Health directly, with a different kind of business model, Gray says. While Genomic Health runs its sophisticated 21-gene analysis at a centralized lab that doctors ship samples to, NanoString envisions selling instruments to labs around the world so … Next Page »

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We’re gathering our things to head over to the Institute for Systems Biology to get ready for this evening’s big event, “The Immunex Impact.” We are sold out now, having registered 244 people, so this undoubtedly is going to be one of the biggest networking events of the year in Seattle biotech.

Those of you who like to Tweet, or follow the real-time highlights on Twitter, check out the searchable hash tag #ImmunexSEA. We have an ensemble cast of speakers lined up, a cool memorabilia display, and a soundtrack provided by the Immunex house band. A special prize will also go out to the winner of the Immunex trivia quiz published here a couple weeks ago.

Registration and networking starts at 5 pm. The program starts at 6 pm, and I’ll work to keep things short and sweet so there’s plenty of time for catching up with old friends. See you there tonight at the Institute for Systems Biology, at 410 Terry Avenue North.

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DNA data is piling up on servers and hard drives near you, and scientists are struggling to sort through it all as genome sequencing keeps getting faster and cheaper. Seattle-based Spiral Genetics is the latest startup in town with ambitions to help relieve some of the IT pain that biomedical scientists are feeling.

Spiral was founded in 2009 by a couple of students in a University of Washington-Bothell entrepreneurship class. Two years later, the company has introduced its first couple of commercial software programs, lined up critical support from Amazon’s cloud computing infrastructure, and signed up a handful of paying customers, including the BC Cancer Agency in Vancouver, BC.

It isn’t radically reinventing how researchers find the precious needles in the haystacks—disease-related genes. But the company is getting its start by bundling open-source programs that are currently available, and leveraging distributed computing power, in a way that can take genome analysis jobs down from several days to several hours. After toying with the idea of a consumer genetics-type of company like Mountain View, CA-based 23andMe, Spiral is now aspiring to compete with another big-idea Google Ventures-backed company in Mountain View—DNAnexus.

“It might sound cheesy, but I want to do something to heavily impact the world. We want to help reach that elusive goal of personalized medicine,” says co-founder and CEO Adina Mangubat.

The company is still very much in its infancy. Spiral Genetics got its start when Mangubat met with a classmate, Becky Drees, in a University of Washington-Bothell entrepreneurship class taught by Alan Leong. Drees, an experienced research scientist at the UW and the Institute for Systems Biology, had the idea of creating some kind of genetics analysis business. Mangubat was an undergraduate psychology major who realized she didn’t want to go to grad school in psychology, and needed to figure out what was next.

Spiral Genetics CEO Adina Mangubat

She was taken with the idea of a genetic analysis business, and helped flesh it out through their classwork. They had their eye on competing in a business plan competition. “I said, ‘If we’re going to do this, we better win,’” Mangubat says.

They won, but that didn’t mean they had a real company yet. But by the time Mangubat graduated in June 2009, the recession was going strong. If starting a company was risky, Mangubat says she figured entering the job market was probably just as risky.

The idea for Spiral Genetics evolved from the original consumer-genetics play into something that helps address the DNA data pile-up that is vexing so many researchers. The new plan was put in place by about March 2010, and Mangubat and Drees enlisted support in crafting their algorithms from Jeremy Bruestle.

You can say the market terrain in this field is tough. Plenty of companies have tried and failed to get much traction in bioinformatics—including big players like Microsoft. Much of DNA analysis is … Next Page »

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We here at Xconomy are eagerly anticipating our biggest Seattle biotech event of the year: “The Immunex Impact.” We expect to pack the house tomorrow night at the Institute for Systems Biology in Seattle, as more than 230 people have registered. There is still a little bit more room to squeeze a few more folks in, but not much.

For those who may have missed the earlier announcements, this event will bring together many of the key people who built the Seattle biotech cluster through their experience at Immunex and other companies. We’re going to do our best to conjure up old memories about the spirit that made Immunex so special during its 20-year run in business.

Here’s what to expect. During the networking portion of the evening, before and after the program, we’ll be playing the 2002 soundtrack from the Immunex house band, 51 You. My favorite track on this CD has to be “Don’t Fear the Merger,” a clever play on Blue Oyster Cult’s “Don’t Fear the Reaper.”

Also during the networking, we’re putting together an awesome display of memorabilia. We will have old photos, T-shirts, a lab coat, trophies, coffee mugs, annual reports, back copies of the “Immunews” newsletters, a banner, and all kinds of other Immunex goodies to display. A certain co-founder (that’s you, Steve Gillis) says he’s willing to poke around in his basement to look for a copy of the “Wayne’s World” video spoof on some certain uptight East Coast pharma executives. I’m counting on you to deliver, Gillis!

But seriously, I want to thank Janis Wignall, Stewart Parker, Jake Johnston, my former Seattle Times boss Rami Grunbaum, and Stewart Lyman for contributing to this awesome stash of company memorabilia.

Once the clock strikes 6 pm, Leroy Hood, the president of the Institute for Systems Biology, will start off the program with some brief welcoming remarks as the host. Maybe he can enlighten us all about how in the early ’80s he got involved in co-founding Amgen (but not Immunex).

After I go through the usual round of thank-yous, the program will feature several well-known veterans of Immunex. I’ll moderate a keynote chat between co-founders Steve Gillis and Chris Henney, which will go for about 20 minutes. Then we’ll hand over the microphone to a group of Immunoids who will each tell a single favorite anecdote from their experience back in the day. Doug Williams, Stewart Parker, Janis Wignall, Steve Graham, Dave Urdal, and Patricia Beckmann will each have their turn to share a fond memory.

Lastly, I’ll wrap up by offering a special mystery prize to the winner of the Immunex trivia quiz, which I published here on Xconomy a couple weeks ago. The bar has been set pretty high, but there’s still time to send in your answers to me at ltimmerman@xconomy.com.

That’s it. We plan to wrap up the program by 6:45 pm, so that all the Immunoids and friends can connect over a drink and some light fare. See you there at the Institute for Systems Biology tomorrow night.

Here’s the agenda:

5 pm: Registration/Networking

6 pm: Welcoming remarks: Leroy Hood

6:05 pm: Introductions: Luke Timmerman

6:10 pm: Keynote chat with Steve Gillis and Chris Henney

6:30 pm: Remembrances

Doug Williams, Biogen Idec

Stewart Parker, IDRI

Steve Graham, Fenwick & West

Janis Wignall, consultant

Dave Urdal, Dendreon

Patricia Beckmann, OTRADI

6:45 pm: Trivia quiz winner announced

6:45 pm-8:30 pm: Networking

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

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

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

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

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Legend has it that former vice president Al Gore was once supposed to visit Seattle-based Immunex. Somebody had the bright idea of making a white lab coat with Gore’s name and “VIP scientist” embroidered on it, which probably would have made for an amusing photo op for the evening news.

Ah, but according to former Immunex government relations manager Jake Johnston, the veep’s visit fell through, and he never wore the lab coat. When Amgen acquired Immunex in 2002, Johnston ended up the owner of this rare collector’s item.

This is just one of the fun examples of Immunex swag that people are planning to put on display at “The Immunex Impact,” the big Xconomy event we are organizing the evening of Dec. 1 at the Institute for Systems Biology. Since I invited people to dig stuff out of their closets a couple weeks ago, I’ve heard the story of the lab coat as well as tales of various other items that have been socked away not just in closets, but basements, and other storage places. I’ve heard about water bottles, well-worn baseball caps, coffee mugs, jackets, and that there is at least one other slinky out there like my prized possession.

Al Gore's famously unused lab coat, courtesy of Jake Johnston

For those of you who want to wear your stuff, feel free—Richard Gayle tells me he’s thinking of sporting his blue Immunex jacket at the event on Dec. 1. For those of you with various other items that you can’t (or don’t want to) wear, I’d suggest showing up with your gear about 5 pm so we can get things situated as people start showing up for the program that starts at 6 pm.

More than 120 people have already registered for this event, which is a month away, and space is limited. So if you are an alumnus or a friend of the Immunex alumni, I’d suggest getting your tickets sooner rather than later. This is going to be the biggest reunion of Immunex alumni in years, as we have confirmed a rare and special lineup of speakers—Steve Gillis, Chris Henney, Stewart Parker, Doug Williams, Dave Urdal, Steve Graham, Janis Wignall, and Patricia Beckmann.

Besides having people bring their swag, I have a number of other fun little touches in mind for this event, which I’ll write about on Xconomy as we get closer. If you have any suggestions of special touches to add, please let me know at ltimmerman@xconomy.com. I’m looking forward to seeing a lot of readers there at the ISB on Dec. 1.

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Immunoids, and friends of Immunoids, listen up. Come December, it will be 10 years since Immunex agreed to be acquired by Amgen. I figure it’s the perfect time to reunite the people who lived through the exhilarating, and sometimes terrifying, experience of building Seattle’s first major biotech company.

So I’m super-psyched to say that we are bringing together a dream team of Immunex alumni for Xconomy’s next big event in Seattle, called “The Immunex Impact” on December 1.

Here are the confirmed speakers who will be there to tell a few war stories from their Immunex days, and to connect with lots of friends old and new:

—Steve Gillis, Immunex co-founder, now managing director, Arch Venture Partners

—Christopher Henney, Immunex co-founder, now chairman and interim CEO, Oncothyreon

—Doug Williams, Immunex chief technology officer, now executive vice president of R&D, Biogen Idec

—Stewart Parker, Immunex’s first employee, now CEO, Infectious Disease Research Institute

—Steve Graham, Immunex’s longtime corporate attorney, now co-chair of life sciences, Fenwick & West

—Janis Wignall, Immunex scientist and science education leader, now a consultant

—Dave Urdal, Immunex president of manufacturing, now chief scientific officer, Dendreon

I plan to make sure the speeches are short and sweet, leaving plenty of time for what this event is really about. It’s a chance to connect and re-connect with the Immunex network that continues to make a big impact on Seattle biotech every day.

Steve Gillis

This event will be from 6 pm to 8:30 pm on December 1 at the Institute for Systems Biology’s new headquarters in South Lake Union. ISB president Lee Hood (not a co-founder of Immunex, but a biotech industry godfather nonetheless) is planning to provide some opening remarks. I’m going to encourage him to reminisce a bit about what he was doing in 1981 when this whole biotech business started really taking off.

As if you couldn’t already tell, I’m chomping at the bit to get this event started. To get your tickets, check out the new “Immunex Impact” registration page here. See you there at the ISB on December 1.

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[Updated: 2:24 pm PT] Complete Genomics picked a bad day to have a bad day. The Mountain View, CA-based company that sequences entire human genomes lost more than one-fourth of its value today after it reported a decline in second-quarter revenue, partly driven by price decreases in its service, and a delay in getting enough all the DNA samples it needs from the Seattle-based Institute for Systems Biology.

The sell-off in Complete Genomics (NASDAQ: GNOM) happened during a down day for biotech stocks and the market in general. Complete Genomics stock fell $3.11 a share, or 27 percent, to $8.14 at 2 pm Eastern Time, while the broader market indexes were down about 3 percent.

A few key disclosures from Complete Genomics in today’s report rattled investors. Revenues in the quarter ended June 30 were $5.9 million. That figure was down from $6.8 million in the immediate prior quarter, and less than the roughly $7.2 million to $7.7 million that Wall Street was expecting, according to Quintin Lai, an analyst with Robert W. Baird. Part of the problem, Complete Genomics said, is that it didn’t receive as many biological samples as it expected from one of its biggest customers, the Institute for Systems Biology, which ordered 615 complete genome sequences in January. And while Complete Genomics scored a couple of big new contracts to deliver 2,700 new genomes over the next year, those new contracts are less lucrative than they would have been months ago, as the price of sequencing each genome continues to drop below $5,000.

“We were disappointed that lumpy DNA shipments to Complete Genomics caused a revenue shortfall in Q2 and an expected shortfall in Q3,” Lai wrote in a note to clients today. “However, we are encouraged that GNOM signed more orders in July than it received in all of [the first half of 2011]. We think the services-based whole human genome sequencing market is still in its infancy, and these large orders reaffirm our belief that GNOM is retaining its leadership position.”

Complete Genomics said revenues declined in the quarter, even though it was able to recognize revenue from sequencing 950 genomes in the quarter, up from 690 in the prior three-month period. The company said it still expects to reach its goal of shipping 4,000 completed human genomes back to customers this calendar year, although the delays from the ISB mean it will need to deliver a majority (2,400 genomes) in the second half to reach that goal.

CEO Cliff Reid said the company can still do that, because … Next Page »

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As one who’s spent a lifetime chasing the quest of a practical, sustainable bioeconomy – I have sympathy for biofuel skeptics. Let’s face it; petroleum is an incumbent that has no match in political or economic strength. But it is hard to deny the convergence of historical and technological trends that suggest a sustainable biofuel might soon be feasible. I have had the privilege of spending the last year in an effort called Sustainable Aviation Fuels Northwest and learned much from over forty stakeholders in the project. Let me offer four observations that give me some optimism about the viability of next generation biofuels.

Historical Shifts

Serious support for biofuels is very recent. The chemurgy movement (the early 20th century emphasis on biofuels and bioproducts from agriculture) never gained broad political traction. The Energy Security Act of 1980 mentioned biofuels but funding and interest fizzled quickly. It was not until the Farm Bill of 2002 there was an energy title, and serious support began. The last decade’s rapid ascent of Biofuels 1.0 (that being corn-based ethanol and soy-based diesel) was unprecedented. While hindsight suggests energy efficiency, environmental and economic impact could have been better managed, the creation of B1.0 didn’t include those requirements. The spark that ignited growth was the diversification and creation of new markets for a surplus of agricultural commodities while also reducing oil imports and boosting rural economic development. It was a supply-side push.

The biofuels industry emerging today (let’s call it B2.0) has learned from this brief history. First, it is now the consumers (not the producers) of the fuel looking for diversity – they seek a reliably sourced portfolio of biofeedstocks – not one silver bullet. Second, unlike ethanol and biodiesel, these new biofuels are distillates or ‘drop-in’ fuels meaning they can be blended and are compatible with petroleum’s infrastructure of refineries, pipelines, and storage. Third, these consumers are demanding global accepted standards for sustainability. Very pragmatic, in exchange for their backing of these new biofuels, they want assurance the supply chains are net energy positive, that carbon and other greenhouse gas emissions are significantly reduced, and they contribute to the environmental, economic, and social health of the region from which they are sourced and used.

Creating a viable B2.0 industry is also attracting talent, perhaps like never before. Biologists who pioneered the human genome like Craig Venter, George Church, even Lee Hood of the Institute for Systems Biology and David Baker of the University of Washington—all noted life science rock stars—have been attracted to the allure and challenge of a sustainable biofuel. Coupled with legacy agricultural land grants, like Washington State University where biofuels never went out of style, the sector is rapidly advancing. Over the past year, among the 10 IPOs in the clean tech space, four are involved with biofuels (Codexis, Solazyme, Amyris, Gevo) and one more is expected, Qteros. A few of these are converting alcohol fuels to distillates, efficiently linking B1.0 to 2.0. Most have valuable co-products and multinational partners. Some might call it a tipping point.

Acknowledging Limits

Deserved or not, B1.0 can also be credited with popularizing the food versus fuel debate. I am pleased with this acknowledgment that our fields, forests, and waters have a finite (but growing) capacity to produce biomass. I am disappointed that the issues have been purposely shaped into a false choice.

Regardless of how or where it’s produced, biomass has five primary fates:

Food – eaten in human diets

Feed – grazed, fed, or consumed in animal diets

Fiber -used for textiles, paper, and other products

Fuel – consumed (usually combusted) for its energy content

Functionality – residing in the ecosystem necessary to cycle nutrients and energy

The allocation of biomass among the ’5F’ fates have been on-going for all of human existence, and always been determined by society. Many a study and book have been written about those cultures where choices were unwise, and history suggests success has only come with … Next Page »

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This week’s biotech news roundup is short and sweet.

—Accelerator, the Seattle-based hothouse for biotech startups, is humming with the activity of a new cancer drug startup called Oncofactor. This company is setting out to spur the immune system to fight tumors.

—23andMe, the Mountain View, CA-based consumer genetic testing company, made an appearance at the Institute for Systems Biology’s annual symposium a while back, and boldly declared that it wants to be a “research company.” Many geneticists snicker at how the company generates data that really isn’t worth much, but ISB president Lee Hood has become increasingly interested in how scientists can tap into the company’s database of 75,000 people, who might be willing to participate in certain kinds of research studies.

—How can a biotech entrepreneur make money with no hope of going public, and fat chance of getting acquired by a Big Pharma company? This week’s BioBeat focused on how Jim Posada of Seattle-based Resolve Therapeutics has structured his company so it will generate liquid returns if he can strike a simple licensing transaction. This idea has sparked a fair bit of commentary on the web, who either like the idea or don’t. A couple days later, Bruce Booth, a partner at Atlas Venture in Boston, wrote an interesting post with his take on various biotech business models.

—Lastly, we had a guest post from Richard Gayle, about “finding a solution to our biotech malaise together.” Gayle laments how hard it is for the sector to offer sustainable employment for scientists and many others required to keep the industry strong, and he’s trying to bring people together to figure out a solution. I’ll keep this post in mind the next time I hear a local pol trot out data from an industry-funded study which says biotech jobs are so bountiful they are growing on trees.

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23andMe is used to lots of eye-rolling from scientists. One geneticist, quoted a year ago in the New York Times, ridiculed the Mountain View, CA-based maker of consumer genetic tests for providing little more than “a really wonderful form of recreation.”

One year later, 23andMe CEO Anne Wojcicki stood in front of a room of genomic scientists at the Institute for Systems Biology in Seattle, and boldly declared that 23andMe is turning into “a research company.” Sure, the business still relies heavily on persuading consumers to buy a test to look at certain regions of their DNA, partly out of curiosity and potential health benefits. But now 23andMe is building up a second revenue stream, using its database of 75,000 customers and counting, to help drug companies and scientists engage with the public, with an eye toward advancing research.

“We got a lot of criticism early, from people who said, ‘You launched too early, there wasn’t tons of data behind it.’ It was probably true,” Wojcicki said in her May 15 talk to scientists at the Seattle conference. Things are changing now, she says: “We still give people access to their genetic information. But a lot more than that, we are really a research company.”

The big change at 23andMe, to enable this kind of shift over the past year, has been about price. The company, founded in 2006, introduced its first product at $999. Benefitting from the breakneck pace of faster/cheaper DNA sequencing the past couple years, 23andMe has progressively brought its price all the way down to $99, plus a $5 monthly fee. The test looks at regions of a person’s genome to determine things like ancestry, and genetic mutations that are thought to slightly raise or lower the risk of certain diseases.

Anne Wojcicki

Wojcicki’s Seattle talk didn’t include any financial data on how well privately held 23andMe is doing, and she wouldn’t provide any forecasts when I asked a couple follow-up questions. But she said the company has seen an accelerating demand from consumers since last Thanksgiving, when it lowered the price of its test from $199 to $99. The lower price has encouraged more consumers to give the test a try, but equally important for 23andMe is what happens after the customer pays for the first test.

The key to its research plan, Wojcicki says, is in maintaining a relationship with its consumers through use of targeted surveys. So far, the company has crafted 50 different surveys, and found ways to make them fun for consumers by sprinkling in random questions so it’s not just “one big topic” that bores people, Wojcicki said. About 50,000 people have taken at least one of the 23andMe surveys, and the average person who does a survey takes 10 of them, Wojcicki said.

It wasn’t totally clear to me from Wojcicki’s talk how this can help drug development, other than simply being able to provide access to patients. But she gave one example in which 23andMe surveyed its customer base three days before an important meeting with a pharmaceutical company. 23andMe asked its customers about their experience with dry eye, got “thousands” of responses, and took the data into the meeting, Wojcicki said.

“We’ve taken on partnerships with pharma companies, where they may want to put out a survey, and we’ll do that for them,” Wojcicki said in a short interview last week, following her talk. “We never return individual-level data. It’s always aggregated. We can ask questions like ‘Is there a genetic association in certain reactions to sunscreen?’ Things like that. We’ve found that consumers are really interested in how they can participate in research.”

Wojcicki didn’t name names of the pharma companies involved, but the company’s growing ability to survey distinct groups of patients—like, say, those with Parkinson’s disease—could be the sort of thing that helped attract a couple more drug companies into its investor syndicate last year. The company’s investors include Google (where Wojcicki’s husband, Sergey Brin, is the co-founder), Genentech, New Enterprise Associates, Johnson & Johnson, MPM Capital, and Roche.

Lee Hood, the high-speed gene sequencing pioneer who leads the Institute for Systems Biology in Seattle, said he was particularly interested in how 23andMe has … Next Page »

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Seattleites know better than most that the notion that you can spur the immune system to fight cancer is going through a renaissance. So it shouldn’t be any surprise that Accelerator’s newest startup, Oncofactor, is testing out a variation on this red-hot theme.

Accelerator, the Seattle-based haven for biotech startups, has plunked down the first $2.1 million into a financing for Oncofactor that could be worth as much as $5.1 million over time, according to a regulatory filing. The company is being spearheaded by Sarah Warren, 29, a newly minted PhD immunologist who previously worked in Alan Aderem’s lab at the Institute for Systems Biology. Warren’s task will be to develop experimental antibody drugs against new biological targets involved in cancer, which ought to disable some of the mechanisms that normally prevent the immune system from destroying cancer cells.

“If you can stop cancer from blunting the immune system, then you can free up the immune system’s ability to clear the cancer cells,” says Carl Weissman, the CEO of Accelerator.

This idea, which Weissman came up with about 18 months ago, faced intense skepticism among the scientific team at Accelerator, including from Warren, who spent two years on a fellowship program that exposes young scientists from the Institute for Systems Biology to the world of business at Accelerator. She doubted Weissman’s hypothesis, but when he challenged her to prove it wrong by using bioinformatics tools to find new targets, she came back with more and more encouraging data to suggest the idea just might work.

“This is an idea that’s a little bit out there,” Warren says. She could have followed the usual path toward a postdoctoral fellowship in academia, but jumped at this because, she said, “few if any postdoc positions provide the opportunity to make a leap of this magnitude.” She added: “to find something novel for cancer is a really great opportunity.”

Sarah Warren

Seattle-based Dendreon (NASDAQ: DNDN) has staked a claim as a trailblazer in the business of cancer immunotherapy with sipuleucel-T (Provenge), a drug designed to “teach” the immune system to recognize a biological signature of cancer so it can rev up an aggressive attack against tumor cells. Following fast behind Dendreon, Bristol-Myers Squibb (NYSE: BMY) has shown an ability to extend lives of melanoma patients with a new drug, ipilimumab (Yervoy) that is supposed to work in a different way, by essentially releasing the brakes on the immune system that otherwise prevent it from launching a full-frontal attack on malignant cells.

Oncofactor’s approach sounds similar to Bristol’s in concept, although Weissman said the startup is going after a series of novel biological targets—so that would apparently rule out CTLA-4, the target of the Bristol drug. The targets were identified through a bioinformatics research effort that Warren worked on over the past 12 months, during the “25th, 26th, and 27th hours of the day,” she said. While most pharma companies are working on all the same hot targets—PI3kinase, MTOR, MEK, MET to name a few—Oncofactor is looking to tread in the great unknown, developing drugs against targets that haven’t been validated by others.

Oncofactor is still in its earliest of early stages. The company hasn’t yet synthesized drug candidates, much less sifted through which ones are the best to test in the petri dish or animals. “I’m still buying pipettes,” Warren joked.

The startup has identified a number of drug targets, although Weissman wouldn’t identify them, or say how many there are, because Accelerator has … Next Page »

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

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

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

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

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

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

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

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

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

Biotech used to have the promise of that twenty.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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There was a big ribbon cutting, and lots of back-slapping local politicians, when Merck officially opened up the fancy labs it built for Rosetta Inpharmatics in March 2004.

Merck and Rosetta are long gone now—and so are most of the local officials, come to think of it—but the modern biomedical research center at 401 Terry Avenue North is once again humming with new life as the new home for the Institute for Systems Biology. I had a chance to walk through a week ago and see what Lee Hood & Co. have done to spiff up the place in South Lake Union, right across the street from Amazon‘s new headquarters.

The folks at the ISB have been gracious to open up the new facility (NOT the old one next to Gas Works Park) for our next big Xconomy event on May 19. For folks who are attending “Separating Hype from Reality in Alternative Fuels,” you will get a chance to do a short walking tour around the new labs and offices, right after the program concludes and the networking part of the evening begins.

Bright colors—which I suppose must be good for triggering neural impulses for creativity—are everywhere. If you’re registered for the event, and would like to join the tour, just send me a note at ltimmerman@xconomy.com so I can get a handle on the headcount for the folks at ISB. See you there on May 19.

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Geospiza has been around the block a time or two in the bioinformatics business, and now after 14 years in the game, it has come to the end of the road.

The Seattle-based company, which makes software for scientists who analyze data from genetic experiments, said today it has agreed to be acquired by Waltham, MA-based PerkinElmer (NYSE: PKI), the giant maker of tools for life scientists. PerkinElmer, which said it generated $448 million in first-quarter revenue, didn’t disclose to investors how much it paid to obtain Geospiza. PerkinElmer CEO Rob Friel, however, did say in a conference call with analysts that the acquisition will have “minimal impact” on his company’s near-term finances, but that it represents a strong growth opportunity.

“Genomic information is becoming increasingly important in understanding and treating disease. Making sense of the unprecedented volumes of data generated by next generation sequencing and other biological measurements is critical to improve the disease diagnosis process and drug discovery,” said Richard Begley, PerkinElmer’s president of emerging technologies, in a statement.

Geospiza, which I profiled about a year ago when it turned profitable, has been one of the small and persistent voices in the market that has insisted that biologists need better software to manage genomic information. The company, founded in 1997, struggled to get traction with this argument in the wake of the Human Genome Project, but was able to weather the storm as competitors fell by the wayside, and the market eventually became more attractive. As DNA sequencing instruments from Illumina (NASDAQ: ILMN) and Life Technologies (NASDAQ: LIFE) have made it possible to sequence an entire human genome for as little as $10,000 and in a few weeks, it has created a tidal wave of DNA data points that more researchers are struggling to visualize and analyze.

Geospiza has long been forced to compete with old-school Excel spreadsheets in some cases, and custom-made “home-brew” software programs that individual biology labs make for their own projects. But Geospiza has gradually been chipping away at the market, winning over a series of big-name customers at places like the Institute for Systems Biology and University of Washington, Harvard Medical School, Yale University, Children’s Hospital Boston, and the University of Florida. Geospiza, as of a year ago, had about 20 employees.

It certainly looks like this deal has been brewing for a while. PerkinElmer took a multi-year license to Geospiza’s technology back in January.

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We had a grab bag of life sciences-related coverage this week, with a big device company acquisition, some wild ideas for global health, and a whole lot of focus on biofuels.

—Kleiner Perkins Caufield & Byers never has done much investing in the Northwest from what I can tell, but this week I came across a quiet company in South Lake Union that the fabled VC firm built to help convert organic waste into clean-burning natural gas. The big idea at this company, called Harvest Power, is to develop what you could call a giant concrete stomach.

—While biofuel entrepreneurs are brimming with enthusiasm about weaning the world off fossil fuels, I thought it would be helpful to get a bit of a reality check from a top local scientist who’s been thinking hard about this problem—Nitin Baliga of the Institute for Systems Biology. Baliga will also provide some brief welcoming remarks at the next Xconomy Seattle event on May 19, titled “Separating Hype from Reality in Alternative Fuels.”

—This week, I spent a fair bit of time recruiting new speakers to flesh out the agenda for the event mentioned above. The new additions, who will each provide 4-minute “burst” talks about their approach to alternative fuels, are Kelly Ogilvie of Blue Marble Energy, Hoby Douglass of General Biodiesel, and Jeff Surma of S4 Energy Solutions.

—Seattle-based Dendreon (NASDAQ: DNDN) came out with its first-quarter earnings report, and there were no big surprises. The company hit its forecast for sales in the first three months, has started scaling up sales in April now that it has more available manufacturing capacity, and reiterated that it plans to sell $350 million to $400 million worth of sipuleucel-T (Provenge) for prostate cancer patients in 2011.

—One of the big dreams in biofuels is that someday we’ll have open ponds in the desert, full of fast-dividing algae that are genetically modified to spit out the maximal amount of oil. Ned David of Arch Venture Partners has pushed that idea forward as a co-founder of Sapphire Energy, but a couple years into that endeavor, he realized he needed to capture a whole heck of a lot of carbon dioxide from the air in order to feed the algae at companies like Sapphire. The result is his latest startup, Kilimanjaro Energy, which I profiled this week.

—Seattle Genetics (NASDAQ: SGEN) got a big date to circle on the calendar—August 30. That’s when the FDA has agreed to complete its review of the company’s application to start marketing brentuximab vedotin (SGN-35) in the U.S. The agency agreed to a faster-than-usual six-month review schedule for this drug because of its groundbreaking potential against a couple deadly forms of cancer.

—The Bill & Melinda Gates Foundation has taken some flack for its approach to funding big science ideas in the past, which some contended was too heavily weighted toward big-money, long-term projects. The foundation has sought ways to make a bigger impact by tilting more of its research portfolio to really early-stage, out-of-the-box proposals that get $100,000 to sink or swim, which discovery director Chris Wilson explained in our interview.

—Considering a career in biotech? I’m not so sure it’s a good idea to encourage young people to dive in, as you can see in this week’s BioBeat. The action is clearly in computer science, and unless something pretty dramatic happens in government research funding, or pharma/biotech business models, it looks like it will stay that way for quite some time.

—Seattle-based Oncothyreon (NASDAQ: ONTY) pulled in more than $40 million in a new stock financing. This will provide a lot more fuel for the company to pursue development of the cancer drugs in its pipeline other than Stimuvax, the immune-booster that is being developed in partnership with Merck KGaA.

—GE Healthcare made a pretty sizable acquisition last week when it took over Issaquah, WA-based Applied Precision. The local operation, which has 130 employees, makes super high resolution microscopes with software and data visualization tools for biomedical researchers.

—Lastly, Vancouver, BC-based Indel Therapeutics reported that it raised $1.4 million in a Series B financing to support its development of new antibiotics. Things have been pretty quiet lately on the financing front—makes me wonder if there are some big ones in the works.

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