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 »

Comments (1) | Reprints | Share:          

Patricia Beckmann has covered lots of bases in biotech—science, venture capital, entrepreneurship, and state officialdom. But once an Immunoid, always an Immunoid. So I’m excited to have her join Xconomy as one of the speakers at our next big Seattle life sciences event, “The Immunex Impact,” on Dec. 1.

For those who may have lost track, Beckmann is now the executive director of the Oregon Translational Research and Drug Development Institute (OTRADI) in Portland. Like the name suggests, its goal is to help researchers in Oregon translate their biological ideas into valuable new medical products. You can read more about Beckmann’s career and the Oregon initiative in this Science profile from earlier this year.

Beckmann’s enduring claim to fame comes from her scientific contributions at Immunex to the blockbuster autoimmune disease drug etanercept (Enbrel). That product, first approved in 1998, is on track to be the world’s third-best selling drug with $8 billion in worldwide sales in 2014, according to Thomson Reuters. But Beckmann has done a lot of interesting things since then. She managed life sciences investments for Paul Allen’s Vulcan for a while in the 2000s, followed by a stint at the Seattle-based Accelerator. There, she was the founding chief scientist of Homestead Clinical, a Leroy Hood project that was shut down for a while but has since been reborn as Integrated Diagnostics.

We have a great lineup of Immunex vets who have agreed to tell a short story about one of their best memories from their Immunex days. We’ll start things off with a keynote chat between co-founders Steve Gillis and Chris Henney, and then Beckmann will join Stewart Parker, Dave Urdal, Janis Wignall, Steve Graham, and Doug Williams in the “short stories” part of the program.

Patricia Beckmann

Beckmann admits to having once received the fabled “Pons and Fleischmann” award for dubious achievement in science, and she hinted that she might have something to say about that during the event. The award was just one symbol of Immunex’s famously irreverent scientific culture, which encouraged people to try risky things that might fail in the lab. Pons and Fleischmann inspired the award after they were celebrated for discovering cold fusion in the 1980s, at least until other scientists learned that wasn’t really true.

Anyway, this event will be held from 6 pm to 8:30 pm on Dec. 1 at the Institute for Systems Biology’s new headquarters in Seattle’s South Lake Union neighborhood. Tickets have been going fast, and it’s possible at this rate that it will sell out a week or two in advance. So get your tickets now, and get ready for a fun evening of networking and reminiscing with the people who built Seattle’s signature biotech company, and who are continuing to make things happen in the Northwest life sciences community. See you there Dec. 1.

Comments (1) | Reprints | Share:          

One of our local billionaires made a couple of significant biotech investments this week, while one of the venerable names from the biotech scene faded away.

—The Bill & Melinda Gates Foundation made its first-ever direct equity investment in a for-profit biotech company last week, when it plunked down $10 million on Research Triangle Park, NC-based Liquidia Technologies. As the foundation’s Doug Holtzman explained to me in an exclusive interview, this deal was crafted to provide maximum flexibility so Liquidia can build out its technology for making vaccines against various scourges of the developing world—instead of being hemmed in to carry out work on one specific project. Separately, my Boston colleague Ryan McBride reported on how Gates personally invested in Cambridge, MA-based Nimbus Discovery, which is seeking to use computer models to improve drug discovery.

—Seattle-based Targeted Genetics is no longer Seattle-based Targeted Genetics. The venerable gene therapy company is now based out of London, goes by the new name AmpliPhi Biosciences, and is primarily focused on anti-bacterial drugs. It’s the end of an era for one of the region’s important companies of the 1990s and early 2000s.

—Calypso Medical Technologies looked to be on the cusp of big things when it raised $50 million in venture capital in September 2009, but it was actually going through hard times, as I explained in a feature story this week. The Seattle-based medical device company struggled through a tough couple of years when hospitals were unwilling to spend big bucks for its radiation-pinpointing technology for prostate cancer, although the new CEO says hospitals are feeling more confident about spending now that the federal healthcare reform law has passed and the stock market is up.

—The Seattle-based Institute for Systems Biology struck yet another collaboration this week, this time through a partnership with Covance to study brain tumors. Terms weren’t disclosed.

—About 1,000 people turned out for the big Life Science Innovation Northwest conference last week put together by the Washington Biotechnology & Biomedical Association, making this the biggest local biotech event in years—or maybe ever. I didn’t have any one major scoop from this confab, but I put together a half-dozen mini-scoops of new information on small companies presenting at this year’s conference. Here are a few companies that I paid close attention to—PhaseRx, Cardiac Insight, Acqueduct Neurosciences, and Integrated Diagnostics.

—This week’s edition of the BioBeat column, now a regular Monday feature, focused on the state of dysfunction in the IPO market for new biotech companies.

—Lastly, we had a guest editorial from Stewart Lyman about how biotech companies sometimes seek advice for all the wrong reasons. If you don’t already, this post will make you think twice about whether to be impressed when a company brags about how it has a Nobel Laureate or two on its scientific advisory board.

Comments (1) | Reprints | Share:          

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

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

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

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

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

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

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

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

Bob Overell

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

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

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

Comments | Reprints | Share:          

Accelerator, Seattle’s best known hotspot for hatching biotech startups, has found its latest idea for a new company on the East Coast.

Most of Accelerator’s investments of the past have come from its West Coast network, but the youngest pup in the litter at the Seattle-based startup machine, Acylin Therapeutics, is based on the vision of a biotech entrepreneur from Boston, and some science from Johns Hopkins University School of Medicine and The Wistar Institute at the University of Pennsylvania. Acylin is announcing today it has secured an undisclosed Series A venture round (which is typically in the ballpark of $4 million) from the usual suspects who back Accelerator—Alexandria Real Estate Equities, Amgen Ventures, Arch Venture Partners, OVP Venture Partners, PPD, and WRF Capital.

The idea here is that Acylin (pronounced ACE-uh-lin) will make small-molecule drugs aimed specifically at a class of enzyme targets known as histone acetyltransferases. The concept of fighting cancer through this route has been gaining increasing attention in Big Pharma and venture capital, particularly since Cambridge, MA-based Gloucester Pharmaceuticals won FDA clearance of its drug romidepsin for a rare lymphoma last year, and was quickly bought out by Summit, NJ-based Celgene (NASDAQ: CELG) in a deal that could be worth $640 million over time. Merck also has an approved drug, vorinostat, in the same class of histone deacetylase inhibitors (HDAC), and Novartis has a candidate in advanced development for cancer called panobinostat.

Acylin’s hope, based on science from the labs of Philip Cole at Johns Hopkins and Ronen Marmorstein at Wistar, is that it will develop more specifically targeted and more potent drugs that work through this pathway against cancer, metabolic diseases like diabetes, and neurodegenerative disorders.

Carl Weissman

“We are the first company to target this class in a serious way,” says Bard Geesaman, Acylin’s chief technical officer. “The founders have solved a number of 3-D structures, so designing drugs is more straightforward than it was before.”

Biotech is clearly one of those industries built on relationships, and Acylin is no exception to the rule. Accelerator CEO Carl Weissman goes way back with all the key business players here. Back when Weissman was with MPM Capital in 2001, he hired Geesaman as the top technical guy at Cambridge, MA-based Centagenetix, based on a recommendation from stem cell researcher George Daley. Centagenetix was merged into Elixir Pharmaceuticals in 2003, where Weissman got to know chief scientific officer Peter DiStefano. Years later, DiStefano hooked up with one of his former Millennium Pharmaceuticals colleagues, Suresh Jain, who was seeking help in getting his business vision for Acylin off the ground.

Jain, who believed in this company so much that he … Next Page »

Comments | Reprints | Share:          

For the second month in a row we’re compiling all recent Seattle-area tech and biotech deals—”under the radar” and otherwise—into one comprehensive overview of all financings for the month. As always, the information is based on data provided by our partner, New York-based private company intelligence platform CB Insights, and our own prior coverage. And just as in June, the July data shows a clear trend: the majority of the local venture and angel-backed investments are going to the healthcare sector, which includes biotech.

Of the 17 deals Washington companies saw over the month of June, seven of them were in the healthcare sector, amounting to $62.5 million of the $81.7 million invested overall.  Compare this to the $104.3 million raked in locally in June, of which biotech companies nabbed $41.1 million, and it’s easy to see that the healthcare sector is leading in terms of regional financings. But whereas the energy and utilities and computer hardware and services sectors trailed close behind healthcare in June, no other sector was even close to bringing in the same amount of funding in July. The electronics sector trailed far behind with $5.8 million in financing, and the business products and services sector was close to follow with deals totaling $5.4 million.

The Internet sector came in fourth with $4 million in financing. (The Northwest Open Access Network did nab $54.5 million in federal stimulus money to expand high-speed broadband service across Washington state, but as this is grant money and not investment financing, it is not included on the list). Software took fifth place, with $2 million, and the mobile and telecommunications sector took a distant sixth place with $1.3 million in funding.

Perhaps the most shocking result has to do with the energy and utilities sector, which only brought in $0.69 million in July—the only sector to drop below the million-dollar mark—compared to the $35.8 million they raked in back in June. The computer hardware and services, risk and security, industrial, automotive and transportation, and gaming sectors brought in no funding at all in July.

We reported on a number of the larger deals that came through in July, including the $32 million Seattle-based Immune Design raised in Series B funding for the development of a new generation of vaccines. This deal, the second-largest venture deal in Washington state this year so far (behind the $40 million nabbed by Seattle-based Calistoga Pharmaceuticals in June) is just another indication of the healthcare sector’s leading role in Washington state investments. Further evidence: Uptake Medical’s $17.5 million investment for the sale of its emphysema treatment device, and Integrated Diagnostics $10 million deal, the second of its three-part, $30 million Series A.

On the tech side, contact-organizing software developer Gist raised an additional $4 million from Vulcan Capital and the Foundry Group. There were also a few interesting deals you may not have heard of, including a $690,000 round of equity that Seattle-based General Biodiesel, one of the first cleantech companies to set up shop at the McKinstry Innovation Center, brought in.

Here’s the full list of July’s equity-based deals, both under the radar and on it:

July also saw a few startups raising cash through deals based on debt, options, and/or warrants, rather than equity, including mobile software company Dashwire, which brought in over $515,000 in July from an undisclosed investor. (CEO Ford Davidson says the mobile app space is a “market that’s on fire.”) Those seven transactions, worth a combined $14.5 million, are listed below.

Comments (1) | Reprints | Share:          

This week, we saw more than the usual number of venture deals on the Seattle life sciences beat. Maybe the VCs needed to tie up some loose ends before unplugging in the month of August.

—Seattle-based Immune Design snagged the big round of the week, a full $32 million Series B deal that included ProQuest Investments, Alta Partners, Versant Ventures, and The Column Group. The company, led by Corixa co-founder Steve Reed, is following that same tried-and-true formula for company building, Reed told me in an exclusive follow up interview.

—Integrated Diagnostics, the Seattle-based company co-founded by biotech pioneer Leroy Hood, secured a $10 million second installment of a Series A venture financing round first announced in October. The company hit a series of milestones on its quest to develop a test that will take a pinprick of blood and use it to predict the odds that a person will get lung cancer, or even Alzheimer’s.

—HemaQuest Pharmaceuticals tacked on an additional $4 million to its Series B round, bringing the total value of that deal to $16 million. The Seattle-based company, led by CEO Ron Berenson, is developing treatments for sickle cell anemia, and a lymphoma related to infection with Epstein-Barr virus.

—SonoSite (NASDAQ: SONO) is always thinking of some new way for doctors to use ultrasound as a diagnostic tool, and last week I experienced one of those uses first hand. The company is seeking to get more primary care doctors to use ultrasound scans of people’s carotid arteries, to see how much plaque is building up, which can be an indicator of future risk of heart attack or stroke. Fortunately, the company sonographer says I won’t be keeling over anytime soon.

—Marina Biotech, the Bothell, WA-based company formerly known as MDRNA and Nastech Pharmaceutical, secured some intellectual property to help it deliver RNA-based therapies inside cells. Marina (NASDAQ: [[MRNAD]]) paid $5 million worth of common stock to get the RNA delivery technologies from Germany-based Novosom.

—We had a couple of sharp guest editorials from contributors outside the Northwest who nonetheless made points that are relevant to the biotech community here. Steve Speer, a biotech consultant in Carlsbad, CA, wrote a guest post about why penny-pinching isn’t necessarily the best way to get bang for the investor buck at a biotech startup. And Daniel MacArthur, a top-notch genomics blogger and researcher at the Wellcome Trust Sanger Institute in the U.K., talked about how direct-to-consumer genetics companies like 23andMe took a public flogging at a congressional hearing last week, and how this could harm the future cause of research and personalized medicine.

I know you Seattleites have opinions too, so if you’ve got something relevant to the local innovation community that you’d like to say, shoot me a note at ltimmerman@xconomy.com. I’ve been known to help quite a few shy writers with some editing, and they tell me it’s not as bad as a trip to the dentist.

Comments | Reprints | Share:          

Two prominent Bay Area biotech companies took their lumps in front of FDA advisory panels this week, which clearly sent some shivers through the startup community.

—Genentech, the U.S. unit of Roche, failed to persuade an FDA advisory panel to support the use of bevacizumab (Avastin) for women with a type of breast cancer that doesn’t overexpress the HER2 protein. The drug is already approved for colorectal, lung, brain, and kidney tumors, but analysts say the company could lose hundreds of millions in future revenue if it loses this promising market among breast cancer patients. The FDA has a deadline of September 17 to decide whether to keep breast cancer usage in the drug’s label.

—Mountain View, CA-based Vivus (NASDAQ: VVUS) was also unable to convince an FDA advisory panel that its obesity drug deserves a place on the U.S. market. This setback has implications not just for Vivus, which is counting on the weight loss drug to be its first real moneymaker, but also for competitors like San Diego-based Arena Pharmaceuticals (NASDAQ: ARNA) and Orexigen Therapeutics (NASDAQ: OREX). Tom Hughes, the CEO of an obesity drug developer in Boston, followed up with his perspective on what this means for the future of obesity drug development in a guest op-ed.

—I took time to profile one of the rising stars in the Bay Area venture industry, Kristina Burow of Arch Venture Partners. Burow, 36, hasn’t yet hit a home run for the Arch portfolio, but she has played a key role in starting some of its big idea companies of the past five years—including Sapphire Energy, Lycera, Receptos, and Siluria Technologies.

—Tethys Bioscience, the Emeryville, CA-based maker of a test that predicts an individual’s risk of getting diabetes, secured $33 million in an equity and debt financing. The company’s president, Mike Richey, talked in detail about how big Tethys thinks this new market could become, and how Tethys envisions it will save money for the healthcare system for years to come.

—Since Tethys was fresh in my mind, I followed up for a longer conversation with one of its early investors, Menlo Park, CA-based Mohr Davidow Ventures. Managing partner Bill Ericson talked about how MDV has been investing in personalized medicine companies like Tethys for the past seven years. While the concept of personalized medicine hasn’t gone mainstream yet, Ericson says it’s only a matter of time, and MDV is remaining patient, and continuing to bet big.

—Here’s a little story with a strong Seattle-SF Bay Area connection. Integrated Diagnostics, the company co-founded by biotech pioneer Leroy Hood, secured a $10 million second tranche of its $30 million Series A financing announced last October. Menlo Park, CA-based InterWest Partners led the deal for this company, which is seeking to analyze certain proteins found in a pinprick of blood that could suggest future risk of lung cancer.

—South San Francisco-based Achaogen secured one of the biggest biotech venture deals of the second quarter, pocketing $56 million, so I’ve been meaning to follow up with them for some time to find out what’s so interesting. CEO Kevin Judice offered up some revealing insights about his vision to create an antibiotic company that goes after multi-drug resistant bacterial infections.

—San Mateo, CA-based Itero Biopharmaceuticals secured its first partnership to develop a product, attracting support from generics maker Watson Pharmaceuticals (NYSE: WPI). Terms weren’t disclosed, although the companies plan to work together on a “biosimilar” drug for female infertility, a market estimated to be worth $1.2 billion.

—Lastly, we had a thought-provoking guest editorial from former Bayhill Therapeutics CEO Mark Schwartz on how the lack of will to finance early-stage projects is damaging the culture of innovation in biotech. He asks: “Where Will the New Disease Treatments Come From a Decade From Now?” If you have your own opinion on this, or any other issue that’s relevant to the local innovation community, send a draft over to me at ltimmerman@xconomy.com or Wade Roush, our San Francisco editor, at wroush@xconomy.com.

Comments | Reprints | Share:          

Integrated Diagnostics has done what it told its investors it would do, at least in its early days.

The Seattle-based developer of predictive diagnostic tests has secured a $10 million financing, which represents the second installment of a three-part, $30 million Series A venture deal announced last October. As part of the deal, a newly formed investment group in Luxembourg called BioTechCube Luxembourg is replacing a German firm, dievini Hopp Biotech, in an investment syndicate that also includes InterWest Partners and the Wellcome Trust. Integrated Diagnostics, aka InDi, received the second tranche of cash after hitting a series of six progress milestones that investors said they wanted to see at the beginning, says CEO Al Luderer.

“The first thing really is that I didn’t screw anything up since I joined,” Luderer says, explaining how he nailed down the money.

Kidding aside, it sounds like InDi has been hard at work the past few months trying to execute on the big idea of its co-founders, Leroy Hood and David Galas of the Institute for Systems Biology and Jim Heath of Caltech. The vision, which I last wrote about here in March, is to create a new class of diagnostic tests that can spot specific proteins that can be shown to be early warning signs of certain cancers, or Alzheimer’s disease. Hood, the biotech pioneer, has said he hopes this could shake up the healthcare system by making it possible for doctors to detect diseases much earlier than they can be caught today, giving them more information before they make hard decisions about treatment.

This program is still in its early days, and the milestones were chosen carefully by the founders to make sure they were both “meaningful and achievable,” Luderer says. The company has essentially settled on its first two market opportunities, in the early detection of lung cancer and Alzheimer’s disease, Luderer says. It has filed for U.S. patents on its lung cancer diagnostic test, done a lot of market research and studied the health economics, and laid the technology foundation for a test that could be ready to perform in its first rigorous clinical trial before the end of next June, Luderer says.

Albert Luderer

The $10 million financing is enough for InDi to operate at least another 16 months, Luderer says. By that time, it should have data to demonstrate the value of its test at predicting lung malignancies. The company hasn’t yet signed its contracts with medical centers, but it envisions a retrospective study that will analyze existing blood samples from more than 700 people. These patients came in to the hospital with a variety of chest ailments, and had CT imaging scans that showed small lung lesions of between a half centimeter or 2 centimeters, Luderer says. Doctors are often reluctant to do a lung biopsy, an invasive procedure, when the lesions are likely to be benign.

That’s why InDi sees this is an ideal proving ground for its test. By taking a simple pinprick of blood, InDi’s instrument will look for telltale proteins that ought to indicate whether a lesion is benign or malignant. The medical history on these patients is already loaded with data on what the CT scans showed, what biopsies revealed, and how sick the patients got over time. InDi hopes that it will see clear differences in the blood between patients who got serious lung cancer, those who had benign growths, and those who got some other malignancy. In everyday clinical use, the pinprick test would be an early warning sign, which a doctor would verify … Next Page »

Comments (1) | Reprints | Share:          

One of the Nobel Prize winners at The Scripps Research Institute in San Diego has been saying for a decade that chemists would be better off doing the simple thing instead of the hard thing. Now quite a few of the world’s top academic scientists and Big Pharma companies are starting to adopt K. Barry Sharpless‘ philosophy of “click chemistry.”

This is the concept that Sharpless has been advocating a long time, along with a couple like-minded faculty members at Scripps, MG Finn and Valery Fokin. I met with Sharpless, Finn and Scripps’ tech transfer leader, Scott Forrest, a few weeks ago to talk about the boom they are seeing in scientific publications, patents, and some new technology licenses that are taking advantage of “click chemistry” principles.

What’s the big idea? It’s about using small chemical building blocks that you put in water or some other solvent, until they naturally “click” together. Sort of like a plastic buckle on a backpack, these molecules join together in the easiest, cheapest, most reliable, and most durable reactions possible, according to the laws of Mother Nature. These are fundamental reactions that tightly bind molecules together and could be useful as oral pills, industrial adhesives, stable coatings for implantable medical devices, or any number of valuable products. It sounds simple, and Sharpless and Finn say it is. What’s surprising is how strange it might appear to the modern lab with its state-of-the-art tools and its efforts to constantly strive for the leading edge and peer approval that goes with it.

Sharpless has been applying this idea for about 20 years, but he says he was really inspired by Kevin Kelly’s 1995 book “Out of Control.” Kelly, the founding editor of Wired, wrote that scientists should recognize they’re playing “God games.” In the case of a chemist, he or she is trying to do things that are more complicated any human can fully understand, so they should listen carefully to what Mother Nature says. It’s a more humble approach than what you often see in pharmaland.

“We are going toward an unknown target. Even if we think we know the target, we say we know what’s best. That was big-scale hubris. It’s like Cinderella and her sisters, with a shoehorn. Our intellect is saying we can shoehorn what we say works into the shoe. It’s not close to the truth,” Sharpless says. “If you want to be God, you have to allow your objects to have free will. You have to relinquish control.”

Barry Sharpless

Instead of trying to do things the way nature wants, chemistry and other fields of science are really more of a game of “hey, can you top this?” to hear Finn and Sharpless describe it. The click philosophy, they say, strikes a lot of peers as mundane.

“We are trained as most experts to do the hardest things and do them well. That’s how you get praise and learn,” Finn says. “You want to do the hardest chemical reactions and make them work. It’s weird to say ‘We’re not going to do the hardest reactions.’ We’re going to find or create the easiest reactions.’ But if you think about it, it’s a lot harder to invent a process that works all the time, than it is to make the process that’s really difficult work a few times.”

Yet more and more scientists and companies are seeking to apply the click philosophy. One example is Seattle-based Integrated Diagnostics, a company co-founded by Leroy Hood of the Institute for Systems Biology and Caltech’s Jim Heath. Their idea is to create a diagnostic tool that can perform binding reactions cheaply and reliably enough to usher in an era in which physicians will be able to spot proteins that are early warning signs of cancer or neurodegenerative diseases in a pinprick of blood.

Hood loves to tell the story about how the prototype, and the tight binding reactions it performs inside, were rugged enough to produce reliable results even when Heath left the machine in the truck of his car near Caltech in Pasadena, CA.

That’s just one example. Carlsbad, CA-based Life Technologies (NASDAQ: LIFE) markets a kit that performs a click reaction to take quantitative measures of DNA in cells, Finn says. Tampa, FL-based Intezyne, whom Finn advises, is using the click principles to attach polymers to drug candidates in a cheap, strong, consistent way to make chemotherapies active only inside tumors, not other tissues where they cause side effects. Hundreds of drug candidates that use the principle are now working their way … Next Page »

Comments (2) | Reprints | Share:          

There was a lot of variety in Seattle biotech this week, with stories on vaccines, diagnostics, an open-source biology, and an interesting new research service business that emerged from the Fred Hutchinson Cancer Research Center.

—Dendreon (NASDAQ: DNDN) is staking its claim as Seattle’s biotech anchor tenant in the making. One of the things anchor companies do is spin off lots of talented people who populate other companies. So I sought to track down some of the people who had formative experiences at the Seattle-based developer of cancer immunotherapies, and provided updated links on where they are now.

—Sage Bionetworks, the fledgling movement for open source biology, secured some more support this week through a partnership with Merck. The pharma giant, where Sage founder Stephen Friend used to be a mover-shaker, has agreed to support some of Sage’s work to build network models that seek to connect the dots between DNA, RNA, proteins, and clinical symptoms of disease.

—Lee Hood’s new company with a big idea for personalized medicine, Integrated Diagnostics, has recruited its first CEO. Albert Luderer, the former boss of Woburn, MA-based BioTrove, has agreed to take on the challenge of carrying out Hood’s vision of diagnostics that can diagnose cancer and Alzheimer’s at far earlier stages than anything we have today, and to do it with just a pinprick of blood.

—Hans Rosling gave a very entertaining and informative talk last week at the annual fundraiser for the Seattle Biomedical Research Institute, but I walked away with an update on the nonprofit’s quest against malaria. Seattle Biomed’s experimental malaria vaccine—first conceived nine years ago—is being primed to enter its first clinical trial in a matter of weeks.

—We broke the news last week on the founding of Seattle-based Adaptive TCR, a company that uses proprietary software algorithms to analyze the diversity of T cells in a blood sample. The company has raised $4.5 million from angel investors to build a service business model for researchers who are curious to run this new kind of test. CEO Chad Robins says that the information from the T cell analysis could be used for diagnostics and drug discovery.

—Academics get a lot of grief from businesspeople for not being entrepreneurial enough, but we heard the other side of the story this week in a smart account from Anthony Rodriguez, a Ph.D student in bioengineering at the University of Washington. Why don’t more researchers start companies? Lack of time is one big reason, he says.

Comments | Reprints | Share:          

This week, I’ve learned a lot about game-changing ideas and how to think about making them work. Like anything meaningful, some of the lessons will take more time and effort to sink in. But here are five lessons to take away from our Xconomy Forum (“What’s Your Breakthrough Idea”) held at the University of Washington on Monday:

1. Not everything is, or should be, a breakthrough idea. Nick Hanauer of Second Avenue Partners framed the whole discussion by pointing out that entrepreneurs have different motivations: some might want to make a lot of money whether or not they change the world; others may want to change the world whether or not they make much money. Either approach is perfectly valid; just be true to yourself.

2. Venture capital alone won’t sustain breakthrough ideas. VCs don’t fund new ideas or the invention process, said Nathan Myhrvold of Intellectual Ventures. Instead, they fund “zillions of ‘me-too’ ideas,” he said. Which is why Myhrvold is trying to create a new “invention capital” marketplace—and why his company has awarded $315 million to individual inventors in the U.S. and has deals with more than 100 universities to support the invention process.

Meanwhile, Hanauer told me last week that most VCs don’t take risks anymore because the VC business model rewards those who can simply avoid a major screw-up. “The business model is toxic to risk-taking, because it’s so unbelievably profitable for the partners just if it doesn’t fail,” he said. (Of course, VCs will tell you that their model isn’t broken—because it isn’t.)

3. The proper mindset of breakthrough-idea thinking is to be “narrowly insane but not a total whack job,” as Myhrvold put it. By narrowly insane, he meant that inventors need to be crazy enough to think they can do something unprecedented, without being delusional. Put a different way, it’s helpful to be a “high-functioning contrarian,” as Hanauer says Jeff Bezos has described him. (“A low-functioning contrarian means you’re in prison,” Hanauer adds.) In other words, try to see the world differently, and imagine what would happen if things were arranged in other ways. Amazon.com, for example, delivered more than 10 times the selection of a brick-and-mortar store at a cost savings of more than 25 percent. That’s the kind of thinking that can transform an entire industry—in this case, those who sell books (for starters).

4. Part of being a good entrepreneur means not listening to your critics, or the entrenched interests. As Lee Hood from the Institute for Systems Biology and Integrated Diagnostics put it succinctly (I’m paraphrasing), people have seriously doubted him six or seven times in the past—and he’s been right every time. (He didn’t say how long it took to be proven right.) But the basic message was that if you want to change the world, you will meet with resistance—the people and companies in power don’t want things to change—but don’t let that deter you. Hanauer stressed the importance of … Next Page »

Comments (2) | Reprints | Share:          

Integrated Diagnostics, the Seattle-based company seeking to carry out biotech pioneer Leroy Hood’s vision for personalized medicine, has hired its first CEO.

The company’s new leader is Albert Luderer, a veteran diagnostics executive who ran Woburn, MA-based BioTrove until that company was acquired last November by Carlsbad, CA-based Life Technologies (NASDAQ: LIFE) for an undisclosed sum. Luderer’s name may be familiar to some Seattle biotechies from his stint running Bellevue, WA-based Light Sciences earlier in the 2000s.

This is a critical hire for a fledgling company like Integrated Diagnostics, known as InDi. The company, founded by Hood and David Galas at the Institute for Systems Biology and their Caltech colleague Jim Health, took its first big step as a company in October. That’s when it secured the first $7.5 million out of a $30 million founding venture capital round from InterWest Partners, the U.K.-based Wellcome Trust, and Germany-based dievini Hopp Biotech holding, part of a collaboration with the government of Luxembourg. The company, one of the boldest visions of Hood’s long career, aspires to create a new wave of diagnostic tests that can spot signature proteins in a pinprick of blood that are associated with certain cancers, or Alzheimer’s disease.

This work has the potential to shake up the healthcare system in three big ways, Hood has said. It will make it possible for doctors to detect diseases much earlier; it will pave the way for more individually tailored therapies that are more likely to pass clinical trials; and it will allow doctors to follow up with patients to see if treatments they prescribe are really working at the molecular level. While diagnostics have traditionally been low-price, low-margin commodities that take a backseat to drugs, this new wave of truly predictive diagnostics could become more valuable to the healthcare system than today’s one-size-fits-all drugs.

Albert Luderer

InDi (pronounced like “Indy”) considered some CEO candidates from outside the Seattle area to carry out this vision. But Luderer has agreed to move back from Massachusetts to Seattle to build the company here in the Northwest.

“Lee knew my background when we met, and he said he was looking for someone who could crystallize the vision and turn the science into a commercial vehicle. That’s what I do,” Luderer says.

BioTrove, which makes a “universal test tube” to speed up the efficiency of genetic analysis, ended up as a success, even though it wasn’t able to follow through with an IPO in 2008 when the capital markets crashed. The death of the IPO meant that Luderer didn’t have enough cash there to take BioTrove’s successful life sciences tool business into a potentially broader market like diagnostics, as he intended.

But Luderer has a lot of experience in diagnostics over the course of his 30-year career. He held senior positions at Dianon Systems (now part of Lab Corp of America); and Boehringer Mannheim (now owned by Roche), as well as Corning. He helped create Siemens Diagnostics through a joint venture with Ciba Corning. Luderer also knows how to speak the language of science, with a doctorate in immunogenetics from Rutgers.

Why did he take this job? Money was important, and not in the sense you might think at first blush. He has been working for the past decade in venture-backed companies, spending most … Next Page »

Comments (1) | Reprints | Share:          

[Clarification: 3:35 pm, 4/2/10] Leroy Hood‘s eye is turning from the north to the south side of Seattle’s Lake Union. The biotechnology pioneer and his colleagues at the Institute for Systems Biology are looking for new digs that are twice as big as their 65,000 square foot facility on the north side of the lake, Hood says.

“We just don’t have enough space. It’s an ideal building, we love the location, and the view of the city is terrific,” Hood says. “But we need twice as much space.”

He added: “We are thinking seriously about moving to South Lake Union. In all probability, it will be the old Rosetta building there.”

He’s talking about the fancy facility developed in 2004 by a joint venture of Schnitzer West and Vulcan Real Estate to house the Rosetta Inpharmatics unit of Merck. [Clarification: a previous version of the story omitted Schnitzer West.] That cutting-edge biology and computing facility had room for about 300 employees, but it has been much quieter since the fall of 2008 when Merck said it was shutting down that operation as part of global cost cuts. Hood never worked there, but he was partly responsible for its creation, since he was a co-founder of Rosetta back in the mid-90s with Stephen Friend and Lee Hartwell.

Few people in Seattle know much about Hood’s nonprofit research center, and it puzzles more than a few biologists, but it has definitely been on a roll the past couple years. The basic idea for the Institute, which Hood co-founded with Alan Aderem and Reudi Aebersold in 2000, is to use high-powered computers to study complex networks of genes and how they interact, rather than the traditional ways of biology that Hood says are too narrow, looking at one gene, or one protein in isolation. He says the holistic approach of studying entire biological systems will lead science down the path to a historic attitude shift from reactively treating disease to what he calls “P4 medicine,” or predictive, preventive, personalized, and participatory medicine.

The Institute is known as a hotbed of entrepreneurial activity, having spawned the Accelerator, Seattle-based NanoString Technologies, Integrated Diagnostics, and an intriguing partnership with Mountain View, CA-based Complete Genomics to sequence 100 entire human genomes. But none of those for-profit efforts have generated windfall profits that could provide the comfort, of, say, an endowment to support the nonprofit institute for decades to come.

One of the watershed moments for the Institute came in June 2008 when it scored a five-year, $100 million commitment from the government of Luxembourg. In January, an independent review of research institutes around the world said the Institute for Systems Biology produced the highest impact scientific publications of any U.S. research center from 2003 through 2007. And just this week, the Institute said it received a $6 million gift from an unnamed California venture capitalist to further its research in personalized medicine, biofuels, and global health.

It’s all starting to add up to a growth curve that few biotech companies in town can match. The Institute had 230 employees, and an annual budget of $35 million, when Hood gave a talk about it in February 2009 at a Technology Alliance event. One year later, it has 300 employees, and an annual budget of $45 million, Hood says. The Institute’s strategic plan over the coming five to eight years is to add eight to 10 new faculty members, bringing the faculty roster to 20, with a staff of 400 to 450 people, operating with a “substantially” bigger budget, Hood says.

Comments (2) | Reprints | Share:          

Entrepreneurs need to think bigger. Big companies need to think bigger. Everyone needs to think bigger. Including Xconomy.

That’s why we’re organizing our biggest event in Seattle so far, called “What’s Your Breakthrough Idea?” It’s on the afternoon of March 29 at the University of Washington, in the atrium of the Computer Science & Engineering building. Our theme will be how to recognize true breakthrough ideas in technology and business, and how to build scalable companies that really change the world—think Microsoft, Amazon, Google. (Registration info is here; the early bird rate ends early next week.)

We’re pleased to announce that Nick Hanauer will be giving the opening keynote. He is the co-founder of investment and strategy firm Second Avenue Partners, and, for anyone who doesn’t know, he was the first non-family investor in Amazon.com, as well as founder of Avenue A Media (which became aQuantive and was bought by Microsoft for $6 billion). In case he ever needs a soft landing, he is still involved with Pacific Coast Feather, his family’s pillow and comforter business. Nick helped to inspire our event with a talk he gave in 2008 on “breakthrough thinking and ideas” at an NWEN gathering.

The centerpiece of the event will be a keynote chat between Leroy Hood and Nathan Myhrvold. Dr. Hood is the famed researcher and entrepreneur who invented machines that made the Human Genome Project possible. He is the co-founder and president of the Institute for Systems Biology, and the founder of a new company called Integrated Diagnostics (which recently raised $30 million in venture capital). His counterpart, Dr. Myhrvold, is the former chief technology officer of Microsoft and the founder of Microsoft Research. He is the CEO and co-founder of Intellectual Ventures, a prominent company focused on the business of invention and on creating what he calls the “invention capital” industry.

We will also feature a number of talks that highlight specific breakthrough ideas and lessons for building companies around them. Our lineup of speakers includes: David Bluhm from Z2Live (social mobile gaming), Bill Bryant from Draper Fisher Jurvetson (“brave new world” startups), Christina Lomasney from Modumetal (nanotech for energy and safety), Mick Mountz from Kiva Systems (logistical robots), Steve Seitz from UW (3-D virtual worlds and computer vision), Dan Weld from UW and Madrona Venture Group (Web interfaces and knowledge discovery), and Norm Wu from Qliance (healthcare without insurance companies).

The event will be highly interactive: we want to hear lots of questions and discussion from the audience. There will also be plenty of time for networking. It’s an exciting time for the Seattle-area innovation scene, and there are a lot of great events coming up (more on those soon). We’re looking forward to seeing you on March 29.

Comments | Reprints | Share:          

Whether you’re an entrepreneur, an investor, a researcher, a corporate executive, a journalist, or a patent attorney, you’ve heard it: an idea that will supposedly change the world. In fact, you probably come across someone trying to pitch you an idea like that every week, if not every day. Maybe you even have one you’re working on yourself.

Breakthrough ideas are catalysts of innovation and progress. Think Amazon and its online books, Google and its Web search algorithms, Apple and its iTunes and iPhone. But in the technology and business world, seemingly great ideas are a dime a dozen. For every Amazon, there are dozens of online retailers that have failed. For every Google, dozens of search companies that went nowhere. And so on.

What really counts, of course, is forethought, execution, and results. But that’s much easier said than done. So what makes for a true breakthrough idea? And how can startups and business leaders make their biggest ideas more marketable and scalable, and really change the world? (Thanks to Nick Hanauer of Second Avenue Partners for inspiring this thread in a talk he gave at an NWEN event in December 2008.)

We’re asking these big questions, and we’re going to try to answer them. On the afternoon of March 29, Xconomy is convening a special forum in Seattle called “What’s Your Breakthrough Idea?” The event (agenda and registration info here) will be at the University of Washington, in the atrium of the Paul G. Allen Center for Computer Science & Engineering. We are doing everything we can to make it a must-see for technology, life sciences, and business leaders who have a deep interest in the world’s biggest ideas—and how they will (or won’t) impact the future.

The centerpiece of the afternoon will be an in-depth discussion between two of the area’s top thinkers in innovation across broad realms of science, technology, and society: Nathan Myhrvold, the co-founder and CEO of Bellevue, WA-based Intellectual Ventures, and Leroy Hood, the co-founder and president of Seattle’s Institute for Systems Biology (ISB). They will tackle the important issues of how to think about big ideas, how to tell promising ideas from not-so-promising ones, and how to get maximum bang from ideas that survive. They will speak from experience.

Myhrvold comes from the worlds of physics and software. As Microsoft’s former chief technology officer and the founder of Microsoft Research and later Intellectual Ventures, his company focused on the business of invention, he knows a thing or two about evaluating global-scale ideas. Meanwhile, Hood comes from the worlds of biology, life sciences, and genomics. As the co-founder of ISB as well as a new company focused on early detection of diseases, called Integrated Diagnostics, Hood can speak with great depth on the progress and challenges in biomedicine and human health. Their combined perspectives should make for a tremendously revealing and entertaining cross-disciplinary chat and Q&A.

We’ll also do some deeper dives into specific breakthrough ideas from a select group of speakers, who will include: David Bluhm, CEO of Seattle startup Z2Live, focused on mobile social gaming; Mick Mountz, CEO of the Boston area’s Kiva Systems, a robotics firm working on warehousing and logistics applications; Steve Seitz, professor of computer science and engineering at UW, an expert in computer vision and graphics (he helped develop the technology behind Microsoft’s Photosynth); Dan Weld, UW computer science professor, the co-founder of Netbot, AdRelevance, and Nimble Technology, and a venture partner with Madrona Venture Group; and Norm Wu, CEO of Qliance, a Seattle firm that provides healthcare to thousands while circumventing insurance companies.

Of course, changing the world is never easy. But we’re hoping the discussions and talks on March 29 will inspire our audience to think big, and think realistically—while also making useful connections that otherwise might not happen. Plus we’re going to have an absolute blast with this star-studded lineup, and we think you will too. For more information, and to register for “What’s Your Breakthrough Idea?”, please visit our event page.

Comments (3) | Reprints | Share:          

Any fair assessment of Seattle biotech over the past five years would have to count Accelerator as one of the bright spots. But the past year or so has been unusually quiet at the biotech startup incubator. Accelerator recently endured a six-month dry spell when it didn’t see any exciting new investment ideas enter its pipeline, according to CEO Carl Weissman.

“We can survive these kind of times easily, because what the board really expects is that the quality [of investments] never goes down,” Weissman said when I stopped by his office on Seattle’s Eastlake Avenue last week. “We don’t have to lower our standards on quality in order to satisfy a quota.”

For those who aren’t familiar, Accelerator is one of the central players in the local life sciences innovation scene. Biotech pioneer Leroy Hood, along with a number of prominent venture firms, founded Accelerator in 2003 to provide some lab space and operational support for scientific entrepreneurs with potentially groundbreaking ideas that need a little more proof before they can secure serious venture dollars. Accelerator has raised a total of $43.8 million, some of which it has put to work in 10 startups so far. The roster includes four Seattle companies that have emerged and raised a combined $144 million since graduating—VLST, Theraclone Sciences, Allozyne, and Integrated Diagnostics.

That last company, known as InDi for short, is the most recent startup with roots at Accelerator to score venture bucks. It was known as Homestead Clinical in a previous incarnation, and it didn’t win follow-on financing from Accelerator’s primary VC backers, but it emerged in October anyway with a $30 million commitment from outside VCs largely because of Hood’s “force of will,” Weissman says.

Carl Weissman

OK, so InDi may be another notch in the Accelerator belt. But I wondered about the other three startups that were founded at Accelerator in the past two years—PharmSelex (formerly known as GPC-Rx) in June 2008, Mirina in August 2008, and Xori in May of 2009. All three are still operating, and Weissman wouldn’t say much about their future prospects other than, “We’re really pleased with the progress from two out of the three.”

So we’ll have to sit tight a while longer to see whether any of those three emerge, or fade away. What was more surprising to me is what he said about the slowdown in the flow of new ideas for companies. From about June through December, “there wasn’t much,” in the way of exciting new scientific ideas coming in to Accelerator, Weissman says, even though it has historically been inundated with pitches. That improved a bit last month, when Accelerator found three new ideas that it considered “very exciting,” Weissman says.

The feast-and-famine cycle at Accelerator “is to be expected,” he says, and that is why the organization doesn’t have a hard quota … Next Page »

Comments | Reprints | Share:          

The Institute for Systems Biology, a Seattle-based research center known for its entrepreneurial activity, was ranked No. 1 among all U.S. research institutions and No. 3 worldwide in terms of the impact of its scientific publications, according to an analysis by Spain-based SCImago Research Group.

The impact ranking was based on an institution’s total research output, how much it collaborates with other centers, the influence of its publications, how often they are cited by other scientists, and other factors. The full report examined the publication records of more than 2,100 research institutes around the world from 2003 to 2007.

The Wellcome Trust Sanger Institute in the U.K. was ranked No. 1 worldwide in terms of the scientific impact, followed by the Institut National de Physique Nucleaire in France, and the Institute for Systems Biology—all of whom have impact ratings more than triple the worldwide average. Seattle’s other research institutions were well-represented in the report, too, with both The University of Washington School of Medicine and the rest of the University of Washington campus in the top 20 worldwide in terms of research output, and with scientific impact ratings that were more than double the worldwide average. The Fred Hutchinson Cancer Research Center’s impact rating was also more than double the worldwide average.

“It’s great to see that an independent analysis of outcomes demonstrates that we were on track 10 years ago,” Institute president Leroy Hood said in a statement.

The Institute for Systems Biology was founded in 2000 by Hood, Alan Aderem, and Reudi Aebersold, in order to foster cross-disciplinary research that looks at whole biological systems, rather than single genes or proteins in isolation. While the Institute has worked hard to establish its chops with scientific peers, it also seeks to apply its work in the broader business world. The Institute co-founded the Accelerator for launching new biotech companies in 2003, and has most recently given birth to a new company called Integrated Diagnostics that seeks to detect cancer, Alzheimer’s, and other diseases much earlier through looking for biomarkers that can be found in a pinprick of blood.

Comments | Reprints | Share:          

Well, 2009 did not turn out to be the biotechnology disaster here in Seattle that many people had predicted.

By my reckoning, only four of the local biotech companies that I track on my website went bust in 2009 (Eden Biosciences, VizX Labs, Northstar Neurosciences, and Rosetta Inpharmatics). This last blow was softened when Microsoft bought some of Rosetta’s assets from Merck (it’s biosoftware division) and hired a number of its employees. Many of the VizX employees (along with its GeneSifter software) were absorbed by Geospiza. The loss of four companies put Seattle on a roughly equal footing with Boston, which saw at least five companies fold, and San Diego, where at least six companies went under.

Although we didn’t lose quite as many companies, it was still a very tough year locally for those employed in the biotech sector. At least nine companies reported significant layoffs, including Cardiac Science, CMC Icos, Trubion Pharmaceuticals, Cell Therapeutics, Poniard Pharmaceuticals, Amgen, Targeted Genetics, ZymoGenetics, and VLST.

On the positive side, Dendreon moved much closer to being able to sell sipuleucel-T (Provenge), their novel treatment for prostate cancer, and has been on a hiring frenzy. OncoGenex Pharmaceuticals had a breakout year with its own prostate cancer treatment. Partnerships were both formed and broken at a dizzying pace, with Seattle Genetics, ZymoGenetics, MDRNA, Alder Biopharmaceuticals, Arzeda, Ikaria, Kineta, Trubion, and Nanostring among the notable participants. Amgen won its long running patent fight with Roche and was able to block them from selling generic erythropoiesis stimulating drugs in the U.S. Some top executives moved around, with Immune Design gaining part-time help from ex-Zymo CEO Bruce Carter, and with Peter Thompson leaving Trubion and Stewart Parker departing Targeted Genetics.

Other notable events: PATH won the $1.5 million Hilton Prize, the world’s biggest humanitarian award, for it’s work improving health in poor countries, and local biotech Omeros was successful in launching their IPO (although the stock price has dropped some 25 percent since then).

A number of new companies launched or moved into the area, including Arrowsmith Technologies, Beat Biotherapeutics, Qwell Pharmaceuticals, ImaRx, Novo Nordisk, AVI Biopharma, Covance, Arzeda, Xori, Presage Therapeutics, Integrated Diagnostics, Sage Bionetworks, and Genzyme (via its acquisition of Leukine from Bayer). Chris Rivera got off to an excellent start as he took over the head job at the Washington Biotechnology & Biomedical Association. The State’s Life Sciences Discovery Fund expenditures were cut by 41 percent to help balance out the state budget deficit.

In 2010, at least three companies that operate in Seattle will hope to have their drugs approved: Dendreon’s sipuleucel-T (Provenge) for prostate cancer, Amgen’s denosumab (Prolia) for osteoporosis, and Cell Therapeutics’ pixantrone for non-Hodgkin’s lymphoma. Here’s hoping that they all fair well.

Health care reform is sure to bring numerous changes to the industry. One key change likely to be enacted via legislation in 2010 will define a regulatory pathway for the approval of follow-on biologics, which are generic versions of biologic-based drugs. This has the potential of providing significant savings for consumers, although such benefits will depend on the period of market exclusivity awarded to innovator drugs.

Continuing economic problems indicate to me that 2010 will also be a very challenging year for biotech companies in Seattle and beyond. I expect to see many more deals for the acquisition of product candidates, but not so many acquisitions of companies. I wish all of you on the local biotech scene a productive and successful year in 2010.

Comments | Reprints | Share:          

Early-stage software and IT deals are a scarce breed these days. That’s my initial take from looking at the October funding numbers for Washington state, courtesy of ChubbyBrain, a New York-based information services company that makes tools for investors, startups, and entrepreneurs.

According to ChubbyBrain’s stats, Washington tech, life sciences, and cleantech companies raised a total of $69.75 million last month—down from $84.9 million in September, but still up from $51.4 million in August. There were six venture deals in October, worth a total of $59 million (see below), to go along with three debt financings (a total of $8.35 million) and an unattributed financing round of $2.4 million.

The venture deals were dominated by a $30 million Series A round for Integrated Diagnostics, Lee Hood’s early disease detection startup, and a $22.5 million financing for PopCap Games, the 10-year-old company’s first outside funding round. Looking at the past three months, it’s clear that large early-stage software deals aren’t coming back anytime soon. (You really have to look at the sub-$1 million deals to get an idea of the activity in software and IT, at least in the Northwest.)

In addition to the VC deals, there were three debt financings in the ChubbyBrain stats (and previously reported in Xconomy): Kennewick, WA-based solar developer Infinia raised $3.25 million; Seattle-based lab automation company Teranode raised $900,000; and Kirkland, WA-based health-tracking firm Veratect raised $4.2 million. Lastly, Spring Wireless, a Brazilian company that set up North American headquarters in Seattle early this year, raised an unattributed round of financing worth $2.4 million.

.

.

Comments (2) | Reprints | Share: