Waltham, MA-based Proteon Therapeutics, a developer of drugs for kidney and vascular disease, has brought in another $15.2 million in equity- and options-based funding from 19 investors, an SEC filing shows. The biotech company’s last financing was in 2009, when it announced raising $12 million from new backers Bessemer Venture Partners and Devon Park Bioventures to bring its then-funding round to $50 million.

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Lexington, MA-based Amag Pharmaceuticals (NASDAQ:AMAG) said last week that it planned to cut 68 jobs or 24 percent of its work force to reduce its expenses. The cuts were announced along with the firm’s third-quarter financing results, which included a lackluster $15.1 million in revenue from sales of ferumoxytol (Feraheme), a drug for treating iron deficiency anemia in patients with chronic kidney disease. “As our sales in the dialysis segment have begun to decline at a rate quicker than our growth in the non-dialysis chronic kidney disease  segment, we have made the difficult decision to restructure our organization,” said Brian Pereira, the firm’s president and CEO, in a company press release.

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It was a shorter week, but we had a heavy volume of headlines on acquisitions, partnerships, job cuts, and company strategies for New England-area biotech names.

—Cambridge’s Alnara Pharmaceuticals kicked off the holiday weekend last Friday with news that it been acquired by Indianapolis-based pharma giant Eli Lilly. The companies didn’t disclose the purchase price of the acquisition, which will give Lilly access to Alnara’s cystic fibrosis treatment, the enzyme supplement liprotamase, whose FDA approval Alnara has recently applied for. Ryan did a story this week looking at the process leading up to the buyout of Alnara, which included heavy reliance on contract employees and lean development budgets.

—Luke wrote about a transplant to New England’s biotech scene: AlloCure, a developer of adult stem cell therapy for kidney disease that has moved its headquarters from Salt Lake City to Burlington, MA. The startup has added a new CEO in the process, AMAG Pharmaceuticals and Amgen veteran Robert Brenner. Allocure is aiming to grow standardized stem cells that don’t need to be genetically matched with patients, which hospitals can keep in stock to treat patients with when they first notice the signs of kidney failure.

—Ryan profiled On-Q-ity, a Waltham, MA-based diagnostics company that’s out to track tumor cells in patients’ blood that evade traditional detection. The startup is led by the former president of Genzyme’s genetic testing unit, Mara Aspinall. On-Q-ity is developing biomarkers that can determine if cancer cells are resistant to certain therapies, helping to guide and monitor treatment courses for patients.

–Woburn, MA-based Bio2 Technologies, a developer of tissue engineering scaffolds for the orthopedic market, pulled in $1.1 million of an equity offering that could total $2 million, according to an SEC filing. The company has licensed a technology to improve a material’s porous properties, called “cross linked microstructure” from Woburn’s Geo2 Technologies, which is … Next Page »

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Boston has landed an intriguing biotech startup seeking to tap the New England talent pool. AlloCure, the developer of an adult stem cell therapy for a severe kidney disease, has moved its headquarters from Salt Lake City to Burlington, MA, where it is being led by new CEO Robert Brenner, a veteran executive from AMAG Pharmaceuticals and Amgen.

AlloCure first made news in July 2008, when it nailed down an initial financing of $14.5 million from SV Life Sciences and the venture arm of Danish drug giant Novo Nordisk. This company is still quite lean, with less than 10 employees, but it has global operations with sites in Utah and Hamburg, Germany, where its respective co-founders, Christoph Westenfelder and Axel Zander, are located. Brenner, the new CEO, will be based in Burlington, MA.

The big idea at AlloCure is to come up with an adult stem cell therapy that could be the first effective treatment for acute kidney injury, also sometimes called acute renal failure. This is a condition in which people’s kidneys quit working, and the only real treatments are dialysis or a kidney transplant. People with diabetes or high blood pressure are often at high risk of getting an acute kidney injury in the hospital if they go on a heart bypass machine during surgery, or get certain potent antibiotics, Brenner says. Estimates vary, but as many as 500,000 people in the U.S. suffer from this condition, and various studies put the death rate at 30 to 70 percent within a year’s time of the injury, Brenner says.

“If we could develop a cell therapy for acute kidney injury, it would be a revolution,” Brenner says. “People have been working on this for their entire professional careers.”

Lots of novel ideas have been tried, and all of them have failed. Researchers in the past have experimented with an injectable peptide from Scios, a unit of Johnson & Johnson, as well as Amgen’s blockbuster anemia drug, erythropoietin (Epogen), and a variety of devices.

Robert Brenner

The founders of AlloCure have a different strategy that hinges on an infusion of adult stem cells that might be able to prevent acute kidney injury from happening, or help reverse the damage in the early stages, Brenner says. AlloCure’s founders have learned how to take a certain kind of adult stem cell found in the bone marrow, called mesenchymal stem cells, and greatly expand their numbers in a consistent manufacturing procedure. Importantly, they’ve shown they can isolate cells without certain markers on the surface, known as antigens, that could provoke the patient’s immune system to recognize the cells as foreign invaders that must be attacked. This means that cells from any individual could be grown in an AlloCure factory, and infused into any patient, without requiring a genetic match, Brenner says.

Because the infusion would be standardized, it’s possible the cells could be kept in stock at hospitals and given “off-the-shelf” when a kidney specialist sees signs of acute kidney injury.

AlloCure hasn’t publicly disclosed any clinical trial results yet on this procedure, but it enticed Brenner to join the company based on results of a study of 16 patients. This study was designed to give patients a single high-dose infusion of these mesenchymal stem cells after they underwent surgery which put them on a heart bypass machine. While patients weren’t randomly assigned to a control group to offer a strong comparative benchmark, researchers did follow other patients who got similar surgeries without the cell therapy infusion, Brenner says. That offered an eye-opening contrast, he says. The results will be presented at an upcoming medical meeting and published in a peer-reviewed journal, Brenner says.

“The results are extremely promising,” he says.

Brenner, 42, doesn’t need to hire a consultant … Next Page »

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It’s not quite two guys in a garage getting their big break, but it’s close. Medify, a healthcare IT startup incubated at Seattle-based Voyager Capital, said today it has raised $1.3 million in first-round venture funding. Voyager put in $1 million, and the rest was from angel investors and the founders. The stealth company is led by Derek Streat, former Classmates.com vice president, and Jay Bartot, former vice president of Farecast (now part of Microsoft’s Bing).

Medify bills itself as “data-driven care management” for consumers. It’s too early to get into many specifics about the company’s technology, but let’s just say it is off to a pretty compelling start. Streat, the business guy, and Bartot, the technical lead, have been working on the company since late last year when Bartot left Microsoft. He had previously co-founded Netbot and AdRelevance before working on the travel site Farecast (from the early days through its $115 million acquisition by Microsoft in 2008). Streat, for his part, began his career as an investment banker, joined Classmates.com in its early days, and co-founded AdReady, before getting into social technology entrepreneurship.

Streat met Bartot while working on Unitus New Ventures, a social innovation vehicle for companies in developing countries, which he helped start in 2008. The two connected over “understanding data-oriented businesses, and how to build community around those things and extract value for those things for consumers,” Streat says.

In 2009, tragedy struck when Streat’s two-year-old daughter was diagnosed with glomerular nephritis, a life-threatening kidney disease. Streat and his wife put in hundreds if not thousands of research hours, trying to understand the disease and how to manage their daughter’s care. “It’s a mountain we’ll be climbing for the rest of our lives, at least until the technology changes,” he says. “This is hands down the most complicated, information intensive, and most important project of our lives.”

That was the impetus for Streat to start building Medify. The idea is to provide online software tools to families so they can gain control over illnesses and health issues in an efficient way—whether it’s caring for their children, say, or their aging parents. The basic idea, as I understand it, is to put all the tools in one place, so a family member can go online, access the medical literature and other information about a particular ailment, connect it to their loved one’s medical history and condition, and also connect with family, friends, and others across a support network. That sure beats doing endless Google searches and joining separate health and wellness social networks (of which there are plenty).

Medify is interesting because it will play in a consumer niche that connects across many other types of health IT systems, from media and content sites like WebMD to medical record systems like Microsoft HealthVault to community sites such as PatientsLikeMe. But Medify seems to have … Next Page »

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With his leadership under attack and FDA regulators cracking down on his company’s manufacturing, Genzyme chairman and CEO Henri Termeer is traveling to meet with the firm’s top 30 shareholders over the next month.

The road trip, discussed yesterday in an interview with Genzyme spokesman Bo Piela, comes just over a month before the company’s annual meeting on June 16. At the meeting, the billionaire investor Carl Icahn aims to unseat Termeer and three others on the firm’s board of directors. And Icahn, who has a 4.9 percent stake in the firm and a record of ousting executives from troubled companies, holds plenty of ammo for his campaign to gain greater control of Genzyme.

A litany of mishaps has riddled Cambridge, MA-based Genzyme (NASDAQ:GENZ), the world’s largest maker of rare disease drugs, during the past year. Viral contamination caused a temporary shutdown at its Allston, MA, drug plant. Shortages of key products have slowed sales. The FDA has slapped fines on the firm for manufacturing violations. And some unhappy investors, Icahn the most vocal among them, want changes—including an end to Termeer’s nearly three-decade reign at the company.

Henri Termeer, CEO of Genzyme

David Meeker, Genzyme’s chief operating officer, candidly summarized the situation at his company when, during his speech at an industry meeting in Cambridge last month, he said: “We’re obviously in a tough spot.”

Many of Genzyme’s problems stem from its manufacturing problems. In June, the company revealed that it was temporarily closing the Allston Landing plant because a virus was found in a bioreactor needed to produce the firm’s top-selling product, imiglucerase (Cerezyme), which is used to treat a rare genetic illness called Gaucher’s disease. Sales of the drug fell from $1.23 billion in 2008 to … Next Page »

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Amag Pharmaceuticals (NASDAQ:AMAG), a Lexington, MA-based firm with a lead product for patients with chronic kidney disease, announced yesterday that it plans to sell 3 million shares of common stock in a public offering. Additionally, the firm is allocating 450,000 shares for underwriters to cover potential over-allotments. The company’s stock traded at $49.03 per share at 3:23 pm ET today.

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Genzyme (NASDAQ:GENZ) says today that it has begun shipments of its best-selling drug for Gaucher’s disease made at its plant in the Allston neighborhood of Boston. There have been shortages of the drug since the firm halted production at the Allston plant in June, when viral contamination was discovered there.

The Cambridge, MA-based biotech is trying to replenish supplies of its imiglucerase (Cerezyme) and its Fabry disease treatment, agalsidase beta (Fabrazyme). The firm says that the first shipments of newly produced imiglucerase will go to the sickest Gaucher’s patients, and it expects to meet all demand for the drug by the first quarter of 2010. Yet the company hasn’t been able to ship the Fabry treatment from the Allston plant, and it doesn’t expect to be able to meet all demand for the drug before the second quarter of 2010. This means Genzyme is behind schedule in getting Allston fully up and running again. The company said in September that it would begin shipping its Fabry drug in mid-December and its Gaucher’s therapy as early as November.

Shortages of the drugs have caused Genzyme to lower sales forecasts and warn doctors to conserve current supplies to minimize interruptions in patients’ treatment regimens. Last year the company generated nearly $1.7 billion and 38 percent of its revenue from sales of the two drugs. In the Gaucher’s market, the shortages have provided an opening to Genzyme’s competitors such as Irish drug firm Shire and Israel-based Protalix Biotherapeutics to garner expedited processes to win potential approval for their rival treatments. Meantime, Genzyme continues to get hit with other setbacks, including the company’s decision to scrap development of its next-generation drug for kidney disease last month after it failed to beat its existing treatment in a clinical trial.

Robert W. Baird & Co. biotech analyst Christopher Raymond lowered his revenue forecasts for Genzyme last week, citing the series of difficulties that biotech firm has had at the Allston plant and other setbacks such as the failed development of a next-generation drug for kidney disease. Raymond projected that Shire and Protalix may garner U.S. approval of their rival Gaucher’s treatments in the first quarter of 2010 and by mid-2010, respectively. And Shire, which already markets a Fabry disease drug outside the U.S., could gain permission to sell the drug in the U.S. by middle of next year.

Genzyme didn’t say anything today about how resuming part of Allston’s production will affect its sales, but it tried to put a positive spin on the matter. “Shipping the first new product manufactured in Allston is a critical milestone in our effort to again fully meet the needs of patients with Gaucher and Fabry disease around the world,” said Henri Termeer, Genzyme’s chairman and CEO, in a statement.

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Another day, another piece of bad news from Genzyme. The Cambridge, MA-based biotech giant (NASDAQ: GENZ) said today it is scrapping development of a next-generation drug for kidney disease after it was unable to beat its existing treatment on the market.

Genzyme’s experimental drug, called an advanced phosphate binder, didn’t appear any better at getting rid of excess phosphorus from the blood of kidney dialysis patients than Genzyme’s sevelamer carbonate (Renvela) in a clinical trial of 349 patients, the company said in a statement. Genzyme had been hoping that the new drug would be more potent.

Those following the Genzyme story know about what’s become a brutal year. Some of the big setbacks were the viral contamination at its Allston, MA factory in June that created shortages of its top-selling products, the failure to win FDA approval of large-scale manufacturing for a Pompe drug, and the rejection of a leukemia drug for elderly patients.

But this kidney drug failure is another serious body blow. The company generates $850 million a year in sales from its two phosphate binder treatments. Patents that protect that franchise from competition from cheaper generics will expire in September 2014, according to Christopher Raymond, an analyst with market research firm Robert W. Baird. The next-generation kidney drug was supposed to help the company extend the patent life of its kidney drug market, Raymond said.

The failure is “a very significant negative in our view,” Raymond said in a note to clients today. He added that he had been starting to warm up to the company, as it has been inching closer to resolving the Allston manufacturing problems, but he called today’s halting of the kidney program a “game-changer.” Raymond has a $54 price target for the stock.

Shares of Genzyme dropped 1.3 percent to $49.65 at 9:39 am Eastern time today after the news was announced. The stock has dropped 25 percent this year.

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The story around Amira Pharmaceuticals’ experimental drug AP2966 is beginning to get interesting. Yesterday the San Diego-based respiratory drug company said its experimental drug reduced lung scarring in mice, offering promise that the oral medication might one day be approved to treat pulmonary fibrosis. But it turns out there may be a lot more to this drug.

Dr. Andrew Tager, a pulmonologist at Massachusetts General Hospital in Boston and a scientific advisor to the company, said AP2966 shows promise against other fibrotic conditions, such as cirrhosis of the liver and some forms of kidney disease. That could make AP2966 a much bigger deal.

Amira already has conducted animal studies pitting AP2966 against pirfenidone, its closest potential competitor. Pirfenidone is approved treat pulmonary fibrosis in Japan and InterMune of Brisbane, Calif. plans to seek FDA approval for the drug. Tager said the Amira drug was superior to pirfenidone in animal models of pulmonary fibrosis and equivalent to pirfenidone in animal models of cirrhosis of the liver.

“The data is very impressive,” Tager said. “As far as what’s out there, this is one of the most promising.”

Amira’s drug targets a receptor called LPA1 that plays a role in inflammation and wound healing. Tager said that it is thought that in some people the receptor has an “over-exuberant response” to injury, which leads to a build up of scar tissue. Tager was the first to connect this receptor to pulmonary fibrosis in a paper published in Nature Medicine last year. He reported that mice lacking an LPA1 gene did not develop lung scarring when exposed to a chemical trigger.

It is still early days for AP2966. Amira CEO Bob Baltera said the company must complete toxicology studies and manufacturing work before it can initiate human tests, which the company hopes to begin during the first half of 2010. Baltera said animal studies did not point to any serious safety concerns. “The data looks clean and the animals look healthy,” he said. “But you never really know until you do the studies in patients.”

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Proteon Therapeutics says it has closed a $38 million Series B round of financing to fund development of its drug for kidney disease patients on chronic dialysis—and the Waltham, MA-based company has struck a separate deal that gives Swiss drug giant Novartis an option to buy the firm if the drug, the lead treatment in Proteon’s pipeline, succeeds in mid-stage clinical trials.

Boston-based venture firm MPM Capital led the round of financing, which included investments by Vectis Healthcare & Life Sciences Fund and previous backers TVM Capital, Skyline Ventures, Prism VentureWorks, Intersouth Partners, as well as earlier angel investors. The cash infusion follows Proteon’s launch of an early-stage clinical trial of its lead drug, PRT-201, an engineered version of the human protein elastase that is intended to improve the outcome of a surgery that prepares a patient’s blood vessel to be frequently hooked up to a hemodialysis machine. Failure of this procedure, called arteriovenous fistula surgery, is a common problem for patients on long-term dialysis.

“Patients with kidney failure endure great suffering and frequent hospitalization due to vascular access complications,” says Proteon CEO Timothy Noyes, in a statement. “If successful, PRT-201 may improve medical outcomes and lower the associated cost of care.”

If the treatment succeeds in a later mid-stage clinical trial, Novartis has the option to buy Proteon outright or to license the firm’s lead product candidate. Proteon says that the potential buyout deal with Novartis would be worth $550 million, which includes the initial acquisition payment and future milestones. The startup didn’t provide details on how much it would receive upfront verses down the road if the drug achieves development goals.

Noyes is no stranger to large companies buying out smaller biotech firms. He was part of the executive team at former Waltham biotech firm GelTex Pharmaceuticals, which Cambridge, MA-based biotech Genzyme (NASDAQ:GENZ) acquired for more than $1 billion in 2000. Noyes took the reins at Proteon in 2006, and he later moved the company’s headquarters from Kansas City, MO, to Massachusetts. The firm still operates research labs in Kansas City.

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Ryan McBride

AMAG Pharmaceuticals could be months away from a long-awaited green light from the FDA to begin sales of ferumoxytol (Feraheme), an iron-replacement treatment for people with kidney disease, and a potential cash cow for the Cambridge, MA-based biotech firm (NASDAQ:AMAG).

The promise of ferumoxytol has boosted the prospects of AMAG (formerly Advanced Magnetics), transforming the firm from a small R&D shop to a growing company with manufacturing and marketing capabilities. The FDA—which told AMAG in October 2008 it would need to resolve manufacturing issues at its Cambridge plant to garner approval—is expected to tell the firm whether it can begin sales of ferumoxytol sometime this year.

Ferumoxytol is designed to improve the way iron levels are restored in patients with anemia related to chronic kidney disease, AMAG CEO Brian Pereira says. A key feature of the drug is its carbohydrate coating, he says. The coating enables the drug to be given in larger doses than existing iron-replacement therapies and limits toxic buildups of iron, which have been linked to drops in blood pressure and other side effects. Ferumoxytol is also supposed to be more convenient, because it is given in 17-second shots as opposed to the 15 to 30 minutes it takes to give intravenous infusions of existing therapies. That means patients could get the treatment at their doctor’s office rather than an infusion clinic.

Gearing up for commercialization, Pereira says, AMAG has built an 80-member sales force to market ferumoxytol to hematologists (blood disease specialists) and nephrologists (kidney doctors). Last year the company, which makes ferumoxytol at its facility in Cambridge, secured a deal with a contract manufacturer to ratchet up production of the drug after its potential approval.

“We’re ready for commercialization,” Pereira says. “We’re just waiting for approval.”

AMAG believes that the market for intravenous iron-replacement therapies could reach $1 billion by 2010. The company’s initial market includes 393,000 chronic kidney disease patients who are on dialysis. About 87 percent of patients in that market take intravenous iron treatments such as iron sucrose injection (Venofer), made by a U.S. subsidiary of Japanese drug firm Daiichi Sankyo Company, and Corona, CA-based Watson Pharmaceuticals’ sodium ferric gluconate (Ferrlecit) infusions. (The body needs iron to produce hemoglobin, a protein that carries oxygen through the bloodstream.) Kidney patients often suffer from iron deficiency, and sales of such drugs for that group of patients alone were expected to be $567 million last year, according to industry estimates cited by AMAG.

Pereira says that AMAG has taken action on all of the issues the FDA found at the firm’s Cambridge plant last year (he declined to get into specifics about the issues in order to protect trade secrets). But the CEO has no definite date on when the FDA will make a call on AMAG’s application to begin marketing the drug.

Still, analysts were optimistic about a timely … Next Page »

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Genzyme shares got an unexpected boost this morning. The Cambridge, MA-based biotech company (NASDAQ: GENZ) climbed more than $1 a share to $69.20 this morning after a rival, Amgen, said it discontinued development of an experimental treatment that had been posing a threat to Genzyme’s kidney drug franchise.

Amgen (NASDAQ: AMGN) made the announcement yesterday in its fourth-quarter earnings report that it was ending development of AMG-223. Amgen paid more than $420 million to obtain the drug in 2007 through the acquisition of Ilypsa, in hopes that it would offer an advance for chronic kidney disease patients who need treatment to control the amount of phosphates circulating in their blood.

Genzyme is a leader in this category, with its sevelamer (marketed as Renagel and Renvela) projected to generate $833 million in sales this year, said Christopher Raymond, an analyst with Robert W. Baird & Co., in a note to clients. The Amgen product was “widely believed” to have an advantage in dosing, as it was designed to taken as one pill at mealtime, instead of three pills per meal as required by the Genzyme drugs, Raymond said. Amgen, when pressed by analysts, wouldn’t really say what went wrong with its contender, but regardless, its demise is good news for Genzyme shareholders.

“This threat was always at the back of our minds,” Raymond said, even though many investors considered it more of a concern in the intermediate to distant future.

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