The European Commission has approved apixaban (Eliquis), developed by Pfizer and Bristol-Myers Squibb, for the prevention of venous thromboembolic events (VTE) in adult patients who have undergone elective hip or knee replacement surgery, according to a press release. The two New York companies have an alliance to develop the drug, which is a new oral direct Factor Xa inhibitor. This is the first approval for apixaban, which is also up for review with the FDA.

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[Updated: 3:45 pm] Omeros, the Seattle-based biotech company, went public back in the fall of 2009 partly on optimism that it had found a novel way to help people recover from knee surgery. Today, the company is reporting that the program was essentially a bust. Omeros stock fell 40 percent on the news in after-hours trading.

Omeros (NASDAQ: OMER) said today that its most advanced program in clinical trials, a combination of generic drugs designed to reduce pain and swelling in patients undergoing arthroscopic knee surgery, has failed. There was nothing to sugarcoat here—the drug, OMS103HP, failed to meet its goals in the third and final stage of clinical trials. Omeros blamed confounding factors in the studies, which means that if patients improved, it could have been caused by some other reason than the Omeros drug. And the treatment failed in more than one study. The Phase III program involved three clinical trials, composed of 1,040 patients, according to Omeros’ most recent annual report.

“We are obviously disappointed and surprised by the outcome,” Omeros CEO Greg Demopulos said in a statement.

The Omeros treatment is a combination of three generic pharmaceuticals—the anti-inflammatory compound known as ketoprofen, the pain reliever amitriptyline, and a blood vessel constrictor known as oxymetazoline. By adding that mix to a standard surgical irrigation solution, Omeros hoped it would help people suffer less pain, and ease the recovery from arthroscopic knee surgery. The market potential for something here is quite big—about 2. 6 million arthroscopic knee surgeries are performed each year in the U.S., and the numbers are only thought to go up as Baby Boomers get older.

Omeros is still combing through the data, and didn’t say in today’s statement what it plans to do next. The company said the latest findings do not appear to undermine use of the drug for a type of knee surgery known as meniscectomy.

Fortunately for Omeros, it hasn’t bet the entire company on OMS103HP. The company reported on some positive findings last week from a mid-stage study of patients on a drug for cataract surgery. And Omeros raised $25 million last year from Paul Allen’s Vulcan Capital and the state’s Life Sciences Discovery Fund to support a discovery program that hopes to uncloak a number of promising new drug targets known as G-protein coupled receptors.

Shares of Omeros dropped 40 percent in after-hours trading, down to $4.81 at 6 pm Eastern, following remarks by Demopulos on a conference call.

[Updated with comments from Omeros conference call.] While Omeros is still analyzing the data to determine what went wrong, Demopulos did note that there was a lot of variability in how the study was conducted over a period of years. It was designed so that a physical therapist performed a post-operative functional assessment of the patient. The problem in a large study, with multiple centers, is that there is bound to be a lot of variation in how those individuals perform the functional assessment, Demopulos said. Omeros tried to account for this with consistent training of clinical sites and follow up, Demopulos said.

The company’s cash position is now bound to attract more scrutiny. Omeros said it entered the year with $42 million in cash and investments, after burning through about $18 million of its cash balance in 2010. Demopulos assured analysts that the company is comfortable it has more than 12 months of cash left. Yet that comment was made based on some new information Omeros disclosed today. Omeros said in a separate regulatory filing today that it agreed to borrow $10 million from Oxford Finance in a transaction dated March 25th, and Demopulos told analysts the state Life Sciences Discovery Fund still owes Omeros a $5 million payment.

Demopulos didn’t try to hide the depth of his disappointment in the clinical result, but in his closing remarks, he urged people not to give up on the company.

“This is part of the business we are all in. At Omeros, we have an outstanding group of people, and we are building a company around a unique and valuable set of assets. While there are no guarantees, I don’t expect to make a habit of delivering this kind of news.”

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Seattle-based Omeros expects to apply for FDA clearance to start selling its first product by the second half of next year, and it also hoping to strike at least one partnership over the next couple of years with a bigger drugmaker, CEO Greg Demopulos said today in his first quarterly update running a public company.

Omeros (NASDAQ: OMER) is “on track” to finish enrollment next year of more than 1,000 patients in clinical trials of its lead anti-inflammatory drug candidate that’s supposed to help patients recover faster from arthroscopic knee surgery, Demopulos said on a conference call with analysts. Results from those pivotal studies should be available by the middle of 2010, and if the results are good, the company will ship off an application to the FDA to start marketing the product before the end of 2010, he said.

The clinical trial update was an important point for Omeros to make in the first week it has been legally allowed to make public statements since the 15-year-old company completed its initial public offering on October 7. Omeros raised about $62 million through the transaction, but its shares lost more than a third of their value in the first two weeks, earning it the dubious distinction of having the worst performing IPO of the year. Omeros has rebounded a bit since then, although its shares are still down 23 percent. Now the company is setting up expectations of events in the year ahead—like an FDA filing or a big corporate alliance—which could entice more investors to lift its stock out of the doldrums.

If the clinical trials go well, “we’ll have the first commercially available drug delivered directly to the surgical site to improve recovery” of knee surgery patients, Demopulos said.

The treatment, called OMS103HP, combines a couple of generic anti-inflammatory drugs into an injection designed to reduce post-operative swelling and speed up recovery time, Demopulos said. The clinical trials aren’t designed to see if the Omeros drug can wean patients off opioid-based pain relievers that circulate throughout the bloodstream, but it’s possible that could be one of the benefits, Demopulos said in response to a question from analyst Mark Monane of Needham & Company. Omeros is also looking at health economic analyses that might help justify the drug’s expense by showing how it speeds up recovery time, reducing rehab costs, and allows people to get back to work sooner than they otherwise would, Demopulos said.

While investors are certainly interested in the knee surgery drug candidate, Omeros has made plain that it isn’t putting all its eggs in that basket.

One key piece of the strategy is based on scientific work that it hopes will enable the company to hit a whole new class of targets on cells that have long been considered “undruggable.” This is the group … Next Page »

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Shares of Seattle-based Omeros, the first true U.S. biotech company to go public in more than 18 months, dropped about 13 percent in the company’s first day of trading.

Omeros (NASDAQ: OMER) opened trading at $10, but tumbled $1.27, or 13 percent, to close its first day at $8.73. The company now has 21.3 million shares outstanding, giving it a market valuation of about $186 million at today’s close of trading.

The company, which has an experimental drug in the final phase of clinical trials to help patients recover from knee surgery, raised a total of $68.2 million through the transaction and will get to take home about $62.1 million after subtracting underwriting discounts and expenses. It’s an important deal not just for Omeros and its shareholders, but for biotech and Washington state. It’s the first IPO for a true biotech company since Sunrise, FL-based Bioheart took the plunge in February 2008 (without counting Nashville’s Cumberland Pharmaceuticals and Research Triangle Park, NC-based Talecris Biotherapeutics, which aren’t traditional VC-backed biopharmaceutical companies). Omeros also represents the first IPO for a Washington state technology company since Kirkland, WA-based Clearwire did it in March 2007.

The deal provides a much-needed capital infusion for Omeros as it heads into the pivotal phase for its lead compound for knee surgery patients, and drug candidates at earlier stages of development for neurological conditions like schizophrenia and Parkinson’s disease. Omeros started the year with $20 million in cash, and burned through about $10.4 million of that in the first six months of the year. The company, founded in 1994, has estimated the new cash ought to provide at least two years’ worth of operating capital.

Besides offering cash to the company for drug development, the deal also provides some liquidity for the company’s investors. Gregory Demopulos, 50, the company’s co-founder, chairman, CEO, president, and chief medical officer, is the largest single shareholder with about an 11.4 percent stake in the company after the close of the IPO, according to a regulatory filing today. Other major holders include Arch Venture Partners (3.5 percent), Aravis Venture (2.3 percent), and the Omeros vice president and general counsel, Marcia Kelbon (1.4 percent), according to the regulatory filing.

Omeros overcame some unusually challenging circumstances in completing this deal. The company is facing a lawsuit from former chief financial officer Richard J. Klein, who accused Omeros of wrongfully terminating him. Klein says he was fired after he filed a whistleblower report on the company in December for filing false time records on grant work performed for the National Institutes of Health. The company, in its legal response, admits it made errors in timekeeping, but says it reported them to the NIH, and never overbilled the government. The company also says the NIH accepted the results of an internal investigation. Klein’s suit is still ongoing in U.S. District Court.

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Omeros, the Seattle biotech company developing a treatment to improve recovery from knee surgery, completed its initial public offering late last night in the state’s first IPO in more than two years.

The company sold 6.82 million shares to investors at $10 apiece, for total proceeds of $68.2 million. The underwriters of the offering, led by Deutsche Bank and Wedbush PacGrow Life Sciences, will have options to buy an additional 1.02 million shares. Trading is expected to start today under a new ticker (NASDAQ: OMER).

Omeros is the first tech company from Washington state to go public since Kirkland, WA-based Clearwire (NASDAQ: CLWR) did it in March 2007. The new cash infusion for Omeros is essential for it to pursue its goals, according to a recent prospectus. The company has been around since 1994, and has accumulated a deficit $108.8 million from its beginning through June 30. The company’s cash reserves dwindled from $20 million at the start of the year, to about $10.4 million at the last reported date, June 30. By adding the new IPO money, Omeros should have enough cash to operate at least through September 2011, according to the prospectus. But without that money, Omeros would have needed to “significantly modify our operational plans for us to continue as a going concern,” the company stated.

Omeros also overcame some unusually challenging circumstances in its quest to go public. The company is facing a lawsuit from former chief financial officer Richard J. Klein, who accused Omeros of wrongfully terminating him. Klein says he was fired after he filed a whistleblower report on the company for filing false time records on grant work performed for the National Institutes of Health. The company, in its legal response, admits it made errors in timekeeping, but says that it reported them to the NIH, and never overbilled the government; the company also says the NIH accepted the results of an internal investigation. Klein’s suit is still ongoing in U.S. District Court.

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Seattle-based Omeros is on the docket to go public next week, and will attempt to become the first pure-play biotechnology company to take the plunge since February 2008, according to Renaissance Capital, an IPO analysis firm.

Omeros, which is developing an anti-inflammatory treatment to help people recover from arthroscopic knee surgery, has set a goal of selling 6.8 million shares of common stock at a price range of $10 to $12 apiece, as we reported here a couple weeks ago. Deutsche Bank and Wedbush PacGrow Life Sciences are the lead underwriters of the prospective deal, which could raise as much as $81.8 million for the company, if it can gin up demand for shares at the high end of its range.

If Omeros can pull this off, and end up trading under the ticker “OMER,” it will be the first true biotech company to do an IPO since Sunrise, FL-based Bioheart (OTC BB: BHRT) did it in February 2008. That comparison has to give any biotech investor the creeps, since BioHeart, a stem cell company, only traded a year on the NASDAQ and has seen its stock crash from an opening of $5.25 to $1.80 as of today on the bulletin board.

Biotech-related IPOs have looked a little better lately. Last month, Nashville, TN-based Cumberland Pharmaceuticals (NASDAQ: CPIX), a specialty pharma company, went public at $17 and has traded down to $15.84 as of mid-day trading today. This week, a former unit of Bayer in Research Triangle Park, NC, that makes plasma-derived protein therapies, Talecris Biotherapeutics (NASDAQ: TLCR), raised $950 million by selling shares at $19 apiece. Its stock is now up over $22.

Omeros clearly needs the cash from an IPO to pursue its goals, according to its updated prospectus. It has been around since 1994, and has spent $108.8 million of investors’ money through June 30. The company’s cash reserves dwindled from $20 million at the start of the year, to about $10.4 million at the last reported date, June 30. Assuming it can rake in the new IPO money, Omeros should have enough cash to operate at least through September 2011, according to the prospectus. But without that money, Omeros will need to “significantly modify our operational plans for us to continue as a going concern,” the company stated.

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One of Seattle’s biotech companies showed it’s willing to stick its neck out to see whether the IPO window is really going to open this fall or not.

—Omeros, the Seattle biotech company developing a treatment to help people recover faster from knee surgery, has been getting its ducks in a row to go public for weeks, and this week it formally tipped its hand. Omeros issued an updated prospectus that says it wants to sell 6.8 million shares at a range of $10 to $12, which could generate almost $82 million if it can sell shares at the high end of its range.

—The medical device industry is fuming over a proposal in the U.S. Senate to set up a 10-year, $40 billion tax on medical devices. I got an earful about it this week from David Auth, a local medical device industry leader. He compared this action to the government’s behavior toward General Motors, and concluded, “our government rewards dummies and punishes geniuses.”

—Seattle-based ZymoGenetics (NASDAQ: ZGEN) disclosed some disappointing news late last week, in which its atacicept drug candidate failed to work in a pair of clinical trials for rheumatoid arthritis. ZymoGenetics still has a stake in this product, although it has handed off development work to its partner, Merck KGaA.

—Seattle-based Uptake Medical provided a small bright spot in the local medical device field when it disclosed in a filing that it raised about $3.4 million out of an equity offering worth more than $13 million. Uptake is developing a way to seal off damaged parts of the lung for patients with chronic obstructive pulmonary disease, without leaving any implantable device behind that might cause complications.

—We had a little announcement of our own at Xconomy when we revealed our next event in Seattle, which will focus on the 20-year outlook for life sciences in Seattle. This event on Oct. 19 will feature a stellar lineup of speakers, including Leroy Hood, Steve Gillis, Ben Shapiro and Stephen Friend. They will be followed by executives of Seattle biotech startups with disruptive potential: Calistoga Pharmaceuticals, Immune Design, and VLST. For more information on how to register, click here.

—Autism makes a lot of headlines for its rising incidence, but it has stumped scientists for generations and nobody in pharma or biotech has ever had much to brag about in terms of new therapies. But Gordon Brandt, a former executive at Bothell, WA-based Nastech Pharmaceuticals (now MDRNA) has licensed an intriguing nasal spray compound that he thinks has potential, and he told me all about his quest to raise the capital he needs to put this idea to the test at a company he’s calling Anatrope Pharmaceuticals.

—Gov. Chris Gregoire would, of course, beg to differ with David Auth’s commentary about punishing geniuses. The Life Sciences Discovery Fund, which Gregoire pushed through the legislature in 2005, gave out another batch of state research grants worth a collective $5.1 million to researchers at the University of Washington, Washington State University, the Institute for Systems Biology, and Pacific Northwest National Laboratory.

—Mukilteo, WA-based CombiMatrix (NASDAQ: CBMX) said this week it has secured a $1.5 million contract from the U.S. Air Force to develop automated tools that detect biological, chemical, and environmental hazards that may affect the health of soldiers.

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Omeros, the Seattle biotech company that’s attempting to pull off the first IPO from a Washington company in two years, took a step closer toward its goal today by updating its prospectus and stating it hopes to go public at a range of $10 to $12 a share.

Xconomy broke the news last month based on unidentified sources that Omeros was gearing up to do an IPO after Labor Day, and today’s updated SEC filing provides more evidence for Omeros’s plan. It hopes to find investors willing to buy 6.8 million shares of its common stock, which could generate as much as $81.8 million in proceeds if it finds demand from investors at the high end of its price range. The company also plans to grant its underwriters the right to buy another 1 million shares.

Omeros has been around the Seattle biotech scene since 1994. It had 67 employees at the end of May, and has no marketed products. It has spent more than $108.8 million of investors’ money from inception through June 30, according to its latest prospectus. The company was co-founded by CEO Greg Demopulos, an orthopedic surgeon who received training at Stanford University and Duke University.

The company’s goal is to develop proprietary low-dose combinations of existing drugs, and deliver them directly to a point on the body that’s undergoing surgery, to reduce inflammation, pain, and other complications that prolong recovery time. Omeros’s lead drug candidate is in the final stage of clinical trials for patients undergoing arthroscopic knee surgery—a procedure that 2.6 million people undergo each year in the U.S., according to market research cited by Omeros.

If Omeros is successful in going public, it will be the first Washington company to make that leap since Kirkland, WA-based Clearwire (NASDAQ: CLWR) did it in March 2007.

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Omeros, the Seattle biotech company developing a treatment to help people recover faster from knee surgery, is preparing a renewed push for an initial public offering this fall, possibly as soon as next month, Xconomy has learned from people familiar with the matter.

The company first showed an interest in going public back in January 2008, and if it can pull this off now, it could be the first IPO from a Washington company in more than two years, since Kirkland, WA-based Clearwire went public in March 2007. A spokeswoman for Omeros declined to confirm the company’s plans, citing an ongoing regulatory quiet period.

Lots of ink has been spilled about how the IPO market has been shut down by the recession, but there have been small signs of life recently that have to encourage many companies chomping at the bit to go public. Nashville, TN-based Cumberland Pharmaceuticals (NASDAQ: CPIX), the first pharmaceutical company to go public in almost two years, raised $85 million earlier this month by selling 5 million shares at $17 apiece. Investors haven’t lost their shirts yet, since Cumberland stock closed today at $16.87. Also, while few people seem to have noticed, biotech firms have actually seen improving demand from investors this year in general. Biotech companies raised $8.3 billion in the first six months of this year, about 41 percent more than they did a year earlier, according to Signals magazine, an influential online trade publication.

“The window is opening again for IPOs,” says Michael Butler, chairman and CEO of Seattle-based Cascadia Capital, who’s not underwriting the Omeros deal. “In this environment, the quality of the companies going out is high, and the pricing is reasonable. The institutions want to see IPOs happen, and companies want to get out.”

At least one other Washington company, Seattle-based InfrastruX Group, has recently filed paperwork to go public. It’s a spinoff from Puget Sound Energy that provides construction services to gas and electricity companies.

So what would investors be getting if they buy up shares in Omeros? The company has been around the Seattle biotech scene since 1994, had 67 employees at the end of May, and has no marketed products. It has spent more than $102 million of investors’ money since inception, according to its most recent regulatory filing in June with the Securities and Exchange Commission. The company was co-founded by CEO Greg Demopulos, an orthopedic surgeon who received training at Stanford University and Duke University.

The company’s goal is to develop proprietary low-dose combinations of existing drugs, and deliver them directly into a point on the body that’s undergoing surgery, to reduce inflammation, pain, and other complications that prolong recovery time. Omeros’s lead drug candidate is in the final stage of clinical trials for patients undergoing arthroscopic knee surgery—a procedure that 2.6 million people undergo each year in the U.S., according to market research cited by Omeros.

The drug combination, dubbed OMS103HP, is currently being tested in a final-stage … Next Page »

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OrthAlign, a medical device company in Laguna Beach, CA, said today it has raised $7.2 million in a Series A financing. The round was led by Research Corporation Technologies and Okapi Venture Capital, and included some of the company’s seed investors, Ronald Yagoda, Ned Scheetz, and CEO Pieter Wolters. The company is developing computer-assisted surgical devices for knee replacement surgery.

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Maybe the credit markets aren’t as tight as so many people think. Omeros, the Seattle company that’s developing a treatment to boost the effectiveness of arthroscopic knee surgery, said it has borrowed as much as $20 million to finance its clinical trials and earlier-stage animal tests.

Omeros, which has no marketed products, filed to go public earlier this year but, with the stock market sour on IPOs, hasn’t gone through with it. The alternative financing is from BlueCrest Capital Finance, which is loaning Omeros $5 million, and as much as $15 million more if the company meets certain conditions. Other terms weren’t disclosed.

“This credit facility provides us with increased financial flexibility as we continue to expand our clinical programs and advance our deep preclinical pipeline,” said Gregory Demopulos, Omeros’ CEO, in a statement.

Omeros’ lead product in development is built on what it calls PharmacoSurgery, a technique that’s in the final stage of clinical trials to see if it can use a combination of drugs delivered locally during surgery to reduce post-operative knee pain and improve function in the joint after arthroscopic surgery. The company raised $63 million in venture capital in February 2007 from a long list of backers, including Arch Venture Partners, Aravis Venture, Novartis Venture Fund, Southern Cross Capital, and WRF Capital.

Omeros, founded in 1994, reported it had 62 employees at the end of 2007 with plans to grow to about 70 or 80 by the end of this year.

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ConforMIS, an orthopedic device maker in Burlington, MA, said today it is introducing the third product in its line of implants designed to make knee surgery less invasive. Made to order for each patient based on data from CT or MRI scans; these implants replace only the areas of the knee showing signs of osteoarthritis. By sticking to the affected areas, the surgeon can spare ligament and bone that would be cut in conventional knee surgery, which ought to help preserve the joint’s range of motion, ConforMIS CEO Philipp Lang explained when Rebecca profiled the company and its minimally invasive strategy back in November.

As probably anybody who watches or likes to play sports knows, knee surgery is pretty common. About 500,000 to 600,000 people every year in the U.S. end up getting the most serious form of surgery, total knee replacement. The number will continue to grow as the Baby Boomers keep getting older. ConforMIS’s latest implant, called the iDuo, could provide an alternative to full-blown surgery for patients with arthritis in just two of the knee’s three compartments; an implant that the company launched in February, called the iUni, is designed for patients with damage in just one compartment. One-third to one-half of patients who currently undergo total knee replacement only have arthritis in one or two compartments, said Jong Lee, senior vice president of marketing, in an e-mail.

Interestingly, ConforMIS has its eye on Generation X every bit as much as the Boomers. Since knee replacements don’t last forever, surgeons are looking for alternatives for younger patients. “The iDuo provides a less invasive alternative for young and active patients that maintains their ability to move to a total knee (replacement) in the future if necessary,” said CEO Lang in a statement.

ConforMIS doesn’t disclose how many salespeople will be pitching the iDuo, although the company has a “rapidly expanding direct salesforce as well as distributors” who will carry the product, Lee says. If they end up capturing any significant percentage of the $5 billion market for knee replacements, I’m pretty sure we’ll hear a lot more news from them.

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